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Proof of stake is incapable of producing a consensus

yanmaani.github.io

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Re: Proof of stake is incapable of producing a consensus

#461

Post by naasking »

keymone wrote: post #293
wcoenen wrote: post #268

Whether PoS will work, I don't know. But the author didn't realize that PoW is certainly doomed. PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. That's why Bitcoin is alr…

It’s a system with feedback loops, it’ll eventually level out at some equilibrium. You didn’t provide an actual argument for why it should definitely collapse.

> It’s a system with feedback loops, it’ll eventually level out at some equilibrium.

An equilibrium doesn't entail that it's a sustainable point, or that it's actually providing value when you properly account for all externalities.

Re: Proof of stake is incapable of producing a consensus

#462

Post by c0742e9366 »

floatboth wrote: post #409
c0742e9366 wrote: post #245

Earlier quoted context omitted.

If you go by the usual, energy-wasting meaning of "proof of work" that is also the one relevant to the discussion (i.e., Bitcoin-style PoW which is described in the article), then no.

so, it is proof of work, it's just not "a proof-of-work lottery "

Yes, in the strict sense of the meaning. In general, the comparison of VDFs (a cryptographic building block) and Bitcoin-style PoW (a consensus mechanism) is not that useful. However, using a VDF as part of a consensus mechanism (see e.g., Chia) does not introduce an energy overhead.

To demystify what a VDF is, consider the delay function (i.e., the majority of the work done to compute a VDF) used by the most prominent proposals:

Let N = p*q be a product of two large primes (so an RSA modulus) and assume that the primes p and q have been immediately thrown away/forgotten after initialization. Then, computing

f(x) = x^(2^T) mod N

is believed (dating back to a paper by Rivest, Shamir and Wagner in 1996) to take T sequential steps provided that T is large enough. For a large T, the only feasible approach seems to be repeated squaring modulo N. That is, compute y = x^2 mod N, y' = y^2 mod N, ... for T times.

Re: Proof of stake is incapable of producing a consensus

#463

Post by mastax »

DennisP wrote: post #451
Geee wrote: post #443

Earlier quoted context omitted.

PoW generates heat, which is not waste, if it is utilized. The endgame of Bitcoin mining is that every bit of heat is utilized, because that's the only way mining will be profitable. Running these miners is profitable even without block rewards (heat alone is sold at a profit). You didn't take into account, that: - Bitcoin price growth won't continue forever; it'll find a stable price - Mining rewards halve every 4 y…

You would think then that large bitcoin miners would already be doing this. Maybe installing their miners in large office buildings in cold climates. In theory they could eliminate their cost of electricity and outcompete other miners. Why isn't this happening?

There was a startup on here a year or so ago with this idea. They built self-contained cabinets and put them in people's houses as heaters. Wonder how they're doing. Sounds like an ops nightmare.

Re: Proof of stake is incapable of producing a consensus

#464

Post by mrkramer »

wcoenen wrote: post #268

Whether PoS will work, I don't know. But the author didn't realize that PoW is certainly doomed. PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger. That's why Bitcoin is alr…

>PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger.

Are Google and Facebook eating the world? They are processing petabytes of data on daily basis and every year there is more data and information being shared on the internet. Moore's law is our friend because as long we have better chips more data can be processed and analyzed.

Bitcoin's PoW is based on economy and game theory meaning if people do not find Bitcoin useful they will stop processing transactions or in reality they will stop investing and spending computation power and electricity.

Re: Proof of stake is incapable of producing a consensus

#465

Post by naasking »

inter_netuser wrote: post #146
brianolson wrote: post #133

(my day job is developer on Proof-of-Stake Algorand block chain, I'm a developer, this may not be polished official PR) Article's theory about malicious old blocks doesn't hold up. Let's say I start a new node and verify history since the beginning. Somewhere along the line I'm connected to a malicious node which hands me a fictionalized block. It would need to have been signed by not just one but about 30-45 account…

PoS is Plutocracy on Steroids. You've outlined only one, the most obvious and least probable, mode of failure. The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth. It's already visible on smaller scale in DAOs, e…

> The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth.

And that's where competition between currencies provides checks and balances against such pathological behaviours.

Re: Proof of stake is incapable of producing a consensus

#466

Post by mastax »

mschuster91 wrote: post #427
poontang1 wrote: post #423

Earlier quoted context omitted.

Bitcoin uses about .1% of the worlds power currently. 10x less than you have suggested: https://nydig.com/research/report-bitcoin-net-zero The bitcoin reward also halves every 4 year, so even if price continues to appreciate, the effect is evened out by the fact that less is created every block over time. Lastly, bitcoin mining to could sustained solely by using stranded energy, which would otherwise be unused. Flare…

> Flared gas in texas, for instance, could provide more power than the network currently uses. While the amount of gas that is flared off is immense (25-30% of the actual consumption of the US and Europe), the problem is that it is only flared off because there are no pipelines to transport the gas away and the amount that the small oil wells produce is too low to justify the cost. If it were for me I'd force oil wel…

If you put the miners in a shack next to the well, you don't need a pipeline. Still need a generator and other infrastructure though.

Re: Proof of stake is incapable of producing a consensus

#467

Post by Jweb_Guru »

keymone wrote: post #450
lottin wrote: post #432

Earlier quoted context omitted.

> do they get a choice of what block they append to the chain? No they don’t. Of course, they have a choice. If didn't, miners would serve no purpose. We would just have one block and that would be the block that would be appended. The consensus would be achieved automatically, without any need of guessing secret numbers. > And if it was an election, wouldn’t the result always be the same with largest miner always wi…

> Of course, they have a choice lol, no they don't. a certain hash wins, every ~10 minutes. that hash is calculated from sha(block, nonce), where nonce is the randomized part that miner mutates to get different hashes. once a hash that satisfies the protocol is found - that's it, you can't choose a different block to append to the chain. it is just laughable that i have to explain this level of basics.

Okay, and who chooses the block? (Hint: it's the node that wins leader election).

Maybe this article will help you understand just how nonessential the fact that the block is part of the SHA actually is: https://www.usenix.org/system/files/conference/nsdi16/nsdi16.... Please read the whole article, and then come back so we can have a discussion on equal footing.

Re: Proof of stake is incapable of producing a consensus

#468

Post by notahacker »

dan-robertson wrote: post #395
paulgb wrote: post #384

Earlier quoted context omitted.

How does adding demand for something create a surplus of it? I think you have that backwards.

Scenario 1 involves a crash where mining is no longer being done. So there is a drop in demand.

Scenario 1 involves POWcoiners wasting a lot of energy for several years generating tokens which end up being worthless, keeping coal plants which could otherwise have been decommissioned open for longer to service the resulting higher energy demand, and then when the mining stops and the coal plants can finally be shut down, telling the rest of the world it's only thanks to their energy usage over the last few years that we've been investing in renewables for the last few decades

It's like claiming that if I steal a percentage of your paycheck for a few years and until the government stops me, leaving you with more disposable income than when I was stealing it, I've actually helped you by encouraging you to work really hard.

Re: Proof of stake is incapable of producing a consensus

#469

Post by thinkloop »

littlestymaar wrote: post #444
thinkloop wrote: post #431

Earlier quoted context omitted.

The difficulty is where the security comes from. Bitcoin's goal is to have the highest possible prices and difficulty so that nation-states and alien civilizations can't hack it. It's very easy to have a cheap low-difficulty coin. Equally worthless too. You need to understand that proof-of-work is actually proof-of-waste - the waste, the difficulty, the cost, is the security.

You've misunderstood my point: I'm not talking about reducing the difficulty, I'm talking about (sub-linearly) increasing the mining reward as the difficulty grow. Also the difficulty scaling is important even if you don't take security into account: if you don't raise it, then the block mining frequency rise progressively, and then you end up with more and more orphaned blocks, until you end up with parallel chains…

I see what you mean now. Interesting thought to peg inflation to difficulty. I think the main issue is that Bitcoin is not, and will not be, a means of payment. So price stability doesn't matter much. The nature of the system favors few, large transactions. The small-block size crystalized that. Bitcoin is truly suited as a clearing layer. Eventually it will process just the largest most expensive transactions in the world. Which is good since that's the only way miners will get paid and the high transaction costs will ensure continued security.

Re: Proof of stake is incapable of producing a consensus

#470

Post by lottin »

keymone wrote: post #450
lottin wrote: post #432

Earlier quoted context omitted.

> do they get a choice of what block they append to the chain? No they don’t. Of course, they have a choice. If didn't, miners would serve no purpose. We would just have one block and that would be the block that would be appended. The consensus would be achieved automatically, without any need of guessing secret numbers. > And if it was an election, wouldn’t the result always be the same with largest miner always wi…

> Of course, they have a choice lol, no they don't. a certain hash wins, every ~10 minutes. that hash is calculated from sha(block, nonce), where nonce is the randomized part that miner mutates to get different hashes. once a hash that satisfies the protocol is found - that's it, you can't choose a different block to append to the chain. it is just laughable that i have to explain this level of basics.

Where do you think the transactions included in the block come from? The miner picks them.
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