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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

#611

Post by comex »

bhaak wrote: post #539
comex wrote: post #27

Earlier quoted context omitted.

Indeed. And even if you posit a PoW currency which never has policy changes, unlike Bitcoin or any other major cryptocurrency… And you assume that attackers will never have enough computing resources to execute a 51% attack – which could happen because the currency’s value falls enough that people stop mining it, because an extraordinarily well-funded entity decides to attack it, or because someone manages to hack th…

What you describe is indeed a viable threat in certain conditions. It's called "Eclipse Attack". But it's a threat for single nodes not for the network as a whole.

> But it's a threat for single nodes not for the network as a whole.

Indeed, but the same is true for attacks on "weak subjectivity" proof-of-stake. They're only a threat for nodes that have been disconnected for a long time (months) before they try to reconnect.

Re: Proof of stake is incapable of producing a consensus

#612

Post by dathinab »

inter_netuser wrote: post #135
darawk wrote: post #131

> Proof of stake is a scam. When I say that, I mean that proof of stake is (1) claimed to be a consensus system, and (2) constitutionally incapable of actually producing a consensus. Ok. Go break one of the many existing systems that operates using proof of stake then. If you've done this, you should be leading your article with it. If you haven't, you shouldn't be speaking. Proof of stake is not some theoretical thi…

you didn't read the article to the end, did you? about 40% in: "Because of all the arguments above, we can safely conclude that this threat of an attacker building up a fork from arbitrarily long range is unfortunately fundamental, and in all non-degenerate implementations the issue is fatal to a proof of stake algorithm’s success in the proof of work security model. However, we can get around this fundamental barrie…

> Security model in PoS = trust the rich.

Same for PoW.

Crypto currency weather PoW or PoS boils down to "give the few rich all the power while giving the many less rich a illusion of security".

In PoW it just slightly tweaks "richness of money" into "richness of computation resources (which you get through money)".

This difference has complicated effects like:

- benefits anyone with cheap electricity (i.e. either places with no environmental protection, government support in some way, or the few places with cheap clean power)

- benefits anyone with good connections to chip factories

- the investment needed for gaining power being less bound to the currency itself but computation power instead

Re: Proof of stake is incapable of producing a consensus

#613

Post by TheFlyingFish »

duped wrote: post #51
rank0 wrote: post #46

Earlier quoted context omitted.

It’s because if you’re not decentralized, then you don’t need a blockchain.

The gold standard was decentralized. Over a century of monetary policy has shown that decentralization isn't aligned with political or economic goals.

Gold, silver and other metal coins were usually produced by a central (and government-controlled) mint, no? And counterfeit was harshly punished?

Re: Proof of stake is incapable of producing a consensus

#615

Post by dathinab »

inter_netuser wrote: post #195
darawk wrote: post #138

Earlier quoted context omitted.

> you didn't read the article to the end, did you? I skimmed it. It made no serious arguments. If it had a serious argument, it would have exploited one of the many existing proof of stake systems. > Security model in PoS = trust the rich. Some like having masters, whatever floats your boat. You mean...exactly like PoW mining?

No, exactly the opposite of PoW mining. Miners do not set the rules, they are merely a service that provides immutability to a ledger, with a nuclear option that will bankrupt all the billions they have invested, should they misbehave. Large stakers can rent-seek and extract your wealth, PoS is the same system we have now, plus some code. You are quite literally being exploited right this minute, by the same methods…

Miners decide what they mine.

Their contribution is what makes the currency work.

They are some of the main profiteers from the currency.

You can't do a fork or rule change without enough miners going along (I mean you can but it would not have much value).

So in practice have all the governing/decision making power (as a group not a single person).

Sure they might not come up with changes, but they do decide weather any change do take effect in the end.

Re: Proof of stake is incapable of producing a consensus

#616

Post by hedora »

comex wrote: post #606
xorcist wrote: post #435

Earlier quoted context omitted.

This explanation does not make sense to me, which is probably due to my lack of understanding, but perhaps you can expand on this: > about 30-45 accounts _which had stake at that time The this is stated makes it sound difficult. But if this is false history presented by a malicious node, surely they could make up anything, as it the data does not need to line up with any official history at any point. (Without a trus…

The history still needs to be signed by former stakers to be valid. The "nothing at stake" problem is that a staker might break the rules by signing two mutually incompatible histories. During the staking period, they are strongly disincentivized from doing this because anyone can present proof that they've done so, causing the network to punish them by taking away all the funds they staked. But once that period expi…

This is the “nothing at stake problem” from the article.

Warren Buffet buys up 70% of the network, induces a network partition, and then double spends it all, signing both transaction histories.

By the time he’s caught, he’s converted 2x the value of the POS network to POW bitcoins.

Replace “warren buffet” with “crypto exchanges selling bundled securities”, and the above is not just plausible, it’s inevitable.

The same scam has been run over and over again with conventional banks (who are inevitably bailed out on top of getting to take the money and run), POS just changes the nature of the obscure underlying financial instruments.

Re: Proof of stake is incapable of producing a consensus

#617

Post by mgraczyk »

> If you have a file on a computer, despite what NFT promoters believe, it is not possible to prevent people from copying it.

Not sure if these quips are meant to be jokes or serious, but nonsense like this detracts from the credibility of the argument. Nobody believes the data corresponding to an NFT cannot be copied.

Re: Proof of stake is incapable of producing a consensus

#618

Post by viro »

turbinerneiter wrote: post #167
inter_netuser wrote: post #146

Earlier quoted context omitted.

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…

How is that different from PoW or our current political system?

Because money can't literally buy votes. no matter how many ads you show me I would never vote for Trump.

Re: Proof of stake is incapable of producing a consensus

#619

Post by comex »

ricardolopes wrote: post #119
comex wrote: post #60

Earlier quoted context omitted.

> Do you know any other way to bootstrap a peer to peer network without centralised authorities? I’m not the parent, but – no, I don’t. But that’s exactly the point. The need to bootstrap from centralized authorities is what’s supposedly so bad about weak subjectivity in proof-of-stake. Yet in practice, it’s needed with proof-of-work as well.

Maybe I didn't word it right, but I wasn't calling bitcoin's method reliant on centralised authorities, just asking if there were more methods out there that weren't as well. Bitcoin is an open source permissionless protocol, so you have multiple clients to chose from, each with their own list of bootstrapping nodes, many open source where you can submit a PR to add your node too. You can even build your own client a…

> Bitcoin is an open source permissionless protocol, so you have multiple clients to chose from, each with their own list of bootstrapping nodes, many open source where you can submit a PR to add your node too. You can even build your own client and point to whatever you want. You can also just ignore them and just point directly to nodes in a list from a public forum, a private chat, whatever.

I characterized this as relying on centralized authorities (albeit several of them), but sure, it can also be considered decentralized to some extent.

The point is that it's a mechanism outside of the proof-of-work network itself. Instead of relying on a machine to reach consensus via a formal protocol, you the human are probing for a social consensus by evaluating statements made by other humans (via GitHub, public forums, or private chats, or just talking to people in person).

In both proof-of-work and proof-of-stake, you need to find social consensus in order to initially obtain the software, after which point you can rely on the network's consensus.

The difference with proof-of-stake is that you have to redo this if you disconnect from the network for months on end.

In practice, for a variety of reasons, practically all users of cryptocurrencies download regular software updates, and thus continue to rely on social consensus, regardless of whether the currency is proof-of-work or proof-of-stake.

Re: Proof of stake is incapable of producing a consensus

#620

Post by evergrande »

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…

What if Buffett just wants to see the world burn and doesn't care about getting the money back out?

Or if a nation state or the central banks see it as an existential threat, they could consider it the cost of doing business? Maybe $30B to take out Algo or Solana and destroy trust in all PoS networks? That's a rounding error for them.

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