Why the change in HN title? "Proof of stake is a scam and the people promoting it are scammers" is clickbait for sure but it's the author own title and it is the subject of the article.
Proof of stake is incapable of producing a consensus
691–700 of 822 posts
Re: Proof of stake is incapable of producing a consensus
#692Earlier quoted context omitted.
The article addresses that in the section starting: >>Therefore, once they have withdrawn their deposits, they are untouchable. This is the “nothing at stake” problem. There will inevitably come a point when a node is free to liquidate their entire stake and cash out. And later concludes that, In order to know which is the valid staking, you have to already have a decentralized mechanism for ordering transactions, wh…
But that's also true for PoW as you can use hardware which after an attack you can use for other things.
But you have to do new work (and a lot of it, requiring energy and time), compared to the trivial cost of generating another signature as in PoS.
Re: Proof of stake is incapable of producing a consensus
#693Earlier quoted context omitted.
I would add that the silly argument that a super-wealthy individual or a government could in theory degrade or destroy a transaction platform is applicable, not just to Algorand and other block chains, but also, more generally, to ANY transaction platform . I mean, if Doctor Evil suddenly decided to spend tens of billions of dollars to destroy the three main credit card networks, he could probably do it. In fact, it…
IMO people listing things that discourage an attack (people will hate him, his credit cards won't work, etc) are just people trying to comfort themselves. It's like saying, "No one would break into my home because they might hurt themselves breaking in, or I might hurt them up, or they might get caught by the police and go to jail. It's just too risky." At the end of the day, Dr. Evil will gladly spend 10s of billion…
That's not what I said. Please don't attack a straw man. My main point was, and is, that the same attack-logic applies to ANY transaction network. The example with Doctor Evil was about other transaction networks.
Why would Doctor Evil attack a block chain network when he could attack global/national/regional credit card/wire transfer/ACH networks, many of which are built upon ancient pre-Internet technology, are full of discoverable vulnerabilities and critical points-of-failure, and are operated by cash-rish financial institutions with liquid, easy-to-short stocks?
Re: Proof of stake is incapable of producing a consensus
#694Whether 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. It’s actually the opposite since the block reward goes down over time
> It’s actually the opposite since the block reward goes down over time
See history of block reward in dollars[1]. This the miner's collective budget to find blocks.
It's about 350K USD per 10 minutes now, or 2.1M USD/hour. Pick an industrial electricity price, say 0.05 USD/kWh. That budget will then buy 42 GWh/hour, or 42 gigawatt of power continuously (roughly 2% of global power consumption). Of course, miners have other costs, and their growth is lagging this ceiling. But it gives you an idea.
That's why I think we're heading for overshoot, and future block reward halvings will come too late.
Re: Proof of stake is incapable of producing a consensus
#695After reading this whole article, I find it really scary that something like this can get so much attention.
It looks like the author read about PoS circa 2014 and hasn't read anything written or done since then. It's true that the "nothing at stake" problem exists, but there are tons of practical solutions and mitigations that work, many of which are already deployed and protecting >$100M. Soon ETH will be securing trillions with such mitigations.
To address the specific points the author makes:
1. If a node signs another version of the same block within a reasonably short time period, “slash” their deposits (e.g. punish them inside of the system)
2. If a node signs another version of the same block, like, a year later, just ignore it.
Re: Proof of stake is incapable of producing a consensus
#696Earlier quoted context omitted.
"folks" is not me, that is certainly not the point I was making, and your "predictability" indicates that your comment is no less based on fact-free as those you criticize. Obviously, if the mining is done off-earth anywhere, it will not contribute to the CO2 problem, =ASSUMING= that it does not require on-earth energy resources to put the power generation there. Crypto mining also stops being a problem when 100% of…
OK, “Crypto is bad until the entire grid is decarbonized” is a reasonable position. It’s not airtight: there are a number of grids and they aren’t all interconnected, but at least it’s on the right track.
Yes, I agree, and was thinking something like that after I wrote - the range is not actually global, but basically grid-scale.
For example, if the Texas grid became ~100% wind and other clean-source-powered, then BTC mining in that grid would not in any practical sense consume clean power that could otherwise displace dirty power. The 100kW you use to feed your miners could in theory be used to reduce production from a nearby coal plan in Oklahoma, but in practice, since the grids are not connected, they aren't, so that is probably the right scale.
That said, if it gets big and the miners are consuming enough production of solar panels and wind turbines to slow clean energy buildout on other grids, that's the second order of the same problem.
So, maybe everyone with crypto should, instead of convening to buy the constitution or a basketball team, go fund the takeover and conversion of an entire grid to clean energy, and build all the miners there.
Re: Proof of stake is incapable of producing a consensus
#697Earlier quoted context omitted.
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.
Everyone gets paid! > Proof-of-Stake attacks aren't about having 51% of the CPU that overwhelms a Proof-of-Work system, but about having 60-70% of the _value_ in the network. If a nation buys 2/3 of the coin and destroys the network, investors (as a whole) take a 1/3 loss. Then they can (re)start another PoS coin. Ironically the nation would be up against the old saying that the market can stay irrational longer than…
...or gradually alters consensus to pad their pockets at the expense of smaller stakeholders.
congrats, you've reinvented central banking and plutocracy.
Re: Proof of stake is incapable of producing a consensus
#698(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…
Importantly, if "Warren Buffet comes along and wants to spam our network" his bad actions would be tied to addresses that can be blacklisted.
You can't do that with PoW without "additional" consensus rules, which is that slippery slope to PoS!
Re: Proof of stake is incapable of producing a consensus
#699Earlier quoted context omitted.
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.
> 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. While you are correct that burning $30 billion dollars to destroy trust in PoS blockchains isn't that much money, I disagree that such an action would actually destroy trust in PoS…
Why destroy it, when you can co-opt and control?
Spend $X billion, then just bleed everyone without power. Sort of like what we do now.
Re: Proof of stake is incapable of producing a consensus
#700Proof of work is good for jobs that require skill (science, technology, productivity, markets). It’s ok to have proof of stake (corporation shareholders) or proof of vote (communities, unions, families) for things that don’t require skill so much.