Bitcoin Forum

Someone told me that PoW has advantages over PoS if implemented properly and there is a good link for that.
Could somebody post it here or explain in simple words.

In my view PoW is always wasteful and is vulnerable to centralization.
The only downside of PoS is risk of improper initial distribution.

PoS encourages hoarding rather than using the currency. This means that the biggest users don't necessarily want to use their coin to see uncertain growth, the natural growth of their coins through staking is enough.
PoW, on the other hand, usually means that the currency has to be sold to break even with electricity and miner costs.

The mintpal hack: https://www.cryptocoinsnews.com/mintpal-gets-hacked-pos-vericoin-fork-result/
showed another problem of PoS coins.
It is a lot easier to suddenly out of nowhere spring up with a large amount of PoS coins that you've been buying, the exchanges are fairly open.
On the other hand, suddenly creating mining power to disrupt the Bitcoin network seems harder.

So overall, I think the weaknesses of PoS are that by very design, it seems counter-intuitive to community growth and also, it can be dominated more easily if one centralized party holds lots of coins at any point, as compared to PoW where it is not as easy to gain control of the hashing power.

I was thinking exactly this.  Especially for coins with a smaller market cap, an average non-whale could even dominate that coin if he wanted to.  I think that neither one is perfect, and they both have advantages and disadvantages.  For me I like POW because people have to invest money into hardware, so it makes me feel like there is a an invested community, while pos coins seem to have less value behind them.  I know this is just my perception, but it is how I think.

What prevents someone from stealing million BTC from any exchange ? I don't see how PoW prevents this.
With decentralized Asset Exchange like NXT  trade.secureae.com  problem of stealing from exchanges does not exist.

BTC pump of 2013 - 2014 shows that mined currency does not have to be sold and can be hoarded too.

I still don't see compelling arguments in favor of PoW.

Suddenly buying significant amount of PoS is also not possible, considering huge price jump on attempt.

Considering concentration of PoW mining power in few huge miners hands it is hard to find competing mining power to take significant portion of control away from them. While with PoS it costs nothing for a whale to set constant sell wall and keep it forever preventing any pump. No need to burn energy to keep monopolies in check.

Well there is one. In the creation of a currency, something with a value is brought in. It need to have a cost for its creations and to then be based on something. Like gold, it has a value, oil, diamonds and... electricity.

Having a cost to its generation provide to its value.

If taking something valuable from people is the only issue then why not create NXT  asset, and put huge sell order that will last several years.

Only one pow coin can success, that is bitcoin . and pos coin can't be a coin, but could be a platform.

PoS is derived from Sunny King's code and advanced checkpoints were there since the beginning.
Any coin which has implemented advanced checkpoints is not completely decentralized, checkpoints control can be hacked, or misused by devs.
With staking you get additional coins if you keep your wallet online. It helps network, but in the same time if you are just an investor, or don't keep your wallet online and unlocked because of any reason, you are out of game.
Some PoS coins are accused to be unfair with big staking percent at the beginning.

Please argue if you dont't agree.

This discussion is interesting:

POS has no ongoing block production cost, which means that to attack the chain costs nothing. You can immediately see why this causes problems compared to POW.

Inflation matters in a Pow coin and to overcome a later released coin is disadvantaged, some cheated in an attempt to overcome it which then stops it from being successful. Stacking on top whats already there ------  choo choo train.

In PoS it does not matter when you start your money for nothing enterprise (creation of Proof of Stake coin)
Endless new starts, none can get traction because always improvements in code, road to nowhere |||||| yellow ducklings in ocean

The distribution advantage of POW is no better than POS, why should only people with really fast computers and tech types get to make the early major mining which is where many make a lot of money?

POS at least rewards a developer IF the coin has value and also opens the playing field to anyone who wants to risk money without having to have tech skills....no different to any investing basically. Plus POS helped kill off stupid coins, once ICO happened and people couldn't make a quick buck on silly coins they started to die out. This is an advantage that most have not recognised. No one is going to make a POS Bill Murray coin....


Also the POW concept all it really does is something very illogical ie Ok you can lift this weight with you hands or you can lift it with your tongue....just making something artificially difficult is dumb. We have to mine Gold cause that's the only way to get it out of the ground...POW in that sense is like many advances in society or systems by holding onto something of the past even though it's illogical.

Beware: you're talkin' treason 'round here. :P

My country has a law on capital export. Since there's no national exchange this basically means I have no chance to get PoS coins. Explain me this fair distribution thing.
Besides my PC consumes 60W idle, 120W loaded (playing) and 130W when mining (and playing Borderlands 2), in this terms, getting into PoW coins is almost for free to me.

Huh? You can't get on any exchange or buy into a POS coin....sounds like BS. Where do you live North Korea?

POW guys who made some from POW coins ironically complain the most about POS when they are the ones who were able to buy into them early from accumulated BTC and LTC. etc.

In my opinion, hoarding has also positive characteristics. It could be functional to price stability if there were restrictions in moving these hoarded coins.

Imagine that for receiving PoS rewards / forging, you must lock your coins for some months. In this case, you cannot sell them in a crash* and the crash would not be so deep as many people wouldn't be able to sell. So if you stake you are taking an entrepreneurial risk - and this way I think it's legitimate to earn coins for it.

As of now, I don't know any coins using this system. But Proof of Burn (https://bitcointalk.org/index.php?topic=131139.0) as used in Slimcoin is a bit similar, because when you burn coins you'll get them eventually back, but over a long time. There was also a coin called ReserveShare where "staking" coins can be moved but you have to pay a high fee, I don't know if they have implemented their particular PoS mechanism.

*You could try to sell your private key, but it wouldn't be easy because you still would have access to the address and so your counterparty must have plain trust in you.

Interesting, I did not think about this disadvantage of PoS, good catch.
So PoS cannot be as widely distributed as PoW unless there is already PoW coin that can be exchanged for PoS.

So any PoS coin owe part of it's success to PoW coins.
And any PoW coin capital will eventually be moved to a PoS coin (BTC -> NXT).

When I see what happened with Bitmark Projekt and no miners and pools are left (can't move my coins lol) I guess POS is now my favorite

Distribution comes with time  :)

I think hoarding is positive only if it's done by wide number of investors. Wide enough to prevent closed circle agreement of pumping and dumping.
And the best way to achieve it is by distributing well and disallowing trade for long enough period of time, like 1 year or 2 until features are implemented to discourage massive dump.

No Government or Bank will ever create a Proof of Work (PoW) coin, period.  It separates the Men from the Boys.

If PoW requires energy and energy is controlled by govt and banks then why do you consider PoW being different than PoS ?

I believe there's two points here:

1. With PoW coins, there's no advantage to keeping the coins online, while with PoS coins the exchange is motivated to store coins online where they can stake them.
2. With PoS coins, a major theft can put a huge chunk of mining power into the hands of a malicious actor. See the case with the Vericoin hack from Mintpal, where 30+% of the total supply was stolen, leading to a hard fork to revert the transaction: http://www.coindesk.com/bitcoin-protected-vericoin-stolen-mintpal-wallet-breach/

NXT decentralized exchange solves that problem too. No central exchange - no concentration of staking power and theft risks.
Am I right ?

Yes, you are right. As long as secure passwords are used for the wallets - which you think we'd all have learned by now - Nxt's decentralized exchange does not have that point of failure.