Bitcoin Forum

I know it sounds like heresy and I know this is a bit cheeky but I think Bitcoin should move to POS (proof of stake) for mining rather than POW (proof of work).

I think that there are a number of reasons this would be beneficial but the main one would be a reduction in the huge amount of energy wasted in mining - I think many of us have seen the recent bad press in this regard and it is only going to get worse. 

It would also allow mining on much lower level hardware and might reduce the pressure to sell (from miners who have to cover costs).

I certainly think it is an interesting thought experiment for discussion regarding the pros and cons.

PoS when 21 000 000 bitcoins are already mined ;)

Unfortunately that's more than 100 years away so that doesn't really help with the energy use.

Bitcoin is what it is largely because of mining. Switching to POS would be disasterous.

That's what I used to think but I'm not so sure now.  What does mining provide that POS wouldn't?

The fact that obtaining a machine capable to mine the currency costs money and isn't accessible to anyone adds value to it in and of itself. Removing this attribute of bitcoin could take away a big part of the economy that has formed around it and cause massive loss of interest.

I disagree.  It is the scarcity of bitcoin that (and the fact that it was the first cryptocurrency) that gives it value. POS would not change that.

explain the nature of this so-called "waste". I'm going to give you a head-start: you can't

The point you mentioned is 100% right, but not possible at the moment.
If you would destroy the mining like its at this point, you would destroy the economy.

A lot of mining people had loosings (hardware, power etc.).
A lot of people are thinking a mining farm can make them rich.
A lot of people are paying real money to get some bitcoin - to start the "BIG BUSINESS" ...  ::) ::)

But those people are really important. They are like gas/fuel for a car.
For now we need them and it will regulate slow by itself. Then we can switch POS to POW.

See Peercoin. Did they really win?
At the momet Bitcoin is too important in the changes on the financial sector and changing how things are working.
I concide to 100% with your thinking and it would be great to see it working - better yesterday then tomorrow.

But for now I feel better with:
- Dont touch it!   :'( :P
or
- Never touch a running system  8)

I can.  POS would require less energy therefore POW is wasting energy. Simple enough.

You cannot save time if you stop your clock  :D
--- but you can try to run a little bit faster every day  :o ;D

Thank you for your thoughtful points.  I understand your concerns and but I think that it may actually be easier and less damaging to switch to POS now when BTC isn't really mainstream.  Once it does get much bigger it will be much more difficult to make the change.  I think the people who were in favour of an increase in block size have also made the same point.  A change later will be more painful for the whole community.

I agree that Peercoin didn't really go very far but I think Bitcoin has such momentum that you can't really compare the two.

Sadly, you were incapable of a meaningful explanation, as I suspected. The problem is that POS cannot achieve the quality of security that POW can, so your comparison isn't meaningful. That's why this design is the successful one: it works, lol (and hence why POS failed as a technology)

Mining will get unprofitable in some years or it will get stucked.
At this point switching is almost no risk.
Chip production (2017/2018) is down to 7nm but this will almost the end of the bottle neck.
With a big maybe 5nm.

A quantum computer could solve it (and maybe solve the whole bitcoin chain in milliseconds).
But who has one? I will buy it for 10 bitcoin  :P

Switching will be necessary - maybe earlier then we think, but right now not.
BitPay spreaded the Bitcoin under the seller.
Now Bitcoin first needs more spread for buyer and the normal consumer.

Well since you are such a genius I'm happy for you to explain why POS is less secure than POW;)

Already did in my first post in here. (see up up up)
That one you already quoted.

Lol I was talking to Carlton Banks but I'm not sure what you're referring to. Perhaps you could elaborate?

I know you are talking to banks - or my answer would not be friendly anymore :P
But I like the point you think of, but I think the way is not the right (hard switch)
Bitcoin was the new idea - maybe we need something new again (within bitcoin)

So we would need a mix from POS and POW maybe.
Solving "puzzles" is ok - but why not solve a puzzle like Boinc is offering.
YEAH - I AM YETI @Home - and I help SETI@Home ;)

So fill up the POW with sencefull things may help. It would be not a waste of power anymore.
Curecoin for example is for cancer research.
A pitty BOINC has no COIN - but its 100% science related and I think the oldest system in this public way I know (Seti @Home was my first software like this --- uhhm --- 20 years ago) :D
And now Seti is a small BOINC one :D
And there is always enough to calclulate - even all ASICs and GPU on the world could not solve all REAL puzzles of mankind.

You can rent supercomputer power at almost any big research facility for real big money. Why?
They dont need power over a day. They need it most time FAST for a SHORT TIME with MAX POWER. (emergency results, weather results, results of ill people and and and ...)
And big research companies, goverments and hospitals are buying those power.
ofc they are not using a normal pc or server for clustering - you could say they are like ASICs for the science people and always for special coding.
Not even one normal software you and I know are working on it - not yet ;)
And an ASIC, well --- looks not like I could use it for anything else.

I had the luck to see such a big cluster from inside and it is amazing!
Not to compare with even a big normal datacenter. Racks, too - but anything else was a new fantastic world :P
I am invited to see it again in 2 years and I will go again. I have so many new questions  8)

---

Under the line. Lets calculate something important and we all feel better with bitcoin. Having them in the own wallet and doing something good while using (and mining) them ;)

That is another good idea.  I also actually mined with BOINC and CURECOIN too.  The problem is it hasn't worked (at least not yet in terms of catching on to a big degree with those cryptos but SETI@home was huge for a while). 

I suppose this would be POW where the work was more than just securing the network.  Is there a specific name for this type of POW? 

Anyway thanks for contributing it was my intention to have a friendly discussion.  I'm not saying I'm definitely right I'm just interested in exploring these ideas:)

Maybe ROD -> ResearchOnDemand  ???

If there is no name for it I vote for ROD :)

POW is successful. POS isn't. If POS was some kind of silver bullet, I think that would have worked out by now. The exploits for POS depends on the specific implementation, I'm not going to waste my time explaining it to someone who wants to re-open a technical debate that was settled years ago, and yet hasn't researched any of that old material.

Nothing has changed since then.

Cool. I second it!

From what I understand (and I'm not saying I'm an expert although you clearly seem to think you are) that debate was never settled.  There are people who are far more knowledgeable than me that were on opposite sides of the argument but then you haven't even bothered to consider that or perhaps you are too arrogant to even think you may be incorrect. 

It was my intention to have a friendly discussion on the matter.  You seem to be incapable of doing that - the tone of your initial response made that clear.

You have added nothing to the discussion on an intellectual or even a social level so please feel free to leave.

The markets have spoken: POS failed. No amount of appeals to authority or name-calling is going to change that.


You seem to think you can make falsehoods true by virtue of simply saying them. That doesn't actually work. I suggest giving up on that strategy.

@Banks

Well, maybe you are right.
But if all would do the same, because it is the right way, there never would be winners.
Winners are those, who try that what other people are afraid of or change the ways.
Btw Bitcoin was such a "changing way" and you decided to stay @money?
Is there moneytalk.org, too? ;)

Sometimes it can be a point of time, only.
A lot of products, inventions, stuff, books, pictures, music, political "correctnes" and whatever was just 100 years, 1000 years or sometimes just month to early.

What will happen if the last bitcoin was found?
On Bitcoin is no 1% per year rule like with some crypto´s, who already are trying to find a solution that mining will never stop with those coins.

Even if POS failed and it is not a matter of time --- it will just stay a garbage-solution.
Then the thinking behind this solution and why ever POS was invented was to prevent power waste at the end and stop the need of miner to get the system working.

POW is working. For now, only.
POS was maybe a step to more ---- maybe to early ---- or just garbage. If we use water-, sun- and windpower it is well :P (no it isnt!!!)

But anyways, Soul_eater is right that maybe Bitcoin can´t handle it at the end.

Banks, what would you say to "such a mix". POW, but the calc-power is for usefull things like science research and not just for 1+2+1+3+1+? ;)
Just for the time it is POW and mining is used and nothing else - whatever "else" could be.

And Banks, your are an older member to this board. Ofc you know more and you already read a lot of more and maybe you are addicted to Bitcoin many more years - but never give up to help other people. This is a board for talking and I am always happy, if I search something, that there is maybe the ONE USER who is spending a nice and usefull answer to me.
Even if you are 10 level higher - if you have a question somebody on level 15 has to explain you - you want to get an answer with respect, or? Dont want to hang into this too much. Maybe you know each other from older posts already (big friends) - but have fun or work hard on a board or take a day of break and relaxing time  8)

A buddy is saying this sometimes and I like it much:
Dump people will maybe your nurse, cook or paramedic later - be gentle and you can live longer ::) ;D

And if you tell the dump people, that they are dump, then maybe they will change it and get smart.
And then you are as smart as the dump people and they dont like you :P
But if you help them, then they are as smart as you and the like you - and maybe then they can and will help you.

Ofc - I am one of those dump people, too. Because if I ever would say that I am smart, I proofed that I am not with the same sentence :P

Well, the "easy" answer is to fork Bitcoin software into a POS coin. Once that is done, announce that in 50000 (or whatever) blocks it will fork the block chain itself.  Then see how many people follow. You'd have a bit less than a year to convince people with 50000 blocks.

At worst you'd end up with Bitcoin and POS-Bitcoin. Discussions here will (I wager) do nothing (it has been discussed ad nauseam), putting the time into the software to implement it will show people that you are serious.

Once the split happens, watch to see what happens to the price of coins on the two chains in fiat terms. That will tell you what everyone thinks of the POW vs POS debate and whether it is a winning idea - or not.

(And to me this seems really off topic for the Dev and Tech section)

POS would require less energy therefore POW is wasting energy. Simple enough.

So you are proposing a POS coin change but keeping the 21 million limit? That imho is NOT gonna happen in my lifetime...

they can't even get the politics out of a 'hard fork' try taking transaction fees away from the network folk that are still doing pow

when it is no longer in any way/shape/form due to extreme difficulty makes any sense to mine BTC (or rely on that as major $$$ point)

(above is from my limited view on how this works..but I mean really ..the devs of any flavor core/classic get into nerd slap fights on a hard fork
or not.....a POS coin change would never happen (again imho) just from the egos/politics/power involved ..or lost there of....so it a no go from that start

again imho

(always take what I say with a grain of salt at one time in my newbie BTC youth of 2013 I DRANK the BFL kool aid of 'In 2 weeks' (tm BFL) always best

to keep that in mind on my posts) :) (such a happy clueless kool aid drinker I was in 2013...alas now I'm a a cynical ..is it all gonna go FUD and "Tulips' thru dev stupidity skeptic)

I miss my 'cute' newbie world view :(

POS and POW are not functionally equivalent. The so-called "waste" energy represents the "work" aspect of proof-of-work. Apparently too simple for some.

Carlton is correct. "There ain't no such thing as a free lunch."  Somehow, someone, somewhere is paying for the security. In POW, the work portion does that. The energy isn't wasted, it is the security. Whether the security comes from work or something else, you get the amount you pay resources for.  There are many long well written discussions about this if you google things like POS vs POW coins etc.

Regardless, the only way to settle it is to fork and let people decide for themselves. A top down, enforced approach has no chance of success in convincing everyone.  If you really think POS is better, fork it as above (or pay someone to do so) and let people decide for themselves which branch they want to use going forward from that point, maybe they use both - I think it would be a great experiment and would love to see how it turns out.  The thing is, no one has forked Bitcoin like this in the years since POS was proposed just lots of discussions about why they think POS is better without an empirical study.  So I think a lot is just argument for the sake of doing so without any intent of actually taking action while expecting "someone else" to implement it for them.


P.s.  QQ: "Dump" is not "dumb". :-)

The 'work' is not just work, its also work of distribution organized as a competitive model of creating the money supply, this value is partially preserved and part of it is wasted. Competition is a great mechanism for selecting quality, but fungible things have no difference in quality, so it has no function other than distributive, and the latter is centralizing very fast. When miners became different from the users an antagonism internal to the system was created. Users and miners now have different rationalities, the latter's optimal course of action isn't to increase the value or promote adoption, but to decrease it further and corner the market, so only the most cost efficent miners (the biggest farms with the lowest electricity costs) are able to make profit, driving the competition away, then pump to profit even more and then repeat the cycle if the pump spawns some competition. Because in PoW security also depends on distribution of money creation and PoW is centralizing I can't see how it could work without decentralizing mining profits. PoS isn't worse in this regard, but it is lacking in a better mechanism of dynamic distribution that wholly depends on distributing the profit of money creation.


I wonder what fork the miners would choose...
There will never be a chance for bitcoin to go to PoS, it was too late since before PoS was created.

interesting thought,  And it will not take another 100 years to mine the last 5 million coins.. miners should of decimated the blockchain by 2041 at the earliest.

I think everyone should have ponies and we should invent free energy and matter transmutation tomorrow and all live in peace and harmony without need for any money.

why not?  It seems just as likely as bitcoin moving to POS.

This.

Maybe another example:

The USA stands on nr. 1 in military spending.
If you look at the top 10 the USA spends as much as the following 9 nations together.

Isnt that a terrible waste of money?
The answer is: Security is damn expensive.

There seems to be a consensus of some people here that PoS is not secure, but I didn't see anyone elaborate as to why. Is it the monopoly problem or is there something else?

Please (really, pretty please) don't send me to Google it. I'm a newb, I admit, but I also spent a while reading the PoS vs. PoW posts and articles, and couldn't find any other consensus argument beside the monopoly problem.

There are a number of possible attack vectors but perhaps the most well known is called the NAS (Nothing At Stake) issue.

Basically the whole "benefit" of POS is that it is ultra-low energy which means that solving a block takes virtually no effort (so creating 100+ different blocks at the same height would be fairly straight forward just using standard hardware).

Choosing the "best" block for the consensus chain is normally based upon the previous block and something to do with either the UTXO's being used (for Bitcoin clones) or to do with an account id (for other implementations) but it would be very simple to withhold your "best" block whilst preparing more blocks (and the more of the UTXOs/accounts you control the easier this could become) in order to do a "re-org" (i.e. to re-write history).

It should be noted that blockchains by their very nature can't avoid re-orgs as P2P consensus is dependent upon timing between nodes which is unpredictable.

If such a fork happens and other nodes aren't sure which fork will win in the long run then they would have nothing to lose (hence NAS) to simply create blocks for every fork "just in case" (to make sure they don't end up losing out) which could lead to longer and longer forks (and it would make rational sense to create blocks for each and every fork if there is any sort of block reward or other benefit from minting new blocks).

Larger re-orgs due to such an issue/attack could likely lead to a very unstable blockchain that would presumably lose the faith of its user base (basically this could be thought of as being a sort of "tragedy of the commons" issue where the common property is the various forks).

Basically the only real defense against this kind of issue/attack is centralisation (which is not at all what one hopes would ever occur with Bitcoin).

I actually liked the way Bitcoin is right now - mining. If POS were to come, than the early adopters will have very huge advantage. Which will make more medias advertise Bitcoin as a 'ponzi'. I do not think the developers will make Bitcoin POS anyway. Your idea is good but I'd say a lot of Bitcoiners do not like it.

CIYAM, thank you for the great explanation.

Is the kind of attack that you described can be successfully implemented without holding 51% of the coins?

I don't know if any math analysis has been done to work out at what % such an issue/attack would start to wreak havoc but as stated if all parties "acted selfishly" (which is what is assumed in Bitcoin) then there is no reason to think that even small % holders wouldn't create multiple blocks (one for each possible fork) so they would all end up colluding in what would then amount to most likely an even bigger problem than >50% (as the forks would never end).

Also note that to start a fork you only need to withhold your "better block" just long enough after an inferior one has been minted (clearly the more minting power you have the longer you can make such a fork before it is "published" but even a fork of 1 block could start such a chain reaction and that could be done unintentionally even).

It should be noted that "automatic checkpoint" mechanisms can limit the length of any particular fork but you are still potentially just going to start up a bunch of new forks after such a checkpoint has occurred (and once faith in such a blockchain has been dealt this kind of a blow I couldn't see the coin really having a future).

Basically POS only works if the coin is controlled by a cartel (which won't work against itself in creating and continually extending such forks) or if the (vast?) majority of players do not participate in such NAS behaviour (i.e. they only use the standard software that won't behave that way).

Those that argue "but we haven't seen this happen on XYZ" simply aren't admitting the most likely reason why that would be the case (i.e. because XYZ is actually under then control of a cartel and of course this is almost impossible to either prove or disprove). Also if an alt-coin that isn't worth very much is using POS then it is far less likely to be subject to such an issue as there simply isn't the financial incentive to care (and a smaller community is perhaps more likely to have more honest players).

Of course the standard software would have to be modified to take the NAS approach (but presumably that wouldn't cost much to do if there was potentially a lot of money to be made from wreaking such havoc).

IMO there are other ways that energy consumption could be dramatically reduced that don't carry such a risk (and I'll be elaborating more upon that later this year most likely).

Sorry OP you are not Satoshi here. What Satoshi did was right and is still working immensely worldwide. POS coins will never ever succeed and most importantly it will decrease the scalability as more people will never trade with BTC anymore rather than staking it for more profits.

Tl;Dr; POS will never happen. If you are not satisfied then go find another POS altcoin.

Moving bitcoin to POS will make it dead, bitcoin POW mining is what makes it price stable and worth,if bitcoin algo changed to POS then its price will drop because if there will no investment and cost to mine people will start dumping it for lower then market price that will make it dead.

What Satoshi did was dead when wallet mining was dead.


CIYAM are you working on usable computation of pow, improved pos or something else?

IIRC there are some academic papers on the topic, however I don't have any interesting links to hand.

There are some deep problems with POS. The election of who should stake *should* be a lottery that participants have no control over. One vulnerability arises because the election process relies on the block chain to generate entropy. Elected people get to write to the block chain, thus changing who should stake next.

Without something like POW, it's possible for someone to retroactively take the block chain, alter it so *they* are chosen, and then they can create the next block. He can even produce a block that allows him to stake again.. and so on.

POW prevents this, making more difficult with every block to rewrite the chain. POS doesn't have anything like this, the CPU power required to grind variations of the chain which favour the attacker is rather small.

Satoshi discussed and anticipated the issue, so saying what Satoshi did was dead when wallet mining was dead is not a factual statement.

Some of what Satoshi said at various times in 2010:

Obviously miners will choose the POW fork since the PoS fork doesn't need them.

If PoS was really a better solution a fork of the bitcoin software and then a fork of the block chain at some future specific point would easily be possible and is not dependent on the miners.  Both forks would continue for some unknown period of time, perhaps forever running in parallel with different transactions, balances and the like.

What I am working on is a method to reduce the amount of "work" required for a POW implementation by limiting the work to instead be more of a "proof of active account" (with all blocks needing to be minted by such proven active accounts).

One way to picture this would be if we had 1 in every 1,000 blocks requiring proof from every possible minting account and the blocks between these proofs being minted in accordance with a PRNG that will determine the "best account" for producing each block.

So it doesn't attempt to replace POW with something else but instead "spaces that work out" allowing for much greater energy efficiency (with the trade-off being that it does require the use of accounts for minting).

I certainly wouldn't expect Bitcoin itself to use this approach, however, it might be something that will appear in a side-chain down the track.

There have been a lot of great criticisms; PoW work isn't a "waste", PoS doesn't do the same thing PoW does, Nothing-at-Stake has shown for a long time that distributed consensus isn't possible, markets have not been convinced the PoS is superior, and cartelization.

I'd just like to point out that if you want to dive into this pool despite all the warning signs, you might want to consider what you're getting for this high risk. In the best case scenario we're looking at a currency that, by design, is controlled by a benevolent handful of wealthy stakeholders. Doesn't that sound familiar? There's only maybe a hairs difference between the objectives of PoS and actual existing financial institutions today, except these financial institutions are faster, cheaper, and more secure.

If you're willing to give up decentralized consensus and rely on benevolent stakeholders in your design of a currency, then there are much better ways to do it than PoS.

Oh, I wasn't aware, thanks for correcting me.


Neat, its like pos integrated inside pow instead of the usual pow/pos combo. Does this mean that the new money supply would just be created by minting, and mining would just be a requirement and not actively rewarded with fees and new money supply?

I wouldn't use the term POS as *stake* has nothing to do with it (i.e. how many coins you do or don't have is irrelevant) so it would require a new initialism (perhaps "proof of account" although I think POA has been used to mean other things already).

But yes the proof is only used to create/verify a new/existing minting account and results in no direct reward itself (any rewards for fees and/or new money supply are simply awarded to valid minting accounts in what is effectively a random manner).

Bitcoin POS mmmm that would be nice and allow much more people to "mine" which (I think) it was one of the beauties of Bitcoin at the beginning.

Still.. this would destroy bitcoin at the current stage.

In a hypothetical scenario where the consensus mechanism has become too centralized, a move to POS instead of another POW mechanism would be beneficial for BTC, IMO.

How can POS destroy Bitcoin? If Bitcoin move to Staking, Im sure the price will go high and it will be fair to everyone.

not sure at all.....

Would one be able to code Windows 10 on Windows XP (Old to New Apple & Linux codebase applies as well)?
Think that time has long passed (1Mb anyone)?
Having the idea of producing an interest rate from a 7+ year old prototype (sure 3rd parties, as the prototype holds the most value in prestige working condition)?
So research could be very much WoW (thinks about users who think Sha256 or Scrypt is still the only codebase over the years)?

Mining is fun (well, most for the little miners, and more in the past, but that's still that). I helped a lot I think. Also, what to do with all the people that bought mining hardware ? What to do with the fex companies living of mining hardware sales and exploitation ? That's facts that need to be taken into account.

Maybe switching to POS would be a good idea in 100 years once the 21,000,000BTC have been mined. But, right now? Nah.

Carlton Banks has it. 

PoW is built to run on any amount of excess energy.  Any epsilon will do.  Bitcoin would run on a microjoule per year if that was all we could spare. 

It is PoS that encourages more waste of energy resources, as tokens are not physically tied to energy.  Of course PoS is much better than fiat, which ties everything to fraud, but that's another story. 

What do you mean?

I mean that if you can exchange currency tokens for energy (i.e. "buy gas") you will do so with consideration for how easy it was to obtain said tokens. 

Right?  If you had to bust your ass for a few proof of work tokens, you might be less willing to spend them all on joyriding in a gas-guzzler. 

Now consider if you received the tokens not because of work, but simply because you had previously obtained a stake.  Now, you (not everybody, but you) got quite a few tokens without doing any work. 

How about that joy-ride in the gas guzzler now?  Still not?  Maybe with a bit of peer pressure from that special friend? 

The point:  Free money leads to wasteful spending decisions. 

Unlimited private free money leads thusly always to unmitigated disaster, but that's called "fiat" and is another story.

First the distinction between mining as work and staking as free is unfounded, staking requires the (arguably) same type of work mining does, but it requires less electricity to do it. Secondly, I disagree with your points on spending, they seem to be very close to 'trickle down economics' thats used to justify giving free money given to the most wealthy. Free money does not imply spending, this has been shown not to work again and again. And in any case, spending itself is not the same as wastefulness, while spending in general is good for the economy and the problems of fiat are more a confusion of cause and effect (they see that in prosperous economies there is a lot of spending, then they try to force spending to achieve prosperous economies and fail), wastefulness is the spending where value is destroyed and where there exists a viable alternative where this same value would be preserved.

OK sorry if I wasn't clear.  My background is in physics.  By "work" I mean specifically force times distance, a quantity with units of Energy.   You are right, staking does require a nonzero amount of this work (energy expended), however the work required (the energy required) is not proportional to the amount of public coin issued.  Tying issuance per token to energy expenditure makes a whole lot of sense, from a "theory of value" perspective and also from a energy-budget-for-society perspective.  PoS might work and might even have some advantages in avoiding mining centralization but as far as the energy footprint goes:  PoW is the best we have.  Once we have a proof-of-negative-entropy coin I will change that statement.   

I also didn't mean to imply that free money implies spending in the sense of helping the economy, you are right to criticize that viewpoint. 

I don't think POS is the way to go for bitcoin, there are plenty and I mean plenty of altcoins out there that love their POS but for bitcoin I don't think it would do it much good.

I dont know if it's meaningful to bitcoin network, but eth will switch PoW to PoS soon.
It's the second bigger digital currency, so... let's see how it will be.

for bitcoin, right now, i think like someone said:
"don't mess with it, it's working!"

As a physicist you know energy is plentiful, so you at least have to talk about electric power or specifically hashrate (the relevant work done for blockchain security), the latter is what is rewarded with newly issued coins. I agree that expenditure works well for value, but its the expenditure of value, not electricity that works (if we abstract other factors, the logic is that miner pays X for electricity and won't sell for less) this expenditure of value is the almost same in PoS, it just has another from (staker pays X for coins and won't sell for less), the difference is that for mining electricity is spent, and for staking only liquidity of value is spent (and so nothing is really spent as the process of reversing it costs very little relative to electrical power), this benefit brings its problems on the value side, the ease of reversing the process also means it is less effective for determining value and consequently works worse for adoption.

Interesting point about proof-of-negative-entropy, negentropy is a very useful concept for thinking about systems, however because its as general concept as entropy, I think it describes all existing proofs. Every type of cryptographic proof is a proof-of-negative-entropy, the work done to validate transactions in a blockchain exports entropy from the system because it verifies transactions and proves that the data is the same, so no new information for this specific transaction is possible. A blockchain is order that exports disorder by organizing representation of data, to optimize this entropy-export, the least ammount of value should be required for verification. Right now PoS seems to me as an improvement as it 'recycles' value for different functions, but of course there is still much room for improvement. If crypto is to be an improvement in regard to existing financial institutions, it has to deliver what the banks lack, efficient and fair risk/uncertainty/entropy managment.

The ecological issues are the same, we need more efficient ways of exporting entropy, not a decrease in energy consumption, trying to decrease consumption only potentiates the inefficiencies of the systems.

My layman's understanding is that POS in general has at least one big theoretical exploit just waiting to happen, and it probably will once there is sufficient value on a POS chain for a blackhat to bother coding up the exploit.

So ethereum switching to POS seems like a nice test case of that possibility.    :-)

Anyway, the short answer to bitcoin moving to POS is:  never gonna happen.  too controversial.  changes to bitcoin protocol require consensus.   end of story.

Hey, thanks for actually hashing out (no pun intended) the negative entropy thing which I had just thrown the term out there.  I first heard of tying negative entropy to currency in a book by Frank Meno called "Cats, Aether, Gyrons, and the Universe:  Something for Everyone".  He didn't go into even as much detail as you did in that paragraph in specifics. 

Anyway I don't have much to add but as far as "improvement in regard to existing financial institutions" you might like this post:

https://bitcointalk.org/index.php?topic=1467410.msg14807275

And on the energy analysis topic you might like this one:

http://frass.woodcoin.org/msats-per-joule/

Cheers :) 
 

The economic value of a good or service is not equivalent to the joules required to provide said good or service. They are only tangentially related.

https://mises.org/blog/labor-theory-value-refuted-nobody-cares-how-hard-you-work

Thanks for the link.  I'm still struggling to come to terms with theory of value and transformation problem and what relevance they have to current conditions.
Why don't they mention the author of the theory of value by name do you think?  Seems odd. 

"In a situation where value is measured almost strictly in dollars (i.e., as in the case of profits measured by a large company) an employee that brings in the most revenue or a manager that oversees a profitable division will be rewarded, regardless of how many hours he works."

Yes, well, if value is measured in dollars the theory of value is specifically refuted, as I point out in this poorly written post (sorry): 

http://frass.woodcoin.org/fiat-feudalism-a-primer-for-marxists/

Ok inb4 offtopic: Theory of value is important when considering the basic mechanisms of a currency. The link by DumbFruit is dumb, the author has very little knowledge of what labor theory of value is (or more likely very little knowledge in general), but I guess thats already implied by the context of the whole 'Mises Instutite' austrian economics thing.

You propose that fiat contradicts the law of value, I think this is false. "Under fiat feudalism, the yardstick of value is explicitly no longer tied to labor." It is true that it isn't tied to labor, but the problem is that it never was immediately tied to labor. Labor theory of value does not imply an immediate relation of prices and value, only that value regulates prices in the long term. Fiat could be considered in the same way, its costs are not immediate labor, but mediated labor, because to issue new money the costs a goverment pays is credit. My point isn't that theory of value is correct (I think it is partially but not as a general theory of value) or that fiat is good, but that theory of value is not an empirical theory, it can not be tested and falsified, its a speculative theory and its critique must be conceptual. Although both marginalism and labor theory are partially useful for theory of value, neither is sufficient for it, both lack in a historic analysis of value in general and epistemology required for it. It is my opinion that we currently don't have any viable theories of value, we have some great starting points and new data to base it on, and even great ideas (see Ayres), but no viable theory.

Here are some relevant links:

Ayres: http://sites.insead.edu/facultyresearch/research/doc.cfm?did=46744

some history:

https://www.academia.edu/9262850/MONEY_AND_RUSSIAN_REVOLUTION_Why_Cultural_HIstory_Needs_Its_Own_Theory_of_Money

https://www.academia.edu/11718405/Neolithic_versus_Bronze_Age_Social_Formations_A_Political_Economy_Approach

Neat.

If you think it’s offtopic then I’ve successfully made my point. After all, I’m not the one that tried arguing that the value of Bitcoin is somehow protected by the energy expended to make them or, following that, arguing that PoS energy kind of does the same thing.
It was no less off topic here, but notice that wasn’t your response;
https://bitcointalk.org/index.php?topic=1454710.msg14806179#msg14806179

Oof! Hit me right in the feels. Excuse me while I dramatically swoon and collapse, sprawling to the floor.
That’s because value is invented in the minds of Homo Sapiens through economic calculation.
“The value of money, as we have seen, depends upon the subjective valuations of the people who hold it. And those valuations do not depend solely on the quantity of it that each person holds. They depend also on the quality of the money.” -Henry Hazlitt

“Every man who, in the course of economic life, takes a choice between the satisfaction of one need as against another, eo ipso makes a judgment of value. Such judgments of value at once include only the very satisfaction of the need itself; and from this they reflect back upon the goods of a lower, and then further upon goods of a higher order.” - Mises
https://mises.org/library/economic-calculation-socialist-commonwealth
https://mises.org/library/economics-one-lesson

Again, joules expended to provide a good or service is only tangentially related to the value of said good or service. Bitcoin's value isn't intrinsically tied to it, and whether or not PoS has some similar work would also not tell us anything about the value of a PoS coin. All it could tell us is if the value of work required to create said currency exceeds the value of said currency, then the production won't survive very long in the marketplace.

Now, work expended in Bitcoin does contribute to it's security which people tend to value in their currencies... But that's a different subject.

You misunderstood, I said that theory of value is relevant for this discussion and not offtopic, of course when creating money and value its useful to know what money and value are.

I don't see how theses on objectivity/subjectivity of value has anything to do with us having an adequate theory of value, yes the ground of value can either be objective or subjective or both, but this isn't sufficient for the basis of a theory of value, mathematics is also invented in the minds of Homo Sapiens Sapiens, that doesn't mean it isn't objective in the epistemic sense, origin isn't function, what theory of value and money must do is to explain the function adequately. I have read some of it, he seems to have some very fundamental misunderstandings about reality and knowledge, and listing unfounded claims without reasons.


Things don't have to be intrinsically tied to have an effect, the expended value in bitcoin used for security affects value, at least as a condition that it can have a non-zero value, it also very likely determines the particular value, how and to what extent is the question, the fact that it is not an isometric or immediate relationship doesn't mean there is is no relationship.

I'm not sure we're on the same page. I was specifically arguing against the idea that the amount of energy used to provide a product decides some portion of the market value of that product.
It was put forward that because it takes more energy to produce Bitcoin it must have a value that exceeds PoS. Put another way; because PoS doesn't necessarily cost very much to move and produce, it is a less valuable currency.
Peter Schiff implied the same sort of fallacy when he was insisting that Gold was a good purchase when it fell to $1200/oz because he argued that if it fell any lower than that it would cost more to mine than it was worth. It then fell down to roundabout $1000/oz. The point is that $1200 was clearly not some kind of floor on the price, just because that's presumably the cost of production.

It's putting the cart before the horse. Gold isn't valuable because it costs alot to produce; It costs alot to produce because it's valuable.
Similarly, bitcoin's aren't valuable because they cost a lot to produce, they cost a lot to produce because they're valuable.

It depends on what you meant by "adequate". I took it to mean we don't have a way of even theoretically deterministically arriving at prices. That would be true because value is subjective and non-deterministic.
That doesn't mean we don't have theories that at least show us why it's subjective and non-deterministic.


I can see that the fact that they're valuable, which drove up the cost to produce them, also made it more secure, which may make it more valued by consumers, and so on, but it's important to see the direction of causation here. I know it wouldn't be right to say energy used to produce bitcoin doesn't have anything to do with it's value, that's why I said it's tangential.

I do not see the cost of production as a way to argue in favor of PoW, or to show some failing in PoS. In fact, the whole thing is pretty ironic considering PoS' primary selling point is that it uses less energy to provide it.

Thanks for comments :)  I think this discussion is appropriate and have always been intrigued by the linguistic coincidence of value from proof of work and theory of value from work. 


I'm not sure I understand this point.  If I print a million new Harriet Tubman 20s, where is the mediated labor or credit cost?  If I create a bank account with a trillion USD in it, as Lord Blackwell was recently complaining about, where is the mediated labor or credit cost? 


Hmm.. sounds about right.  Perhaps the topic is more on the psychology side than on the quantitative economics side. 


Neato, thanks!  I'd perhaps never even heard of exergy.  These will take me some time before I can make a decent comment.

You also might be interested in this classic:

http://www.columbia.edu/~ram15/grash.html

Bitcoin won't go POS. There are many alternatives which started as POS, if you want a POS coin.

POS is useless anyway. If it happens, It will create a negative effect on the prices.

Maybe POW for bitcoin can be used as a measurement for a stable economic indicator for central bank interest rate targetting or GDP uses. If bitcoin price skyrockets so would mining efficiency until it cannot, and then a new tech breakthrough would be needed (hence the GDP/economic indicators since every boom bust happens around new tech breakthroughs in the market)... i've always thought thats what POW will amount to way later down.

Yes, surely this is a very practical question of the actual organization of production, if there are some people that can mine for less, they will use the opportunity when the value drops, but what seems to me almost as important is their share of production, if they have a monopoly it seems that the optimal for them is to keep the profit rates at the level that exclude competition and still give them maximum possible profit, because thats a better situation for them than just temporarily increase profits. The absolute equilibrium of value is just 0, everything else is uncertain, variable and depends on context but that doesn't mean there are no rules in this chaos.

For bitcoins this is true, because it is designed for this to be true (difficulty), however this doesn't mean that its true in general, or that this is the dominant factor, we could for example think of it as a feedback loop of value, that increases the difficulty and difficulty that increases the value.


No, prices could only be determined if we determined prices to be so, prices can be both deterministic and non-deterministic (otherwise either competition or price fixing would be impossible in practice). But its important to distinguish between price (as quantified exchange-value), exchange-value, use-value and value in general, and this is what I mean that we have no adequate theories of value, no valid scientific model of value in general and exchange-value in particular that would show why and how it is subjective/objective and non/deterministic in a way that physics has a adequate model of atom, and because it has it knows that it can't measure spin&location at the same time.

It's not the direction of causality that is the problem, is not a either/or both can determine value more or less in more and less determinate and immediate ways. It seems ironic, because there are many functions done by the same mechanisms in crypto, Bitcoin is a very elegant construct, but elegance is inefficient, its always better to separate functions and optimize them one by one than to bundle them together, except for actual use where they have to be bundeled for ease of use.

You don't create the million in a vacuum, if you do you have a new, probably worthless currency. If you create a million in a monetary system that has rules for its creation the rules have some cost associated with it (buy goverment bonds, lend money/assume risk etc.) and the other type of credit is enforced on the population as the decrease of real wages and general buying power and living standard. I've heard about how Bitcoin is supposed to be apolitical, and it is to a degree, but only because it has its monetary policies fixed, what would have to be determined is if they are in fact good monetary policies, and thats for alts to explore.

This is great, I've always had a problem with Gresham's law, because it was stated in its simple, false form.

What evidence is there that such rules are followed?  Rhetorical question of course, with fiat there can be no such evidence.  There is plenty of evidence however on multiple levels that the so-called rules are NOT followed and tokens are indeed created in a vacuum, though you're right there is certainly a lot of associated costs with this including most obviously decrease of real wages, buying power, and living standard, but also costs of structural inefficiency which are much more difficult to quantify. 


I totally agree!!  With public coins monetary policy is now a real thing which is adhered to rather than a pretend thing which could never be verified.  Now that the thing exists, we need to explore the space and see what works.

such thing wouldnt even be possible.. Bitcoin was designed to be mined it was never intended to be POS.. to make it POS your basically saying delete all information on Bitcoin and render Bitcoin in itself useless just to make Bitcoin V2 and hope it picks up as quick as the original. which is unlikely. Bitcoin is fine where it is. if it's not broken don't fix it

I might agree here, the 'value' of something is usually related to the supply and demand of that thing.

It is true that Switching to POS would be problem for Bitcoins as who are holding large amount of bitcoins will be getting benefit without mining as POS concept is like that, so i also think that Mining is good option for Bitcoins as who ever mines will get the benefit of Bitcoins,

POS is good for Altcoins as they are just starting it newly and they have barrier of coins supply.

the effect of moving to pos will be more negative than positive.. with the current wealth-distribution huge holders, also those temporarily holding big amount, receiving most benefits from a pos transition. not to talk about economical disaster. don't forget pow gives btc more value (electricity, hardware companies, researchers on field of pow/blockchaintech, and so on). in fact most of the value comes from PoW.

Isn't POS already available with some sidechains?

Yeah make it POS and bitcoin will be a pump&dump fest more than ever. It is already too volatile and POS will make it more and more.

That's a big change and the chances of fking bitcoin up are too high. It won't happen.