Bitcoin Forum

I'm not too technical, but I know bitcoin has proof of work built in which is how mining works. Why doesn't bitcoin have proof of stake? Proof of stake seems necessary to ensures the security of a crypto network long term.

I'm reading about PPCoin which is the only coin with proof of stake built in. Ppl are saying this makes it the best alternative crypto-currency blah blah blah

If an alt coin that has proof of stake (currently only ppcoin) became popular, would bitcoin implement it?

I heard that there is nothing at stake with these proof of stake chains.

No. Bitcoin is and always will be proof of work.

lol, Actually the ppcoin started trading on BTC-E.com (http://BTC-E.com) yesterday, and it has a bit of value. I don't think there are other proof of stake coins, I may have missed something..
I'm a bit of a speculator, I'm thinking ppcoin will blow up and demolish all of the other alt cryptos due to this proof of stake aspect.


Isn't the beauty of bitcoin that it can be changed? How do you know exactly what the future will bring for bitcoin?

bitcoin > PEE PEE

+10

I saw you on a ppcoin thread, you just like saying PEE PEE hahaha (now they are now talking about changing the name).

Obv BTC beats the pants off all other coins combined.

Nothing at stake as in when you try double spend bitcoin you have to do it when there are 0 confirmations or waste a lot of money to do 51% or Finney, but for proof of stake you don't loose anything when you try to cheat. Right now PPcoin is some hybrid apparently (details are harder to find than for Bitcoin), but my gut says that when it migrates to pure proof of stake many bad things will happen.
Let me quote one of the devs (with some bolding)

Don't you know ppcoin is the successor of bitcoin? bitcoin is unsustainable and will crash soon!
There's a reason the ppcoin price is skyrocketing pump'n'dump! Better buy in now while they are still cheap!

+1
But this is only if u think there's room for alt cryptos in the eco-system medium term.
IF YES, THEN I C no reason not to have ~1-10% of your crypto portfolio in each worthy coin: PPC, LTC, NMC etc...
They are likely to end up being ~5-10% of the market sooner than later, because traders are proving they love them, and traders bring in a lot of new capital. Tons of risk though.

Although I haven't looked into PPCoin in too much depth (or any of the others for that matter), the occasional discussion here about "proof of stake" seems compelling. It seems to allude to the idea of a "benevolent monarch" who is compelled to act honestly because quite frankly, His/Her best Game Theory move has to maximise the benefit for mankind. This seems to beat the "proof of work" concept where the stake may be positioned elsewhere. Thus, in Bitcoin's main fork (what most people think of as THE Bitcoin), large miners (who control fees) could act against the best interests of users.

As a simple example, a large dominant miner could, theoretically, keep transaction fees low for a long time to pump up a bubble (low fees --> high monetary velocity --> high exchange rate), and they will then disrupt the network by spiking the minimum fees (setting off a crash). Meanwhile, this miner has heavily invested in some alt-chain, so that when users go looking for alternatives the miner makes a huge profit. These sorts of dirty tricks or 'attacks' are not so easy when currency issuers have to prove that they have a legitimate stake in what they are issuing.

LULZ I can't believe I wrote "blahblahblah" in the first post of this thread and a guy named "blahblahblah" chimed in with a really competent post! :)

Regarding nothing being at stake by generating POS blocks on attack chains, wouldn't this hurt the value of your coins on the legitimate chain? To be generating POS blocks, you need to have coins. If you have coins, you have an interest in the security, viability, and ultimately the value of the block chain. If you mine on an attack fork for no other reason than "well why not, it doesn't cost me anything" then you may be hurting your value on the honest chain, even though you're not actually investing hashing resources into it.

You're welcome... I think!  ;)

It seems to me that while it can be possible to forecast the behaviour of rational behaviour, it isn't possible to forecast every possible irrational behaviour that makes up real world attempts at breaking the system.

That is why sometimes it makes more sense to just let the coin out into the wild and wait to see if it does get broken - then fix it.

Its like having a focus group without group think! :)

They moved this topic to the alt crypto board because it mentions alt cryptos? What I'm trying to get at is the idea of proof of stake for bitcoin.
What would it take to get proof of stake implemented in bitcoin? A surge in the value of ppcoin would be a start. But what if ppcoin fails? Will the idea be perceived as a bad one for bitcoin?

PEE PEE is just for emergency circumstance. So BTC still stands the trend top.

I also hope Bitcoin will gradually introduce POS as this would allow to totally reduce the waste of resources happening with mining right now and that would allow to run the network with essentially no fees. People with stake would keep the system alive and protected even if they don't get fees.
Fees would still exist as there wouldn't be room for all non-sense transactions people could make up but the block reward as an incentive to mine would essentially be pointless and just a way to initially distribute coins.

I haven't looked into PPCoin too closely but would see buying it as vote to add POS into Bitcoin. If they don't have tons of pre-mined coins like Freicoin, if they have some well known supporters from the developer team, if they have a significant part of POW mining to bootstrap, I would consider buying.

(Why the hack did litecoin not die yet? Why is it at $4? Why? This scam with no innovation pisses me off. Sorry for off topic.)

Bitcoin can't possibly introduce stake.

And bitcoin will not waste that much energy.  Energy wasted = Exchange rate * block reward.  So, as block reward halves, waste drops.  This doesn't happen with PPC.  Well, moore's law reduces waste, but increased miners add waste.  So PPC is just waste right now because it is getting growth.

4x the block generation speed, which is useful for smaller transactions and to take the load off bitcoins block size limitations, and an encryption method which is more ASIC-resilient and less likely to be 51% attacked as a result, would indicate some thought out innovations with the design of Litecoins. If both were introduced at the same time, Bitcoin would've died off years ago and Litecoin would reign supreme instead.

I keep seeing people not knowing much history of altcoins claims as if scrypt hash was litecoin's 'innovation'. It was done by ArtForz and first debut was in tenebrix. coblee just copied it.

https://github.com/ppcoin/ppcoin/wiki/History-of-cryptocurrency

I agree with your disagreement. Your thread is obviously not about alt coin discussion and much more towards bitcoin itself... Did the mod even read your post or read it and plain stupid or read it and is just a purist Nazi? Under the circumstances I hope he just didn't read...

Fair enough. So why Tenebrix die off?

No long term incentive to mine it (no block reward halving was implemented)

Well I see a slight chance to get POS into Bitcoin if it was introduced over a period of years so that mining hardware producers can adapt to that change or rather find their peace with it.
Why halfing the block reward won't cut it to not have several nuclear power plants produce the energy for mining follows from the price 1000-folding in the same time we cut the reward in half. This halfing just doesn't cut it. I would guess bitcoin will trade for $10,000 before we next half the reward. This will mean that one day of block rewards will be worth more than all the ASIC companies invested together to get started. Do we really want to have this mad amounts of money into POW mining?

Can someone explain to me in layman's terms what proof of stake means exactly?

Blocks are given to you based on obtaining and keeping coins for a certain duration (coin age) rather than by mining competitively to solve blocks through a lottery system (proof of work).

The main problem with it is that it seems to introduce vulnerabilities (https://bitcointalk.org/index.php?topic=169204.msg1761154#msg1761154), and the major advantage is that it's more power efficient and makes a chain somewhat more resistant to a PoW 51% attack.

Finally an informative answer :)

Wouldn't that encourage people to hoard coins? So I keep getting more blocks as I have more coins (or more stake.)

Yes, but the an even stronger incentive is created when a coin is expected to appreciate in value as BTC has been doing recently.

according to the history, how could trc priced higher than ppc ? It has no innovation or even author and has just born half a year.

I don't understand what TRC has to offer?! Is it just a crappy LTC? If yes, it's WAY overvalued and PPC should overtake it pretty fast.

Certainly I believe it creates a balance between spending for just so not the lose value (fiat) and store of value (gold). After a while remember, not that many coins will be added in circulation, but there still always will be, so people have incentive to hoard to gain value, but with the ever increasing value, you have an incentive to spend (basically creating another means of supply/demand through the currency itself)

So this coin would essentially be totally controlled by MtGox (i.e. their reserves).

Mt.Gox doesn't trade PPCoin.

Can someone explain the PPCoin block reward more indepth.

this  ?

An ideal proof of stake chain would allow you to mine with just your standard client ticking the "generate coins" checkbox. This checkbox could default to checked if you hold more than x coins assuming a trade off between some moderate computation costing moderate amounts of energy and noise and the chance of contributing to the network security within the next week/month.

MtGox would not control Bitcoin if Bitcoin was POS as MtGox does not control 51% of all coins. By far they don't.

MtGox would have to pay interest on coins stored with them as else people would not hold larger stashes of coins there. Same would apply to any hosted wallet.

this

Yeah.  The 51% problem still exists for PoS systems, but you just need 51% of all the coins available to fork the chains instead of 51% of the network hash power.  The tradeoff is that 51% forks of PoS coins are not readily reversible, eg, if your PoS chain has a 30 day waiting period before claiming PoS blocks and you obtain 51% of all coins then wait, then decide to fork the chain, removing any amount of blocks in the chain up to the last 30 days still leaves you, the original forker, with 51% of the coins and perfectly able to commit the same exploit again.

PoW, by contrast, can just roll back a few hours because sustained 51% attacks appear to be extremely rare and also extremely costly.

But the bigger problem with PoS is double spends by creating short PoS block spams of length six or so.

MtGox was symbolic. Think banking cartel, "the rich" and governments. So what's the difference to today?

Also I wouldn't even be so sure if it's more energy efficient. Maybe distributed specialized hardware (ASICs) is better than every John Doe with a few coins running their computers instead of just keeping paper wallets, despite all their coins together not even adding up to 50% anyway.

It's not only about electricity. ASICs are a huge step forward for the environment as ASICs cost so much to build (for now) that the overall calculation
profit = mining output - mining effort = mining output - electricity costs - hardware costs - bandwidth costs
with profit close to zero and mining output being 25Ƀ per 10 minutes:
3600Ƀ/day = electricity costs + hardware costs + bandwidth costs
make the equation's big post shift away from electricity to the hardware costs.
With POS the equation should be:
3600Ƀ/day = Ƀ holding "costs" + electricity costs + hardware costs + bandwidth costs

People would invest less into electricity (that destroys the environment) and hardware (that also ends up on the waste dump very quickly) and more into Bitcoin itself to protect Bitcoin. The perfect solution to achieve this might not be available yet but I find it very intriguing to search that solution.

My problem with a heavy POS dependency from the start is the bootstrapping. How should this coin be evenly distributed ever? Therefore I hope Bitcoin slowly adapts POS at some point years from now to stop the sin of wasting tons of uranium on securing what could be secured with tons of Bitcoins as well.

Well, bitcoin block reward will drop and less electricity will be wasted.

Wrong.
Blocks will get full this year and people will start paying fees -> more electricity will be wasted.
Price will rise much faster than 100%/4years -> more electricity will be wasted.

I hope the stake can have more types. Just thinking the decentralized network as the decentralized bank, if it could specify the stake as many types, like 1-month stake (a% interest), 3-month stake (b% interest), 12-month stake (c% interest), 3 years stake (d% interest), etc. (a < b < c < d).

We can configure the stake types for a certain amount of coins and if the money is in stake, we can also force terminate the stake status & don't gain the interest.

I think currently the stake in PPCoin is too simple logic, can not have some greater effects. Actually, the stake can have many usages.

A "Perfectcoin" would have an ideal balance of all features. While a single cryptocoin (bitcoin) can change and evolve over time, I don't think this is enough to serve the global market. There must be at least 5-10 coins with different properties that create a Perfectcoin balance.

This balance already exists (regardless of the fact that bitcoin has 95%+ of the capitalization). After reading more about PPCoin and dev Sunny King, I vote PPCoin into my vision of a perfectcoin balance:

BTC - the best coin
LTC - another version of the best coin, for the lulz
NMC - unique name-based protocol
PPC - POS integration
DVC - structure supports development

We can explore the effects of the various properties of these coins on the market simply by owning them. I keep ~2.5%+ of my portfolio in each one of these coins.

This thread seems to conclude that POS is VERY interesting, but needs time to incubate in PPCoin.

This is why I made MC2 with favour being passed to the PoW blocks -- I didn't want the PoS system eventually overpowering the PoW system because a system which gives interest simply upon holding coins tends to make the rich much richer and increases income inequality in the long run, which is an undesirable property of current global financial institutions.

I think the Freecoin incorporates demurrage. Maybe FRC should be worth more, if the POS is implemented wrong in PPC.

In the long run with PPC and BTC all the coins get paid out. When there's no block reward left, does the POS reward system work on transaction fees like BTC mining reward?

There is never a point when there is no block reward left for both PoW and PoS (Ppcoin gives continuous yield of 1% for PoS forever).  When MC2 hit 1% yearly inflation, it locks in and switches to a voting system that lets users increase or decrease block reward inflation by plus or minux 1% max.

The fees system is different too -- PoW miners obtain fees while PoS miners destroy fees.  So, PoW miners always have the advantage, but PoS miners can antagonize PoW miners and deflate the coin supply via fee destruction.

I feel like it's the dawm of the Cambrian Period allover again.

forgot about scrypt, nvc and ltc use it

NVC also utilises PoS as well.

I know nothing about NVC... It uses everything?
many ppl rag on it, call it a scamcoin etc.... and the price has been falling. What gives?

Pre-mined and they lied about it. Gave it an awful reputation. Plus I believe they launched the coin in some Russian forum and users here didn't find out about until later (I may be wrong on that one).

Plus Scrypt is more energy intensive that SHA, which kind of defeats half the point of PPCoin (being energy efficient as possible).

Ah ok, so it's a sort of mutant coin conceived by greed. Interesting.

If you combine POW with POS which you have to to bootstrap I think, you are kind of free to pick whichever hashing there is and resources will go into both hardware and electricity to the extent of the coins mined worth independent of the specific algorithm. Scrypt is preferred by some funny coins because it can be used on a default computer competitively somehow maybe longer than others. Maybe.

It may be surprising, but you are lying now. Or simply believe to lying person like smoothie. He lying about any altcoin except LTC. :D

We don't care about "reputation", created by reputationless trolls, because they simply has nothing behind their words. Unlike me and another participants of our projects. We already made for BTC and LTC community more than they ever will be capable to do. And it hurts them, they had nothing to oppose it... It's the main reason of their silence in real discussion. They simply can't answer the questions like "What did you done for LTC or BTC community?". :)

It's partially true. It was announced here(in Russian subforum), 2 months before starting the chain.

Scrypt used only for PoW blocks. So, there is no difference with PPC in sense of long-term energy-efficiency, because in the future stakeholders will generate dominant part of blocks, in fact almost all from it. For this moment, network still in "bootstrap" phase, while there are no such coins volume, which will be able to generate enough stakes according to "1 block per 10 minutes" blocks rate rule.

We publicly destroyed "premine" + ~40k. So, maybe it's time to take a closer look to things which you are talking about. ;)

Yeah I didn't mean to say anything negative about NVC, sorry.
disclaimer: I have absolutely no idea what I'm talking about re: NVC.

Post updated, and I'm sorry for this offtopic  :)

PPCoin... another altcoin, down the drain!
Why did they name it PPCoin?  Because they wanted it to make a big splash!
Greenback, meet the yellowback... PPCoin!
PPCoin... now sponsored by asparagus, so don't forget to eat your veggies!
Now there's PPCoin... news so good you can't hold it in!  Soon you too will be jumping up and down with excitement!
PPCoin... the altcoin that has the most liquidity!
Yes, that is a jar of PPCoin that I am storing under my desk... why do you ask?
Don't forget to wash each time you handle your PPCoin!
PPCoin... you don't need a computer to mine it, just use your kidneys!
PPCoin... for best results, don't forget to flush your cache!
Today in the altcoin race, PPCoin is #1 and SolidCoin is #2!  We're #1!!!!

jk... I think PPCoin is cool and am pool-mining some right now.

Now if you excuse me, I need to go deposit some more PP into the pool... bwahaha!  :D

Having drained all those PP jokes out of my system, I have a question.  Given two systems (proof-of-work and proof-of-stake), can anyone think of more systems?

Such as:
* proof-of-identity: You have to prove your real identity (such as signing up through Facebook or Google+ account), which controls the currency on a per-person basis, not just a per-algorithm basis.  Plus you can be more sure who you are sending money to, develop reputation (like Ebay sellers), etc.
* proof-of-commodity: An altcoin backed by some online commodity, such as offering units of future execution of computer time on useful tasks, or units of storage capacity.  Computer time and storage space are commodities, yet have the unique property that they can be transferred online, and hence are a suitably scarce basis for an online currency.  (Note: Bitcoin et al. consume computer time in their production, they don't use computer time as a backing).

What else could there be?

Maybe something with a proof-of-reputation built on your proof-of-identity idea. Reward based on positive feedback in a WoT built into the ledger.