Bitcoin Forum

With various innovative consensus mechanisms such as PoS, DPoS and PBFT emerging in the blockchain world, some people are asking “is PoW outdated?”, “what is the future of PoW?”, “is it still meaningful to do some optimization and innovation work based on PoW?”

After much research and analysis, YeeCo team believes that PoW is still the basis or the kernel of other existing consensus mechanisms and holds an irreplaceable position. Here is our analysis and thoughts on the essential advantages of PoW consensus.

Distributed Consensus

When Satoshi Nakamoto came up with the PoW consensus, he didn’t mean to further the research on distributed consensus done by the scholars. People intend to consider that his PoW consensus provides a solution for distributed consensus in Byzantine environment, giving it an academic perspective, and we start to connect them together.

Speaking of the distributed consensus, we have to include "FLP impossible" theorem in our discussion. "FLP impossible" theorem is come up with and proven by three scientists, Fischer, Lynch and Patterson, in their paper "Impossibility of Distributed Consensus with One Faulty Process” in 1985. The theorem concludes that there is no deterministic consensus algorithm that can solve the consistency problem in a minimum asynchronous model system that is reliable in the network but allows node failure (even if there is only one). The revelation of this theorem is that the technically workable distributed consensus must be compromised in some respects.

In fact, there are mainly 2 types of compromise; one is the compromise of asynchrony, and the other is the compromise of finality.

The compromise of asynchrony is to set the timeout mechanism, assuming that the message will not be infinitely delayed. The DLS algorithm (“Consensus in the Presence of Partial Synchrony”) and the PBFT algorithm (“Practical Byzantine Fault Tolerance”) are examples in this. Furthermore, the DLS paper reveals two goals of asynchronous consensus in the Byzantine environment: security (consistency) and liveness (availability). Both of the examples make synchronization assumptions to ensure liveness rather than security, which means that if the real environment does not meet the synchronization hypothesis, it will only cause liveness problems rather than consistency problems. That's why we often say that PBFT is a consensus algorithm that prioritizes consistency over availability.

The compromise of finality is based on the concept introduced by Nakamoto, which is that finality is probabilistic. A probabilistically secure consensus is jointly constructed by peer-to-peer networks  through the proof of work and block rewards. It seems that on the map, the Nakamoto consensus is only one of the 2 compromise solutions of the asynchronous Byzantine consensus problem defined by consensus researchers, but the introduction of probability finality not only solves the traditional asynchronous Byzantine problem, but also solves a bigger problem. : Allows any number of nodes to participate in the system in an open manner, and they don’t have to know the complete set of the participants. It is very remarkable because this is the reality that the public chains face. In practice, the Nakamoto consensus that makes compromise on finality has achieved great success.

In essence, the innovative consensuses are also based on the 2 types of compromises.

The Compromises Made by Various Consensuses

PoS

PoS is essentially a PoW and it is a kind of compromise of finality. Staking can be regarded as a threshold. By introducing the threshold, the number of the participants is reduced. The smaller participant set size has two advantages: 1. The total workload of the entire system will be reduced, so is the energy consumption; 2. Asynchronous communication networks are smaller in scale and a fork is less likely to happen due to the delay, and block intervals can be smaller. This is why PoS says it has higher TPS and is more efficient.

DPoS+PBFT

DPoS+PBFT is PBFT in nature and it’s a kind of compromise of asynchrony. The purpose of DPoS is to select a set of participants that can apply the PBFT algorithm. This set has to meet three conditions: 1. The scale is small enough, otherwise the traffic is huge; 2. The total number of the participants is a certain figure, so it is an asynchronous consensus problem that PBFT can solve; 3. The number of malicious participants (Byzantine nodes) is less than 1/3. The Staking mechanism plays two roles in it: 1. Screening users as a threshold; 2. As an incentive mechanism to reduce the proportion of malicious nodes.

Tetris

Tetris is a knowledge inference based consensus algorithm innovated by YeeCo. It is essentially BFT and a kind of compromise of asynchrony. Tetris itself is a solution to the standard Byzantine problem, with a focus on its high performance and proven security. The BFT participants are selected through a pluggable upper layer protocol, which is workable in PoW, DPoS, VRF, etc.

Algorand

Algorand is essentially a BFT, a kind of compromise of asynchrony. Algorand chooses a set of participants that can apply the BFT algorithm in a very special and ingenious way, using VRF (verifiable random function), similar to each participant owning a lottery ticket and the participant can know if he/she is selected or not without communicating with other participants. It seems to be very efficient, but there are a few limits: 1. Need to set a threshold for the participants, because the cost of creating a private key to participate in the network is very low, and in fact Algorand takes the participant’s balance into consideration; 2. As there should be a winning rate for the lottery, and the system needs to know the total number of participants whic is a consensus problem in itself. In order to infer the total number of participants, Algorand tries to make sure that the online balance is about the same as the total balance in the network by rewarding the online nodes. This is in fact a Byzantine fault tolerant system that requires that the total balance of the online and honest nodes is  over 2/3.

DAG

DAG (Directed Acyclic Graph), adopted by IOTA and Conflux, is essentially PoW, and a compromise of finality. If the previous consensuses aim to avoid forks, then DAG’s aim is to control the fork to a certain level, thereby improving the system’s TPS. The essence of DAG is proof of work, but the principle of the longest chain has been changed to the principle of  the most difficult graph structure.

PoW Being the Kernel or Basis

The difference in the various consensus mechanisms is actually the difference in the path from “an open set of network participants” to “consensus”. For example, if the path is from “an open set of network participants” directly to “consensus”, then it is PoW; if the path is from “an open set of network participants” to “an open set of ledger keepers” first and then to "consensus", then it is PoS; if the path is from “an open set of network participants” to “a closed set of ledger keepers” first and then to “consensus”, then it is X+BFT, and X may be DPoS or VRF.

We can see that there are not much innovation in these consensus mechanisms. As long as a consensus is reached from an “an open set of network participants" (nodes can join and leave freely), only one model can be adopted, Nakamoto consensus: nodes are motivated to continue to reach a consensus result based on a consensus result with probabilistic finality.

The meaning of PoW to other consensuses lies in 2 points:

If the consensus is constructed from “an open set of network participants” (nodes can join and leave freely), then it is essentially Nakamoto consensus, so PoW consensus is regarded as the kernel of such consensuses.
If the consensus is changing “an open set of network participants” to “a closed set of network participants”, then mechanism is still required in this case. Where does the consensus on the value of staking come from? The first crypto currency and the Nakamoto consensus play important roles in it. So PoW consensus plays as the basis of such consensuses.

The Essential Advantages of PoW

PoW supporters has listed a number of its merits, such as reliability, purity. When it comes to energy consumption, some people regard it as a flaw, while some people disagree and believe that energy cost is the basis of security.

From my point of view, the essential advantages of PoW are as follows:

Ultimate Openness

PoW is designed for an open set of participants. This openness (the participants are unstable) is always a challenge for them to reach a consensus, whether it is during the earliest cold start, or during the mining stage when the crypto price and mining difficulty are fluctuating.

PoW has adopted an extremely simple mechanism to solve the openness problem. PoW does not need to make any patches for any of the scenarios or conduct any governance. Relying on its core mechanism to drive the entire system, it has withstood the test of time. PoW consensus design is ingenious, simple and adaptable, making it outstanding among a number of consensuses.

PoW is an absolute permissionless system. New hashrate can join the competition at any time and at the same starting line with existing hashrate. Although Staking investments seem similar to the hashrate investments, but different initial factors lead to quite different situations. If the blockchain system is a system that is easy to fall into the "Matthew effect", then in PoW the requirement of hashrate investments (external and physical) is an important factor to resist this effect. On the one hand, the lagging adjustment mechanism makes it difficult for the system to enter a steady state. On the other hand, the external and physical hashrate investments are more independent than stakings. For PoW, the positive feedback of the consensus advantage of influencing the consensus result to the business advantage is one-way, but for staking, the positive feedback is two-way.

Ultimate Security

The frequently discussed security issues, such as 51% attack, over 1/3 Byzantine nodes, are all issues that may arise due to the consensus rules. However, the blockchain system is ultimately a system running on a physical network, so, compared with the attack that takes advantage of the consensus rules, the attack at the physical network level would be a catastrophe to the blockchain system.

PoW believes that the power of a node should not be determined by the virtual resource it holds(Staking), but should be determined by the physical resource (hashrate).

In the case of Staking, it is easy to fall into a situation where the size of the network nodes doesn’t grow with the continuous investment of virtual resources due to the lack of driving force. The economic scale of the system and its resistance to threats from the network are not matched, and there is no internal mechanism to promote that.

In the case of PoW, the resource investments correspond to the investments to power of influence in the network. At the initial stage, the hashrate investment is to invest more nodes. Later, with the emergence of professional mining machines and mining pools,  the hashrate and the node count do not match exactly. But since the hashrate is invested, the investors will definitely take measures to get the power of influence in the network, and the economic scale of the system and its resistance to threats from the network are matched. If virtual resources are attached more importance to when weighting the node, the difference between the power of influence in the system and that in the physical network for the nodes will be greater. As for the PoW that doesn’t take the virtual resources into consideration at all, the power of influence in the system and that in the physical network for the nodes are the same. The security of PoW is reflected here: energy cost being the basis of security is resulted from the physical network environment.

Openness and security are exactly the two angles in the “blockchain impossible triangle” (in the triangle that’s formed by Scalability, Decentralization, and Security, there are only two angels can be achieved).

The essential advantages of PoW is that it provides a highly decentralized and secure consensus mechanism. And the one that’s left, scalability, is exactly the development and innovation direction of the PoW consensus.

This article is written by YeeCo CTO. Please feel free to share your thoughts below.

To know more about YeeCo:

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This is a copy paste from https://medium.com/@yeefoundation/is-pow-outdated-what-are-the-essential-advantages-of-pow-consensus-6d12f0851007

It really looks like you may tbe the author. But why don't you include the source? Your account may be banned for that.

Also, try to add some discussion with the knowledged you have, don't just throw a wall of text here..

PoW is a technical deadend , the majority of new coins all choose more energy efficient designs



The Major problem with PoW is that energy cost is not segmented to ONLY PoW Miners,
The PoW miners draw Energy from the Entire Global System, and while they may reap ever increasing rewards from drawing more energy,
the same can not be said for everyone else.

No one cares about the PoW miners completing with each other,
but they will care when the miners are competing with you , your friends, your family, and your business,
(driving your energy bills higher).

Thinking an exponentially growing drain on the world resources won't eventually cause energy prices to increase for all people to the point ,
that one must de denied.

So then the question becomes, will the PoW miners be denied energy or regular people?

Which is why BTC should start looking at some other form of consensus that won't place them in direct combat with the rest of the world's populace for energy consumption.
(There a reason China is banning PoW mining, in the long run it is unsustainable due to the price increase it will cause on people that have nothing to do with bitcoin.)
https://www.wired.com/story/china-says-bitcoin-wasteful-wants-ban-mining/

https://www.washingtonpost.com/news/worldviews/wp/2018/02/13/cryptocurrency-mining-in-iceland-is-using-so-much-energy-the-electricity-may-run-out/?utm_term=.a1441db5f29f

https://www.bbc.com/news/technology-48799155

Anyone thinking PoW is a sustainable process, is having a deer in the headlights moment.  :P

https://cacm.acm.org/system/assets/0002/8094/072117_vickistiefel.com_deer.large.jpg?1500654675&1500654675

Cryptocurrency is about setting money free from banks, governments, trusts, etc. to have this goal fulfilled, bitcoin encourages both producing and managing money directly by people,

Efficiency does not make sense in the context of money production because money is supposed to be a store of value and you just can't embed value in a unit of commodity efficiently because efficiency means less work and less resource consumption i.e. less value.

You need to have a theoretic approach to the concept of money to be eligible for discussing such a crucial issue otherwise, you follow the path that Vitalik Buterin went, a junior programmer who happened to become a celebrity because of his proposal about a Turing Complete machine for bitcoin and was 'fallen in love' with PoS overnight when he was like 19 years old and had no clue about what money is and what it is not.

Bitcoin is not a simple invention to be re-visioned by simple minds and naive people (being a celebrity or not), its success story is based on PoW and a deep understanding of money as a store of value, what money has always been before the invention of fiat which is the cause of every single economic crisis in modern history. Nevertheless fiat currencies are far better than pure PoS generated money because they are backed by law, while PoS money still worthless (just like fiat) is backed by enthusiasm of a small community that eventually loses its stem.


To be more specific and exact: energy cost is the basis of bitcoin value.

 :D
It started that way, but that has been over for years.
PoW mining is only for the mega rich as no one else can afford it.

When did you last mine a bitcoin block with one of your warehouses full of ASICS?  ;)



Interesting , how most countries like China, call it energy waste.
The Ethereum founder has realized that PoW is unsustainable, shame so many are blind to it.

I put it to you like this and honestly think on it before you reply.
Bitcoin Mining drives up the price for energy for everyone, say it hits 1 million dollars per 1 BTC,
So now they are buying the majority of the world energy and driving up your personal rates.
This means your usage of energy has to be reduced, so now explain to your girlfriend, why you can't take her to see her family, because travel is now too expensive, explain to her why heating milk for her baby, or even taking a hot shower or running a heater or an air conditioner uses too much energy and you can't afford it. Now ask yourself , how long is she going to stay with you?  :P

PoS was created as a solution to the energy waste back in 2013.
PoS networks will not drain the world's energy supply like PoW network will.

And we don't have to get into a back and forth about PoS verses PoW.
There are other consensus designs they could choose from.

The main point , PoW has a time limit, at some point it either takes all of the electricity or the People have to end it.
That is the problem with it's Winner take all design.

If BTC devs don't like PoS , no one says they have to use it,
but they do need to come up with a consensus that does not make them enemies of the rest of the world.

Current BTC miners are already elitist, with the majority of the global populace shut out of mining,
moving to a new consensus where they still have control but no longer squander the world's energy resources,
would be a win/win, a win for them and a win for the environment and future generations energy usage.
If PoW Miners keep on the present course, something is going to have to break.

*the articles from my earlier post show Countries like China will just outright ban all PoW mining,
Iceland is on the verge of being unable to meet demand , and the Bitcoin Miners are using more electricity than the normal populace.
Something will have to give. Odds are Bitcoin mining just gets outlawed in the majority of countries and possibility the world.

No, it is the same as usual. You get as much as you spend on mining. There are issues to be fixed like pooling pressure, true(and I'm working on it), but the fundamentals are solid. Compared to most industries, mining is ways less vulnerable to economics of scale.

As I've reminded in my post, he came to this "realization" when he was a teenager, overnight after a discussion with another clueless PoS enthusiast in his 20s. One needs a minimum level of education to approach economics, it is not about IQ, it is about science.


Your scenario is flawed, it has been 10 years and bitcoin now consumes lots of electricity and nobody has claimed anything about its role in electricity fees and you are trying to fix a problem that does not even exist.

Bitcoin price oscillates around its value which is determined by the amount of socially required work necessary for producing it. With halving in action the amount of bitcoins generated in a year multiplied by the costs determines its value and eventually its price.

The effect of an increased price is primarily justified by halving: Without any increase in difficulty and power consumption one can predict a doubling in value/price every 4 years.

Now suppose the increase rate goes further than 25% a year. Interestingly there is a second mechanism that balances everything: Suppose as a result of increased price the the global power consumption of bitcoin increases to the levels that has a minor impact on electricity fees, it will immediately have a negative feedback on total network hash rate because now less power consumption would suffice for the same level of security.

It is the point: bitcoin does not rely on electricity, it relies on the cost of electricity. So, if in some point of history probably when network generates hundreds of bitcoins in a year which worth 1 million dollars each, the network needs to consume hundreds of millions of dollars, almost nothing compared to the total electricity market cap.

As a simple rule you can estimate the cost (amount * fee) of consumed electricity in the network as being almost equal to the total value (amount * price) of mined bitcoins. It is just wrong to suggest a scenario about an imaginary situation in which we have both electricity fees and consumption amount increased to an unsustainable state that affects human life globally because of bitcoin price surging.

As you can hopefully realize now, it is not that easy for an under-educated 19 years old boy to understand how PoW is sustainable and still I'm deliberately avoiding deeper and more sophisticated topics. it is why I don't give any credit to the move your favorite pop-star, Vitalik made on that night in the lobby of that hotel the move which he describes it as "falling in love with weak subjectivity" (a PoS based on PoW scheme).

Sorry to disagree with most of the answers here, but I think that POW is the only relevant answer to the problem of strengthening the blockchain and make it impossible to be reversed, without having a central authority that is controlling the network.

Without mining and all this work generated by the miners, you only need the private key to hack a blockchain. Most coins that are not mined are centralized (Ripple, or Libra). These people want to have a way to reverse the transactions, either because they are big corporations who do not want to have a problem with a government or because they just want to be acting like banks.

Satoshi Nakamoto nailed it and without being peer to peer, or without POW, Bitcoin would never take off. There were many attempts to make cryptocurrencies that failed at this time.

Now, because most people are playing with crypto like in a casino, the relevance of all this work is starting to be forgotten. Scams, and unsafe crypto are popping up from everywhere and nobody seems to care if they are safe or not, if they are centralized or not.

Without POW, a blockchain is not safe. And who cares about the electricity? All our cities are using countless of bulbs all night and nobody complains about the waste. The electric consumption of the miners is just another propaganda against the crypto, built by the fiat resistance.

Playing video games is also costing a lot of electric. All these geeks playing all day on their computers, is this useful?  ;D ;D ;D Save the planet: stop playing games!

Really,
Blackcoin is PoS only, I guarantee you can't break it.  :D

The Governments that are banning the PoW mining , care about electricity.

Find me an article where a government has banned video games, because it compromised their power grid.

The ability or stupidity of those here to completely ignore bitcoin energy waste issue is astounding.  :-*

So is the naivety of people like you who do not understand what is the difference between wasting energy and consuming it for a useful purpose, actually one of the most useful cases of energy consumption in the history: setting money free from central authorities.

Central Authorities,  :D

you do realize that it only takes 4 mining pool operators to collude to double spend with Bitcoin.
And the only thing preventing it , is that the Community Trusts them not too, otherwise they point their miners elsewhere.
I hate to break it to you , but you trusting the pool operators not to abuse their position, is you trusting a central authority.  :P

So all of that wasted electricity is irrelevant as the trust of 4 individuals is all that stands between bitcoin and a double spend.  :)

---

So whether you believe the energy waste is a issue or not.
What does the community proposes to do about the problem of governments seizing their ASICS, like Iran just did.
Since hiding their ASICS energy footprint is not possible.

Pos is always piece of shit.  It is basically a bond with zero backing.  Worse then a junk bond it is a virtual junk bond whose value is based on pure imagination.


Pow is a hard iron gear based or backed coin.

Ie all the warehouses of miners burning power to create the coins.

What you simply don’t understand is the value of burning power to make a coin.

It is real that value and here is a simple example.  Niagra Falls  has USA and Canadian power plants.

When they are at peak capacity due to high river flow they have enough power to supply all the coin mining in the world.  Obviously that is not what happens what happens is many power plants supply many miners all over the world.

I consulted on a 100 mega watt farm built.  It was to use power from five plants that surrounded it.

And it was designed to run from 20 to 100 megawatts. It would run 100 megawatts when the power plant had excess power production and it was to run 20 mega watt when power plants were supplying power to other customers ie lots of ac on a hot day.


That service supplied by that farm helps each and every power customer using those five power plants.

Most people that say pow waste power do not understand pow farms can be used to help balance the grid loads all over the world.

A power plant like niagra falls does not shut the river off when the river is flowing high and hard. It simply used to make the excess power and shunt it into the grid.

Ie it wasted that excess power.  Pow solves a real problem when used correctly.

Every time I see a thread with people claiming pow wastes power I simply would like to say hammers smash skulls ban them.  

The truth is proper use of a hammer to build a home or a shed is good.

The use of pow to help balance the worlds power grid is good.

So the goal would be to encourage proper use of hammers and pow.  Nuff said.

No , not enough said,
governments are seizing ASICS because of their disruption potential of the power grid.
Do you plan to stick your head in the ground and ignore that also.

The ASICS miners that power BTC are being seized (because they can't hide because of their insane energy waste footprint),
so does the community have a strategy besides cowering in a corner and waiting for the governments to seize all of their miners.

Answer the question,
when a superior military force seizes your toys,
what do you do?


FYI:
I wait for an answer, but doubtful the ones arguing understand what to do.
So I'll go ahead and answer it.

What you do when a superior military force seizes your ASICS?
IS  ADAPT!
1.  Either modify the PoW to a more energy efficient version , that can hide it's energy footprint
and if that is impossible

2.  Switch to another algorithm that is energy efficient
No one says it has to be PoS , it can be any algo that is energy efficient , Duh!

3.  Move all ASICS to an island in international waters and power them from a Volcano
(Least likely but if their is a super villain here then doable.)  ;)
https://pm1.narvii.com/6180/c9a4001f9e9afa91b278aef95bc777977d9f1847_hq.jpg

Pooling pressure is a flaw that could be fixed and is not inherent to the whole idea of PoW and pools do not act like central authorities anyways. Actual mining farms and individual miners are far more distributed and they won't stand misbehavior of pools and switch easily to other pools by means of a glance and a distributed nework of full nodes are witnessing every single event in the field. collusion between pools is not economically feasible and have no history in bitcoin and if it had we wouldn't see bitcoin price above 10 grands right now.

As of governments seizing mining farms, it is not a real threat and Iran is not a typical example. I'm from Iran, our government is a mess, they have been trying to regulate mining operations in Iran for like years and they have done nothing in this regard, now we have powerful juridical authorities who are corrupted like hell. They have spotted two wealthy farms somewhere in Yazd province that are not regulated (naturally), probably they've claimed their cut and when the owners resisted to pay them they've asked "a friend" to issue a verdict for temporarily stopping their operations. Iran government and what it does or does not is a chaotic messy pattern and is not a good fact to be used for induction. ;)

Colluding Pool operators for a short term 51% attack is an attack vector.
If you develop a fix for that great , one less thing to worry about, until then however it is still a major attack vector.
Which at the moment the community solution is to just Trust the Pool Operators.  :P

Government seizure of ASICS is also an attack vector, so denying that is a problem leaves Bitcoin Vulnerable to it.
So if no one is willing to fix the Massive Energy footprint , how exatly do they plan to fight Government seizures.
Because if enough happen, the bitcoin blockchain freezes or hash rate falls so low , 51% attack become common place and bitcoin is destroyed.
It is even possible the World Governments Collude and use Seized ASICS to 51% attack bitcoin to guarantee their fiat monopoly stays the only real choice for finance.  

Sometime in the near future, even countries that are friendly to Bitcoin are going to start charging their miners higher energy fees than the regular public, because bitcoin is requiring those Power Utilities that only planned for a modest 3-5% yearly growth to provide a much greater % yearly growth, of which more capital will be required by the Utilities to finance.

https://www.utilitydive.com/news/munis-to-charge-bitcoin-miners-higher-power-prices-in-new-york/519275/
https://www.politico.com/magazine/story/2018/03/09/bitcoin-mining-energy-prices-smalltown-feature-217230

The same community that was too frighten of a hard fork , that they soft fork in segwit.
The same community that ignore the energy waste and potential of government seizures on a daily basis.
The same community that trusts a mere 4 individuals to safeguard the entire bitcoin network from 51% attack.

The point is, they need to start exploring the backup plan now,
before the energy waste debacle gives the governments the needed pretense to destroy bitcoin,
because bitcoin is losing the PR front with the general public and
the continued refusal not to begin addressing the energy waste problem is going to be a major blow against it.

FYI: I'll even tell you how it will play out.
Random Government Leader
Bitcoin miners are stealing energy & money from the Young & Old & weakest among us ,
so they can profit from the most unfortunate of us, and raping the environment and destroying our children's future.
So as of today, This Great Nation will Ban all Bitcoin Mining, to protect our Nation and call on all of the other nations of the world to do the same, We will protect this Nation , We will protect our children and their future.

*A few backdoor trade deals and any country not agreeing originally , will soon after.
Any small country that refuses to agree will get invaded because of their corrupt dictator.
Or suffer an EMP that fries all of their ASICS and local power grids. *

By the time that speech is made,
Bitcoin will be the great satan, and no one will care about any possible algo change to fix the energy waste,
it will be too late and bitcoin will have lost the PR war and real war forever.
Time is running short, before the above fable becomes reality.

Good, you have accepted the fact that the POS perpetual motion machine will never make a blockchain as secure as POW. Good luck looking for that energy-efficient hashing algorithm.

But POS is "OK", if you can accept the trade-offs.

Mind to get into more details about this? Sounds interesting.

Ok , we all know you're slow.

But see if you can grasp the following,
a PoS coin designed with extremely low inflation and all transaction fees destroyed.
The rich don't get richer and if they sell, they lose their staking capacity with every coin sold.

Where in that confused brain of yours, does that seem to be a perpetual motion machine.  :P
Realize their is a major difference between high inflation coins and low inflation coins.

FYI:
Clarification : I said Bitcoin did not have to choose PoS,
but I personally believe a well designed PoS is more secure than bitcoin current PoW.
Look at this way I can pay off or coerce just 4 pool operators and I can 51% attack bitcoin, it be a lot harder to 90% attack a PoS coin.
Because you need 90% of a PoS coin to sustain an 51% PoW style attack on a PoS coin, due to dormancy after staking.
https://bitcointalk.org/index.php?topic=5160201.msg51666688#msg51666688

FYI2: Even Theymos was concerned of centralization of PoW Mining in Oct 2016 and proposed a possible hybrid design including PoS

Instead of 'believing', you could provide a proof by creating an altcoin with the 'well designed' specs of your choice. If you are right, it should go up the roof and in a few years people would trust the security of your coin so much, that Bitcoin will be forgotten in a week.

I could be wrong, but I think that Bitcoin had no such value, that it has now, if it was cheap and easy to mine.

The Altcoin , I mentioned already exists.
It has suffered no successful 51% attack , definitely secured by more than 4 individuals running pools, and runs on PoS only.
None of the N@S bogeymen myths have been able to harm it.

There are manipulators in the markets that primary goal is to assure alts don't do better than bitcoin.
They use trading tactics to keep most coins low, while using those other tactics to keep their primary coin stable or high.
It is a temporary inconvenience that will one day be overcome.   :)

Let me guess, Zeitcoin? Hahaha! OK. ::)

The problem with POS is distribution, and that there are no costs in generating income, and in forging a block by staking. It's much easier for stakers to bribe other stakers to censor transactions.


But there's still no costs for stakers, which makes them perpetually the whales of the network for free.

No dum dum , it does not.

Since they don't receive excessive interest, and they don't receive transaction fees,
for them to earn anything else such as fiat, they have to sell from their principle amount.
(Your confusion between high interest bearing PoS coins and very low interest bearing PoS coins, only shows your ignorance.)

They also have node costs, which have greater hardware requirements than those useless non-mining btc nodes of yours.
Unlike your non-mining bitcoin nodes that do nothing but relay data,
Staking nodes actually secure their network while competing with other nodes,
totally replacing the energy wasteful warehouses full of ASICS and your non-mining nodes.  :D

Well, I've been investigating this issue for a while. In this article (https://bitcointalk.org/index.php?topic=4687032.msg42296802#msg42296802) posted in bitcointalk, I've mathematically proven that both mining variance and proximity premium flaws, the two most important factors behind pooling pressure (the force which pushes miners to somehow "collude" by means of forming pools), are direct results of Satoshi's choice of a winner-takes-all approach to mining reward distribution.

Briefly speaking, winner-takes-all approach to PoW, leads to a Bernoulli distribution of chances and for small shares of total hash power, and by small I mean shares less than 0.001 which for current bitcoin network it is about a farm with like 4500 S9s installed, mining is no longer an industry but a gambling business (fair gambling tho) in which you have definite chance not to hit a block for days because of variance.

Also, I've proposed a framework for solving this problem (https://bitcointalk.org/index.php?topic=4438334) earlier and I'm busy developing it by extending the idea to another BIG problem: on-chain scaling! The idea is to shot both birds by one and only one bullet and prove one point: Cryptocurrency is not doomed unlike what Vitalik Buterin have suggested almost directly by his ridiculous claim about the existence of a trilemma.

From a pure technical point of view I'm personally convinced that both problems: centralization of mining through pools and on-chain scaling have common roots in winner-takes-all model and I'll publish my work asap, but technology is not the main challenge, community is, imao.

I'm not ready for fighting with people who are so insistent on not upgrading bitcoin and keeping it as is: a secure store of value and nothing else.

It has been months since when I've finished every single design issue and I'm just hesitating to say a word because I'm not optimistic about what happens when you come with a hard fork proposal, I want bitcoin to improve and it should happen in a friendly environment with cooperation and friendship, it is what bitcoin is or supposed to be, a campus for good people, isn't it? But things don't work like this in bitcoin nowadays, unfortunately.

Is PoW Outdated?

Yes and No.  :D

What are the Essential Advantages of PoW Consensus?

Useful-Proof-of-Work can be used for solving 'problems', not only consensus, on-chain i.e. ...

- https://en.wikipedia.org/wiki/List_of_unsolved_problems_in_mathematics

See my sig. and no that's not an advertisement, it's a Proof-of-Useful-Proof-of-Work.

One for the Bitcoin Maximalist's and long live the 'Jedi's of Pi'.

I'm not ok with this idea.

Look, when your work is useful for any purpose other than blockchain integrity, you can just sell it as a service and be rewarded somehow for it. Now your incentive for behaving properly in the blockchain ecosystem remains unknown.

The way you look at PoW, accepting it as being a meaningless work and a waste of resources and trying to 'fix' it, is flawed from the first beginning. There is no waste, resource consumption is necessary to produce any commodity, bitcoin is no exception.

Not so. PoW is far from being meaningless in this instance, it simply has a secondary 'useful' output.

There is 'no waste', not 'less waste', you are correct in this regard i.e. 2 x commodity outputs, being 'coins' and prime gaps with every block ...

Also, not an 'idea', it actually functions as intended, on-chain and has done so since 2014.

...

"So the difficulty will simply be the length of the prime gap?

Not exactly. The average length of a prime gap with the starting prime p, is log(p), which means that the average prime gap size increases with larger primes. Then, instead of the pure length, we use the merit of the prime gap, which is the ratio of the gap's size to the average gap size.

Let p be the prime starting a prime gap, then m = gapsize/log(p) will be the merit of this prime gap.

Also a pseudo random number is calculated from p to provide finer difficulty adjustment.

Let rand(p) be a pseudo random function with 0 less than rand(p) less than 1. Then, for a prime gap starting at prime p with size s, the difficulty will be s/log(p) + 2/log(p) * rand(p), where 2/log(p) is the average distance between a gap of size s and s + 2 (the next greater gap) in the proximity of p.

When it actually comes to mining, there are two additional fields added to the Blockheader, named “shift” and “adder”. We will calculate the prime p as sha256(Blockheader) * 2^shift + adder. As an additional criterion the adder has to be smaller than 2^shift to avoid that the PoW could be reused."

For Prime Gaps see: https://en.wikipedia.org/wiki/Prime_gap

HINT: We could use some more PoW, much more actually!

...


Correct.  ;)

::) Then what are the stakers' incentives for forging blocks? That's a big security trade-off.

Bitcoin simply works because of the incentives, the costs, and the game theory that holds everything together. It keeps everyone in the network honest.


Hahaha. Stop eating those crayons. The costs in mining Bitcoin is the energy expended in hashing. POS coins have no such costs.

Thanks for the read, although I wouldn't call pooling a problem. It was rather a solution against centralization, because at some point in the past, small miners would've had to wait years to find a block. By combining computing power (pooling) they were able to lower the variance. The fact that at this moment we have a low amount of big pools could change anytime. For example when some small country governments want to get involved seriously into Bitcoin mining. These could build huge mining operations at the lowest electricity cost possible. Other countries would definitely follow out of FOMO and we would see a new global level of a mining race.

I am still interested in your hard fork proposal esp. the part about how you want to avoid pooling.

Same Incentive as People that only Hold Bitcoins.
In Time Price per coin will go up.

PoS is just as secure a PoW and in some cases more so, many that have a personal interest in PoW don't want to admit it.
I find it amusing so many here defend the energy wasting PoW
and they themselves are unable to participate in PoW mining due to financial restrictions.
You're like poor people arguing how secure the banks are, and you have no control over the security, much like most PoW supporters.

PoS supporters can at least directly help secure their networks.
I stake coins everyday, so when did you last mine a Bitcoin Block  , Wind_FURY?

::) Is that really your debate? You need to think about the security trade-offs your Zeitcoin is giving up, besides eating those crayons. But, most POS networks have centralized signers through checkpoints. If you're OK about that, then good luck to you.

No, most PoS coins don't run a checkpoint server.
Peercoin Hybrid PoW/PoS does,

However the following PoS coins don't run a checkpoint server
Blackcoin, Mintcoin, PandaCoin, Zeitcoin

Show us what you know which coins run a checkpoint server dumbo?

Bitcoin is reliant on just 4 individuals (pool operators) , so your btc security is a issue of pure trust, the energy waste is meaningless.

FYI:
While not running a checkpoint server , your beloved bitcoin does still have checkpoints in the client code.
Maybe you should petition the devs to completely remove them.  :D

You are welcome.

The ultimate solution to mining variance is low difficulty (and not forming syndicates/pools  because it is the operator who decides about the block contents) and it is achievable by retiring winner-takes-all philosophy and replacing it by a contributor-takes-share alternative.
Youcan imagine several protocols for this but the one I've become totally fascinated by, is when you combine this idea with a sharding algorithm. Principally it is possible because each shard is responsible for a part of the network and you need to distribute both incentives and costs.

It is what I've mentioned earlier in my previous post, both centralization and scaling problems have roots in the same flaw: winner-takes-all. In my design the whole mining job is divided between tens of thousand of shards, each with very low difficulties, so very low variance for small miners and it is how we get both birds, decentralization and scaling, with just one stone.

As of your speculation about governments engaging in mining, I do agree it will be good news for bitcoin but not for centralization because we are talking about very unreliable actors with high possibility of collusion and worst intentions ever, we need small farms, individual miners, hobbyists, ... all over the world to decide about every single block they mine to resists against such possibilities, otherwise it would be easy for governments to push on pool operators and impose censorship on individuals and even nations. The only force which is able to resist such scenarios is free will of small miners who can directly act and decide.  

Keep trusting in Game Theory (ie:4 pool operators), you better examine the following
https://en.wikipedia.org/wiki/Prisoner%27s_dilemma

---

https://coin.dance/nodes



  :D

 

Considering Bitcoin Core is over 97% of the available nodes,
their coded checkpoints are enforcing the checkpoints thru out the network, regardless of the other's inclusion or exclusion.

Then either those coins are worthless to attack, or stakers are already centralized by a cartel of staking-whales.


Misinformation. There are more pools in the Bitcoin network, and miners can always leave a pool anytime they want.


::) There are none at present, not like some POS coins that regularly checkpoint every some amount of blocks. Plus those checkpoints were from several years ago to avoid DOS attacks on nodes that are doing the initial blockchain download.

I don't understand how a low difficulty and dividing the block reward will prevent miners from pooling. Would it really make a big difference if there is a blockreward divided by 'tens of thousand of shards' or a single block reward, because each of this shards would be treated like small 'blocks' that have a value and big mining farms would mine most of them anyway.

If governments could collude to 51% the network, they also could collude to stop destruction, pollution, war and starvation. The fact, that they can't tells me, that Bitcoin will be safe.

Low difficulty means more hits in a given period of time for small miners. Actually it is how stratum works now in pooling ecosystem, you get low difficulty, you hit and the operator checks if your hit happens to have a high difficulty as well, simple.

My point is if we could manage for a sharding protocol properly we would be able to eliminate pools too.

It is not how decentralization defined in bitcoin core design. We need more divergence than like 100 governments plus a handfull of pool operators ultimately under their regulations and control, governments who have diplomacy and UN and international bodies. You are right they have diversities but it doesn't mean they can't sign treaties or follow UN security council resolutions. And we know how it works when it comes to such a corrupted institutional system.

Contrary to the popular belief that keeps getting repeated, mining is getting increasingly decentralized. Bitmain is no longer the king in town. Jihan Wu thought he was the Caesar, and he ended up kicked.

PoW works, gets Bitcoin secure and continues to do so. Shitcoins haven't been through what Bitcoin has been, so they are objectively inferior and of less value.

All non PoW and non-Bitcoin-PoW is not secure, actually centralized sockpuppetry.

 :D  Modified your Post , to give you a little history lesson.

They used to say the same kind of nonsense about IBM verses all non-IBM computers.
IBM sold it's 1st PC in 1981.
In 2004, IBM sold all PC manufacturing to a Chinese Company.

IBM gave up, because the clones were better and the Public Knew it.

Now people repeat nonsense thinking Bitcoin will forever be on top.
While it's clones perform more transactions faster and cheaper and just as secure.
Keep believing the nonsense , that a once superior product that refuses to improve , will stay superior.

People that don't study history are doomed to repeat it.   ;)

Of course Bitcoin will not be "on top forever". It's still a software experiment "that could fail" in reality. But, there's not one cryptocurrency better than Bitcoin up to this day. That's not open to debate.

But yet, Bitcoin is the most valuable, the most secure, and the most reliable cryptocurrency in the world. If you cannot get the concept behind what keeps everything together in the Bitcoin network, then that's your problem.

Keep eating those crayons, try harder. 8)

@khaos77,
Dude, you are rehashing used stuff again and again. Just keep in mind: without work there is no value, without value you are left with conventions, central banks are gods of conventional money, no need to any PoS shitcoin.

Dude, it is not cool to lose our way and be lost in PoS shit because there are some problems with PoW, it is our job to fix those problems instead of tracing back to a failed agenda just like reputation based systems. Unlike what you may believe bitcoin is a more modern invention than reputation/stake based systems, do your homework please.

People behind this PoS thing are totally out of their minds, for instance they are talking about finality which is a joke and an obvious violation of cryptocurrency axioms which are against centralization and trusts.

FYI, I've solved pooling problem like hell and besides budget and the need for contribution it is just because of governance ambiguities that I hesitate to go any further. Anyway, from a pure theoretic point of view, winner-takes-all approach and pooling pressure are not inherent to PoW.

As of your price/value statements: I know price is not value and I've written a thorough analysis about this in this forum few months ago. But I wonder how it would help PoS discourse? Dutch Tulip mania is exactly what pure PoS coins about. They have price just because of their community playing a manic game in exchanges with them, bitcoin is not Tulip it needs a lot of work to be produced.

It's not an opinion. It's a fact. How can you refuse to admit the truth?


In your opinion.

I can admit that it's not "perfect", but that doesn't change that it's simply the best, most reliable, most secure, most valuable cryptocurrency available.

Did you? Where's your Github?

Plus your opinion on Matt Corallo's BetterHash? I believe BetterHash would solve it enough, demoting pools to mere coordinators, and distributors of rewards.

Unfortunately: I'm not as optimistic as you about BlueMatt's proposal, BetterHash.

1-It seems impractical to me for pool operator to accept like millions of different Merkle roots and query them with miners to discover the actual transactions included. Please  note that the operator should do this for each share.

2-Having a coordinator/reward distributor is not a good choice for protocol design. Note again that to have a low variance you need very large pools and no matter what they do they make the network vulnerable to regulatory and censorship for the least.

As of my solution, stay tuned ;)

If it's ok, I will use your reply and debate on your behalf. I will post all responses here. 8)


Will a hard fork be a requirement?

Since Vertcoin has been attacked (see https://medium.com/coinmonks/vertcoin-vtc-is-currently-being-51-attacked-53ab633c08a4 )
We can say that having an exotic algorithm for mining is not something that can protect a blockchain on a long term. One day or another, ASIC having more memory and more storage, the exotic algorithm is solved and can run on these mining gears, opening the door to a 51% attack.

So why then re-creating the wheel with new mining algorithms. To protect a blockchain, there are different solutions apart from changing POW to something else.

My personal opinion is that so far POW is the best, easiest solution. All the problems have been solved and we know the risks. We only need to find solutions. The 51% attack problem can be easily fixed by controlling the maximum hashrate through the pools and lock the new blockchain to a limited pools that are limiting the maximum hashrate of the miners for example. An idea that would need a specific thread to debate.

Multiple layers of confusions here:

Firstly, Vertcoin is just another ASIC-resistance bitcoin forks, (one of the most decent ones) and has nothing to do with pooling problem.

Plus:

• 51% attack is a general vulnerability for any PoW coin and generally speaking any decentralized cryptocurrency. The fact that Vertcoin has been exepriencing such an attack in 2018 doesn't discredit this coin, it simply says that total hashrate of the network is dangerously low and you have to wait for a lot more confirmations before releasing your assets.
  
• POW is more than Satoshi Nakamoto and bitcoin. The idea is burning energy to prove responsible behavior in p2p communication. Satoshi added the idea of generating money as an incentive system for participating in such a network but when it came to implementation (detail design), s/he made a mistake by choosing a winner-takes-all approach to this idea which is flawed because of mining variance and its centralization consequences.
• Fixing mining variance and pooling pressure is feasible without breaking  PoW basic ideas simply by replacing winner-takes-all approach by a more modern alternative. Actually Stratum and pools are doing this right now but in a dangerous and unfavorable way.

 

BetterHash is not a mining algorithm.


But what is the fix? What's better than POW to arrive to consensus? Before you answer that, think about the trade-offs in the security model.


But doesn't the "winner-takes-all" approach is pleasing to greed? But with that, the miners are forced to be honest, because the other path is costly and bad for the miner, and the whole network?

Any rewarding system, is pleasing to greed but winner-takes-all is too risky and discouraging because most people have a definite chance not to win anything and this makes them hesitant to join, bad for security! Let's go pooling , but wait, it is bad for security too!

Now suppose we use a winner-takes-share approach to PoW in which we accumulate works done in the network and distribute rewards accordingly. No we would have a very low unit of work and low variance consequently and average/small miners would be able to participate in consensus directly.

I know it is very challenging but it is practical and I've made enough progress to be confident about its feasibility. Stay, tuned.

I cannot see how a more socialized structure of rewarding small miners would stop them from pooling their resources together. It might also discourage big miners from investing in more hardware, reduce the total network hashing power, and reduce network security.

Plus BetterHash isn't only about the rewards, it's about the reduction of the mining pools' power over the network, and bringing that power back to the miners.

You can't really compare Bitcoin to a product like a computer. This is way more complex than "you have product A, then product B replaces product A because it's faster and more efficient without a security loss".

First of all, you have to point to product B. Where is it?

If it's still not there (it isn't as far as I can tell) what would take for product B to exist?

If product B existed, why would it replace product A?

Bitcoin is all about certainty. You cannot outdo the uptime without 0 hacks of the Bitcoin blockchain. 10 years and counting. Even if in theory you make a better product, Bitcoin is still the most time-tested. Similarly, there are faster stronger ciphers than AES-256, but are less time-tested, so you go with the safe thing. Bitcoin is the safe thing for anyone with enough money to move the market anywhere, if they wanted to diversify in cryptocurrency, everything else is an exercise in insanity.

I've heard that guys from Zold.io are developing Proof-of-Availability. The idea is that the highest reputation in the network will be defined by the quality of the server and its availability to others. Pretty interesting idea, it seems to me.

He didn't consider that Bitcoin's model is more superior, more secure, and that it simply works for what it is, a censorship-resistant cryptocurrency. Speed of transactions, or higher transaction throughput won't matter, if it's less decentralized, therefore less secure, and has lower POW spent on it.