Bitcoin Forum

Every crypto related form of transactions I know requires a sender, receiver, and a necessary means of validation. I guess this is the term some of us are all use to including myself. Do miners have a different meaning and also perform a different task from validators?, I never knew until I came across it.

Whenever i hear the word mining, only one cryptocurrency comes to mind and that's Bitcoin. Just as i like Bitcoin and it's Network so much, definition of a miner has never been a problem. Even the process called mining is a almost like a sub-topic on it's own that can be elaborated further into halving, validations, computing, hash, node, etc.

Miners uses the Proof Of Work consensus protocol in validating Bitcoin transactions, thereby adding those transactions into a block, and adding the block to the Blockchain. This entire process requires high computational power and a heavy competition among other miners. Miners who successively mines a block are rewarded with the native token of the cryptocurrency which happens to be Bitcoin, Monero, Litecoin, etc, depending on the Blockchain they are working with.

Validators uses the Proof Of Stake consensus protocol in validating transactions, and verifying new blocks before adding them to the Blockchain. The Proof Of Stake protocol requires all validators to stake a certain amount while partaking in the validation process. The validator of a particular transaction is determined by the number of his/her crypto holding. Validators also get reward which comes from fees, but less computational power is needed unlike that of mining. Examples of cryptocurrency that uses the PoS protocol for their transactions are Solana, Ethereum, Cardano, BNB, etc.

I noticed so much difference between this two as they work for different Blockchains. Some of these features are :

• difference in Computational power
• reward for those who successfully validates. PoW reward contains tx fees and the reward already designed in the protocol, while  PoS reward contains tx fees only.
  
• difference in competition level. PoW requires high competition among miners, while PoS requires the highest staker to get most valuable transactions.
• PoW requires spending more on mining equipment, while PoS requires buying large number of coins for stakes.

I noticed that there is a possibility for validators to easily perform some manipulations such as choosing large amount of transactions for themselves alone. My reason is because, since it requires the highest staker to get a better offer, then those with more stakes could take control of certain transactions often.


My question:
1. Do you think validators can easily manipulate validation process ?
2. Do we think most Blockchain adopted PoS inorder to avoid computational cost?
3. PoW reward especially Bitcoin seems more beneficial. is this the reason why we still have lots of miners even if it requires joining a mining pool?.
4. Miners And Validators - What comes to your mind?

I am 100% open to correction as I still see myself as a learner. Pardon any of my error and share your personal opinion.

Yes, for example by signing every version. Making a signature is cheap, while mining an alternative chain is hard. Which means, that if you want to trigger for example deep chain reorganization, then all you need in PoS is just re-signing the whole chain (which is a fast process, and you can easily reorg thousands of blocks). On the other hand, re-mining the chain is very hard, and some historical violation of rules are "grandfathered in", so they are written as exceptions in the code, because nobody will re-mine thousands of blocks. For example: BIP-30: https://github.com/bitcoin/bips/blob/master/bip-0030.mediawiki

I think they adopted it, because they still don't know, how to make Proof of Work chain correctly. One example of a failed attempt is NameCoin, which accepted only NameCoin-based block hashes, when calculating their difficulty. And because of that mistake, you can 51% attack NameCoin, even if you don't have enough power to 51% attack Bitcoin. What they should do, is to trace every double SHA-256 header, no matter if it is valid or not, and calculate their difficulty, based on that. And if they wanted to stick with 10 minutes per block, then they could just decrease their amount in the coinbase transaction, relatively to their local difficulty (or even not introduce any new coins at all, and just do a 1:1 peg with existing coins, and reward miners with their own product, called "domain names").

Usually, you have to join a pool, no matter if it is Proof of Work, or Proof of Stake. Because there is a single chain of valid block headers, and you don't have "1000 valid blocks, at height 123,456". Of course, in chains like ETH, you have features like "uncle blocks", but then, that sword has both ends, and when you push that pool-related information on-chain, then validating everything from scratch takes more time, than it should.

Solving the problem of pools would require sending "shares" in a purely P2P way, so that each node would act like a new mining pool, and would share the block reward with every other peer, which submitted enough shares.

I think those two functions are now somewhat separated in the Bitcoin network. You have ASIC miners, which just take 80-byte block headers, and produce a small hash. And you have validators, which are just full nodes, checking if the result of that mining is valid or not. In the old times, we had only "nodes", without splitting them into those who mined, and those who didn't mine. Now, the situation is different, but it was planned upfront to end in that way. Of course, there is still some room for improvements, for example some miners could just run LN nodes, and receive millisatoshis on L2, if they have too small hashrate, to compete in the mainnet.

In bitcoin, mining and validating have different meanings. Bitcoin transactions are validated by nodes and they are confirmed by miners.

Once you broadcast a transaction, it's sent to some nodes. Nodes check if your transaction follows the rules. If so, they put your transaction in their mempool and also send it some other nodes.
Miners solve the proof of work problem and they include the transactions in the blockchain.

They both have competition. In the first scenario you are competing to be the one with majority hashrate while in the other you want to have majority of the supply. Same way we can have different successful miners on PoW despite them having different amounts of hashrate, it also occurs on PoS.

Important differences is that PoS is not created to boost security and it heavily favors centralization of the supply while taking coins out of circulation.

- Jay -

Initially when someone came up with the idea (Proof of Stake) more than a decade ago they were thinking about an alternative blockchain algorithm that doesn't rely on heavy computation. But this is a flawed protocol that failed nearly as soon as it was introduced.

So I wouldn't use the word "adopted" for it.
Nowadays any altcoin that chooses this algorithm aims to maximize their own income. Such coins usually have a massive premine where the developer tries to create a passive income for themselves without doing any work. Like Ethereum!

P.S. One of the major flaws of PoS is that almost always the centralized exchanges can easily become a massive stake holder and perform an attack on that coin!

I just imagine Binance becoming the highest staker. That's already a 100% centralization on their own Blockchain. From all these, the rough work lies more on PoW making it's security level very high.


Seems not everyone can easily compute every mathematical concepts that concerns PoW protocol. Though I have come across some alt that has successfully applied this mechanism. I will do more reading on Namecoin and their failed concepts.

They already are big in a lot of chains.
By the way here is an actual example of such an attack on a PoS coin called Steem:
https://cointelegraph.com/news/the-steem-takeover-and-the-coming-proof-of-stake-crisis

This is wide  :-\. Now the Steem social network would be in a complete disaster. Justin should have done better rather than ruining the entire system. Could this also be part of the reasons why some of the developers had to leave to create a Steem clone  ???. I read about their exit sometime back.

You probably mean Hive and the Hive.blog as alternatives for Steem and Steemit. Those who didn't agree with the takeover had their reasons to leave. Some others were maybe asked to or let go. Hive appeared as a direct response. A decentralized social media with no censorship and a lower chance for such a takeover as what happened to Steem and its services.

One of the key differences that comes to mind when comparing Proof-of-Stake and Proof-of-Work is the ability of a staker to maintain their voting power indefinitely without incurring additional costs.  For instance, if Bitcoin were Proof-of-Stake and Binance had 210,000 BTC staked, they could consistently maintain the ability to create 1% of the blocks, always, no matter what. 

With Proof-of-Work, if more miners join the network, they directly reduce your voting power.  You can't hold onto a fixed portion of the hashrate by simply owning a certain number of ASICs.  That's beautiful, in my opinion.