Bitcoin Forum

guys which do you think has more chance to succeed? PoS coin or PoW coin? and why

PoS ftw

I believe the ideal is a PoW/TaPoS hybrid, eventually converging on Transactions-as-Proof-of-stake as the transaction rate gets large enough that any 'whales' big enough to game it for a double spend are also too big to do so and not get prosecuted.

Most implementations of Proof-of-stake suck.  They are not the way it's supposed to work, and the PoS stakers who forge blocks do not actually contribute security to the block chain in relation to their staking award.

Hybrids  have the best balance between fairness and security.
HBN for me.

POS for me, everyone helps secure the network and gets interest paid for doing so.  True decentralization.

Can you elaborate on that.

what im thinking is. PoS coins basically gives you more coins by just having one. inflation of course prevents the coin's value to rise.
on the other hand PoW coins with limited coin supply should they succeed has higher chance for the price to go up because of scarcity in the future.

but then again greece said that they cant make btc as their currency because it is inflationary.
people wont spend btc because they know the value will rise.

"Inflation bad for POS but good for POW", one rule for POS and a different rule for POW? :-\


Also, not all POS are inflationary.

oh sorry typo greece said they cant make btc as their currency because it is NOT inflationary. because of that people wont spend it because value will rise sooner or later

Neither, PoS in its current state needs more work and PoW is just a waste of resources.
I suspect we will see an evolution of one or both soon (tm)....

What are the areas in POS that need more work?

1. I am not convinced incentivizing miners with a % reward based on holdings is the right solution (making the rich richer?)
2. There is still centralisation and this area needs work i.e. checkpoint node

There have been improvements such as BC PoS 2.0 but more work is needed.

I suspect he is referring to the use of "coin age" ... and that one can keep their wallet offline for weeks and just turn it on to stake before turning it off again.
BC PoS 2.0 addressed this but as my post above, more work is needed IMO on PoS.

1. It depends on the percentage. How rich will they get if the percentage is 0.5% or less? POS coins that use very high inflation, rather than transaction fees, as rewards are different. In the long run, these will make everyone poorer.

2. Not all POS use centralized checkpoints. BC's POS 2.0 moved it away from Peercoin/Novacoin and made it very similar to Nxt (Come-from-Beyond reviewed it and this was his conclusion, almost identical). If BC implemented all of Nxt's idea then it would no longer need centralized checkpoints that (I believe) Peercoin still requires.

PoW, definitely PoW. Only CPU/GPU PoW, since ASICs are plague.

Okay....  With PoS as usually implemented, the "coin days destroyed" are the basis for selecting one chain over another.  So that's the "security" measure that people ought to get paid for providing.  But it is not what people get paid for providing.  They get paid for locking up coins, providing something else.  Something completely unrelated to the security of the block chain, because they can lock up the same coins on both sides of any fork.

Also?  "Coin days destroyed" are not a finite resource in the way that something needs to be finite in order to help secure a block chain.  Someone with 1 coin that's a month old should not be able to play for a 3-to-1 advantage in a game that nets him ten coins one day old.  Nor should someone be able to spend the same coin in both of two different forks to generate different priority in both just because the coin is spent at a different block chain height.  

"Total transaction volume" is also not limited in the way you need it to be limited for security.  If you have a system where an attacker can generate more priority for an attack chain by repeatedly shuffling his coins between different wallets after the fork, that's a broken system.

Also?  If an attacker can prepare a block chain without letting anyone else see it, which has comparable transaction volume, just by replaying other people's transactions that he sees on the main block chain into his attack chain?  That's also broken.  If it's a coin-days-destroyed system so by playing them into later blocks make his attack chain have more priority than the real chain?  That's even more broken.

The only real measure of stake that matters when picking between two forks of a block chain, which is limited in the way we need a security measure to be limited, is the amount of coins that existed before the fork, which are  used as inputs after the fork.  Even that is useless unless the transactions actually specify which side of the fork their stake supports by specifying the ID of a recent block and not being valid in any chain not derived from that block.  

So, a Proof-of-stake system that works looks like this:  Every transaction 'stakes' a recent block and is not valid in any block chain that is not derived from that block (so an attacker can't replay it into an attack chain that started before the stake block).  The choice between forks is made on the basis of which chain has more coins that existed before the fork and are used in transactions staked after the fork.  Because that's the basis of chain security, that's what users get paid for providing. And you do that by making them get interest on the coins they use as inputs in transactions, up to the stake block. 

If they stake a block that's not very recent, the transaction is valid in all possible forks arising after the stake block, so it's not very useful for security.  On the other hand, it's valid in all possible forks arising after the stake block, so they can be comfortably certain that whatever fork wins in such a split their transaction will be in it.  So they get the security payment interest up to the stake block, and the miner gets the security payment interest after the stake block.

Miners are motivated to include absolutely all the transactions they can find on the network because including all the transactions means their block has priority if a fork happens.  Miners will also make a transaction staking their own entire wallet every time they make a block, both to collect the interest on their coins and to generate priority for their block.  

But someone not using their coins to support any block chain is contributing nothing to security for that whole time, so there has to be a top limit on the amount of time people can get paid interest for.  Not too short, or you spam the block chain with transactions far too frequently made just for the purpose of not losing interest. But not too long, either, or you wind up with the whole burden of security sitting on the miners as people just sit there with their wallets not supporting either branch of any fork.  Let the rest of the stake interest go to the miners along with tx fees, because the miners are providing security for all the people who leave their coins sitting there.  

It doesn't matter how you decide who gets to form a block; I think proof-of-work mining is fine for that.  But, once again, the amount of security counted for a chain fork, should equal the amount of security the payment is a reward for, so if you have a block subsidy (and you should, to distribute a coin supply) then you have to count the miner's work, or whatever resource the miner irrevocably committed to his block that he cannot also commit to any forking block, toward block chain security too - in roughly the same proportion as the proportion of block subsidy to stake interest generated.  

My own preference is for the miner to get a constant block subsidy, which will start out being the whole money supply.  Hence the system works like a proof-of-work coin until coin interest/stake awards start to be generated. But if the system lasts, then the block award eventually pales into insignificance relative to the amount of stake income being generated, because compounding interest.  So it asymptotically approaches a system that works like a proof-of-stake coin. The transition is very gradual, but at that point the miners are basically living on transaction fees and stake scraps.

Is that really what you got out of that whole explanation?  Darn, my communications skills must suck.

I'm not a miner.  I never have been.  I really do want to make a proof-of-stake system that works.  But getting past the initial part is hard, and that genuinely is my best idea for getting there. 

What I outlined winds up being a Transactions-as-proof-of-stake system; it makes the transition gradually, but that's where it goes.  Payments for block chain security, aside from the block subsidy which gradually fades into insignificance because inflation, are made to people in proportion to the amount of block chain security they provide  by using their stake in support of one version of the block chain instead of another. 

I proposed proof-of-work as a ramp-on because I don't think transactions-as-proof-of-stake will be "steady" enough to secure a block chain until you have thousands of people making transactions.  There's just too much variation in transaction volumes from one period to the next, so an attacker could force a split by making a really big transaction during a slow block.  Without something "steady" in the initial stages, you'd have to counter that variability with long block times to allow transactions to average out somewhat and give the inevitable forks time to resolve.  At least until you have a whole lot of people making transactions, and at that point the "miner" is living on tx fees plus what he gets by staking his own coins.

You could have a different ramp-on if you like.  Another possibility is copying the txOut set of an existing coin to make the initial distribution.   But distributing your stake payments to the people whose stake actually supports security means that the people who make transactions get almost all of it, and the people who form the blocks eventually wind up getting almost none of it.  So, as I said, it doesn't really matter how you decide who gets to form blocks.

Ultimately the market will converge on some kind of PoS system.  It doesn't have to support the mining costs that Bitcoin does, so it has a competitive edge. 

But right now Bitcoin has an enormous network advantage - it may take many years before a period of market chaos big enough to overcome that arrives.

POS might have merit after long (and I mean long) periods of actual POW mining (we're talking years, if not decades). These flash POW periods of 2 weeks before converting to POS are ridiculous.

Absolutely.  I think permissionless block formation, for at least transaction fees, is an important feature of a winning implementation.  This is one of the reasons I think block formation should not be determined by stake share.  It's okay for people to have a motive that varies in proportion to their stake, but it should never be zero-stake=no way to form blocks nor zero-stake=no reason to form blocks.

Cryptocurrency should be designed for the people, although distribution is usually not fair, POW makes it much more fair. POS is a really bad idea. It is trying to turn crypto into penny stocks when really it is a currency. POS is an example of making the rich richer, all that is wrong in the world really. Do no work, get money. POS is mostly used to scam people (look at iGotSpots coins 10k etc.). I think POW with useful research algorithms will be the best in the future.

Yes that is basically a POS coin. Flash mining with POS with 100% a scam.. I always feel sorry for the sheep

PoS really doesn't have to stand for "Piece of Shit" although as currently implemented it usually does.

The real issue with the usual implementation of proof-of-stake is the ludicrous drop in coin production as it shifts from proof-of-work (or IPO, or whatever) to proof-of-stake.  You have a short mining period that maybe a few dozen people get in on, and then from there on the creation of coins is hundreds, or even thousands, of times slower AND restricted to those few dozen people.  Which means both that there's absolutely no reason for anybody besides those early miners to ever use the coin, AND that it's a horrible investment.

It's possible to implement a good PoW/PoS hybrid.  The problem is we've only seen the scammers' version of a PoW/PoS hybrid.  The structure and rules of a good one would be dramatically different.

PoW/TaPoS hybrid with lightning network

https://i.imgur.com/8X9pkaf.png
https://bitcointalk.org/index.php?topic=970822.0
http://lightning.network/lightning-network-paper-DRAFT-0.5.pdf
https://www.youtube.com/watch?v=8zVzw912wPo
http://lightning.network/lightning-network.pdf
http://www.coindesk.com/could-the-bitcoin-lightning-network-solve-blockchain-scalability/


 45,000 instantly confirming transactions  per second and being able to scale without bloat

The future is so Bright we all are going to have to wear shades  8)

I have.... please clarify with specific technical objections that aren't already addressed in the whitepaper and by the developers. Please be very specific citing the page and /or article as well and with a detailed explanation for us to take you seriously.

... or are you feigning incredulity due to your shitcoin becoming obsolete before anyone even notices it?

I see...  feigning incredulity.

I already have done my homework and am providing you the research to educate yourself. Please come prepared next time; I look forward to hearing the specific objections.

https://bitcointalk.org/index.php?topic=970822.0
http://lightning.network/lightning-network-paper-DRAFT-0.5.pdf
https://www.youtube.com/watch?v=8zVzw912wPo
http://lightning.network/lightning-network.pdf
http://www.coindesk.com/could-the-bitcoin-lightning-network-solve-blockchain-scalability/

I even provided you with a nice slideshow and video if the whitepaper is too overwhelming for you.

The biggest problem with digital currency:  people think it's just created for free, out of nowhere, and that therefore it is worthless.

For some coins, that is true.  It's worthless money that costs nothing to make.  People just type numbers, and you pay them money for it.  They can create 1 million coins, or they can create 1 billion coins for the same amount of effort.  The coins are free, they come from nothing, so they are worthless.

With proof of work without premine, that is not true.  Nobody created free money and sold it, and nobody can print new money for free. POW costs electricity and equipment - it takes work.  Bitcoin comes from work, and therefore it carries the value of the work that created it.  If it costs you $200 to mine 1 Bitcoin, then you will want to sell it for more than $200.  The value of the coin is based on the cost of mining and maintaining the network.
 
With 100% proof-of-stake, what is the value based on?  Maintaining the network costs much less, so the value of the coin is decided arbitrarily by the few people who already own coins. 

But, depending on the initial distribution, POS has advantages.  I can't mine Bitcoin with my PC, or even with my expensive video cards.  So I can't participate in the network, other than running a node, and even that may soon change.  But with proof of stake, I can participate as much as anyone else who has coins.  So, depending on where the coins came from - ideally from a POW period - the coins might be worth buying in order to participate in maintaining the network. 

And of course some projects use coins as fundraising tokens or investment shares.  For these coins, especially if they pay dividends, POS is ideal because there is more going on than just mining and coins.  When the coin is mainly a placeholder for something else, you don't want to spend a lot of money running the blockchain;  you want the value of the coins to be based on something else, with the blockchain being only one part of the project rather than the entirety of the project. 

But if you're just talking about a typical altcoin that never had a POW distribution, that isn't used to represent shares in a company, that pays no dividends, that doesn't do anything other than what Bitcoin already does, that was instamined and then sold rather than given away for free, then what do you really have?  Just empty made-up money that someone created for free.  There would be no good reason to pay real money for it.

Then all work is waste.  Quit your job, if you have one.



Longer than you can fund the instaminers. 



None of us will have a retirement if we depend on government.  The government creates money that doesn't require any work, which makes it more and more worthless.  So keep buying other currencies that are also worthless.

Not all work is waste, but not all labor creates value.  Given that there are more efficient alternatives, POW is pretty wasteful for most use cases.  There may be some scenario in which it makes sense, but I don't think a global currency ledger is one of them.

What would have happened if Bitcoin had been Proof-of-Stake from the beginning?

What would have happened if Bitcoin had transitioned to 100% Proof-of-Stake sometime in the past few years?

If Bitcoin was PoS right now, what would you tell someone who says Bitcoin isn't real money because it's not backed by anything and people just get it for free?

What would you tell someone who asks where Bitcoin comes from and how they can get some? 

Most people's first assumption was that Bitcoin was a scam, even when anyone could mine it with a laptop.  So how many people would have adopted Bitcoin if the answer was "You can only get Bitcoin by giving real money to the few people who already have bitcoins, and then you can buy in and become a seller yourself!"

Would the average person be more or less inclined to view Bitcoin as a pyramid scheme?

Miners pay for the electricity they use, so the electricity is theirs to do whatever they want with it.  You can talk about waste, but the miners are only "wasting" their own money.  It doesn't affect you negatively, and the miners obviously think it's worth it.  The people "wasting" their own money don't feel like they're wasting anything, and your opinion has no weight regarding their personal choices.  And if they spend a certain amount of money mining, and then sell their mined coins for more than they spent, then they've profited. 

What definition of "waste" are you using that applies to increasing your supply?  "We had 2 dollars, but you went out and got 2 more dollars!  Now we have 4 dollars, which means you're wasting dollars!"  That's what you're saying, when you say mining is wasteful.

It is supposed to be wasteful as that provides a unique security value that forces an attacker to spend real money aquiring ASICs and than real money running them to attempt an attack which would allow 2-3 double spends before getting caught.

Perhaps bitcoin should migrate over to a PoW variant like primecoin to search for primes... or maybe recapturing ASIC heat waste is good enough for the future.

nope. you are probably not reading enough. BTC still is the best coin to invest in and still many people believe in it.

go try it yourself post here or other forums and ask them what coin is the best investment with the criteria of active development, coin that you can trust to continue growing and devs not going away.

you may be surprised but most of them would say keep btc as it is the only coin you can trust 100%

as for me i would also dash as a coin to trust.

Pow makes sense more than Pos for me.

Pow creates artificial work because of the mining.
Pos seems a give away for now. buy some coins and get some for free.

yet the biggest problem why btc cant be adopted as a currency is because of its limited supply. meaning price would eventually go up because of scarcity thus making people not wanting to spend.
so PoS has an advantage over there.

maybe Pow Pos hybrid is the best. but not 2 week mining  or short term mining. i would say years of mining then PoS

Pow for coin distribution and then switch to full POS aka peercoin

I agree with most of what you said except the above. I understand we intuitively assume the above to be true based upon the fear mongering Keynsian economists have instilled in the public when they warn of a deflationary spiral. In practice bitpay has release data reflecting they see spikes in spending when Bitcoin rapidly appreciates (Or goes through disinflationary/adoption bubbles). We have been theorizing that this is due to the wealth effect being more powerful than ones hoarding instinct. When Bitcoin goes up in value people are more generous with tips and spend more because they are wealthier and everything has become cheaper.


Bitcoin may eventually need to modify the algo to provide security if transaction volume doesn't sufficiently ramp up. There are many ways to do this but the great risk for bitcoin is too much vested interest in old mining preventing a transition. This is why Vitalik is considering setting up an inflationary bomb in ethereum to go off for the PoW chain of ether when they decide to switch to some yet to be invented TaPoS variation.

Yup what you said is true that now people spend more when btc rises its value. But btc is only owned by a few people.  But that would change if an entire country makes it their currency.  As you can see people spend usd euros etc 1 because for daily living.  2. Value goes down because of inflation.  So what do they do they invest their money to beat inflation rate.

But if you adopt btc as a national currency.  Lets say you have 1 btc now.  Current supply would be distributed to people.  Then mining would take place until you reach max supply.  You will be stuck at 20+ million coins forever.  Let us say your 1 btc can buy a car now.  But when max supply is reached and you need to accomodate all people to have btc as currency.  The only thing that everyone can have btc is to increase the price so it can be divided to people.  

Would you still spend btc if you know it would worth so much more on the future?

Yes, in practice when bitcoin was shooting up 30-100 dollars a day (hyper deflation which is the moment when you expect people to be saving the most vs slowly growing in value ) is when bitcoin payment processors saw the largest jumps in purchases. This isn't spikes in transaction volume on the blockchain due to day trading but purchasing goods and services with bitcoin.

I spend bitcoin all the time and in fact I specifically spend it when its is going through a "deflationary spiral" or appreciating in value and than when bitcoin is losing value or acting inflationary I use my fiat. This way I am leveraging bitcoins volatility to insure I always buy goods and services cheaper.

I understand this may seem strange because we were always warned about the dangers of deflation but the data reflects that the Austrian school of economic thinking may be onto something.

I seriously doubt any country will ever adopt bitcoin as a national currency (inflation is how they steal from their citizens)but even if they do that doesn't change the data above.

I'm sorry, I don't follow.