Proof of Stake is the Evolution.
Proof of Work is a failure,
(Control Centralized to Chinese Mining Pools over a year ago.)Chinese Mining Pools currently Control ~67% of BTC , just because people are currently throwing more fiat at it,
don't mistake public ignorance for technical superiority.
If I am a PoW miner , I can sell my coins and still keep control of the network with my ASICs.
If I am a PoS Staker, when I sell my coins, I am selling my % of future staking potential.
FYI:
It all breaks down to resources, Million of Dollars to maintain PoW Security
(required monetary expenditures ~ year for new ASICS),
Where as a PoS coin network can be maintained and Secured with a few PCs.
(This is why PoS will succeed PoW, spiraling cost structure of PoW guarantees Centralization.)FYI2:
As far as the Gov goes , they can seize you and sell your coins PoW or PoS.
And if they don't want you staking or mining, they can cut your electricity or internet connection.
Currently no algorithm will protect you from a Government out to get you.
I think the debate is more difficult than that.
It is true that PoW, if specialized hardware is out, allows for such economies of scale, that centralization is unavoidable. This is what happened to bitcoin, what happened to scrypt coins which lost their reason-d'être for it. For the moment, there are still PoW schemes which allow spread-out mining, but the question is whether that's due to the fact that these coins have low enough stakes that it isn't worth *yet* to develop ASICs for it, or whether they found the magic solution.
In other words, PoW avoids too much centralisation, as long as general purpose computing can compete in the mining race. From the moment that you cannot do PoW on your PC any more, it is essentially over. The question is whether there are PoW algorithms that will remain complex enough, even in the face of enormous potential gains, to resist specific hardware development. I might think that an algorithm that is *regularly forked* might be a solution. You are not going to invest into billions of hardware if 6 months later, the algorithm is forked into something that renders your hardware useless. Also, if general purpose computing is the best solution, that might at best stimulate the development of better general purpose computing hardware, instead of totally useless hardware EXCEPT for mining a specific coin.
So maybe a morphing, forking, complicated PoW algorithm is the best protection against PoW centralisation.
But PoS has also its integrated centralisation, because the compound interest formula diverges, which means that in a toy world where N parties have different stakes, and you let evolve a PoS system (with "interest") in such a world, then the initial top stake holder will ultimately obtain all coins. One can even estimate the time frame over which this divergence takes place. Once the top stake holder has 50%, or 66%, or 95% of all stakes, he is total master of the network (which, at that point, becomes most probably worthless).
The PoS system has the inherent instability of any "capitalist" caricature, where the rich get richer, because your possessions give you a a proportional fraction of the gains, which increase your possessions, which entitle you to an even larger fraction of the gains, until you reach 100% of all gains.
There is essentially no solution to the centralisation problem, apart from 'changing the rules' regularly and in an unforeseeable way, which is exactly what "immutability" tries to avoid. In the real world, that's also what happens, and avoids all richness to concentrate in the hands of an oligarchy: revolutions, political overhaul, unforeseen crises, war, ...
Without those perturbations, there would just be a few rich families possessing the earth, and all the rest of us would be their slaves.
