Concise but complete technical description of various proof-of-stake (PoS) schemes?

[Daedelus]

Their user base is and economy is drastically reduced.

Why, if you can run multiple wallets on
different branches?

In Wallet A you have 100.

McDonalds forks the network with their 5% stake. So now you have Wallet A with 100 and Wallet B with 100.

You sell a DVD for 100 on the original A network (95% of economy) and buy a burger for 100 on network B.

Your new balances are A = 200, B = 0.

McDonald's then tries to buy supplies for 100 they got from B. There is no one who wants to accept their transactions as the economy is so small, there are no fries suppliers running nodes on network B. They are all still doing business on network A.

McDonald's can't spend that 100 Nxt on chain A as that 100 is still in wallet A (+100 they got for the DVD). The transaction that moved those coins to McDonald's was on network B. McDonald's tries to convert the 100 to fiat to pay their suppliers. All the exchanges still run network A so they aren't interested in converting their forked coins from network B.

McDonald's decides to rejoin chain A rather than go out of business, so all network B's transactions never happened (no nodes running B = no network or history). McDonald's has an economic incentive to stay with the main chain if it wants to stay in business. Users have an economic incentive to stay on the main chain if they want their coins to be useful for transacting with businesses.

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[YarkoL]

I applaud you for attempting to spell
it out in so concrete terms. I think I understand
the argument, but

McDonald's then tries to buy supplies for 100 they got from B. There is no one who wants to accept their transactions as the economy is so small, there are no fries suppliers running nodes on network B. They are all still doing business on network A.

Is this a realistic assumption? wouldn't the fries suppliers have an
incentive to follow and open up an account on branch with McDonald's, so as
not to lose their large customer. And all the people with a liking
to hamburgers? Especially since they all - including McDonald's -
can still run wallets on the other forks.

I'm just not convinced that economic incentives are enough to
keep everyone on the same boat. To me they could under certain
circumstances encourage splitting. Please note that I don't think
this is a necessarily a bad thing at all.

[LiQio]

I applaud you for attempting to spell
it out in so concrete terms. I think I understand
the argument, but

McDonald's then tries to buy supplies for 100 they got from B. There is no one who wants to accept their transactions as the economy is so small, there are no fries suppliers running nodes on network B. They are all still doing business on network A.

Is this a realistic assumption? wouldn't the fries suppliers have an
incentive to follow and open up an account on branch with McDonald's, so as
not to lose their large customer. And all the people with a liking
to hamburgers? Especially since they all - including McDonald's -
can still run wallets on the other forks.

I'm just not convinced that economic incentives are enough to
keep everyone on the same boat. To me they could under certain
circumstances encourage splitting. Please note that I don't think
this is a necessarily a bad thing at all.

They could eat for free in economy B -> this alone should incentivize McDonalds not to stay in economy B and switch back to A asap

(btw. those examples make me hungry)

[Daedelus]

The problem is, if McDonald's goes alone then network B basically becomes Disney dollars or a loyalty scheme. Network B transactions are only accepted or have value in one place: McDonald's. And they can decide to suspend that at any time without notice or recourse by shutting down network B (granted, they could take them to court in this case but why take the risk when McDonald's could just continue on network A?) Anyone can choose to accept them if they want, but why would they?

It would be like accepting payments from McD's in airmiles or the like, one of your suppliers will need to accept airmiles as payment or you are digging yourself into a hole. Lots of expenses and nothing of value to others that you can use to pay them. Sooner or later, you will have to stop accepting airmiles and go back to the original (e.g. dollars) just to stay in business.


The economic majority holds the balance of power. There is nothing stopping McDonald's forking. But they can't force anyone to use their chain. And, as shown above, there can't be any interaction between the two chains so the fork would need the economic majority for it to stand a chance of surviving long term. i.e. McDonalds forks and takes a fries supplier, a logistics company, a cow farmer, a butcher and 1 billion customers etc. with them and tries to make a sustainable economy.


Another way of thinking of the forking. It would be the same as McDonald's being on the Nxt network but then announcing they are only going to pay suppliers only in a 3 node, $5000 POS coin that is at #970 on CMC (a small economy of limited number of users). Or going from USD to [Island Nation form of currency].  It doesn't make economic sense for them or for their suppliers to follow. Any payments their suppliers receive in the mean time are likely to be worth nothing in the long term as the economy is too small and is most likely to fail.

I would say it is more of an assumption, it follows logic given the economic rules (self interest in preserving the value you have).