How soon we will need a new algorithm?

[MightyStorm]

A little too much math for me.

Can someone explain in simple terms?

[doof]

You don't understand Proof of Work, vs Proof of Stake?

[Lorenzo]

A little too much math for me.

Can someone explain in simple terms?

In a proof-of-stake system, each coin is kind of like a miniature mining rig and the more coins you stake, the more coins you can get as rewards. These rewards either come from network fees or from inflation.

The article provides an argument that proof-of-stake systems are flawed. It claims this is so because in most proof-of-stake systems, having 51% of the staking coins at any one time is basically the equivalent of having 51% of the hashrate of a proof-of-work coin, and since the rich get richer under some proof-of-stake models, the coin will eventually be controlled by a single rich person who might be able to sufficiently mount a 51% attack and manipulate the blockchain.

It then goes into detail about how this could be prevented by proposing novel variations of proof-of-stake.

Surprisingly however, proof-of-importance doesn't seem to be on that list. It's a variation of proof-of-stake but where factors other than just your staking balance are also taken into account:

http://cointelegraph.com/news/113698/proof-of-importance-nem-is-going-to-add-reputations-to-the-blockchain

[MightyStorm]

A little too much math for me.

Can someone explain in simple terms?

In a proof-of-stake system, each coin is kind of like a miniature mining rig and the more coins you stake, the more coins you can get as rewards. These rewards either come from network fees or from inflation.

The article provides an argument that proof-of-stake systems are flawed. It claims this is so because in most proof-of-stake systems, having 51% of the staking coins at any one time is basically the equivalent of having 51% of the hashrate of a proof-of-work coin, and since the rich get richer under some proof-of-stake models, the coin will eventually be controlled by a single rich person who might be able to sufficiently mount a 51% attack and manipulate the blockchain.

It then goes into detail about how this could be prevented by proposing novel variations of proof-of-stake.

Surprisingly however, proof-of-importance doesn't seem to be on that list. It's a variation of proof-of-stake but where factors other than just your staking balance are also taken into account:

http://cointelegraph.com/news/113698/proof-of-importance-nem-is-going-to-add-reputations-to-the-blockchain

Thanks, that's easier to understand.

[lithiumc]

blake 256 is all you ever need

[louise123]

Surprisingly, nobody seems to have noticed that both mentioned algorithm depend on those with the most cash.
Yes, it is true for Bitcoin as well.
If you got the cash, you get the coins, either by buying or by setting up a mining operation.
(Smart investors will go for the first option)
It is as simple as that.

[e1ghtSpace]

A little too much math for me.

Can someone explain in simple terms?

Basically with POW, power goes in (mining) and coins come out.
With POS, nothing except time (staking) goes in, and coins come out.

This is why I feel POS coins are not worth anything at all.

[LiteCoinGuy]

after the 20mb block increase...so never i fear 

[ajareselde]

From this idiotic "article:"

If the rich are more likely to get a block, they are more likely to collect the reward for the block. Every block they get, the richer they become. The richer they become, the more likely they are to collect the reward for a block.

This keeps going on for the life to the cryptocurrency and if the cryptocurrency lives long enough, it will see 51% stake holders, or 91% stake holders, or even 99.91% stake holders. It is only a matter of time.

This is too idiotic to merit response. Who is "Guest Author" anyway? Does Cointelegraph just let anybody post "articles" on their site?

But POS is still proven to be dumb solution, disregarding the way the article was written, i agree with this fact. Holding coins should never give you advantage in minting new ones.
This is what made me lol way too much "Proof of Hodl (PoH)" - First and last time i read this, i hope.

cheers

[dothebeats]

From this idiotic "article:"

If the rich are more likely to get a block, they are more likely to collect the reward for the block. Every block they get, the richer they become. The richer they become, the more likely they are to collect the reward for a block.

This keeps going on for the life to the cryptocurrency and if the cryptocurrency lives long enough, it will see 51% stake holders, or 91% stake holders, or even 99.91% stake holders. It is only a matter of time.

This is too idiotic to merit response. Who is "Guest Author" anyway? Does Cointelegraph just let anybody post "articles" on their site?

But POS is still proven to be dumb solution, disregarding the way the article was written, i agree with this fact. Holding coins should never give you advantage in minting new ones.
This is what made me lol way too much "Proof of Hodl (PoH)" - First and last time i read this, i hope.

cheers

The proof of Hodl (or more commonly known as PoS) is kinda off in methods of minting new coins. 51% attack could easily be done by a single entity who holds too much coins, whereas in proof of work method, you will first need a lot of hashing power before you could perform an attack. PoS could easily be taken advantage, while in PoW you need a lot of hashing power and hardware before you could perform an attack. However, as difficulty rises in PoW, a lot of computing power is needed to solve a block in order to generate coins--this requires a lot of energy and power. The demand for power over time in PoW is ever increasing, which is also a problem to be talked upon if ever bitcoin gone mainstream.

[franky1]

Surprisingly, nobody seems to have noticed that both mentioned algorithm depend on those with the most cash.
Yes, it is true for Bitcoin as well.
If you got the cash, you get the coins, either by buying or by setting up a mining operation.
(Smart investors will go for the first option)
It is as simple as that.

yep the algorithms based on POS are to make the rich richer
eg mark kerpeles
eg exchanges

once the large hoarders take their slice all that would be left is dust. far far less than someone would get if they bought miners

[crazyivan]

New algo? Why would we need another one. These we have are quite sufficient. PoW and PoS especially.

[flyingplows]

New algo? Why would we need another one. These we have are quite sufficient. PoW and PoS especially.

If you would care or at least read, instead of spamming bs, what OP was trying to say - you would understand that PoS has a major flaw because of compounding interest for big bag holders as explained by math in the article which explicitly show that your % in PoS is always getting lower if you're not rich in that particular coin. Further they discuss how to solve these problems. Real implementations are being made in their own understanding like VARY coin by igotspots guy if you're really interested

[Kazimir]

blake 256 is all you ever need

Blake-256 offers exactly zero advantage over sha256.

[cryptworld]

Bitcoin will never change its algorithm,as simple as that

[bitllionaire]

Why is a new algorithm needed?
There are many algorithms,anyway bitcoin will keep sha256 to the end

[thebenjamincode]

you know what? altcoins mostly do new algorithm
try to go for the altcoin discussion section and you might get what you want

[Amph]

Bitcoin will never change its algorithm,as simple as that

it's not guaranteed, if something in the future could come up, and it could reveal to be better why not? it's not like we are stuck with current tech forever

[Kyraishi]

Bitcoin will never change its algorithm,as simple as that

it's not guaranteed, if something in the future could come up, and it could reveal to be better why not? it's not like we are stuck with current tech forever

That is true, though I doubt it will just switch to another encryption algorithm just cause it's better.
More like if there was a thread to the current algorithm (Sha-256).

Which brings me to this question:
Wouldn't that make Bitcoin an alt-coin?

[shulio]

Bitcoin will never change its algorithm,as simple as that

it's not guaranteed, if something in the future could come up, and it could reveal to be better why not? it's not like we are stuck with current tech forever

That is true, though I doubt it will just switch to another encryption algorithm just cause it's better.
More like if there was a thread to the current algorithm (Sha-256).

Which brings me to this question:
Wouldn't that make Bitcoin an alt-coin?

Bitcoin will still be bitcoin although it may change algorithm in the future. If there is something better that could give some advantage for bitcoin, I dont see why not changing the algorithm as long as you dont switch the POW to POS then bitcoin will still be a bitcoin. There is a lot of altcoin that use sha256 as well but that doesnt mean that they are bitcoin