PoS vs PoW

[menoiazei]

Trying to understand how proof of stake vs proof workS...
also would like to hear opinions and strategies from people who walk the pos walk...

many thanks! 

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[speaktome]

Trying to understand how proof of stake vs proof workS...
also would like to hear opinions and strategies from people who walk the pos walk...

many thanks!  

POW  -  Mining equipment + CPU to generate blocks. The most times very expensive.


POS   -  CPU. Leave open your wallet to generate blocks.


So Wich for you is?    

[Kagekatsu]

Trying to understand how proof of stake vs proof workS...
also would like to hear opinions and strategies from people who walk the pos walk...

many thanks! 

Well, PoS is much cheaper than PoW. In PoS, you leave your wallet open to stake your coins, read carefully the coins specs and try to understand if leaving your wallet open (means your PC always on) is profitable or not. Usually developers propose high PoS rewards to attract investors.
In the other hand, PoW requires mining equipment that can be relatively cheap (like GPU cards) or professional (ASIC). Surely more expensive than PoS, but mining guarantees coin stability and strenght.

[CoinBateman]

Trying to understand how proof of stake vs proof workS...
also would like to hear opinions and strategies from people who walk the pos walk...

many thanks! 

Well, PoS is much cheaper than PoW. In PoS, you leave your wallet open to stake your coins, read carefully the coins specs and try to understand if leaving your wallet open (means your PC always on) is profitable or not. Usually developers propose high PoS rewards to attract investors.
In the other hand, PoW requires mining equipment that can be relatively cheap (like GPU cards) or professional (ASIC). Surely more expensive than PoS, but mining guarantees coin stability and strenght.

PoS is really just mining too, but your upfront cost is your computer running the wallet + holding the coins.

[jl777]

Some in depth research papers on PoS: https://github.com/ConsensusResearch/articles-papers/tree/master/articles

[nonbody]

The more coins you have the higher your reward, thats the principle for POS, i prefer POW just because its more fun

[Kagekatsu]

You have to know that you can generate coin with POS using the wallet on a virtual machine and let it works h24.
So you can have a lot of coins without expensive hardware.

[stuff0577]

You have to know that you can generate coin with POS using the wallet on a virtual machine and let it works h24.
So you can have a lot of coins without expensive hardware.

Yeah but you must have more coins to have more profit and also need to unlock your wallet to make it work.

POS also somehow bring more buy's on the coin.

[DumbFruit]

"Proof of Stake" is a terrible name for a system that doesn't emulate, let alone simulate, the same functionality of Proof of Work.
What does "Proof" mean, in "Proof of Work"? It means that you can prove to anyone that you have caused a certain amount of entropy at the margin of a monotonically lengthening chain of these Proofs.
As long as no one particular entity controls more than ~50% of the hashpower (Ignoring selfish mining for the moment.) we can identify, over time, one -only one- monolithic chain of data. Only one set of these Proofs can have spent the most work. Only these Proofs allow this monolith to form in a sea of mutually distrusting parties.

What does "Proof" mean when talking about "Proof of Stake"? How can one take "Stake" and "Prove", to someone that doesn't trust you, anything about a piece of data?
Imagine you have a hundred people in a room and you dump a pile of receipts on the ground which lack any date indication, and then ask them to sort them. One person picks up a receipt and yells, "Look, this receipt that I picked up has the largest amount change returned on it! Now I'll tell you how all of these are ordered!"
That's meaningless! First of all, why should we trust someone just because they have a big receipt, and secondly what does it "Prove" exactly?

In other words, PoW is a method for a decentralized group of mutually distrusting parties to come to a consensus about a specific ordered set of data. PoS is no such thing. PoS should be called "Evidence of Receipt in Exchange for Trust".

https://download.wpsoftware.net/bitcoin/pos.pdf

[monsterer]

What does "Proof" mean when talking about "Proof of Stake"? How can one take "Stake" and "Prove", to someone that doesn't trust you, anything about a piece of data?

You can't. Proof of stake is just providing proof that at a given instant in time, you owned X amount of currency.

The major problem with POS is that producing a block doesn't use up a limited resource; i.e. it costs nothing and therefore attacking the network also costs nothing.

[LiQio]

Trying to understand how proof of stake vs proof workS...
also would like to hear opinions and strategies from people who walk the pos walk...

many thanks! 

This is good starting point: https://blog.ethereum.org/2014/07/05/stake/

[jl777]

What does "Proof" mean when talking about "Proof of Stake"? How can one take "Stake" and "Prove", to someone that doesn't trust you, anything about a piece of data?

You can't. Proof of stake is just providing proof that at a given instant in time, you owned X amount of currency.

The major problem with POS is that producing a block doesn't use up a limited resource; i.e. it costs nothing and therefore attacking the network also costs nothing.

It actually costs something, namely calculations of the alternate branches, which is somewhat similar to PoW

The distribution of the winning miner/staker uses the same SHA256 to randomize things. The differences between them are not as large as most people make it out to be.

The search space is pretty large to create a better chain, curious to know your estimate on the number of hashes needed to do this attack for nothing

At a higher level, both PoW and PoW allocate the winning blocks base on the same thing, ie money.
Money buys hashrate gets blocks vs Money buys coin stake which gets blocks.

The end result is that people with more money get more blocks.

James

[monsterer]

It actually costs something, namely calculations of the alternate branches, which is somewhat similar to PoW

The distribution of the winning miner/staker uses the same SHA256 to randomize things. The differences between them are not as large as most people make it out to be.

The search space is pretty large to create a better chain, curious to know your estimate on the number of hashes needed to do this attack for nothing

At a higher level, both PoW and PoW allocate the winning blocks base on the same thing, ie money.
Money buys hashrate gets blocks vs Money buys coin stake which gets blocks.

The end result is that people with more money get more blocks.

James

That cost is trivially achievable though. It might as well be costless compared to POW.

Your equivalency is incorrect, here is the true equivalency:

* money buys mining equipment
* money buys coins

Note that after this step in either currency there is a massive difference when it comes to producing a block.

[jl777]

It actually costs something, namely calculations of the alternate branches, which is somewhat similar to PoW

The distribution of the winning miner/staker uses the same SHA256 to randomize things. The differences between them are not as large as most people make it out to be.

The search space is pretty large to create a better chain, curious to know your estimate on the number of hashes needed to do this attack for nothing

At a higher level, both PoW and PoW allocate the winning blocks base on the same thing, ie money.
Money buys hashrate gets blocks vs Money buys coin stake which gets blocks.

The end result is that people with more money get more blocks.

James

That cost is trivially achievable though. It might as well be costless compared to POW.

Your equivalency is incorrect, here is the true equivalency:

* money buys mining equipment
* money buys coins

Note that after this step in either currency there is a massive difference when it comes to producing a block.

"cost is trivially achievable though" really?

please describe to me this trivial algorithm. I can then code it up and we can take over all the PoS coins. I will split the proceeds with you 50/50, I am just not smart enough to figure out a way to trivially achieve this as I am just a simple C programmer and dont know all the advanced algorithms that you must know.

As near as I can tell, I would need to create a large number of addresses with minimal amounts of funds and then start calculating all the permutations of recent blocks to create one with a larger weight. But without actually funding these accounts with meaningful amounts of coins (that costs money!) the chances of winning a block is quite small. And even this "costless" attack is costing a lot of computations. And if I have to buy 10% of the coin supply to attack it, that is far from a trivial and free attack.

I am not disagreeing that there is a difference in effort, as doing billions of hashes to find a block is a lot of work as opposed to hashing pubkey against previous block. What I am saying is that the random distribution of block winner (and that is primary purpose of PoW/PoW isnt it?) is pretty much the same between the two.

Anyway, it is trivial to say something is trivial, quite another thing to prove that claim.

James

[monsterer]

I am not disagreeing that there is a difference in effort, as doing billions of hashes to find a block is a lot of work as opposed to hashing pubkey against previous block. What I am saying is that the random distribution of block winner (and that is primary purpose of PoW/PoW isnt it?) is pretty much the same between the two.

Anyway, it is trivial to say something is trivial, quite another thing to prove that claim.

James

There is no need for a proof, a simple Reductio ad absurdum will do:

The following two facts cannot both be true:

* Mining a POS block on very low performance hardware such as a PI is easily possible
* Producing a block is prohibitively expensive

[jl777]

I am not disagreeing that there is a difference in effort, as doing billions of hashes to find a block is a lot of work as opposed to hashing pubkey against previous block. What I am saying is that the random distribution of block winner (and that is primary purpose of PoW/PoW isnt it?) is pretty much the same between the two.

Anyway, it is trivial to say something is trivial, quite another thing to prove that claim.

James

There is no need for a proof, a simple Reductio ad absurdum will do:

The following two facts cannot both be true:

* Mining a POS block on very low performance hardware such as a PI is easily possible
* Producing a block is prohibitively expensive

that is your "proof"?

I do not recognize the math you are using. It seems you are using "common sense" to prove the behavior of complex mathematical system.

But I will play along as I can provide a counter example to your proof:

You have to have purchased significant stake in order for a low performance hardware to be able to generate blocks.
Such a significant stake is prohibitively expensive. So both your statements are possible at the same time.

Money -> stake -> blocks vs Money -> hashrate -> blocks

PoS: The mathematical properties of staking is distributed according to stake using statisical means
PoW: The mathematical properties of mining is distributed according to hashrate using statisical means

both stake and hashrate are purchased with the same money. If to use your level of math proofs, I have proved that PoW and PoW are identical! But I am not saying that. each has its own place where it has advantages over the other

But please, let us not just be making unsubstantiated statements, this would become some sort of illogical "debate" where logic and truth are not part of the process. You do want to have truth and logic part of the discussion, dont you?

James

[monsterer]

You have to have purchased significant stake in order for a low performance hardware to be able to generate blocks.
Such a significant stake is prohibitively expensive. So both your statements are possible at the same time.

Money -> stake -> blocks vs Money -> hashrate -> blocks

PoS: The mathematical properties of staking is distributed according to stake using statisical means
PoW: The mathematical properties of mining is distributed according to hashrate using statisical means

both stake and hashrate are purchased with the same money. If to use your level of math proofs, I have proved that PoW and PoW are identical! But I am not saying that. each has its own place where it has advantages over the other

But please, let us not just be making unsubstantiated statements, this would become some sort of illogical "debate" where logic and truth are not part of the process. You do want to have truth and logic part of the discussion, dont you?

James

Purchasing stake may well be expensive.... Let's say, for example that purchasing enough stake to attack a POS chain costs you as much as buying enough mining equipment to attack a POW one?

So, once you are ready to attack both chains, then what?

*) In the POS chain you can attack continuously at zero cost, since block production costs you nothing
*) In the POW chain you must spend continuously to produce a valid block, and what's more, you must outpace the entire network in order to produce a longer chain

Simplifying, in a POS chain the attack cost is a constant (the price of the stake) whereas in a POW chain, the attack cost is superlinear in the number of blocks you want to produce.

[jl777]

You have to have purchased significant stake in order for a low performance hardware to be able to generate blocks.
Such a significant stake is prohibitively expensive. So both your statements are possible at the same time.

Money -> stake -> blocks vs Money -> hashrate -> blocks

PoS: The mathematical properties of staking is distributed according to stake using statisical means
PoW: The mathematical properties of mining is distributed according to hashrate using statisical means

both stake and hashrate are purchased with the same money. If to use your level of math proofs, I have proved that PoW and PoW are identical! But I am not saying that. each has its own place where it has advantages over the other

But please, let us not just be making unsubstantiated statements, this would become some sort of illogical "debate" where logic and truth are not part of the process. You do want to have truth and logic part of the discussion, dont you?

James

Purchasing stake may well be expensive.... Let's say, for example that purchasing enough stake to attack a POS chain costs you as much as buying enough mining equipment to attack a POW one?

So, once you are ready to attack both chains, then what?

*) In the POS chain you can attack continuously at zero cost, since block production costs you nothing
*) In the POW chain you must spend continuously to produce a valid block, and what's more, you must outpace the entire network in order to produce a longer chain

Simplifying, in a POS chain the attack cost is a constant (the price of the stake) whereas in a POW chain, the attack cost is superlinear in the number of blocks you want to produce.

It all comes down to the same thing: money

And if we were to hypothetical bitcoin vs bitcoinPoS, then I would think that it would cost a lot less to buy 50% of hashrate than 50% of marketcap.

You need to take into account that prices are not static and any pre-attack accumulation will make the price go up exponentially.

And it seems that you are admitting that in the absence of an attack, there is not much difference. So the difference is the cost to conduct an attack.

So, what would it cost to buy half the hashrate for bitcoin?

James

P.S. Another twist that makes this not so trivial is that once the attacker has accumulated a large stake, he has a large stake! And now his decisions to attack need to take into account the cost to his stake.

[monsterer]

And it seems that you are admitting that in the absence of an attack, there is not much difference. So the difference is the cost to conduct an attack.

So, what would it cost to buy half the hashrate for bitcoin?

James

P.S. Another twist that makes this not so trivial is that once the attacker has accumulated a large stake, he has a large stake! And now his decisions to attack need to take into account the cost to his stake.

I am saying that no matter the cost of acquiring stake, the attack cost is still a constant. In POW, the attack cost is superlinear.

In addition, POS is not proof of current stake, it is proof of historical stake - at time X there is a proof that you owned Y stake. This means you can buy a bunch of coins, keep the keys, sell the stake and then use the historical proof to produce fake, valid chains.

[DumbFruit]

P.S. Another twist that makes this not so trivial is that once the attacker has accumulated a large stake, he has a large stake! And now his decisions to attack need to take into account the cost to his stake.

That's not really true, all you need is "proof" that at one point you had a large amount of stake. (See 4.2 Costless Simulation) Things like NXT get around this problem by time-locking changes and blah blah blah.
You can, of course, add enough rules to make a PoS currency kind of work, but that's not really surprising because their security model isn't novel. If you're willing to give up trustless decentralized consensus then there are much better ways than PoS to make a digital currency..