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Author Topic: The Fallacy of Proof of Stake?  (Read 346 times)
Ucy
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October 28, 2017, 10:33:42 AM
 #1

The belief that Proof of Stake is energy efficient is false, funny and incredibly narrow-minded. Question that ought to be asked is how is the staked money/wealth produced in the first place? Through Magic?
Imagine a situation where a factory owner who powers his factory with dirty coal and polutes the environment invests $1milion in a PoS Ethereum.

What if PoS is Banksters agenda to Centralize Cryptocurrency?  considering that those who will control majority of PoS Cryptocurrency (eg: Ethereum) will make the important decision. They could even use their Voting Powers to Centralize the Network, eliminate Anonymity or kick their enemies out of the Cryptocurrency? I honestly prefer that a bit of voting power continues residing in the hands of hundreds of like-minded ( like-minded, very important) Anonymous Coin Creators who in turn will be monitored by community to ensure Core Ideology isn't changed. Core Ideology being: Decentralization,  Anonymity and Deflationary.


Proof of Works is like a Money- Printing-Factory. Ofcourse Energy is required to produce Money/Wealth. Most important thing is that Big problem is being solved and value created.  Solved problem is usage of money without Central Banks or Authorities.



Finally:
If it takes PoW 1000MW to produce 20million dollars worth of Bitcoin. It most likely will take PoS investors thesame or higher energy to produce thesame amounts of dollars. Both PoS and PoW are energy "wasting". Lol



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pebwindkraft
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October 28, 2017, 10:46:54 AM
 #2

I was thinking along the same lines, and understand the difference of PoW vs PoS.
Whereas PoW can easily be defined for bitcoin (number of blocks * difficulty nonce@average power consumption of miner hardware), it get's more difficult for PoS. If you could outline a bit more, why this should have "nearly the same" power consumption?
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October 28, 2017, 01:06:45 PM
 #3

I think that is wrong way to look at it. PoW is not wasting energy, it's purpose is to bind digital and real world in the best way we could think of. PoW algorithm was originally created by hashcash as an email spam prevention. The problem it solves is that it takes no effort to copy or transmit data over Internet so it can cause a lot of problems for actual humans whose brain power is limited to use it. This is what capthcas do to make sure there is a human behind the screen. Spam is a problem when anyone can create an identity at no cost, this would be a problem when you want to make a consensus on which transactions came first. And you can't have capthas in decentralized manner so Bitcoin uses PoW to make sure that the consensus isn't taken over by spamers.

PoS isn't a blockchain. You can always just compress the blockchain in one chainstate and vote on that if you use a PoS system. So there is no need for a blockchain and it would just be slowing it down. It is adding wheels to a rocket so it can be a car. We don't want a car, we have that already, we want a rocket.
PoS just means that you think that systems is already decentralized enough and that you want to give up on that and just make the current power rule forever. It is like going into a democratic country and saying that the current government is good and decentralized enough and that they will self regulate and trow out the bad apples and make the current government a government forever because elections are hard and you need to waste money on printing ballots and stuff.
Anyone can mine in PoW, but not in PoS. Same for democracy. Elections aren't a waste, they are a necessity. Sure it is more difficult then sitting and doing nothing while someone makes decisions for you, but even the nicest person could and probably will get corrupt once he knows that he is safe.

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pawanjain
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October 28, 2017, 02:14:52 PM
 #4

Although both are just a wastage of energy as you say, they do give a considerable profit. PoS coins which have a good % for staking the coins are quite profitable and it is worth to invest in them to get a good return for the investment. I recently invested in a coin called xgox which gives 1000% anually for staking and it also gives a whopping 5000% for some particular set of blocks. So although the energy is wasted, what matters is the money we are making out of it.
I do agree with you on rest of the PoS coins which do not give a high % of return as this one.














 

 

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Ucy
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October 28, 2017, 02:37:17 PM
 #5

I was thinking along the same lines, and understand the difference of PoW vs PoS.
Whereas PoW can easily be defined for bitcoin (number of blocks * difficulty nonce@average power consumption of miner hardware), it get's more difficult for PoS. If you could outline a bit more, why this should have "nearly the same" power consumption?

To answer your question:

Monies invested in Proof of Stake Cryptocurrencies definitely come from somewhere.

Energy  is required to run most businesses.

—  Proof of Stake Investors are probably wealthy individuals who use Energy to run their businesses and make money.

— And These wealthy individuals invest this money in PoS Cryptocurrencies.

* In Summary:
Proof of Stake Cryptocurrencies depend on wealthy investors  —> Wealthy Investors depend on energy —> so, PoS indirectly depends on Energy.

It PROBABLY cost more energy to produce something in factories than it cost mining hardware to produce 1 Bitcoin.



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Ucy
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October 28, 2017, 03:10:40 PM
 #6

I think that is wrong way to look at it. PoW is not wasting energy, it's purpose is to bind digital and real world in the best way we could think of. PoW algorithm was originally created by hashcash as an email spam prevention. The problem it solves is that it takes no effort to copy or transmit data over Internet so it can cause a lot of problems for actual humans whose brain power is limited to use it. This is what capthcas do to make sure there is a human behind the screen. Spam is a problem when anyone can create an identity at no cost, this would be a problem when you want to make a consensus on which transactions came first. And you can't have capthas in decentralized manner so Bitcoin uses PoW to make sure that the consensus isn't taken over by spamers.

PoS isn't a blockchain. You can always just compress the blockchain in one chainstate and vote on that if you use a PoS system. So there is no need for a blockchain and it would just be slowing it down. It is adding wheels to a rocket so it can be a car. We don't want a car, we have that already, we want a rocket.
PoS just means that you think that systems is already decentralized enough and that you want to give up on that and just make the current power rule forever. It is like going into a democratic country and saying that the current government is good and decentralized enough and that they will self regulate and trow out the bad apples and make the current government a government forever because elections are hard and you need to waste money on printing ballots and stuff.
Anyone can mine in PoW, but not in PoS. Same for democracy. Elections aren't a waste, they are a necessity. Sure it is more difficult then sitting and doing nothing while someone makes decisions for you, but even the nicest person could and probably will get corrupt once he knows that he is safe.

Thanks for the great points.
You also made somethings clearer.


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