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Author Topic: POW vs. POS  (Read 1660 times)
cryptomageReal
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September 05, 2018, 04:08:00 PM
 #121

for bitcoin=just POW
if anyone want to do this need to Rewrite the bitcoin code!
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cellard
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September 05, 2018, 06:09:21 PM
 #122

I definitely think that proof-of-work is going to be phased out soon, though proof-of-stake isn't much better, they all require specialist hardware in order to run their networks, which is not something we should implement for later generation blockchains, a waste of energy can't be the best way to secure a blockchain. I notice that the major blockchains are starting to shift towards POS as it's definitely more environmentally friendly than POW, but it also increases centralization and the risk of a vector based attack so we should look for even better alternatives in future.

No way. There are exactly 0, zero other coins out there that can outperform Bitcoin's pure PoW approach specially as a store of value, and probably not any of these other projects, be it PoS, or any of the more exotic variations, may not deliver a better solution than a second layer solution on top of Bitcoin's POW blockchain when it comes to day to day payments.

Some are trying hard and they will basically be competing against Bitcoin's LN. Will you trust their project above LN to pay for a coffee? will you even bother going into another token at all? that we'll have to see.

Dig Bicks
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September 05, 2018, 10:33:06 PM
 #123

I definitely think that proof-of-work is going to be phased out soon, though proof-of-stake isn't much better, they all require specialist hardware in order to run their networks, which is not something we should implement for later generation blockchains, a waste of energy can't be the best way to secure a blockchain. I notice that the major blockchains are starting to shift towards POS as it's definitely more environmentally friendly than POW, but it also increases centralization and the risk of a vector based attack so we should look for even better alternatives in future.

No way. There are exactly 0, zero other coins out there that can outperform Bitcoin's pure PoW approach specially as a store of value, and probably not any of these other projects, be it PoS, or any of the more exotic variations, may not deliver a better solution than a second layer solution on top of Bitcoin's POW blockchain when it comes to day to day payments.

Some are trying hard and they will basically be competing against Bitcoin's LN. Will you trust their project above LN to pay for a coffee? will you even bother going into another token at all? that we'll have to see.

Lets not get too complacent.  I remember a time when myspace was the dominant social platform, I remember a time when VHS was the preferred media format, I remember a time when the simpsons was still a good show.

The point is lets not pretend that a new coin won't come along in the future and dethrone bitcoin.
d5000
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September 06, 2018, 06:51:23 AM
 #124

The future might bring us to a point where coins begin life with a PoW approach and then switch over to PoS after they’ve all been mined. Or they might release all possible coins immediately upon going live and stay PoS all the way.
"The future"? Both variants are pretty much standard since 2013 or so Grin

Lets not get too complacent.  I remember a time when myspace was the dominant social platform, I remember a time when VHS was the preferred media format, I remember a time when the simpsons was still a good show.
Well, you're of course right, but there are also other examples:

- Google - dominant in its category since the early 2000s (~15-20 years)
- Microsoft/Windows - dominant since the early 1990s at least (~30 years)
- Coca-Cola - dominant since the 1950s ? (~70 years)

Bitcoin is dominant, basically, since 2009. Almost 10 years.  Myspace was dominant only for 5 years, so Bitcoin is already doing better. Wink

The reason why I don't see much competition for BTC, in the short term, is however that almost all other coins are following a centralized or semi-centralized paradigm which won't attract most people attracted genuinely by Bitcoin. (I heard that Dash is about to declare insolvency, for example. That won't happen to Bitcoin Wink )

(And since I heard about the 0,02 USD/kWh solar plants in Mexico I suspect that PoW can be sustainable. It may be not ideal, though.)

Ix
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September 06, 2018, 07:12:10 AM
 #125

I think this reasoning (that is, doubting PoW value like that) is wrong. The problem of "conventional banking" is not in said overhead.
It's wrong to compare an average bank electricity consumption, plus it's workers salary with Bitcoin/PoW alts consumption.

Bitcoin doesn't eliminate banks. Banks are the ultimate liquidity providers to enable capitalism. FRB evolved because the demand for money exceeded the supply of gold. Should Bitcoin become the dominant currency of the world, banks would need to apply FRB to it as well to help control the price or risk massive waves of bankruptcy in a deflationary event. The alternative is banks won't touch bitcoin. Without demand for bitcoin investment capital, it will likely always remain niche.

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Fractional reserve banking is setting the rules for economy and politics that benefit bankers, and damages everyone in the course of that.
Fiat money exist as debt, so whoever has better "credit rating" can go deeper into debt and benefit from inflation, or from devaluation of his currency towards the reserve currency, currently USD.
So called credit rating is under gross manipulation by powerful interests. This leads to the clusterfucks like in 2008.

While true, there is nothing special about PoW in this regard. Any decentralized currency combats these problems.

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"policies that result in savers earning returns below the rate of inflation" in order to allow banks to "provide cheap loans to companies and governments, reducing the burden of repayments"
This siphons money from workers who hold deposits or bonds (e.g. indirectly in pension funds) to the shareholders, who are already rich.

Historical savings interest beats inflation. It is only in the last decade or two that basic savings interest has not kept up with or exceeded inflation. The stock market will generally always meet or beat inflation as long as an economy grows as it is automatically indexed to inflation by the investment of inflated currency thereof. The "theft" via inflation is highly dramatized. It is government spending (and other interference) that causes a misallocation of resources, not inflation. In the case of the 2008 crisis, it started as pressure from the US government to the banks to issue more mortgages to less qualified people, distorting the checks and balances of the system.

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Whereas PoW baskets can be woven by anyone with free time and necessary skills.

You mean anyone with custom, production monopoly-prone specialized hardware.
byteball
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September 06, 2018, 08:10:09 AM
 #126

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Whereas PoW baskets can be woven by anyone with free time and necessary skills.
You mean anyone with custom, production monopoly-prone specialized hardware.
Well, not exactly. Ethereum and many alts are still mined using normal GPUs, also suitable for gamers or genome microbiologists.
I view them as spare liquidity reservoir for Bitcoin.

...
A PoS system without issuance is nothing more than a second layer protocol for bitcoin (one may suggest to understand LN as a PoS network on top of bitcoin) and with issuance, it is just a scam no matter how big and popular it is, it is a scam just like USD.
...
On PoW/PoS hybrids.
I don't know about Decred (their "foundation tax" from mined coins taken forever seems fishy to me) but in Metro based on NXT plus BitcoinJ-like PoW
they seem to have an interesting proposition. NXT is example of PoS system without issuance, but with bad initial distribution since they never had mining and even no ICO.

PoS-produced blocks are very frequent, like dozen per minute, so it enables LN-like applications and decentralized on-chain exchange working faster than Etherdelta.
PoW blocks are once per 10 minutes like in Bitcoin.
As BitcoinCash already enabled smart contracts by using Qtum or something similar on top of it, Metro can become side chain to it.
If Rootstock will materialize, they can sidechain to BTC itself.
Too bad they took NXT with accounts system like in Ethereum, I guess they would be better off taking BitcoinJ or similar Java implementation of Bitcoin as codebase
and add blind shooter PoS algo for frequently issued blocks to it.
Whether it would be better, worse or complementing LN, it's hard to say right now.

*byteball cooтвeтcтвyeт нopмaм и тpeбoвaниям дeмoкpaтии, тoвap cepтифициpoвaн
marlon45
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September 11, 2018, 11:46:01 AM
 #127

I was listening the Epicenter podcast (which I suggest to listen to), Anthony Lusardi of the ETC foundation was talking about this.

Essentially, PoW is a tried and tested concensus mechanism. You just have to look at the security of Bitcoin to know whether it works or not. Are there problems in PoW? Yes. It's inefficient and wasteful in terms of energy consumption and does not align itself with greener and more environmentally friendly drives (this is actually important and for some, crypto in general is just a no-go area simply because of the mining farms). It is however the longest running consensus mechanism and it is supposed to allow natural competition - you can join the network and get mining rewards. Obviously, it comes with its own problems of centralization, mining mostly occurs in China. Why? Because electricity is cheap and they make the miners.

To go back to PoS and to the point made in the podcast (i'm pretty sure it was in the one about ETC). Imagine a scenario where you had a majority stake in the network. Obviously that would also lead to proplems of centralization because of the higher proportion of coins you actually own for a given network. They will be worth a certain amount to the staker so they wouldn't want to give them up. The problem is, they might be worth even more to a potential buyer who wishes to "purchase" the network by purchasing those coins from highest holding staker. It might be less wasteful that PoW but it doesn't solve any problems of potential corruption.
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