PoW vs PoS: is it matter in terms of coin's value?

[tpacavalcante]

What's up, guys!

Recently I came across an opinion that "only Proof of Work (PoW) coins are worth investing because they are the real sound money, backed in the energy consumed to mine them".

On the other hand, PoS coins are based on nothing, created out of the thin air, and generally have the problem of having high concentrations of the initial offer in the wallets of the founding institutions, developers and initial investors of the crypto project. For this reason, many are considered scams because they are only waiting for a market valuation to be able to offer the reserves they already have and make a profit.

I found the argument quite reasonable, although clearly radical. Personally I think that what defines the value of a crypto is its usefulness, its use case.

But I was really intrigued by the argument in favor of PoW coins, which in addition to their usefulness, would have their value defined by the cost of the energy used to mine it. That is why they could be considered a less risky crypto investment.

The criticism, moreover, of the high consumption of energy to mine the coins is answered with an ingenious argument that this would be a more efficient way to store energy (in the form of coin) that can be used indefinitely instead of being wasted as it happens to maintain the current financial system.

That said, I would like to know your opinion on this discussion. Does the argument in favor of PoW coins make any sense to you?

I would love to receive some reading recommendations (short, long texts, other threads on the subject) to deepen the topic.

Thank you.

[Dutchyyy]

What's up, guys!

Recently I came across an opinion that "only Proof of Work (PoW) coins are worth investing because they are the real sound money, backed in the energy consumed to mine them".

On the other hand, PoS coins are based on nothing, created out of the thin air, and generally have the problem of having high concentrations of the initial offer in the wallets of the founding institutions, developers and initial investors of the crypto project. For this reason, many are considered scams because they are only waiting for a market valuation to be able to offer the reserves they already have and make a profit.

I found the argument quite reasonable, although clearly radical. Personally I think that what defines the value of a crypto is its usefulness, its use case.

But I was really intrigued by the argument in favor of PoW coins, which in addition to their usefulness, would have their value defined by the cost of the energy used to mine it. That is why they could be considered a less risky crypto investment.

The criticism, moreover, of the high consumption of energy to mine the coins is answered with an ingenious argument that this would be a more efficient way to store energy (in the form of coin) that can be used indefinitely instead of being wasted as it happens to maintain the current financial system.

That said, I would like to know your opinion on this discussion. Does the argument in favor of PoW coins make any sense to you?

I would love to receive some reading recommendations (short, long texts, other threads on the subject) to deepen the topic.

Thank you.

Except for Bitcoin, I find POS coins to be more valuable. Even Ethereum is switching to POS.

POS is 'cleaner' than PoW, and staking creates scarcity that could lead to a price pump.

[JeffBrad12]

Here's my point, the value should be determined from its use-case, it's not from its consensus. The majority of POW coins except legit coins have no use-case at all. Do you wanna burn your earth to mine the crap coin? The major coins like bitcoin should be not be included on the crap coin list but what about another coin like doge that has infinite supply at this moment?
Do you wanna mine it forever? that's why people are going to the conservative consensus because people didn't burn the earth. that's not relevant if you are giving value to the crypto-based on what kind of consensus already used. 

[buzzkillb]

Decred has a great hybrid system. Heavy POW and also the unique stake voting (staking) system, which leads into blockchain voting. A combination of both seems better than pure POW. Whenever Ethereum switches over to PoS only, should be very interesting to see what happens.

[poodle63]

Though the effect in my opinion kinda subtle but PoS usually creates more demand since staking requires people to lock up their coin for some period of time while PoW don't create demand to the coin but instead to the mining rig market.
For alt that even the smallest amount of money matters to increase trading volume and market cap it does matter a lot whether the coin uses PoW or PoS and definitely affect the overall price in the market. just my opinion though.

[Periodik]

It makes sense to me. But that does not mean it totally makes PoS a worthless approach. PoW rationale is full of sense as with PoS rationale. Both makes sense to me. They have different approaches. Both have pros and cons. It does not matter to me. What matters is that a project has a support from the people. So it will be regardless of whether the coin is using PoW or PoS. The point is that the coin has actual use in real life. The most important thing is that it is serving a noble purpose.

Bitcoin and Ethereum are PoW and PoS, respectively but both are amazing.

[Anonylz]

You already said it, what defines the value of any project is it's usefulness, irrespective of whether pos or pow, infact, from a different point of view, I would say pow is just an unnecessary hardship set by the dev to get a coin, spending so much on hardware and electricity bills to mine a coin that doesn't have much usefulness is a waste of time (that does not make a coin valuable)

Aside from btc being a pow coin it has many usefulness which makes it more valuable than any pow coin, the reason why miners don't complain too much about the difficulty to mine btc, there are many shitcoins that are pow. Pos is set to make things easier for people.

[jrrsparkles]

Tokens which are created out of thin air doesn't get any intrinsic value so people may not used to be a Holder for long term with such coins but in terms of PoW they will trust the coin because it involves other people's confirmation for a successful transaction. But it also depends on how better the blockchain was designed, if you take that ethereum blockchain which is currently running on PoW network but they are facing scalability issue and they already started moving to PoS which is ethereum 2.0.

[TanakabZX]

What's up, guys!

Recently I came across an opinion that "only Proof of Work (PoW) coins are worth investing because they are the real sound money, backed in the energy consumed to mine them".

On the other hand, PoS coins are based on nothing, created out of the thin air, and generally have the problem of having high concentrations of the initial offer in the wallets of the founding institutions, developers and initial investors of the crypto project. For this reason, many are considered scams because they are only waiting for a market valuation to be able to offer the reserves they already have and make a profit.

I found the argument quite reasonable, although clearly radical. Personally I think that what defines the value of a crypto is its usefulness, its use case.

But I was really intrigued by the argument in favor of PoW coins, which in addition to their usefulness, would have their value defined by the cost of the energy used to mine it. That is why they could be considered a less risky crypto investment.

The criticism, moreover, of the high consumption of energy to mine the coins is answered with an ingenious argument that this would be a more efficient way to store energy (in the form of coin) that can be used indefinitely instead of being wasted as it happens to maintain the current financial system.

That said, I would like to know your opinion on this discussion. Does the argument in favor of PoW coins make any sense to you?

I would love to receive some reading recommendations (short, long texts, other threads on the subject) to deepen the topic.

Thank you.

Except for Bitcoin, I find POS coins to be more valuable. Even Ethereum is switching to POS.

POS is 'cleaner' than PoW, and staking creates scarcity that could lead to a price pump.

Whatever PoS algo is going to produce PoW can do the exact same thing, you talked about scarcity and it's same scarcity when mining difficulty rise up, I don't believe that ETH is switching to PoS soon, vitalik buterin must have understand the importance of PoW algo on ETH which is why he planned the EIP1559, the highest is both algos to co-exist

[TanakabZX]

POS and POW won't matter much if the project itself sucks, remember use cases and utilities are the most important, I've see hundreds of PoS coins died because of lack of use cases and also the POW coins too

[bitcoin-shark]

personally i like the pos formula more, with pow consumes resources, pc wear, energy, perhaps the only coin to be mined that can still give satisfaction is bitcoin, it should be given the choice between the two options on all coin

[New_order]

I've mined so many coins in the past and majority of them are dead, there are also many proof of stake coins that fold up in a very short term because they give high returns to stakers, what should be investors first priority is project's use cases, if they aren't solving any problem in crypto space what is their PoW and PoS algorithm for?

[IShishkin]

Except for Bitcoin, I find POS coins to be more valuable. Even Ethereum is switching to POS.

POS is 'cleaner' than PoW, and staking creates scarcity that could lead to a price pump.

BUT

you might have noticed that Ethereum is not hurry up to switch to this PoS! They haven't even published a complete spec for their ETH 2.0. They speak too much but what are they doing? Maybe they are smarter than you think? They haven't done this switch despite the fact that a dozen of "ethereum-killers" and "first-movers" have already finished a long awaited transfer.

[IShishkin]

Though the effect in my opinion kinda subtle but PoS usually creates more demand since staking requires people to lock up their coin for some period of time while PoW don't create demand to the coin but instead to the mining rig market.
For alt that even the smallest amount of money matters to increase trading volume and market cap it does matter a lot whether the coin uses PoW or PoS and definitely affect the overall price in the market. just my opinion though.

BUT

it works as long as people keep investing in the PoS project. When people stop doing that staking will stop creating demand. Staking will start creating extra supply since people will start unlocking their stakes.

[RabbiTANK]

Forget the ways of earning out of any projects, either through pow or POS many will still be scam and won't live long before they disappear, my advice is find extra clean and promising project to invest money on or stake or mine, whatever suits you, ETHEREUM for example is big and you can stake with ETH 2.0 vs a new coin that's POS coin which was launched not too long, which one would you got for ?

[hatshepsut93]

PoW coins are not backed by energy, this is a total misonception. PoW currencies are secured by their spent energy, while PoS coins aren't really secured by anything - if you hold enough coins, you can attack the network as much as you want, compared to PoW where it would always cost you money to do so. But simply having PoW does not guarantee security, you need a decent amount of energy involved, otherwise it's still practical to attack such coin, which is what you can see with coins like ETC or BTG which were successfully attacked in the past.

[tpacavalcante]

PoW coins are not backed by energy, this is a total misonception. PoW currencies are secured by their spent energy, while PoS coins aren't really secured by anything - if you hold enough coins, you can attack the network as much as you want, compared to PoW where it would always cost you money to do so. But simply having PoW does not guarantee security, you need a decent amount of energy involved, otherwise it's still practical to attack such coin, which is what you can see with coins like ETC or BTG which were successfully attacked in the past.

The total expenditure of energy to guarantee the functioning of a cryptocurrency is not comparable to what is spent to maintain the functioning of the current financial system. Nothing in the real world works without expending energy. This is also a misconception.
It is important to note that with PoW coins you cannot simply create 20% of your total coin supply out of thin air in a given wallet saying that it is the "project's foundation and/or the for the developers and initial investors". Who will invest in an excellent project knowing that 50% of the token total supply is in the hands of the developers? It seems to me that this is an important problem that calls into question the viability of a project, no matter how interesting an technology is. It seems to me that this is exactly what prevents "ethereums killers" from actually killing ethereum. PoW coins are at least more fair and decentralized in this regard.

Pow or Pos don't matter in terms of coin value, what matters is the actual utility of the coin, with pos anyone can stake the coin and benefit from it but pow is not always that simple, beside many projects are only going for pos now.

Ok ... I would like to go deeper into this topic, but I would like to make it clear that this is already deviating from the OP of the discussion.

I think that we (participants in crypto space) need to reflect on our role in this technological revolution.

1. It is one thing to put ourselves as an investor, looking for the project that will increase the price of the token and make us profit from it.
2. Another thing is to look for the project that is useful and is better developed.

Note that finding a project from point 2 does not necessarily mean that it will be the best project in terms of investment (point 1).

Bitcoin is originally an "electronic cash" project, but it cannot be used to buy coffee. For this purpose (eletronic cash), other projects are better: bitcoin cash, litecoin, monero, digibyte, etc.

Like other smart contract projects, they are better in terms of scalability than Ethereum, but they simply cannot kill the ethereum, however advanced its technology.

This reflection questions our (mine too) idea that the project is valued for its usability. It seems to me that there is a certain conservatism in crypto space, which simply prevents us from moving from one project to another with better characteristics.

And this is absolutely predictable ... noticeable in so many other technologies. For example, Whatsapp. It is not the best instant messaging application, but it is the most used because it was the first.

The new question I ask here, changing the direction of the OP a little, is: do we all know what our role is in crypto space (investor or users)?

Because if you are a user, it is better to use digibyte (a heterodox option, to generate less controversy) than bitcoin as electronic cash.