Issues with Proof-of-Work

[aidoyoh]

after doing dev work with ethereum and bitcoin it seems that both consensus options are blatantly fairly flawed. POW has obvious scaling issues and POS seems like a bandaid solution with wealthy people automatically being allocated more currency through an infinitely compounding cycle. Is the crypto/blockchain community not open to new type of consensus? It seems like POW and POS just keep getting updated rather than addressing the real issue and switching base mechanisms. Do others just not see issues with POW or POS?

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[franky1]

in regards to Pow mining it does not matter how many transactions are in a block
the PoW part of mining. just solves a puzzle based on a 256bit hash.
no matter the blockdata load they all resort to a 256bit ID no matter the scale. so it has nothing to do with PoW being the problem of scaling

PoW is not limiting scaling.
scaling is delayed due to developer/corporate sponsor politics of not wanting to scale bitcoin because they want to offramp users to subnetworks rather than scale bitcoin even by % periodically..
 the stall/delay is further becoming impatient due to the prime candidate subnetworks they promised to be the "solution" subnetworks.. have flaws of their own and are not fit to handle the scales they were promoted to handle (they are worse than what bitcoin can handle onchain now (unless you only want chewing gum/coffee amounts))

bitcoin however has a great value lock. and yes many subnetworks that "bridge" between many mainnets are already fostering bitcoin value as liquidity for their own network units. and yes some of them are even out liquidity providing compared to the promoted ones promised 7-8 years ago

and all this political commercial, corporate promises has nothing to do with PoW

[Ojima-ojo]

You could do well by pointing out the issues you mentioned with Proof of work (pos) and proof of stakes (POS), scalability is already a popular challenge to both Network algorithms and a lot of developers have been made toward solving that scalability issue.

Bitcoin proof of work is greatly criticized because of its power consumption and environmental hazards and in solving these issues, proof of work which requires a lot of energy due to its use of computing devices that are constantly working to confirm transactions, and to reduce the dependence on the grid for electricity supply, the miner is now migrating to renewable energy as alternatives power sources.

Using convertible energy such as solar panels and other environmentally friendly energy generation mechanisms!

Proof of stake on the other hand pause a great risk due to the centralization of the network in the hand of the higher pool providers and this is where the risk is.

[aidoyoh]

What do you think it would take for people to be open to a Consensus method that works off a new base mechanism(not based in POW or POS)?

[franky1]

PoS issues are a multitude of things
but lets use ethereum as an example

just look at the 6month market charts
ethereum blind follows bitcoin market.

this is because ethereum does not have an independent community.
by this i mean if it did they would have their own sentiments of price and desire and their markets would not resemble the wiggles(ups and downs) of bitcoins.
lack of independence/desire means the markets just follow the prime markets due to arbitrage opportunities made by prime mainnets of real good utility/community/value

other factors are although ethereum switched to stake. they didnt add the redemption method at the merge. meaning peoples value has been locked and unmovable between 'staker pools' thus frozen and unspendable

yes they can find off-market trades to swap ownership. but thats just taking one person out away from his stake to put another sucker into that persons stake

these stakes in coinbase for instance are locked to coinbase. meaning if coinbase were to want to change some code. users owning that stake will not want to oppose coinbase because opposing a change = stake being destroyed and the owner losing it all. so they blindly go along with their stakers plans
AKA centralisation

other aspect of centralisation is that the threshold to be a staker is 32 coin meaning more then $30k invested. so people end up having to pool/syndicate smaller amounts with other people. thus less independency and along with the other flaws above less freedom to get out and just say no

with bitcoin Pow
asics can just pool jump in milliseconds away from malicious pools at no cost/harm

[pooya87]

Apart from the drama that Franky loves to raise about devs, he is right. The scaling has very little to do with mining algorithm, it is about the block space being limited which exist in both PoW and PoS.
However the flaws in PoS are by design and there is nothing that can really fix them whereas PoW doesn't have those flaws. For example in a PoS coin (specially altcoins) where people store their coins on exchanges and the altcoin exists only on the exchange for trading (aka gambling) the exchange suddenly gains a supermajority power to control the PoS network (which has happened in the past!). Something that is not possible in PoW because by design we have a genius way of preventing such attacks by making them needing to do actual work.

What do you think it would take for people to be open to a Consensus method that works off a new base mechanism(not based in POW or POS)?

Most people are very open to new innovations in cryptocurrency world the problem is that we are always disappointed because almost everything new we see is a money grab project which is why the algorithms they introduce is also designed to ease their scam not to innovate and solve problems. Example: everything about Ethereum from its conception to help create tokens to scam people to their recent switch to PoS that helps them make money using their 72 million premined coins.

[franky1]

Apart from the drama that Franky loves to raise about devs,

crypto is not self coding AI.. all rules of al cryptos are dev created!!
its how code is created.
ignoring the politics is allowing their centralisation to influence their ability to activate without restraight

they call themselves "core" "reference" "proposer" client for a reason
its bitcoins only drawback. head even lead maintainer of core admits how core is a central point of failure which they are trying to get away from

it pays to keep attention to details and critique proposers/devs influences. to not let them have free reign

[aidoyoh]

Only two bitcoin pools were responsible for mining more than half of Bitcoin's blocks in the second half of December. Doesn't that prove POW is vulnerable as well in the sense that a few mining pools make up a super large portion of the network?

[franky1]

Only two bitcoin pools were responsible for mining more than half of Bitcoin's blocks in the second half of December. Doesn't that prove POW is vulnerable as well in the sense that a few mining pools make up a super large portion of the network?

what you think of when u mention Pow pool are not what you think
within those pools are sub groups of stratums where there are subgroups of miners per stratum. located all over the world with different managers. and people can pool hop to different pools/stratums in milliseconds

when times are good and there are no malicious proposals where devs made bad code and blackmailing the network.. hashrate per pool is meaningless(in regards to rules)
if devs were to make malicious proposals(taking weeks-months to enforce/activate). asics can pool hop in MILLISECONDS

no one in ethereum PoS can de-stake from their CEX pool right now

[aidoyoh]

I agree POW > POS by far I just think that POW may also be limiting the potential of decentralized currency in its own way.

It seemed promising a first but with all the required amendments is it really still the best solution out there or is it time to rethink the base principles of consensus.

[Ucy]

The truth is that Proof of Work is the true consensus mechanism/method for a trustless decentralized Blockchain Network. The moment you start deviating from this fact the more complicated and confusing things become.
It's simply a consensus method for proving to a trustless Network that a work has been properly done before it's approved, possibly with reward. Any Consensus method you develop should be based on this(PoW), maybe slightly or completely different from Bitcoin PoW type.
Proof of Stake should never even exist in the first place as the name and idea is fundamentally flawed. Consensus or agreememt only happens once a work is done with proof that it has been done, which is why a true consensus must always have the word Work rather than Stake attached to Proof..
So your own consensus method must be Work Based Proof and nothing else.


You could say "Issues with Bitcoin Proof-of-Work"  rather than "Issues with Proof-of-Work". Proof of Work has no issue as it's perfect consensus method for a trustless network or world.
By the way, Bitcoin PoW remains the best consensus mechanism for a decentralized & trustless network as far as I can tell. It doesn't violate the other Bitcoin principles. But I know of alternative PoW that will prove very useful for any truely decentralized and trustless network. And it maybe compatible with the current Bitcoin.  I just prefer it tested on another network. Notwithstanding, the current Bitcoin consensus is still very much useful and it's the right method for any true cryptocurrency.

[NeuroticFish]

I agree POW > POS by far I just think that POW may also be limiting the potential of decentralized currency in its own way.

It seemed promising a first but with all the required amendments is it really still the best solution out there or is it time to rethink the base principles of consensus.

POW has indeed the theoretical capacity of getting centralized by miners migrating where they can get more profit (cheaper electricity, lower taxes, maybe solar/wind power).
But this is the theory. In reality the miners are pretty well spread, much better than 5 years ago. In reality the miners can pick the pools they want and I don't see why miners would be dumb and endanger Bitcoin (and their revenues) by using all of them the same pool (and even trying 51% attack, which would clearly bring the price down).
Actually I've seen - not in case of Bitcoin - one pool getting over 51% hash rate and still not attempting anything fishy. Again, staying honest usually pays off better in this business.

Or.. do you see other issues which you expect us to guess?!

[digaran]

Why do I think this is an interview between OP and franky? Lol. I haven't seen any proposal worth discovering, have you? Bitcoin becoming centralized is equal to no bitcoin at all, no one will use it.

[serjent05]

Bitcoin proof of work is greatly criticized because of its power consumption and environmental hazards and in solving these issues, proof of work which requires a lot of energy due to its use of computing devices that are constantly working to confirm transactions, and to reduce the dependence on the grid for electricity supply, the miner is now migrating to renewable energy as alternatives power sources.

The Bitcoin mining environmental hazard is being debunked by research, data and statistics.  I believe anti-Bitcoiner are exaggerating this issue and making it an issue to give hindrance to Bitcoin propagation.  I find this thread: Bitcoin Mining is Good for Environment enlightening as it gives information on Bitcoin mining and its economic impact.

Proof of stake on the other hand pause a great risk due to the centralization of the network in the hand of the higher pool providers and this is where the risk is.

Yeah, POS has an issue since it invites potential concentration of wealth that can result in centralization.

[aidoyoh]

if you use the government's attempt at decentralized consensus as an analogy for bitcoin. Proof of Work is like randomly selecting presidents and not revealing who they are until they are done with their term (pretend the president is actually the one who makes decisions). Sure you may prevent murder but if you select randomly it is rare you will select the best candidate for the current market condition, as you are limiting access to all the potential information. This makes it difficult for the network to optimize itself into the future as it is constrained to a single network perspective for each decision(proposal). Seeing as blockchain is software I feel like it should be built to scale alongside computational innovation rather than being restrained by it.(block size wars, time server constraints, pow function)
 
If you based a network in communication could it possibly be the best way for all relevant data to be compared and the system optimized for the next state. In an ideal world wouldn't everyone be able to properly communicate their perspectives and reach common ground? The only way to have all the relevant information is communication, and we can program computers to communicate clearly and uniformly through protocols. Why is network communication being minimized rather than optimized amongst consensus methods?

[franky1]

if you use the government's attempt at decentralized consensus as an analogy for bitcoin. Proof of Work is like randomly selecting presidents and not revealing who they are until they are done with their term

nope

block creation is not that at all
(sticking with YOUR election analogy(poor analogy but lets go with it))

imagine everyone puts a tick on a ballot(a transaction)
and posts it to whatever polling count centre is available . near them
where multiple counting stations get it. but only one instance can be deemed valid

the polling centre collates said cards/tx. and counts them up. and puts them into a batch

*they then run it through a machine that costs alot of electric to give that batch an ID*
*this* stage of costly batch ID creation is the POW

then when there is a secure enough batch ID to preserve the cards/tx data from being tampered with

the polling data of that specific counting station is released to the public. where the public validate its secure.
the next polling counting station. then batches up some cards/tx not already validated and uses that already public batch ID of the latest publicly aware batch ID within its batch collation. and then *the PoW* process is done on that batch
thus having a chain of batches of polling cards preceding each other

and again released to the public
the public can then see which votes(data) voted for x or y candidate (or pay whomever tx destination is) and you can see the results are confirmed 2016times a fortnight(~10 minutes each) as polling centres release their batches throughout the day

anyone can then tally up results at any time to see who has most votes at any given ~10min period

the thing is.. there is no stopping the polling. meaning yes satoshi may have held onto 1million votes out of 19m votes for 14 years and micheal saylor may have only 135,000 votes in last 2 years and greyscale might have been growing its vote count to 635,000 votes over 10 years and binance might have 575000 votes

but as the polls are continual. they can change futuristically in 10 minutes. rather than 4 years. and cant change retrospectively(its possible but cost prohibative to do such, thus you dont really see it get done)

..
Pow is not about changing votes retrospectively(by itself. POW does not read or write polling cards). nor about keeping votes a secret for 4 year term. nor about the PoW being related to editing votes when received(again PoW is not about reading polling cards).
(a malicious polling count station, could if it had enough power to outpace the other poll card collating centres, could produce an empty batch(management decision not related to PoW). thus holding up/delaying any change of majority by having nothing to count for a period.
but thats not PoW caused.. thats bad management of selecting to not fill their batch BEFORE using PoW to secure an empty batch

PoW is about securing a batch ID of collated votes(or empty boxes). which then is a proof of confirmation they are then counted and locked(or nothing new occured) and treated as valid locked positions at that given time

if a polling count centre had more cost/power then its competing count stations. it could go back and make its own pile of empty batches or batches of collated votes it favours(again not POW related but management decision) and then make the batch ID's faster then competing stations. to overtake them and re-org the results
(costly endeaver that can easily be rejected by other mechanism, thus not worth attempting)

...
why i say its a poor analogy to compare to elections
is if treating btc as votes. satoshi has remained president with most majority votes for 14 years, even when elections that could change who has what btc every 10 minutes
meaning elections can swing to a new vote majority leader any time
(EG a merger of greyscale and binance) where they show they have more btc/votes than satoshi by co-mingling their coin

which has nothing to do with PoW and PoW has nothing to do with election counting.. just batch securing an ID of a the count of recent vote changes

[pooya87]

Proof of Work is like randomly selecting presidents and not revealing who they are until they are done with their term (pretend the president is actually the one who makes decisions).

Wrong analogy and I strongly suggest you start studying bitcoin to first understand how it works.

Miners don't really make any major decisions, they are merely workers on the network that are "working to get paid". So it is like holding a raffle to hire a different construction worker to place each block for each wall that goes up and pay them for their work.

Then instead of one "boss" overlooking their work, we have tens of thousands of them (ie. Full Nodes) watching over their work to enforce the "law" aka the consensus rules.

[aidoyoh]

I feel I understand how bitcoin works as I have rebuilt it multiple times testing various small changes, although I can understand why it was unclear what I meant. When I say bitcoin is like the government, I meant it in a very general sense with nodes acting as the citizens within the population. I am not referring to transactions acting as votes but rather nodes accepting/confirming the longest chain as their vote.

 Citizens(nodes) do their jobs everyday to contribute to the economy which is the ongoing macro system(make and distribute transactions). Presidents(nodes) are randomly selected to group transactions for the next block through attempts at solving the POW function for that block.  Just like a president a citizen(node) is selected for a brief time period to make potential decisions for the networks next economic state. The difference being instead of 4 years of decisions it is building 1 block/proposal worth of decisions.

When it comes to the analogy, I am referring less to the specifics of the voting/election aspect and more to how it is unlikely for a system to be represented accurately from a single point or origin. A president is selected and then treated as a temporary origin point for decisions. The population can always rebel(accept another chain), however, the problem more so lies in the fact that the “president “ only has access to a single market perspective for forming proposals.

This means each time a proposal is made it is only coming from the perspective of that position in the network thus limiting the systems ability to build the most efficient block for adapting to market conditions. Focusing on network communication you would be able to instead decide on the best potential block for the network rather than the block of the first person that solves the POW.

In this analogy you could take it even farther and say that mining pools are similar to political parties how the network uses mining pools to group candidates and simplify the selection process but I will admit it's a bit of a stretch.

To summarize:
POW:
Selects proposal based on what node is making it.(selects potential proposal based on node who first solved POW)

Ideal:
Selects proposal based on best proposal for the current conditions
(Selects node based on best potential proposal)

Transactions = participation in the economy
Proposals =transitions system to next economic/market state
Nodes = citizens
President = node/citizen who solves POW first that term(block)
Votes = which proposal/chain a node is willing to confirm/using

[darkangel11]

Although the idea above is interesting, I see 0 chance of it being implemented as long as PoW works fine. You'd have to somehow blow up pow and prove it to be counterproductive for bitcoin to fork into what you're proposing.

Bitcoin proof of work is greatly criticized because of its power consumption and environmental hazards

Which is complete and utter garbage argument used by haters, just like another one that goes something like "blockchain not bitcoin"...
Please tell me what is this so called "environmental hazard" of using bitcoin. Are you saying that ice caps will melt if we keep mining?

[NeuroticFish]

To summarize:
POW:
Selects proposal based on what node is making it.(selects potential proposal based on node who first solved POW)

Ideal:
Selects proposal based on best proposal for the current conditions
(Selects node based on best potential proposal)

It's not any first, it has to meet the difficulty too. And this is important because it also regulates the speed of blocks being mined. "First" is relatively easy to quantify.

"Best" on the other hand... who and how to decide what's best, in an unbiased way, plus to make sure it's not cheated and also making sure the blocks are mined at the correct speed? (The who part is meant to be a trap, since the only correct "who" is the nodes.)