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Question: Annual 10% bitcoin dividends can be ours if  Proof-of-Stake full nodes outnumber existing Proof-of-Work full nodes by three-to-one. What is your choice?
I do not care or do not know enough
I would download and run the existing Proof-of-Work program to fight the change.
I would download and run a new Proof-of-Stake program to favor the change.

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Siegfried
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April 25, 2014, 05:13:46 AM
 #181

Answer this question - how many coins did you spend on your mining operation in the past 12 months, including equipment, energy, labor, and everything else, and how many coins did you mine?
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April 25, 2014, 05:14:18 AM
 #182

People have been cheated by costless fiat for so long time that they already forget that a currency without cost actually worth nothing, legally counterfeiting is still counterfeiting

The problem with fiat is not costlessness, but possibility of arbitrary, limitless creation. PoS costs much less than PoW, but coin creation is still constrained by the parameters of the code.

The price will immediately crash to the coin's production cost, since miners have the motivation to immediately cash out large gains

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April 25, 2014, 05:14:40 AM
 #183


Could you please elaborate on the nature to your objections. The public consensus cannot be moved towards Proof-of-Stake unless all objections are reasonably addressed.

simple, i like it just as it is. thanks.

I agree with the broad principles of conservatism. They have served my household very well over the decades.

Is it that a change has an unknown risk associated with it? And this risk to you is not worth the change I propose despite the assurances of my two arguments?

you completely misunderstand me. My objections are not political, nor are they to do with risk. I am not adverse to change.
We have Bitcoin, which has been designed from the ground up before any other additives or preservatives were realised. Sure it has it's minor flaws but that is all part of it. It is not broken, in actual fact, it is surviving pretty damned well; from it's humble beginnings.

By introducing PoS into the workings, all you are doing is making those who have massive farms, even richer - and those who have 3 or 4 coins in a wallet, poorer.

your idea stinks of idiosyncrasies and I feel, if you want a coin which produces PoS, then you should go mine some shitcoin or other.

This is not for Bitcoin. Bitcoin is exciting - difficulty level trends are tremendously interesting, as is - for a small miner like myself, watching who is top of the pile. If you introduce PoS into Bitcoin, then you will see value plummet, Bitcoin accumulation lifespan shortened and interest lost.

It's not a good idea, whatsoever.

How do you figure? In the PoS system proposed, a holder of 3 or 4 coins would receive a yearly dividend of approximately 10 percent. A year later he would have 3.3 or 4.4 coins. In the current system a holder who does not mine does not receive any dividend. In fact, it the opposite of what you say; small holders actually get poorer in the current system because their share of the total coin supply decreases as new coins are mined (they get richer relative to fiat holders, of course). Sorry, but the idea that PoW is good because difficulty level trends are interesting is not a strong argument.

I do not believe Bitcoin will fail if it does not shift to PoS, but if it can be improved with little risk, it should be done.

so if I mine a fiat value of $500,000 per day, how much stake does my wallet accrue... my 3 btc will accrue 0.3 in one year - are you taking the piss?
I think i'd rather keep mining thanks.

The point of PoS is that mining is unnecessary. You seem to making a Luddite argument. Instead of investing hundreds of thousands or millions into a massive mining operation, you could just buy a lot more coins and spend your time relaxing on the beach sipping your favorite beverage while you collect 10 percent each year rather than spending time and effort every day maintaining your mining operation.

or I could go buy an ISA from my bank; but that's NO FUN, is it?


The difference is that you would be getting 10 percent new coins, not fiat. I don't think fun has anything to do with this.

Then you clearly misunderstand why people become Bitcoin enthusiasts (at home miners).

I became interested in mining bitcoin because I am a tech geek. My wife works in a bank and If it were the accrual of funds that I wanted, I could easily get a valuable fiat product, which could would be monitored and tracked and would pay me (some form of) stake/interest. Now, although I am a very small investor (as would be the same case with Bitcoin) I see many massive investors high above me, accruing their own share of ~whatever 10% will accrue them.

lets take ABC Mining Farm (fictitious name) for example - to add PoS into the Bitcoin framework, you are not actually making it less worthwhile for ABC to exist, and build bigger datorhalls, but you are providing more of an incentive to those massive operations, to become bigger. This is already proved in my case above; massive fiat banking investors become richer, small investors become poorer (the financial divide becomes greater).

The only thing a PoS system in Bitcoin would do, is widen the gap.

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April 25, 2014, 05:18:17 AM
 #184

In future when majority of the coins were mined, people might consider switching to a POS system, since the incentive to mine will get less (if a very low fee is still preferred by users) and the system will become vulnerable. But that is not going to happen in decades

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April 25, 2014, 05:18:36 AM
 #185


Could you please elaborate on the nature to your objections. The public consensus cannot be moved towards Proof-of-Stake unless all objections are reasonably addressed.

simple, i like it just as it is. thanks.

I agree with the broad principles of conservatism. They have served my household very well over the decades.

Is it that a change has an unknown risk associated with it? And this risk to you is not worth the change I propose despite the assurances of my two arguments?

you completely misunderstand me. My objections are not political, nor are they to do with risk. I am not adverse to change.
We have Bitcoin, which has been designed from the ground up before any other additives or preservatives were realised. Sure it has it's minor flaws but that is all part of it. It is not broken, in actual fact, it is surviving pretty damned well; from it's humble beginnings.

By introducing PoS into the workings, all you are doing is making those who have massive farms, even richer - and those who have 3 or 4 coins in a wallet, poorer.

your idea stinks of idiosyncrasies and I feel, if you want a coin which produces PoS, then you should go mine some shitcoin or other.

This is not for Bitcoin. Bitcoin is exciting - difficulty level trends are tremendously interesting, as is - for a small miner like myself, watching who is top of the pile. If you introduce PoS into Bitcoin, then you will see value plummet, Bitcoin accumulation lifespan shortened and interest lost.

It's not a good idea, whatsoever.

How do you figure? In the PoS system proposed, a holder of 3 or 4 coins would receive a yearly dividend of approximately 10 percent. A year later he would have 3.3 or 4.4 coins. In the current system a holder who does not mine does not receive any dividend. In fact, it the opposite of what you say; small holders actually get poorer in the current system because their share of the total coin supply decreases as new coins are mined (they get richer relative to fiat holders, of course). Sorry, but the idea that PoW is good because difficulty level trends are interesting is not a strong argument.

I do not believe Bitcoin will fail if it does not shift to PoS, but if it can be improved with little risk, it should be done.

so if I mine a fiat value of $500,000 per day, how much stake does my wallet accrue... my 3 btc will accrue 0.3 in one year - are you taking the piss?
I think i'd rather keep mining thanks.

The point of PoS is that mining is unnecessary. You seem to making a Luddite argument. Instead of investing hundreds of thousands or millions into a massive mining operation, you could just buy a lot more coins and spend your time relaxing on the beach sipping your favorite beverage while you collect 10 percent each year rather than spending time and effort every day maintaining your mining operation.

or I could go buy an ISA from my bank; but that's NO FUN, is it?


The difference is that you would be getting 10 percent new coins, not fiat. I don't think fun has anything to do with this.

Then you clearly misunderstand why people become Bitcoin enthusiasts (at home miners).

I became interested in mining bitcoin because I am a tech geek. My wife works in a bank and If it were the accrual of funds that I wanted, I could easily get a valuable fiat product, which could would be monitored and tracked and would pay me (some form of) stake/interest. Now, although I am a very small investor (as would be the same case with Bitcoin) I see many massive investors high above me, accruing their own share of ~whatever 10% will accrue them.

lets take ABC Mining Farm (fictitious name) for example - to add PoS into the Bitcoin framework, you are not actually making it less worthwhile for ABC to exist, and build bigger datorhalls, but you are providing more of an incentive to those massive operations, to become bigger. This is already proved in my case above; massive fiat banking investors become richer, small investors become poorer (the financial divide becomes greater).

The only thing a PoS system in Bitcoin would do, is widen the gap.

I totally understand you and I respect and admire what you have done. Bitcoin would not be where it is today without you. All I am saying is that if there are major improvements that can be made to Bitcoin, it should be done. I do not believe in tradition for the sake of tradition. Bitcoin is in a much different place today than it was a few years ago.
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April 25, 2014, 05:22:34 AM
 #186


Could you please elaborate on the nature to your objections. The public consensus cannot be moved towards Proof-of-Stake unless all objections are reasonably addressed.

simple, i like it just as it is. thanks.

I agree with the broad principles of conservatism. They have served my household very well over the decades.

Is it that a change has an unknown risk associated with it? And this risk to you is not worth the change I propose despite the assurances of my two arguments?

you completely misunderstand me. My objections are not political, nor are they to do with risk. I am not adverse to change.
We have Bitcoin, which has been designed from the ground up before any other additives or preservatives were realised. Sure it has it's minor flaws but that is all part of it. It is not broken, in actual fact, it is surviving pretty damned well; from it's humble beginnings.

By introducing PoS into the workings, all you are doing is making those who have massive farms, even richer - and those who have 3 or 4 coins in a wallet, poorer.

your idea stinks of idiosyncrasies and I feel, if you want a coin which produces PoS, then you should go mine some shitcoin or other.

This is not for Bitcoin. Bitcoin is exciting - difficulty level trends are tremendously interesting, as is - for a small miner like myself, watching who is top of the pile. If you introduce PoS into Bitcoin, then you will see value plummet, Bitcoin accumulation lifespan shortened and interest lost.

It's not a good idea, whatsoever.

How do you figure? In the PoS system proposed, a holder of 3 or 4 coins would receive a yearly dividend of approximately 10 percent. A year later he would have 3.3 or 4.4 coins. In the current system a holder who does not mine does not receive any dividend. In fact, it the opposite of what you say; small holders actually get poorer in the current system because their share of the total coin supply decreases as new coins are mined (they get richer relative to fiat holders, of course). Sorry, but the idea that PoW is good because difficulty level trends are interesting is not a strong argument.

I do not believe Bitcoin will fail if it does not shift to PoS, but if it can be improved with little risk, it should be done.

so if I mine a fiat value of $500,000 per day, how much stake does my wallet accrue... my 3 btc will accrue 0.3 in one year - are you taking the piss?
I think i'd rather keep mining thanks.

The point of PoS is that mining is unnecessary. You seem to making a Luddite argument. Instead of investing hundreds of thousands or millions into a massive mining operation, you could just buy a lot more coins and spend your time relaxing on the beach sipping your favorite beverage while you collect 10 percent each year rather than spending time and effort every day maintaining your mining operation.

or I could go buy an ISA from my bank; but that's NO FUN, is it?


The difference is that you would be getting 10 percent new coins, not fiat. I don't think fun has anything to do with this.

lets take ABC Mining Farm (fictitious name) for example - to add PoS into the Bitcoin framework, you are not actually making it less worthwhile for ABC to exist, and build bigger datorhalls, but you are providing more of an incentive to those massive operations, to become bigger. This is already proved in my case above; massive fiat banking investors become richer, small investors become poorer (the financial divide becomes greater).

The only thing a PoS system in Bitcoin would do, is widen the gap.


I think you misunderstand the proposal. The proposal is to shift Bitcoin entirely to PoS, not merge PoS and PoW. In a PoS system there is no mining and no reason for massive mining operations to exist. 
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April 25, 2014, 05:24:44 AM
 #187

I would rather see a blend of PoW and PoS.

Use PoS to improve security while leaving
PoW that people are used to and trust.

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April 25, 2014, 05:26:06 AM
 #188

. . . for a small miner like myself, watching who is top of the pile. If you introduce PoS into Bitcoin, then you will see value plummet, Bitcoin accumulation lifespan shortened and interest lost.

It's not a good idea, whatsoever.

Lets talk as miners then, as my very first posts on this forum concerned mining. Here is a photo of one of my three mining rigs. This open design rig has 6 x 5770 cards that hash at a total 0.98 MH/s performing altcoin scrypt-mining for renters. They pay me in bitcoin, which indeed subtracts from the altcoin economy and adds to our Bitcoin economy. These cards despite their age, mined tens of bitcoins for me back when BTCGuild was just getting started. I abandoned mining when SHA-256 ASICs arrived to begin the exponentially soaring difficulty that continues to this day. I did not then, and will not now pre-order ASIC rigs whose return on investment is so uncertain. I will migrate the litecoin-compatible scrypt-mining rigs to Vertcoin-compatible scrypt-N when scrypt-ASICS arrive this year. I will keep running those loved rigs for a long time when I move them to Colorado to heat my mountain home.



I ask you, as a small scale bitcoin miner, have you run the numbers to determine whether you would be better off simply holding bitcoin instead spending cash on  ASIC rigs?

But I think your main objection is belief that bitcoin values will drop if PoS is introduced into Bitcoin. In the best possible world, PoS adds great value to bitcoin as less of daily mining reward gets sold to pay for power and new rigs. Holders are motivated not to sell and that lifts prices. Interest will heighten, especially when 401-K investment funds observe that not only does bitcoin appreciate, it also pays high dividends.
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April 25, 2014, 05:26:44 AM
 #189

I would rather see a blend of PoW and PoS.

Use PoS to improve security while leaving
PoW that people are used to and trust.

That seems more complicated and I don't understand why it would be better.
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April 25, 2014, 05:28:10 AM
 #190

well mostly because of this:


The adoption of Bitcoin is apparently mathematically chaotic in the sense that certain small changes to the present situation lead to large and unexpected consequences. There is simply no precedent for Bitcoin, and therefore we depend upon argued imagination.

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April 25, 2014, 05:29:54 AM
 #191

. . . for a small miner like myself, watching who is top of the pile. If you introduce PoS into Bitcoin, then you will see value plummet, Bitcoin accumulation lifespan shortened and interest lost.

It's not a good idea, whatsoever.

Lets talk as miners then, as my very first posts on this forum concerned mining. Here is a photo of one of my three mining rigs. This open design rig has 6 x 5770 cards that hash at a total 0.98 MH/s performing altcoin scrypt-mining for renters. They pay me in bitcoin, which indeed subtracts from the altcoin economy and adds to our Bitcoin economy. These cards despite their age, mined tens of bitcoins for me back when BTCGuild was just getting started. I abandoned mining when SHA-256 ASICs arrived to begin the exponentially soaring difficulty that continues to this day. I did not then, and will not now pre-order ASIC rigs whose return on investment is so uncertain. I will migrate the litecoin-compatible scrypt-mining rigs to Vertcoin-compatible scrypt-N when scrypt-ASICS arrive this year. I will keep running those loved rigs for a long time when I move them to Colorado to heat my mountain home.



I ask you, as a small scale bitcoin miner, have you run the numbers to determine whether you would be better off simply holding bitcoin instead spending cash on  ASIC rigs?

But I think your main objection is belief that bitcoin values will drop if PoS is introduced into Bitcoin. In the best possible world, PoS adds great value to bitcoin as less of daily mining reward gets sold to pay for power and new rigs. Holders are motivated not to sell and that lifts prices. Interest will heighten, especially when 401-K investment funds observe that not only does bitcoin appreciate, it also pays high dividends.


I want to know that too.

Answer this question - how many coins did you spend on your mining operation in the past 12 months, including equipment, energy, labor, and everything else, and how many coins did you mine?
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April 25, 2014, 05:32:03 AM
 #192

well mostly because of this:


The adoption of Bitcoin is apparently mathematically chaotic in the sense that certain small changes to the present situation lead to large and unexpected consequences. There is simply no precedent for Bitcoin, and therefore we depend upon argued imagination.

Well, if there is a risk of large and unexpected consequences, wouldn't it be better to make a more simple change rather than a more complex one? It seems to me that a complete shift to PoS would be simpler than merging PoW and PoS, though that is just my intuition, I have no technical knowledge of cryptocurrency.
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April 25, 2014, 05:33:15 AM
 #193

You may be right.  The truth is I just don't know.

The only thing that is clear right now is that we DON'T have consensus Smiley

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April 25, 2014, 05:33:58 AM
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I totally understand you and I respect and admire what you have done. Bitcoin would not be where it is today without you. All I am saying is that if there are major improvements that can be made to Bitcoin, it should be done. I do believe in tradition for the sake of tradition. Bitcoin is in a much different place today than it was a few years ago.

thank you for making an effort to be polite, 'Luddite' remarks are not appreciated and I feel that you are better than that.
However, here is what I see...there are already PoS coins available on the toy exchanges, some of which will provide a much higher stake than the 10% which is being discussed. I don't see why PoS should be introduced into Bitcoin, when one can simply exchange their Bitcoin for say; Peercoin, or TEKCoin, hold it for a year until suitable stake is accumulated and cash it back to Bitcoin. I do also; however, agree that Bitcoin is evolutionary, and without trying to sound like one of the greedy large farming operations myself; you'd have a shitstorm from ASIC manufacturers if this was to go ahead.

So, may I ask, is the true purpose of PoS, to reduce electricity use? to bring down mining difficulty? and make the rich, richer?

I concede, it would do all of the these three things but really, none of these are in the best interest of Bitcoin. We would see value plummet and BTC price hit the floor.
If it were to be accomplished, it certainly should not be in the near future; having had only one block halving, in mining terms, we are still early adopters and Bitcoin is still very young. I feel we would be forcing our cryptocurrency to 'grow up' before it's time.

PoS? well maybe, yes, but only after all 21million coins have been mined.  Cheesy

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April 25, 2014, 05:38:03 AM
 #195

The only thing a PoS system in Bitcoin would do, is widen the gap.

Bitcoin Core developers share this intelligent concern, namely "the rich get richer" problem. Indeed Europe and the USA are reading an economic best seller on this topic - that I have downloaded from a tip on this forum to my kindle.

This gets quickly into a defense of the freedom of capital to seek its wisest custodian, including the dumb wisdom of never selling an income-producing asset.

I concede your point utterly, claiming without proof, that the political process will evolve to fairly mitigate this problem. It is bigger than even Bitcoin and will be solved or otherwise dealt with by various jurisdictions worldwide in the fullness of time.

Meanwhile, I for one, favor the concentration of great wealth in the hands of those saved it up and boldly spend it to advance our civilization as they see fit - even to Mars.
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April 25, 2014, 05:43:40 AM
 #196

People have been cheated by costless fiat for so long time that they already forget that a currency without cost actually worth nothing, legally counterfeiting is still counterfeiting

The problem with fiat is not costlessness, but possibility of arbitrary, limitless creation. PoS costs much less than PoW, but coin creation is still constrained by the parameters of the code.

The price will immediately crash to the coin's production cost, since miners have the motivation to immediately cash out large gains

Why would miners have the motivation to cash out their gains?  They would have motivation to hold onto coins to take advantage of PoS awards.

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April 25, 2014, 05:44:47 AM
 #197

People have been cheated by costless fiat for so long time that they already forget that a currency without cost actually worth nothing, legally counterfeiting is still counterfeiting

The problem with fiat is not costlessness, but possibility of arbitrary, limitless creation. PoS costs much less than PoW, but coin creation is still constrained by the parameters of the code.

The price will immediately crash to the coin's production cost, since miners have the motivation to immediately cash out large gains

Why would miners have the motivation to cash out their gains?  They would have motivation to hold onto coins to take advantage of PoS awards.

I cash-out portions of my mining efforts each month, to help pay bills and enjoy an active lifestyle. I think that you will find there are a lot of miners, just like me who enjoy mining, but cannot just hold onto all their coins.

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April 25, 2014, 06:01:47 AM
 #198

People have been cheated by costless fiat for so long time that they already forget that a currency without cost actually worth nothing, legally counterfeiting is still counterfeiting

The problem with fiat is not costlessness, but possibility of arbitrary, limitless creation. PoS costs much less than PoW, but coin creation is still constrained by the parameters of the code.

The price will immediately crash to the coin's production cost, since miners have the motivation to immediately cash out large gains

Why would miners have the motivation to cash out their gains?  They would have motivation to hold onto coins to take advantage of PoS awards.

I cash-out portions of my mining efforts each month, to help pay bills and enjoy an active lifestyle. I think that you will find there are a lot of miners, just like me who enjoy mining, but cannot just hold onto all their coins.

Sure...but if PoS made things cheaper, you could hold onto more, not less.  just saying.

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April 25, 2014, 06:03:19 AM
 #199

People have been cheated by costless fiat for so long time that they already forget that a currency without cost actually worth nothing, legally counterfeiting is still counterfeiting

The problem with fiat is not costlessness, but possibility of arbitrary, limitless creation. PoS costs much less than PoW, but coin creation is still constrained by the parameters of the code.

The price will immediately crash to the coin's production cost, since miners have the motivation to immediately cash out large gains

Why would miners have the motivation to cash out their gains?  They would have motivation to hold onto coins to take advantage of PoS awards.

I cash-out portions of my mining efforts each month, to help pay bills and enjoy an active lifestyle. I think that you will find there are a lot of miners, just like me who enjoy mining, but cannot just hold onto all their coins.

Sure...but if PoS made things cheaper, you could hold onto more, not less.  just saying.

It's a big 'if' and for all intents and purposes, you could be correct, but you could also be very wrong, it's a gamble which i'd rather not (s)take.

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April 25, 2014, 06:06:17 AM
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I totally understand you and I respect and admire what you have done. Bitcoin would not be where it is today without you. All I am saying is that if there are major improvements that can be made to Bitcoin, it should be done. I do believe in tradition for the sake of tradition. Bitcoin is in a much different place today than it was a few years ago.

thank you for making an effort to be polite, 'Luddite' remarks are not appreciated and I feel that you are better than that.
However, here is what I see...there are already PoS coins available on the toy exchanges, some of which will provide a much higher stake than the 10% which is being discussed. I don't see why PoS should be introduced into Bitcoin, when one can simply exchange their Bitcoin for say; Peercoin, or TEKCoin, hold it for a year until suitable stake is accumulated and cash it back to Bitcoin. I do also; however, agree that Bitcoin is evolutionary, and without trying to sound like one of the greedy large farming operations myself; you'd have a shitstorm from ASIC manufacturers if this was to go ahead.

So, may I ask, is the true purpose of PoS, to reduce electricity use? to bring down mining difficulty? and make the rich, richer?

I concede, it would do all of the these three things but really, none of these are in the best interest of Bitcoin. We would see value plummet and BTC price hit the floor.
If it were to be accomplished, it certainly should not be in the near future; having had only one block halving, in mining terms, we are still early adopters and Bitcoin is still very young. I feel we would be forcing our cryptocurrency to 'grow up' before it's time.

PoS? well maybe, yes, but only after all 21million coins have been mined.  Cheesy

I am sorry if my Luddite remark came off as rude. I was merely trying to express a similarity that I perceived. The Luddites had good reasons for being Luddites, and serious miners have good reasons for supporting PoW. In retrospect, mechanization was clearly beneficial to the economy. The debate between PoW and PoS is not clearly resolved yet, but the more I learn the more it seems to me that PoS is superior.

PoS would reduce electricity use dramatically, it would eliminate mining, not reduce mining difficulty, and while it would make the rich richer, it would make everyone richer in equal proportion, which provides an incentive for more and more people to own coins. In PoW, the only people who get richer are miners who are performing a wasteful, unnecessary task (necessary in the beginning, but unnecessary now that PoS has been invented).

I am willing to listen to any arguments against PoS, but I have yet to hear anything very convincing. The strongest criticism of PoS altcoins was that the initial coin distribution was much worse than Bitcoin, but now the ability to transfer the Bitcoin blockchain coin distribution to a new blockchain overcomes that objection.
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