Adrian-x
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April 24, 2014, 08:17:11 PM |
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Proof of Stake is socialist. It creates money out of thin air without working for it. Like a bank.
The important part of your argument is the creation of money out of thin air - so to speak. Satoshi put rewards into the network to motivate miners. Proof-of-Stake is exactly like the current Bitcoin system except that you get your fair share of the block rewards as a 10% average annual dividend, instead of those same rewards getting wasted in someone else's datacenter. You are the miner. But the genius of Proof-of-Stake is that it can be performed on an ordinary computer as long as you help process transactions and maintain the blockchain. Proof-of-Work is bizarre. It is sort of like a bank burning their notes in a moat to keep robbers out.It isn’t that bad, I believe PoW is called mining because it relates not to burning bank notes but to using energy to dig for gold. I am sympathetic to your cause, my life and business is devoted to environmental sustainability, it is the allocation of capital that has the biggest impact on our environment, not consumer choices. If Bitcoin mining is to compete for the finite energy available to sustain its exponential growth, we would see consumer’s preference for energy allocation change; this would bring about the necessary shift for long term sustainability we need. I think your energy projection needs to be modeled with the existing economy in mind, just a rudimentary though experiment makes me quite excited for a sustainable future of abundance. Firstly only the most efficient electronics will be used, as they will be orders of magnitude more efficient, I for one was still GPU mining over the winter as the heat cost was subsidised 20% by Bitcoin. But I believe this coming generation of ASIC’s will be significantly efficient to render that benefit obsolete next winter. So projecting on that understanding each subsequent generation will take an estimate of a year to deploy and 2 years to become obsolete and if the price of Bitcoin justifies it, competition will spark innovation, I have half a dozen investment opportunities available for the waste product Bitcoin promises to produce. Note planning for energy infrastructure to accommodate this projected energy demand is not happening, and if it was it would take a decade to implement. This ASIC race will significantly accelerate the halving time in turn we could be seeing a reword of about 1.5 bitcoin in as little as 10 years. If consumers over that time learn to become incredibly efficient choosing to direct their entire national energy supply to Bitcoin production and forgo using it as we do today, they will be ready for the future. On the topic of banning Bitcoin because it is considered ineffective energy usage, is hypocritical as electricity is being converted to heat everyday all over the world, what should happen in a free market is mining will not be centralised but distributed at the very leased to all those applications that use electricity to generate heat.
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Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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Bit_Happy
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A Great Time to Start Something!
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April 24, 2014, 08:20:12 PM |
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This thread makes me so happy... OP do you follow Invictus and Bitshares? Most up to date POS models and many more insights PoW : consensus is achieved by people who have capital at risk; rewards flow to those who perform the most work.
PoS : consensus is achieved by people who have capital; rewards flow to those who have the most capital. This is bad logic PoS = proof of stake and PoW = proof of work. They are two different mechanisms that can be used for achieving consensus in peer-to-peer networks. With PoS, consensus is formed by those holding stake; with PoW, consensus is formed by those doing work. You can dance around this fact as much as you like, but that's what it comes down to Mgburks77. The question is which mechanism will the market prefer? I would actually like to see a PoS alt-coin and I believe that through blockchain mergers of like-minded alt coin communities one can grow to challenge litecoin. This will help us answer these questions empirically, rather than through hand-waving debates that this thread is evidence of. I think it would be proper to call this PoS alt bit shares instead, for it is no longer a coin. Dividends are awarded to share holders for holding stake, rather than to miners for doing work. Arguments are settled based on how many shares one holds, rather than by how much work one performs. This is already a thing! bitshares.org You are toast ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif)
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cbeast
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April 24, 2014, 08:25:41 PM |
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Oh c'mon. At least come up with something that hasn't been done before. Howabout a coin that pays compound interest calculated continuously?
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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Peter R
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April 24, 2014, 08:29:31 PM |
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I believe PoW is called mining because it relates not to burning bank notes but to using energy to dig for gold. I am sympathetic to your cause, my life and business is devoted to environmental sustainability, it is the allocation of capital that has the biggest impact on our environment, not consumer choices.
This. And PoW allocates capital more efficiently than PoS. PoW rewards those who do the most work by risking their time and resources, rather than those who hold the most capital. The electricity spent on PoW (that can go to useful heat) is dwarfed by the natural resources and human labour wasted when capital is misallocated (like we see in our current debt-based fiat system). The bitcoin economy will be good for the environment.
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cbeast
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April 24, 2014, 08:37:05 PM |
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I would argue that PoS adoption uses more electricity that a PoW global system.
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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djshoxxx
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April 24, 2014, 08:41:23 PM |
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I'm interested in at least discussing pos for security reasons. I don't think thing energy use is an issue for the foreseeable future, although that seems to be slope's concern.
I think it would be proper to call a PoS version of bitcoin, bit shares instead. Dividends are awarded to share holders for holding stake, rather than to miners for doing work. Arguments are settled based on how many shares one holds, rather than by how much work one performs. Im a little late to this thread, but I just came here to drop this link: http://bitshares.org/bitshares is already a thing, and its very promising
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Indemnified
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April 24, 2014, 09:07:01 PM |
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I would argue that PoS adoption uses more electricity that a PoW global system.
OK. Let's hear your argument.
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Peter R
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April 24, 2014, 09:14:32 PM |
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I would argue that PoS adoption uses more electricity that a PoW global system.
OK. Let's hear your argument. It's been argued several times in this thread: misallocation of capital leads to inefficient use of our natural and human resources. If you are going to reward yourselves 10%, why not 20%? More is better right? Since consensus is controlled by stake holders, why not vote yourself 50% dividends per year? The more money you award yourselves, the more stake you gain, and the more control you achieve over the network. You guys deserve it! Think of the electricity you saved. In the words of Goldman CEO Lloyd Blankfein, "you're doing God's work."
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cbeast
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April 24, 2014, 09:19:24 PM |
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I would argue that PoS adoption uses more electricity that a PoW global system.
OK. Let's hear your argument. Because PoS gives financial authority to individual stakeholders, no sovereign nation would allow a global authority to control the flow of money. They would enjoy having such authority themselves, however. Therefore each nation, state, community, large corporation, and many individuals as well as financial institutions, brokers, etc. will issue each their own PoS coins with competitive incentives. Not only would people need wallets for their legal tender PoS coin, but they would always want the best deal they can get from all the others. Just the exchanges alone would need computing power greater than the PoW network for Bitcoin in order to keep them straight. Point of Sales would need to be able to differentiate between thousands, if not millions of currencies. The power resources needed to secure all those PoS alt coins would be enormous. At least with all the PoW alt coins, nobody really takes them seriously because they are too insecure. Bitcoin derivative coins like Mastercoin simply use the one Bitcoin blockchain. Millions of clones can be created without adding additional power hungry nodes.
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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BldSwtTrs
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April 24, 2014, 09:19:56 PM Last edit: April 24, 2014, 09:31:06 PM by BldSwtTrs |
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I would argue that PoS adoption uses more electricity that a PoW global system.
OK. Let's hear your argument. It's been argued several times in this thread: misallocation of capital leads to inefficient use of our natural and human resources. If you are going to reward yourselves 10%, why not 20%? More is better right? Since consensus is controlled by stake holders, why not vote yourself 50% dividends per year? The more money you award yourselves, the more stake you gain, and the more control you achieve over the network. You guys deserve it! Think of the electricity you saved. In the words of Goldman CEO Lloyd Blankfein, "you're doing God's work." The dividends come from the transaction fees. If you charge too much fees nobody will use your DAC. It's like a brick and mortar corporation, why Coca-Cola shareholders don't vote themselves 50% dividends per year? You really need to grasp the analogy between blockchain technologies and autonomous corporations, that would avoid you to say wrong stuff such as PoS=rent-seeking. Shareholders of brick and mortar corporations are not rent-seeker, the same apply for the holders of blockchain tokens.
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itod
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April 24, 2014, 09:48:06 PM |
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Ok. Less text and more pictures….
It is pretty amazing how our infrastructure has grown. I hadn't seen either of these before, and they make me confident in the security of bitcoin and proud of what we've accomplished. These are just two examples of ambitious groups who want to earn income by mining bitcoin. They have large amounts of capital at risk and a vested interest in securing our network. They are rewarded objectively based on how much work they accomplish. I've seen these pictures, and have a same feeling as you looking at them: these are the people that will protect the bitcoin mining at any cost, not destroy it. I think they would go as far as restricting their own network hashing percentage, if the unlikely event that would be necessary. However, as time passes by they will have trouble keeping their < 10% of the hashrate, chances they can afford to continue investing and grow the percentage are slim, they have to cover the cost of investment sooner or later.
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Peter R
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April 24, 2014, 10:02:21 PM |
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I would argue that PoS adoption uses more electricity that a PoW global system.
OK. Let's hear your argument. It's been argued several times in this thread: misallocation of capital leads to inefficient use of our natural and human resources. If you are going to reward yourselves 10%, why not 20%? More is better right? Since consensus is controlled by stake holders, why not vote yourself 50% dividends per year? The more money you award yourselves, the more stake you gain, and the more control you achieve over the network. You guys deserve it! Think of the electricity you saved. In the words of Goldman CEO Lloyd Blankfein, "you're doing God's work." The dividends come from the transaction fees. If you charge too much fees nobody will use your DAC. It's like a brick and mortar corporation, why Coca-Cola shareholders don't vote themselves 50% dividends per year? You don't charge too much right away, of course. You wait until you have a large user base, preferably with loans denominated in your shares too. And then you increase the fees, or print more coins, or whatever you want since you're the dominant stake holders. Your example of real corporations was good: the people with the most control always find a way to vote themselves more at the expense of the smaller share holders. Hasn't this been proved time and time again? For me: PoW : consensus is achieved by people who put their time and resources at risk; rewards flow to those who perform the most work. PoS : consensus is achieved by people who have capital; rewards flow to those who have the most capital. PoW seems like the superior mechanism of establishing consensus in decentralized systems.
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clout
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April 24, 2014, 10:09:13 PM |
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peter i think you misunderstand what capital is. mining equipment is capital. bitcoins are capital. any resource, even labor or information, is capital.
in pos, capital flows to those with capital. and pow captial flows to those with capital and economies of scale. you get the same result but at a much higher cost with pow.
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Peter R
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April 24, 2014, 10:12:49 PM |
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peter i think you misunderstand what capital is. mining equipment is capital. bitcoins are capital. any resource, even labor or information, is capital.
in pos, capital flows to those with capital. and pow captial flows to those with capital and economies of scale. you get the same result but at a much higher cost with pow.
Perhaps it would be more clear to write: PoW : consensus is achieved by people who put their time and resources at risk; rewards flow to those who perform the most work. PoS : consensus is achieved by people who have shares; rewards flow to those who have the most shares. The thing you're missing is the difference between capital and capital at risk. PoS rewards rent-seeking; PoW rewards efficient work.
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jonald_fyookball
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April 24, 2014, 10:12:53 PM |
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peter i think you misunderstand what capital is. mining equipment is capital. bitcoins are capital. any resource, even labor or information, is capital.
in pos, capital flows to those with capital. and pow captial flows to those with capital and economies of scale. you get the same result but at a much higher cost with pow.
This actually makes a lot of sense to me. It's similar to the idea of foregoing a mining venture when one can simply invest their money directly in buying coins.
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jonald_fyookball
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April 24, 2014, 10:15:53 PM |
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peter i think you misunderstand what capital is. mining equipment is capital. bitcoins are capital. any resource, even labor or information, is capital.
in pos, capital flows to those with capital. and pow captial flows to those with capital and economies of scale. you get the same result but at a much higher cost with pow.
Perhaps it would be more clear to write: PoW : consensus is achieved by people who put their time and resources at risk; rewards flow to those who perform the most work. PoS : consensus is achieved by people who have shares; rewards flow to those who have the most shares. The thing you're missing is the difference between capital and capital at risk. PoS rewards rent-seeking; PoW rewards efficient work. Peter, true. However, what is the inherent value in doing work? What is the inherent value in taking risk? Work and risk are valuable in life and business, but this is another context.
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clout
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April 24, 2014, 10:19:13 PM |
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the whole world is coordinated through proof of stake consensus. the amount of capital you have is your weighted "vote." those who "vote" in accordance with the future consensus of the rest of the group stand to make more capital. that is to say that those who invest their capital to its most efficient ends will realize a gain on that capital. those that do not will lose capital. this is the essence of capitalism and the free markets and is why it is the foundation of our economic system.
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BldSwtTrs
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April 24, 2014, 10:21:57 PM |
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You don't charge too much right away, of course. You wait until you have a large user base, preferably with loans denominated in your shares too. And then you increase the fees, or print more coins, or whatever you want since you're the dominant stake holders. Assuming a competitive environment, the fees will be stable or decline because alternative DAC with lower fees will always be a threat. Your example of real corporations was good: the people with the most control always find a way to vote themselves more at the expense of the smaller share holders. Hasn't this been proved time and time again? The top management capture value from shareholders because of the agency problem, yes. But in an autonomus corporation there is no executives. For me:
PoW : consensus is achieved by people who put their time and resources at risk; rewards flow to those who perform the most work.
PoS : consensus is achieved by people who have capital; rewards flow to those who have the most capital.
PoW seems like the superior mechanism of establishing consensus in decentralized systems.
PoW is exactly the same thing than burning $$$ to get BTC. - it's the people with the more capital who get rewarded (because they can burn the most of it) - this is capital consuming, and it's become an economics uber-nonsense as soon as there is an more efficient way to achieve the same security level Imagine a world were company A and company B provide the exact same service for the same price. Company A pays 600 000 000$ (and I am conservative, but it's enough to prove the point) every year for security guards. Company B achieve the same level of security without any expenses. Assuming a competitive environment, which company will survive? BTC-PoW will soon be in the same situation where the banking system is today: competing with a more efficient alternative. And between two solutions to the same problem, markets make emerge the more efficient one (because efficience = profits, and people are attracted by profits).
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Peter R
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April 24, 2014, 10:31:29 PM Last edit: April 24, 2014, 10:51:16 PM by Peter R |
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Peter, true.
However, what is the inherent value in doing work? What is the inherent value in taking risk?
You are working to remove enough entropy to create a coin. You express your opinion that the coin is worth looking for by risking your time and resources in trying to find it. Once the entropy is removed, it is removed forever and you have a bitcoin--similar to how gold ore is dug up, processed, and then turned to gold coins. It is this physical relationship between energy and entropy that make it difficult for coins to be created. PoS is predicated on the idea that mining is wasteful. In other words, PoS says that it takes too much work to create a bitcoin and that we should create bit shares instead. But isn't that another way of saying that it should be easier to create shares than coins? And if it becomes very easy to create more shares, won't more shares be created? PoS supporters will tell you that this won't happen, but really if consensus if based on stake and shares can be created out of thin air (there's no entropy requirements) how is this really any different than our fiat system?
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jonald_fyookball
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April 24, 2014, 10:36:42 PM |
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Peter, true.
However, what is the inherent value in doing work? What is the inherent value in taking risk?
You are working to removing enough entropy to create a coin. You express your opinion that the coin is worth looking for by risking your time and resources in trying to find it. Once the entropy is removed, it is removed forever and you have a bitcoin--similar to how gold ore is dug up, processed, and then turned to gold coins. It is this physical relationship between energy and entropy that make it difficult for coins to be created. PoS is predicated on the idea that mining is wasteful. In other words, PoS says that it takes too much work to create a bitcoin and that we should create bit shares instead. But isn't that another way of saying that it should be easier to create shares than coins? And if it becomes very easy to create more shares, won't more shares be created? PoS supporters will tell you that this won't happen, but really if consensus if based on stake and shares can be created out of thin air (there's no entropy requirements) how is this really any different than our fiat system? Hmm... Seems to be related to the "pos scheme still needs a pow issuance mechanism" argument that meni made yesterday in this thread https://bitcointalk.org/index.php?topic=27787.0;allMy point being maybe we need elements of both pos and pow
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