Major Problems in Crypto Currency

[upekha]

POW:
- enormous power consumption
- bad distribution through big mining farms
- threat of 51% attack

POS:
- encourages hoarding, but not spending
- lots of scamming through lacking transparency in IPOs
- potentially bad distribution through IPOs

same for all:
- length of the blockchain

1. other problems?
2. any solutions?

[1715245902]

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[1715245902]

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[cryptowho]

Major*

 

[upekha]

Major*

 

hehem .. yeah xD

[murraypaul]

The third big problem:

- What are they? Are they currencies, designed to be spent, or are they commodities/valuables, designed to increase in value?
The two contradict each other. If you think BTC is going to increase in value, it makes no economic sense to spend it, you would spend USD instead, and keep your BTC.
But the ultimate long term value of BTC is tied to it actually becoming used as a currency (or at least a medium of exchange), and so having actual use, rather than just speculative value.

You need to convince retailers to accept BTC, and for people to spend it, to increase its long term value.
But if you think its long term value will increase, you won't spend it.

[Amph]

the problem of pos (pure pos) is transparency, if they could find a way to spread the coin as much as possible without cheating it might have a bright future

[omahapoker]

theres just too many coins now. need to weed it out to 60-70

[upekha]

The third big problem:

- What are they? Are they currencies, designed to be spent, or are they commodities/valuables, designed to increase in value?
The two contradict each other. If you think BTC is going to increase in value, it makes no economic sense to spend it, you would spend USD instead, and keep your BTC.
But the ultimate long term value of BTC is tied to it actually becoming used as a currency (or at least a medium of exchange), and so having actual use, rather than just speculative value.

You need to convince retailers to accept BTC, and for people to spend it, to increase its long term value.
But if you think its long term value will increase, you won't spend it.

"becoming used as a currency" is quite a problem in the crypto world I find. But I think Bitcoin (and other POW currencies) handle that problem through a transaction fee that is almost nil. enormous advantage to fiat money!

POW transaction fees are usually higher, and proportional to what you spend.

[upekha]

theres just too many coins now. need to weed it out to 60-70

I don't think thats such a big problem.
Better a million shitcoins, than a central banking system where i don't have any choice about my currency what so ever!

[upekha]

the problem of pos (pure pos) is transparency, if they could find a way to spread the coin as much as possible without cheating it might have a bright future

transparency definitly is a issue!
I think NEM is looking quite promising when it comes to the distribution question.

[foodies123]

the major problem of proof of stake is that there's nothing at stake.

[upekha]

the major problem of proof of stake is that there's nothing at stake.

what do you mean?

[lynn_402]

IMHO, Peercoin has the best solutions to these problems; with a fair initial distribution through proof-of-work (mainly from the time period when mining was more accessible), and the small 1%/year PoS reward is not big enough to justify hoarding all of your coins. Anyways, I'm quite sure most holders of 100% PoW coins won't spend much of them before their value is multiplied. Deflation encourages hoarding, so the small inflation present in PoS coins offset the advantages of the small reward hoarding gives you.

[upekha]

IMHO, Peercoin has the best solutions to these problems; with a fair initial distribution through proof-of-work (mainly from the time period when mining was more accessible), and the small 1%/year PoS reward is not big enough to justify hoarding all of your coins. Anyways, I'm quite sure most holders of 100% PoW coins won't spend much of them before their value is multiplied. Deflation encourages hoarding, so the small inflation present in PoS coins offset the advantages of the small reward hoarding gives you.

Yeah I like the Peercoin concept as well!

[lynn_402]

Yeah I like the Peercoin concept as well!

Also, a small transaction fee is mandatory, which means less dust-transactions spam, and thus a smaller blockchain. Peercoin's blockchain is still less than 300mb, and it's one of the oldest coins.

[knightcoin]

POW:
- enormous power consumption
- bad distribution through big mining farms

POS:
- encourages hoarding, but not spending
- lots of scamming through lacking transparency in IPOs
- potentially bad distribution through IPOs

same for all:
- length of the blockchain

1. other problems?
2. any solutions?

enormous power consumption
is it because you pay your electricity bill in fiat ?

[cryptowho]

i thought POS encourages selling coins?

With pow you have to mine any additional coin you want to sell. While in pow you can keep a certain number you want to hoard and keep selling the stake for value. I thought POS would create the ultimate selling obstacle. Is it proving to be the opposite?

[lynn_402]

i thought POS encourages selling coins?

With pow you have to mine any additional coin you want to sell. While in pow you can keep a certain number you want to hoard and keep selling the stake for value. I thought POS would create the ultimate selling obstacle. Is it proving to be the opposite?

I don't understand your point. How is selling coins mined through PoW different than selling coins obtained through PoS?

[upekha]

POW:
- enormous power consumption
- bad distribution through big mining farms

POS:
- encourages hoarding, but not spending
- lots of scamming through lacking transparency in IPOs
- potentially bad distribution through IPOs

same for all:
- length of the blockchain

1. other problems?
2. any solutions?

enormous power consumption
is it because you pay your electricity bill in fiat ?

Its because the planet is already quite fucked up.

[cryptowho]

POS is easy to stake. while mining would be much harder down the road and not to mention expensive


take dogecoin for exmaple. can you mine it easy? if it were POS , you could buy 5 millions and sit there stake additional coins effortless.

Now everyone that owns coins are ultimately"mining" thus creating additional coins.

[lynn_402]

enormous power consumption
is it because you pay your electricity bill in fiat ?

Its because the planet is already quite fucked up.

And negative aspects of mining includes not only the waste of electricity, but the quantity of electronic equipments that gets obsolete in less than a year.

Also, OP, you should consider adding the threat of 51% attack and mining centralization under PoW.