rpietila Altcoin Observer

[illodin]

PoS put to rest:

PoS coins use the number of coins held as the basis for their signalling system. Since coins have an exchange rate, they obviously do not fulfill the criteria of having no value, either practical or intellectual. Thus PoS is not an viable mechanism for honest signalling.

Latter emphasis mine.

Could you provide a practical example where this would actually matter?

[illodin]

Risto (and others who understand crypto economy), may I ask your opinion on this:

BLACKHALO BITHALO AND NIGHTTRADER WORLDS FIRST UNBREAKABLE SMART CONTRACTS LIVE AND RUNNING
www.BlackHalo.info www.NightTrader.org www.BitHalo.org

Anyone? I'm actually surprised not many people seem to care, or is it that they don't understand it?

[dunchy]

My default assumption is that any new coin is either a scam or a folly.

even if this was 100% correct, it doesn't mean there's no opportunities left for insane profits (3-10X on top of Bitcoin is possible with some alts)

Or 100x.

But don't you people feel moral restraint in investing in something that you know to be a scam?

(Luckily the obscene profits are available only in such limited investment amounts that I can more easily forgo them  )

There is no need to call on someone's morals when arguing against playing with shitalts.  Any system trying to be based on trust & morality is doomed to fail, that's why we're here right?

What is important to understand is that anyone taking part in shitalts p&ds are hurting themselves and their prosperity, albeit indirectly, because depriving the newcomers  from their money is hurting the overall crypto  adoption which is by far the most important thing that needs to happen.

[superresistant]

PoS put to rest:

A big text for nothing.
The only argument is :

there will be times where two nodes disagree

and it's wrong. Or at least not even debated.
Disagree what ? He talks like nodes have their own will.

Disagree by working on different chains for some amount of time.

Forking ? As if PoW cannot fork ?
There is no work (mining) in PoS. You don't compete on wasting resources, that's the goal.

[dga]

PoS put to rest:

A big text for nothing.
The only argument is :

there will be times where two nodes disagree

and it's wrong. Or at least not even debated.
Disagree what ? He talks like nodes have their own will.

Disagree by working on different chains for some amount of time.

Forking ? As if PoW cannot fork ?
There is no work (mining) in PoS. You don't compete on wasting resources, that's the goal.

And that's the problem. 

The goal of a PoW-based system is to make it more expensive to amass 51% of the hash rate in order to be able to control the outcome of a fork.  (After all, what is a fork but a disagreement about which transactions to include and who should get paid for the block?).

A PoS-system is aptly named, because it rewards amassing that 51%.

The PoS boosters handwave and claim that doing so would devalue the coins owned by the 51% attacker, but that really just means the attacker would need to be more subtle.

It's a deeply flawed idea in pursuit of a good, but I believe impossible, goal -- decentralized, untrusted consensus without waste.

[Este Nuno]

PoS put to rest:

A big text for nothing.
The only argument is :

there will be times where two nodes disagree

and it's wrong. Or at least not even debated.
Disagree what ? He talks like nodes have their own will.

Disagree by working on different chains for some amount of time.

Forking ? As if PoW cannot fork ?
There is no work (mining) in PoS. You don't compete on wasting resources, that's the goal.

And that's the problem. 

The goal of a PoW-based system is to make it more expensive to amass 51% of the hash rate in order to be able to control the outcome of a fork.  (After all, what is a fork but a disagreement about which transactions to include and who should get paid for the block?).

A PoS-system is aptly named, because it rewards amassing that 51%.

The PoS boosters handwave and claim that doing so would devalue the coins owned by the 51% attacker, but that really just means the attacker would need to be more subtle.

It's a deeply flawed idea in pursuit of a good, but I believe impossible, goal -- decentralized, untrusted consensus without waste.

What type of subtle attacks are possible?

[JorgeStolfi]

Could a PoS miner "rent" coins from a hoarder to simulate that he has the required stake, without actually having it?

[superresistant]

PoS put to rest:

A big text for nothing.
The only argument is :

there will be times where two nodes disagree

and it's wrong. Or at least not even debated.
Disagree what ? He talks like nodes have their own will.

Disagree by working on different chains for some amount of time.

Forking ? As if PoW cannot fork ?
There is no work (mining) in PoS. You don't compete on wasting resources, that's the goal.

And that's the problem. 
The goal of a PoW-based system is to make it more expensive to amass 51% of the hash rate in order to be able to control the outcome of a fork.  (After all, what is a fork but a disagreement about which transactions to include and who should get paid for the block?).
A PoS-system is aptly named, because it rewards amassing that 51%.
The PoS boosters handwave and claim that doing so would devalue the coins owned by the 51% attacker, but that really just means the attacker would need to be more subtle.
It's a deeply flawed idea in pursuit of a good, but I believe impossible, goal -- decentralized, untrusted consensus without waste.

That's the flaw of PoW : pool get to own over 51% of the network without doing any mining, just by owning a strong node.

Could a PoS miner "rent" coins from a hoarder to simulate that he has the required stake, without actually having it?

No.

What type of subtle attacks are possible?

You cannot do a 51% attack on PoS.

[dga]

You cannot do a 51% attack on PoS.

This is factually incorrect.

[dnaleor]

I would like to get your opinion on my recent thought:

all major altcoins seems to go down (LTC, PPC, NMC, ...) but for the last week, monero seems to be relatively stable.
We can not deny that there is a negative pressure on altcoins at the moment, so I assume that this pressure is also on monero.
This could mean that monero goes up a lot when altcoins revive...

[dreamspark]

Could a PoS miner "rent" coins from a hoarder to simulate that he has the required stake, without actually having it?

Pure PoS coins don't have miners in the conventional way, perhaps you know this but I am struggling to therefore see the point of the question. Why would a "hoarder" rent his coins to someone else to stake unless they were paying more than he would make by staking his coins? To that end then, why would a "renter" rent coins from someone to make less than they would by buying some?

[devphp]

Performing a 51% attack on an established PoS coin without Transparent Forging is at least 2 orders of magnitude more expensive than doing a 51% attack on Bitcoin ($50+ billion vs $500 million).

[JorgeStolfi]

Could a PoS miner "rent" coins from a hoarder to simulate that he has the required stake, without actually having it?

Pure PoS coins don't have miners in the conventional way, perhaps you know this but I am struggling to therefore see the point of the question. Why would a "hoarder" rent his coins to someone else to stake unless they were paying more than he would make by staking his coins? To that end then, why would a "renter" rent coins from someone to make less than they would by buying some?

Thanks, it was a stupid question, sorry.

[dga]

Could a PoS miner "rent" coins from a hoarder to simulate that he has the required stake, without actually having it?

Pure PoS coins don't have miners in the conventional way, perhaps you know this but I am struggling to therefore see the point of the question. Why would a "hoarder" rent his coins to someone else to stake unless they were paying more than he would make by staking his coins? To that end then, why would a "renter" rent coins from someone to make less than they would by buying some?

That's exactly one of the tricks.

Party A holds 1M coins and earns a 1% annual PoS "stake."

Party B rents those coins from party A at an equivalent of 3% annual return.

Thus, for a cost of only 0.25% * 51% = 0.000125 of the existing money supply (let's take XMR as an example - that's $525 USD right now), an attacker can mount a 51% attack for a month.

Man, with that kind of opportunity, I should go write some code...

(The other person who asked about subtle attacks:  Just don't orphan everyone's blocks all the time or hold up transactions for too long.  But you could easily do things like stopping all deposits into an exchange for an hour or two in order to manipulate the price, if you were so inclined...)

[dreamspark]

That's exactly one of the tricks.

Party A holds 1M coins and earns a 1% annual PoS "stake."

Party B rents those coins from party A at an equivalent of 3% annual return.

Thus, for a cost of only 0.25% * 51% = 0.000125 of the existing money supply (let's take XMR as an example - that's $525 USD right now), an attacker can mount a 51% attack for a month.

Man, with that kind of opportunity, I should go write some code...

(The other person who asked about subtle attacks:  Just don't orphan everyone's blocks all the time or hold up transactions for too long.  But you could easily do things like stopping all deposits into an exchange for an hour or two in order to manipulate the price, if you were so inclined...)

Ill admit I misread the question somewhat particularly after entering the conversation after the POS vs POW was in full flow. In regards to renting someones coins I was thinking more in terms of staking for coin profits rather than in regards to 51% on the network.

Continue people

[illodin]

Could a PoS miner "rent" coins from a hoarder to simulate that he has the required stake, without actually having it?

Pure PoS coins don't have miners in the conventional way, perhaps you know this but I am struggling to therefore see the point of the question. Why would a "hoarder" rent his coins to someone else to stake unless they were paying more than he would make by staking his coins? To that end then, why would a "renter" rent coins from someone to make less than they would by buying some?

That's exactly one of the tricks.

Party A holds 1M coins and earns a 1% annual PoS "stake."

Party B rents those coins from party A at an equivalent of 3% annual return.

Thus, for a cost of only 0.25% * 51% = 0.000125 of the existing money supply (let's take XMR as an example - that's $525 USD right now), an attacker can mount a 51% attack for a month.

Man, with that kind of opportunity, I should go write some code...

(The other person who asked about subtle attacks:  Just don't orphan everyone's blocks all the time or hold up transactions for too long.  But you could easily do things like stopping all deposits into an exchange for an hour or two in order to manipulate the price, if you were so inclined...)

So you expect people just borrowing you coins worth of millions if you promise to pay back?

[JorgeStolfi]

So you expect people just borrowing you coins worth of millions if you promise to pay back?

With a legally binding and notarized contract, of course.

[dga]

So you expect people just borrowing you coins worth of millions if you promise to pay back?

With a legally binding and notarized contract, of course.

This funny thing happened to me two years ago.

I wanted to buy something non-virtual.  It was pretty expensive.  It has four walls and a roof, and all sorts of nice things like heating and cooling and electricity.  It's often referred to as a "house."

I didn't have enough cash to buy it.  So I went to some people and I asked to borrow hundreds of thousands of fiat dollars.  I offered them a 3.5% annual rate of return -- something comparable to what I discussed above -- and proved to them that I was a pretty good risk and was likely to pay back anything I borrowed.

And you know, the funniest thing happened:  they said yes.

Who'd have thought?

For a better example of borrowing billions of dollars in order to make a profit, go read about how George Soros caused the collapse of the British Pound in order to make a huge profit for his hedge fund

http://internationalinvest.about.com/od/gettingstarted/a/Black-Wednesday-George-Soros-Bet-Against-Britain.htm

edit here's a better link - http://www.telegraph.co.uk/finance/2773265/Billionaire-who-broke-the-Bank-of-England.html

he borrowed about 6.5 billion GBP to play games with the currency.  He won.  Big.

[Este Nuno]

So you expect people just borrowing you coins worth of millions if you promise to pay back?

With a legally binding and notarized contract, of course.

This funny thing happened to me two years ago.

I wanted to buy something non-virtual.  It was pretty expensive.  It has four walls and a roof, and all sorts of nice things like heating and cooling and electricity.  It's often referred to as a "house."

I didn't have enough cash to buy it.  So I went to some people and I asked to borrow hundreds of thousands of fiat dollars.  I offered them a 3.5% annual rate of return -- something comparable to what I discussed above -- and proved to them that I was a pretty good risk and was likely to pay back anything I borrowed.

And you know, the funniest thing happened:  they said yes.

Who'd have thought?

For a better example of borrowing billions of dollars in order to make a profit, go read about how George Soros caused the collapse of the British Pound in order to make a huge profit for his hedge fund

http://internationalinvest.about.com/od/gettingstarted/a/Black-Wednesday-George-Soros-Bet-Against-Britain.htm

edit here's a better link - http://www.telegraph.co.uk/finance/2773265/Billionaire-who-broke-the-Bank-of-England.html

he borrowed about 6.5 billion GBP to play games with the currency.  He won.  Big.

If people on a PoS coin network agreed to make loans like you guys are talking about public on the blockchain or whatever then even if a persona had the best credit in the world they won't be able to borrow 51% of the coins.

[AlexGR]

They only need 51% of the coins staking, which is usually much lower than the 51%.