Re: Proof of stake instead of proof of work

[jubalix]

POS has its own very serious problem:

Someone with a stake can spend it to mine any number of forks simultaneously.

so this is just merged mining, eg with IXC and others in BTC. No problem here.

In contrast POW can only be created on alternatives if computing capacity is split between them. This forces convergence while POS does not.

no merged mining does this without extra hash. The hash for BTC will always work for a lower difficulty.

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[iopq]

No, both PoS and PoW allow everyone to participate in exact proportion to their resources.

No: you can't buy coins of the chain you want to mine if they are not for sale, whatever are your resources.

While you can build how many hashing power you want if you have the resources, and nobody, nobody, can't stop you.

The difference is quite abysmal.

I should clarify that when I talk about PoS I mean only as a synchronization method. Every coin that uses PoS synchronization also needs some issuance method, and the best known issuance method is PoW. The problem with the PoS coins we see today is that they think that by using PoS they don't need PoW, so they use a broken issuance method instead.

For a proper PoS coin that uses PoW issuance, everyone can participate in "the game" by acquiring hashrate normally and minting new coins.

If you move forward in time past the original distribution, it is true what you say that to participate you need someone to sell you coins. But in practice coins are being sold on the market, so this is only a problem if someone tries to acquire a large amount - and that's not really a problem, since the most likely person to do this is an attacker. Therefore, I consider the difficulty to acquire a large voting power quickly an advantage.

POS has its own very serious problem:

Someone with a stake can spend it to mine any number of forks simultaneously.

In contrast POW can only be created on alternatives if computing capacity is split between them. This forces convergence while POS does not.

If you examine the designs listed in the wiki, you'll see they're both resilient to this.

In my system, if a stakeholder signs two conflicting blocks, evidence of this is referenced and the voting weight of his address is reset. (Moving to a new address also resets voting weight, until it accumulates weight again).

The same cannot be said about the alts that pass for PoS these days.

Why then, do you think we haven't adopted it yet?

1. It's too big a change.
2. It doesn't work well with merged mining and alternative uses of the blockchain (a la colored coins).

How long should the issuance period last? In other words, if you were to create a PoW/PoS coin, when would it stop issuing new coins?

[jabo38]

When I examine PoW, it just looks like an inefficient, gate keeping method, long way about distributing coins.  (basically, like a really poorly designed PoS)   WIth PoS, I spend money and I am guaranteed coins.  With PoW I spend money to buy a miner and electricity and am guaranteed coins.  The reason the miners buy the miners and electricity is just to get the coins.  Why not just spend the money directly to get the coins with PoS?  A thing with mining is that it is a gate keeping policy.  Only people with high enough tech skills and are friends with the devs get the coins.  This leads to skewed and unfair distributions.  With PoS the devs advertise and advertise for very long times to get as many people in for the IPO.  This is a much more egalitarian way of distributing the coins.  Is it fair?  No, it isn't, but it is much more fair that PoW.  Anybody can spend any amount with PoS from $5 to $50,000 to enter the game, but with PoW a person needs serious resources and know how.  It isn't 2010 and people aren't using their notebooks anymore. 

On top of that all that "work" that is being done in "POW" is not really all going on to secure the network as people like to so often say.  It is in fact busy work that is just ultimately wasted energy and computing power for every single miner involved but the one that won the block.  The miners are not working relentlessly to process transactions, in fact many of them refuse to process transactions!!!  What kind of financial system is designed in a way that it is actually not in the interest of the people maintaining a financial network to not process financial transactions? 

With PoS like NXT, a forgers whole computing power is gone towards processing transactions and the only reward is the fees, so the forgers are motivated to process as many transactions as they can.  Sounds like a pretty efficient system to me. 

One system the maintainers don't want to process transactions, and the other system the maintainers do...... Hmmmmm, which one is better?

So to me it is a better way of distributing coins and a better way of stabilizing the network.  And oh yeah, the 2nd gen PoS coins are adding function after function and service after service on top of their  networks.

PoW was a revolutionary idea.  +1 to Satoshi coming up with it.  Because of it, he showed that yes, crypto could indeed be real and could indeed work.  He taught us all about a new kind of value.  But now that we know that, we need a much better system that works towards the same end.  If Satoshi would have just released PoS at the start, nobody would have been interested.  It was in the mining in the early days that bitcoin was cool.  Mining made it fun and interesting.  The early days are gone.  Many years have passed.  It is time for crypto to grow up and become a quick, efficient, safe, and easy way to transfer value.  PoS gives our community that. 

Mining is so 2012-2013

[jonald_fyookball]

You have good points.  But after talking with smart people in other threads I'm not so sure a pure Pos coin would be secure, as it suffers from the infamous "nothing at stake" attack vector. 

Also, is Pos as fair as Pow?  Both cost money to acquire initial wealth, but Pos keeps rewarding owners, so the rich get richer. 

[XbladeX]

...but Pos keeps rewarding owners, so the rich get richer. 

Depend on system 1% interest rate rewards all equally.
POS have pain in later distribution need more PR to expand than POW.
But current centralization of BTC mining have same problems with distribution.

Generally to hold value are better POS coins with active community than any POW BTC clone
with dumping miner farms.

[jonald_fyookball]

...but Pos keeps rewarding owners, so the rich get richer. 

Depend on system 1% interest rate rewards all equally.
POS have pain in later distribution need more PR to expand than POW.
But current centralization of BTC mining have same problems with distribution.

Generally to hold value are better POS coins with active community than any POW BTC clone
with dumping miner farms.

Centralization of mining could be a small concern , but that is more of a security issue
than an economic issue.  Pool participants are still rewarded.

[ChuckOne]

With PoS like NXT, a forgers whole computing power is gone towards processing transactions and the only reward is the fees, so the forgers are motivated to process as many transactions as they can.  Sounds like a pretty efficient system to me. 

Good point.

[xtester]

Interesting point of view. Though I suspect a lot of this discussion will shift to POI when it will come out.

[520Bit]

I have hold my PPC for more than half year, but may I say POS=Proof of Shit?

The interest is very low, one can rarely get the interest without massive PPC's.

[mhps]

I have hold my PPC for more than half year, but may I say POS=Proof of Shit?

The interest is very low, one can rarely get the interest without massive PPC's.

Even if Peercoin gives you no "interest" wouldn't you own some just for its security against vulnerability of a pure POW coin? Artificially high POS rate is just inflation that pushes down the exchange rate.

[svojoe]

I have hold my PPC for more than half year, but may I say POS=Proof of Shit?

The interest is very low, one can rarely get the interest without massive PPC's.

Even if Peercoin gives you no "interest" wouldn't you own some just for its security against vulnerability of a pure POW coin? Artificially high POS rate is just inflation that pushes down the exchange rate.

I believe PoS is a work in progress,  but it seems to me that very low interest is important.  There needs to be incentive to keep wallets open and staking,  you will get more total compounding interest if it is open all the time in a coin like Blackcoin.   So there needs to be incentive to stake.  But too much interest will mimic the same inflation as PoW and I think lower levels of inflation are one of POS's biggest benefits. 

[ChuckOne]

Interesting point of view. Though I suspect a lot of this discussion will shift to POI when it will come out.

PoI. What is that exactly? (Besides from Proof of Importance)

[Brangdon]

I have hold my PPC for more than half year, but may I say POS=Proof of Shit?

The interest is very low, one can rarely get the interest without massive PPC's.

But the cost of mining is also very low. As long as the interest pays for the mining costs, it's good.

People have got used to PoW mining as a get-rich-quick scheme. People mine Bitcoin who have no real interest in the currency. They sell their block-reward coins for fiat. PoS isn't like that. As a get-rich-quick scheme, it is indeed shit. The purpose of mining is not to make money, but to help secure the money you've made. (Although since some interest is paid, you might as well have it as not.)

[bitgold]

Isn't the current financial system sort of PoS -- the more you own, the more you earn?

Those on the top of the pyramids will make sure the lower class will never have a chance.

[ChuckOne]

Isn't the current financial system sort of PoS -- the more you own, the more you earn?

Those on the top of the pyramids will make sure the lower class will never have a chance.

Sad, is it not?

Better ideas?

[blade87]

Anyway PoS limits the partecipation to an oligopoly, while PoW is open to everybody, without distinction.

That's an illusion. PoS coins have no more an oligopoly than PoW coins. You think mining 0.1 LTC per day via PoW is worth anything? Spending $300 on a GPU to mine versus spending $300 on a PoS coin itself... I'd say the PoS coin actually redistributes itself better than the PoW coin.

Well, unless you're NXT of course. Then I agree with you.

I really like PoS, but I feel it could use a few tweaks to become "perfect" still.

[mhps]

Isn't the current financial system sort of PoS -- the more you own, the more you earn?

Those on the top of the pyramids will make sure the lower class will never have a chance.

The current financial system has no limit in printing.

A POS cryptocoin has a given "interest" enforced by protocol. If this "interest" is there only for mechanically securing the network, it is a trustworthy efficient system.

[ChuckOne]

Isn't the current financial system sort of PoS -- the more you own, the more you earn?

Those on the top of the pyramids will make sure the lower class will never have a chance.

The current financial system has no limit in printing.

A POS cryptocoin has a given "interest" enforced by protocol. If this "interest" is there only for mechanically securing the network, it is a trustworthy efficient system.

Exactly. The interest is no interest at all. Because the supply of coins does not increase.

[jl2012]

I think they are saying you could 'roll back' on your own node to a point where you did have coin age, and try to attack from that point.

But it's not clear how you would get very far because there would be a longer chain soon and your coin age would be used up fast.

That is like saying you can't 51% attack a PoW network because the main chain is growing.   Yeah if you have less computing power than the "good guys" you can't but what if you have more?  With more than half of the network computing power you will eventually build the longest chain.  With a PoS you will eventually build the longest chain if you have more than half of the network stake.

True. In both cases a majority ownership either in stake or hashing power would make an attack possible.  
But how does that make PoS inferior ?

The attack has no cost or risk.  

Very simplified example:
The network stake is 2M xCoins.
I acquired 1.1M xCoins as of block 1,000.
I sell you 1.1 M xCoins for $$$$$$$ and the transfer is recorded in block 1,001.
I now no longer have any xCoins (effective block 1,001+), I have no cost as I received $$$$$$ in return for the 1.1M xCoins.
I start building an attack chain as of block 1,000 double spending my transfer.

Eventually even if the main chain has a head start, my attack chain will be longer.  This is no different than a 51% attack on a PoW based network however my attack has no cost and no risk.   I already sold the coins.  I am merely using my history of prior ownership to attack the network.

Compare that to PoW.  I build a hashing farm with 51% of network capacity.  If I attack with it then the attack has cost and risk.  The farm wasn't free, I may not succeed in which case I would lose all the legit blocks I could build.   If I sell the hashing farm I can't engage in an attack based on the history that at one point in the past I had more hashing power than the rest of the network.

Both are vulnerable to a 51% attack however PoS allows the attacker to exploit the history (your security mechanism is recorded in the very thing you are attempting to secure) to attack without cost or risk.

What if a PoS/PoW hybrid system? Let say PoS and PoW blocks have to occur alternatively?