Why do people believe that Proof of Work is good for distribution?

[PereguineBerty]

This thread seems like a sensible question has been asked.....

but it's being answered by a bunch of old ladies beating each other with handbags.

[tokyoghetto]

Why do people believe that Proof of Work is good for distribution?

Very good question.
Short answer: because they don't understand economics.

Is fair distribution really important?

Facebook stake was 100% premined and owned by the founder. Userbase has grown bigger and bigger creating value with their contents, then a lot of investors were more then happy to jump in the IPO enriching the greedy Zuckerberg.

Distribution is not really important, what really matters for an investor who considers switching $$$ for cryptocurrencies is network security, liquidity and volatility.

this x 1000.

[darkota]

You can only buy into a IPO for a limited amount of time with PoS.

With PoW, you can mine for decades to come.


PoS has horrible, unfair distribution and it will always be that way, simply because PEOPLE(the devs) choose who gets what amount of coins. You have to rely on them, with PoW, you don't have to trust anyone, you can go buy a mining rig and get your own damn coins.

100% PoS will always be shit and never go anywhere.

HOWEVER.

PoW transitioning to PoS over time is the best method, it's better than 100% PoW and way better than 100% PoS.

[crackerhead]

This thread seems like a sensible question has been asked.....

but it's being answered by a bunch of old ladies beating each other with handbags.

Hahaha well said.

I keep asking myself "why PoW" more everyday, and it's worth a reasonable discussion.

[ChuckOne]

So, what is your opinion on it?

[mczarnek]

I was pondering over PoW. It basically is PoS. You have you mining rigs at stake, right?

You buy your mining rigs and therefore get a bigger piece of the cake.


Same for PoS:

You buy your stake and therefore get a bigger piece of the cake.


No difference here.

This tends to be the way I feel about it too.

[mczarnek]

You can only buy into a IPO for a limited amount of time with PoS.

With PoW, you can mine for decades to come.


PoS has horrible, unfair distribution and it will always be that way, simply because PEOPLE(the devs) choose who gets what amount of coins. You have to rely on them, with PoW, you don't have to trust anyone, you can go buy a mining rig and get your own damn coins.

100% PoS will always be shit and never go anywhere.

HOWEVER.

PoW transitioning to PoS over time is the best method, it's better than 100% PoW and way better than 100% PoS.

Again, people who got in earlier got more coins, and people who threw more money into the fanciest highest powered rigs, get the most coins out of it.

And yes the devs chose who got which coins but let's say when it comes to Nxt, the people who got the most coins were those who threw in the most money.. I haven't heard any of those who got in on the original IPO complaining that they didn't get their fair share.

[darkota]

You can only buy into a IPO for a limited amount of time with PoS.

With PoW, you can mine for decades to come.


PoS has horrible, unfair distribution and it will always be that way, simply because PEOPLE(the devs) choose who gets what amount of coins. You have to rely on them, with PoW, you don't have to trust anyone, you can go buy a mining rig and get your own damn coins.

100% PoS will always be shit and never go anywhere.

HOWEVER.

PoW transitioning to PoS over time is the best method, it's better than 100% PoW and way better than 100% PoS.

Again, people who got in earlier got more coins, and people who threw more money into the fanciest highest powered rigs, get the most coins out of it.

And yes the devs chose who got which coins but let's say when it comes to Nxt, the people who got the most coins were those who threw in the most money.. I haven't heard any of those who got in on the original IPO complaining that they didn't get their fair share.

First of all, it's Very Likely that most of the "IPO investors" for NXT were simply sockpuppet accounts, as No taint anaylsis was done whatsoever. Also, check the NXT richlist, the first 50 accounts own over 48% of all NXT there is. You call that good distribution? That's downright laughable.

With 100% PoS, the early investors get Everything.

With 100% PoW, the early investors get more reward, but they almost always sell early, and there is Always a chance for latecomers to buy their own mining equipment and get coins themselves.

[ChuckOne]

First of all, it's Very Likely that most of the "IPO investors" for NXT were simply sockpuppet accounts, as No taint anaylsis was done whatsoever. Also, check the NXT richlist, the first 50 accounts own over 48% of all NXT there is. You call that good distribution? That's downright laughable.

No need to increase the font size. Nobody wants to talk about Nxt right now. Please, stay on topic.

[darkota]

First of all, it's Very Likely that most of the "IPO investors" for NXT were simply sockpuppet accounts, as No taint anaylsis was done whatsoever. Also, check the NXT richlist, the first 50 accounts own over 48% of all NXT there is. You call that good distribution? That's downright laughable.

No need to increase the font size. Nobody wants to talk about Nxt right now. Please, stay on topic.

With 100% PoS, the early investors get Everything.

With 100% PoW, the early investors get more reward, but they almost always sell early, and there is Always a chance for latecomers to buy their own mining equipment and get coins themselves.

[BombaUcigasa]

PoS is an "ok" distribution method if the issuers are honest. The problem is with PoS being used to secure the coin from thereon.

Would you like me to elaborate on this:

PoS put to rest:

that mechanism is far less than optimal for many reasons and excludes those who don't have mining gear and favours those with higher powered mining gear. It's no different to "rich getting richer" in nxt. In that respect, pow is elitist

This is the problem with proof of stake: it was invented by people who have no idea what problem mining is supposed to solve and have some agenda other than solving that problem.
Mining is not about allocating the issuance of new coins. The fact that they are tied together in Bitcoin is a temporary coincidence. Mining is about solving the problem of distributed consensus - how do a bunch of independent nodes spread all over the planet agree on a precise ordering of transactions when every node must operate with an incomplete view of the network and anybody might be trying to cheat?
This problem has nothing to do with elitism or notions of fairness or populism. Overlaying those agendas into the solution is a great way to not solve the problem.
As nodes on the network continually work to establish a consistent of narrative of what has happened in the netwowk based on their own incomplete knowledge, there will be times where two nodes disagree. Mining is nothing more than a signalling mechanism which provides an objective basis for choosing which version of history to treat as correct, whenever a conflict occurs such that more than one alternative version exist.
The design criteria for what makes a good mining algorithm comes from signalling theory:

Two individuals have access to different information.
They could both gain if they could honestly share this information.
However, their interests do not coincide entirely, and so each has an incentive to deceive the other.
How can honest communication be ensured?

How can honest communication be ensured despite conflicting interests between a signaller and a signal receiver?
Economists and biologists independently proposed that the costs associated with producing signals can provide a solution to this problem. Loosely paraphrased, the solution typically takes the following form.

Suppose that signals are costly, and that for one reason or another, lies cost more than honest signals.

If telling the truth is cheap enough and telling a lie is costly enough, it may be worthwhile to communicate honestly but not to lie.

There's a reason that when Wei Dai proposed b-money in 1998, he didn't even bother to explain why calculations in a proof of work system, "must be easy to determine how much computing effort it took to solve the problem and the solution must otherwise have no value, either practical or intellectual." He assumed this statement would be so obviously true that no explanation was needed. Apparently this is no longer the case.
The signal sent by proof of work is the amount of opportunity cost the miner has paid in order to produce the block. The fact that mining calculations are completely useless outside the signalling system itself is what makes lies more expensive than telling the truth, thus satisfying the conditions for honest signalling. The opportunity cost the miner pays to produce a block only represents a profitable trade for the miner if the network accepts their block. So when it comes to a node in the network choosing between two valid blocks, choosing to accept the block with the higher PoW means choosing the block which produced by the miner who has the most at stake in terms of opportunity cost paid.
Note that if the miner has to use specialized hardware for which there is no possible use other than mining, the signal is even better than performing otherwise-useless calculations on general purpose hardware. Higher opportunity costs = more reliable signal.
Proof of work is a proof of stake system, the only one that actually works.

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.

Related of the cost of PoS and PoW, two identical blockchains with identical parameters but only one difference, the method used for block generation (and reward generation) will cause the PoS chain to consistently require LESS and less costs to secure.
This might look like it's a good idea, to have more security with less costs, except it's not so. With less costs to secure the chain, someone with a higher budget can execute forks more easily, as time passes even more so.
What's the utility provided by a less secure blockchain compared to a more secure one? Obviously smaller, so it will be used less. A less used blockchain will have a lower price per transaction/coin/reward, it all spirals down into nothingness.
Private keys should not be valued based on their past properties, only current properties (for example the Bitcoin core update to allow redemption of unspendable outputs creates value for previously used but empty private keys that could reclaim those funds in the future). As such, an address that used to have more coins than any other should be valued at 0 if it has 0 coins in it now. Instead PoS values empty private keys above other empty private keys. I didn't even mention the demurrage ideas, where free to use funds are taxed, so you have even less utility for your coins if you intend to store value. It's really messed up, why would you use this shittier lower utility version?!
Bottom line: if your coin is cheaper to mine/distribute (because of PoS), it will have a lower value compared the PoW version. Why would you store and the lower value coin?

Why don't people understand that the goal of a PoS crypto is not to be just an other 'coin'.
The value of Nxt, that I know well, doesn't come from the coins but from the services it provide.
You want to build your business on Nxt, send encrypted message, vote, exchange cryptos on a decentralized exchange, send automated transactions, you want to have your P2P good store on that crypto because it cannot be taken down.

Talking about 'coins coins coins' is pointless.

Moreover, a PoS crypto doesn't fork by itself, it has to be intentional. It is the same as forking a PoW.
So the value of the crypto must come from it use and from it's community, not from pumping 'coins'.

EDIT :
On a PoW, a miner doesn't care about the crypto. He just want to convert is ASAP to FIAT to pay his bills.
On a PoS like Nxt, the people interested want to build something from it.
Every business or service added to a PoS crypto make it more resilient.

Maybe some people are hard-headed. The primary purpose of cryptocurrencies is to provide a means of transfer of value, with much of the individual token value being derived from the value of it's utility and cost to produce. It's quite weird that a bitcoin can be worth more or less than it's cost to issue, depending on whether there is a demand or not for the transfer of said bitcoin. The value of NXT and the value of Bitcoin comes from the services it provides.

Sending messages, voting, exchanging and p2p transactions are all utilitarian purposes, and their cost to offer is proportional to the cost to sustain them. If the price to sustain those activities is lower (lololol PoS = I just sit around doing nothing while a 19$/month PC/VPS keeps my wallet connected), then the value of the transacted tokens is lower. If the demand is higher, then more infrastructure will be added to increase the cost and offer security.

Consider the scenario of cheap altcoins that can be forked or attacked with less than 1000$. How much are you inclined to transfer more than 1000$ using those blockchains? What about creating a contract on the bitcoin blockchain which is sustained by millions of dollars daily?

What you are talking about is hype and marketing. And don't forget about competing hypes. Once people decide to cash out and chase the next hype or use the better service, the previous service is worth nothing, whoever invested loses everything. Also the infrastructure (lololol basic PC/VPS that can be reconfigured for new coin) goes away, it's not like you have multi-thousand ASICs that can't be re-purposed. And again, if you stake value, you can't use it. If you don't stake value, you lose it. As time goes by, costs go down and the value of the service goes down. If a better service appears, everyone jumps ship.

[digitalindustry]

wow you guys are really working hard i'll give you that ...

that aside, your comments are actually relevant, but that doesn't mean we give up.

PoW is the best system invented so far.

Random Proof of Work distribution can vary, and its in this variance that improvements can obviously be made.

I don't think Proof of Scam (Po$) has a big future, having said that, i'm sure some people are moving their life saving into stocks as well.. so..?? you never know.

Why do you say Proof of Scam?  What do you have against Proof of Stake?

Why do I have the feeling that I read this question somewhere before?

haha, thanks for asking the question first on another forum

didn't you once tell me that you were mentally disabled ?

wtf? Please discuss this off forum

PoS and Po$ are completely different things.

http://kolinevans.wordpress.com/2014/07/02/on-po-proof-of-scam-defining-the-rational-crypto-currency-exclusive-socioeconomic-dynamic/

[bitwho]

WOW all this attacks on different coin and different algos... so sad. so desperate. want to make a good topic or promote your coin? then make a post about why your coin is good,rather then taking a stab at others

fine i'll bite

Why POW is better then POS ?  

#1 Distribution.

So far, as hard as it is to mine, POW is still the best distribution method. Here is why:

I don't have to have BTC to get the coins. This is very useful if you are a new comer and you just learned about this side of the cryptoworld. You want to earn some coins? well you can buy a mining rig from site that are bound to deliver or money back and with in few days you can start mining away. the other alternative is you have to buy the coin. Can you picture a regular joe feeling comfortable to send discrete information to certain exchanges together with fiat in hopes that few weeks down the road they will be able to open an account with BTCs in there? how about some where in bumblefuck. How easy will this person be able to buy BTCS? Won't it be easier this person to buy a mining rig and get it delivered to them ? Therefore , unlike a POS coin that only is limited to coins to distribute to buyers only, the POW has the buyers and the miner. POW-mining is a trustless system therefore easy to jump in.

An other great feature of POW is that if you are a miner for one coin , you are a miner for all the other coins supported by your mining rig. As we saw, the moment a POW coin like Dogecoin became super valuable almost every single Scrypt miner stopped mining their coin and started mining Dogecoin. This means that more and more people started to mine it and more and more the coins got distributed

Brotherhood of the miners. All the miners have to always be alert about the coin status. they have to check their mining rig is akay. they have to check that the pool they mine into is running smoothly etc. this means that they most likely stop by and interact with the coin's community. Such activity will create brotherhood feeling and you will always feel part of a community.

A coins with POW  there will always be some one mining it and therefore there will always be news about it. it will stay relevant.

Until a better system of coin distribution comes a long POW will be superior.


While POS coins are very energy efficient they are a lonely coin that are always loosing more owners than are joining them. Here is what i mean:

To get into a full POS i already have to be educated into the cryptoworld and i have to already have to own some BTCs to buy the coins. This pretty much rules out any new comers into the world and you will most likely lose them to POW coins. POS coins have closed the ability to enter them via mining and the only way to own POS coin is through buying them from some one else(sorry multipools are not your solutions). This means that it will most likely always be looked like a pyramid scheme network. Its all about finding some one else to sell you their bag. As we have seen, in the crypto world there is more sellers then buyers. and not enough new buyers coming in everyday to keep the buying walls. This is true for all coins, not only POS. Again this means that you will always have more leaving(sellers) the network then entering (buyers). This also mean that since you have no interaction with other coin members. POW miners have to constantly be alert of the coins they mine therefore they are constantly posting and interacting with other miners. POS coin holder don't have to. they only post asking about price. All they have to do is open their wallet once a day for few minute and they are done. there is less interaction between each others. You don't have the brotherhood connection you get from POW mining.



Well there plenty of other angles that we can talk between POW and POS but what matter the most is POW is much better a distributing.

[Spoetnik]

For the people that is reading the stupid replies of digitalindustry please, read this before:

http://kolinevans.wordpress.com/2014/07/02/on-po-proof-of-scam-defining-the-rational-crypto-currency-exclusive-socioeconomic-dynamic/
http://kolinevans.wordpress.com/2014/07/04/why-has-litecoin-decoupled-from-bitcoin-and-is-on-a-price-decline-and-why-is-this-important-for-quark-and-other-free-market-crypto-currencies/

Arrgh.  You wasted my time!  Shame on you.

If it wasn't a clear attempt to promote a shitcoin, I'd think it is some automatically generated content.

These quotes come from 2 respected and well known members of this forum, nothing close to "sockpuppets".

Thus, please people, consider it 2times before wasting time reading this mentally-sick individual called digitalindustry.

 My suggest? Ignore button.

wow respected ? i never heard of ANY of you but i do respect digitalindustry he makes a lot of sense.
i agree with him with about sock-puppets (regardless of Post count)
last week you NXT cheerleaders have been stiring up TONS of drama
and before that you were hyping the coin hard here making sure there was like 10 topics about NXT ALWAYS on page one.
So what happened is some of us got sick of it and spoke up.. big mistake ..out come the trolls lol

Sock puppets i think he means the brigade of NXT troops that pretend and
play games here and are simply posting crap like this then trying to gang up on critics.
Mentally Ill or not, it does not change what he or anyone says.. what is said is said and facts are facts.
And what has been said negatively so far in here about NXT must burn you guys to the core.. hence your non stop Trolling games.

I also don't appreciate your offensive comments about Mentally Ill people.. they can't help it so please lay off the insults.

Facebook ?
Irrelevant.. you can NOT compare a regulated market with an unregulated one
and that right there is a key issue why NXT and similar is a bad concept.. it's far to vulnerable to scammers.
Vs. Martha Stewart doing jail time for insider trading but with NXT you can create 60 accounts and lie your ass off
and then one day just say oh well i was hacked.. or whatever bs

The OP was playing games.. this is an attempt to lure in digitalindustry and gang up on him and try and defend NXT.. it's painfully obvious
after all this is not the first attempt.. they have been ongoing 24/7 for almost a week now.. you guys won't let up.
Masked trolling is all it is..

Premined / IPO style coins like NXT are a scam i think.
A scam in that the release is not fair on purpose.. this is my opinion and others agree with me too !
I see it as a vulnerability issue.. what methods of distribution are easiest to cheat people ?
And block chains and POW work they way they do for a reason.. pointless to explain why ..just Google it "What is POW" LOL
Why explain what it is to a pile of guys playing dumb and asking rhetorical questions to troll and pick fights ?

All this drama lately about NXT just gives the public one more reason to ignore NXT.
Next you guys are going to accuse me of ripping off some guy with a Youtube advice video lol

All i can say is if people want a far coin maybe try Quark ?
Myself i wouldn't touch NXT if it was free..

[mczarnek]

All i can say is if people want a far coin maybe try Quark ?
Myself i wouldn't touch NXT if it was free..

Quark actually is a scam.. NXT is actually trying to accomplish big things and change the world.

Quark was insta-mined, which you could consider similar to an IPO, except that the developers were only into it to hype and pump it up then dump it all over the market.

First of all, it's Very Likely that most of the "IPO investors" for NXT were simply sockpuppet accounts, as No taint anaylsis was done whatsoever. Also, check the NXT richlist, the first 50 accounts own over 48% of all NXT there is.[/size] You call that good distribution? That's downright laughable.

Not true.. taint analysis was done on the Nxt IPO.

[duuuuude]

hey,

if quark was instamined, the how did i mine it for 4 months straight and then give it away for more then 2 months straight, and you can check my post, it proves what i say is true, so lets not start saying quark is a scam and instamined, it just shows how new you are and how much research you still have to do.

j

[darkota]

hey,

if quark was instamined, the how did i mine it for 4 months straight and then give it away for more then 2 months straight, and you can check my post, it proves what i say is true, so lets not start saying quark is a scam and instamined, it just shows how new you are and how much research you still have to do.

j

Incase you didnt know. Check Quarck's blockchain.

Over 50% of Quarks were mined in a very short time period my friend...It was indeed instamined.

[darkota]

All i can say is if people want a far coin maybe try Quark ?
Myself i wouldn't touch NXT if it was free..

Quark actually is a scam.. NXT is actually trying to accomplish big things and change the world.

Quark was insta-mined, which you could consider similar to an IPO, except that the developers were only into it to hype and pump it up then dump it all over the market.

First of all, it's Very Likely that most of the "IPO investors" for NXT were simply sockpuppet accounts, as No taint anaylsis was done whatsoever. Also, check the NXT richlist, the first 50 accounts own over 48% of all NXT there is.[/size] You call that good distribution? That's downright laughable.

Not true.. taint analysis was done on the Nxt IPO.

LOL, taint anaylsis was NOT done on the NXT IPO, why are you blatantly lying for?

[Spoetnik]

This thread seems like a sensible question has been asked.....

but it's being answered by a bunch of old ladies beating each other with handbags.

and your comment here is the worst of them all...
you showed up ran your mouth, ignored the topic at hand and left.
thanks for wasting my time

[Spoetnik]

You can only buy into a IPO for a limited amount of time with PoS.

With PoW, you can mine for decades to come.


PoS has horrible, unfair distribution and it will always be that way, simply because PEOPLE(the devs) choose who gets what amount of coins. You have to rely on them, with PoW, you don't have to trust anyone, you can go buy a mining rig and get your own damn coins.

100% PoS will always be shit and never go anywhere.

HOWEVER.

PoW transitioning to PoS over time is the best method, it's better than 100% PoW and way better than 100% PoS.

well said and great points.. thanks for posting !