Proof of Work Vs Proof of Stake

[quarkfx]

PoS cannot remain decentralized because they rely on various reputation systems. This will invariably lead to centralization.

I am agnostic when it comes down to the question PoW or PoS but it seems to me that in both cases there are incentives to centralization. In case of PoW people start minung on pools where the biggest is usually the most efficient.

I also must say that the whole discussion looks pretty childish to me. Bashing from both sides and everybody knows better than the rest. This are the moments when I see why crypto isn't attracting more people. It's a real shame.

There is a fundamental philosophical difference. PoW is an open Universe. PoS is a closed Universe. That is to say, that PoW is open to outside competition at any time. Even if the mining becomes monopolized, a balancing power can always save the day. With PoS, once monopoly is attained, it can surreptitiously and discretely claim control to reverse transactions and double spend at will.

Maybe, and PoS has certainly its issues, but I am pretty sure that most of its current problems can be addressed in later versions. Also my main argument wasn´t that PoS is good but rather that PoW provides incentives to centralization as well as you can see from the hash monopolies of many pools in different PoW communities.

[cbeast]

PoS cannot remain decentralized because they rely on various reputation systems. This will invariably lead to centralization.

I am agnostic when it comes down to the question PoW or PoS but it seems to me that in both cases there are incentives to centralization. In case of PoW people start minung on pools where the biggest is usually the most efficient.

I also must say that the whole discussion looks pretty childish to me. Bashing from both sides and everybody knows better than the rest. This are the moments when I see why crypto isn't attracting more people. It's a real shame.

There is a fundamental philosophical difference. PoW is an open Universe. PoS is a closed Universe. That is to say, that PoW is open to outside competition at any time. Even if the mining becomes monopolized, a balancing power can always save the day. With PoS, once monopoly is attained, it can surreptitiously and discretely claim control to reverse transactions and double spend at will.

Maybe, and PoS has certainly its issues, but I am pretty sure that most of its current problems can be addressed in later versions. Also my main argument wasn´t that PoS is good but rather that PoW provides incentives to centralization as well as you can see from the hash monopolies of many pools in different PoW communities.

I hate getting into philosophical debates. You are free to choose an ideology.

[TheCloser]

And don't forget the main problem about POW and this is the most important one.... every investor or long term buyer has to pay to the miner for securing the blockchain. POS coins investor don't they them self are doing their part to secure it and get even PAID!

No one will be a slave to POW coins once they notice how the game is going on.

Imagine if the US dollar was distributed by proof of stake. 1% of Americans would get all the money!

Furthermore, money is created with work. If a currency isn't backed by work what gives it value? I feel commitment to the creation of wealth should require some financial backing by each of us (mining equipment and power - just like the US mint and their custom ASIC printers).  If you literally have no skin in the game then what is the point?

[From Above]

0.1% of Americans would get all the money!

correct

~CfA~

[Propulsion]

And don't forget the main problem about POW and this is the most important one.... every investor or long term buyer has to pay to the miner for securing the blockchain. POS coins investor don't they them self are doing their part to secure it and get even PAID!

No one will be a slave to POW coins once they notice how the game is going on.

Imagine if the US dollar was distributed by proof of stake. 1% of Americans would get all the money!

Furthermore, money is created with work. If a currency isn't backed by work what gives it value? I feel commitment to the creation of wealth should require some financial backing by each of us (mining equipment and power - just like the US mint and their custom ASIC printers).  If you literally have no skin in the game then what is the point?

It's idiotic to rely on a system that requires no work to create wealth. Proof of Stake is broken by design.

[clout]

[/quote]

And don't forget the main problem about POW and this is the most important one.... every investor or long term buyer has to pay to the miner for securing the blockchain. POS coins investor don't they them self are doing their part to secure it and get even PAID!

No one will be a slave to POW coins once they notice how the game is going on.

Imagine if the US dollar was distributed by proof of stake. 1% of Americans would get all the money!

Furthermore, money is created with work. If a currency isn't backed by work what gives it value? I feel commitment to the creation of wealth should require some financial backing by each of us (mining equipment and power - just like the US mint and their custom ASIC printers).  If you literally have no skin in the game then what is the point?

You have no understanding of what money is... Money is debt, it is not created by "work" (whatever that means). Currencies today are not backed by anything that is why the are referred to as fiat (latin for "it shall be"). The top 1% of Americans posses more than 40% of the nations wealth (all the money).

[Spoetnik]

PoW>PoS

Nuff said.

The ultimate answer is a slow transition from pure PoW to PoS, so it doesnt happen at once like all these stupid coins have it do.

better yet POS+POW Jackpot coin.. first to have separate algo's for each

[smalltimer]

It seems the majority of coins released nowadays are PoS and most have an incredibly short PoW phase. I'm kind of confused why PoS is so popular and have a few questions to ask.  


1) What are the advantages of having such a short mining period? In most cases it seems a disproportionately high number of the total coins are issued in a few days/weeks.

2) What happens when PoW phase ends i.e. if blocks aren't being generated by miners, does staking from wallets keep the network generating blocks quickly enough?

3) Is a PoS network secure without having a big hashrate because there's no point in mining as there is no benefit to mining?

4) Why don't coin devs use PoW and set the initial mining subsidy to high rates instead if they want to get early adopters?


I'm wary of mining PoS coins and would appreciate your honest thoughts on the above.

1) miners can dump and move on, devs do the same, investors are left holding the bag. So that's the advantage of short mining period. Flashmining is better than premining. Add some ninja-lauch - perfect.
2) yes, bagholders keep staking and hoping it'll get somewhere without the dev who is already releasing the next coin to dump
3) discussion is ongoing
4) because it's not about adoption

[yourstruly]

Proof of Work originally was designed to do three things:

1. Secure the network
2. Provide a method of fair distribution of coins
3. Allow the network to be supported by the clients that used it

After a few years in the wild, proof of work has failed to accomplish any of the original goals. Security of the network has been on the brink of compromise due to large investors like Ghash.io that can afford to run mining farms larger than anyone else. It fails to provide fair distribution of coins now because to obtain newly minted coins you now must make massive investments which ensure only the rich will obtain the remaining bitcoins. And now the network is ran by mining farms ran by an elite few who can afford to fill warehouses with incredibly expensive equipment.

Proof of Stake is actually closer to how Satoshi originally envisioned the network, powered by the users who run clients. It uses far less energy to do this, allows for faster transaction times and Blackcoin's dev Pavel has been working to fix security issues with PoS.

Pavel has already patched transaction malleability and made 51% attacks even harder to accomplish with his new PoS v2.  So while it doesn't provide for point 2 it clearly is better at points 1 and 3. This is why Proof of Stake is clearly the next step in cryptocurrency. I think Blackcoin is the best contender for this because the developer Pavel works in the open, is constantly pushing fixes to the protocol and not just making fancy wallets. Neither protocol is perfect but PoS is clearly better overall for the environment and decentralization.

[yourstruly]

PoS cannot remain decentralized because they rely on various reputation systems. This will invariably lead to centralization.

I am agnostic when it comes down to the question PoW or PoS but it seems to me that in both cases there are incentives to centralization. In case of PoW people start minung on pools where the biggest is usually the most efficient.

I also must say that the whole discussion looks pretty childish to me. Bashing from both sides and everybody knows better than the rest. This are the moments when I see why crypto isn't attracting more people. It's a real shame.

There is a fundamental philosophical difference. PoW is an open Universe. PoS is a closed Universe. That is to say, that PoW is open to outside competition at any time. Even if the mining becomes monopolized, a balancing power can always save the day. With PoS, once monopoly is attained, it can surreptitiously and discretely claim control to reverse transactions and double spend at will.

Maybe, and PoS has certainly its issues, but I am pretty sure that most of its current problems can be addressed in later versions. Also my main argument wasn´t that PoS is good but rather that PoW provides incentives to centralization as well as you can see from the hash monopolies of many pools in different PoW communities.

Proof of work in the wild just does not seem to work as expected, time will tell on POS but it appears to be solving more problems than PoW does. With low interest rates like with Blackcoin you can prevent too much consolidation which is one of the downsides.

[Oran]

1) miners can dump and move on, devs do the same, investors are left holding the bag. So that's the advantage of short mining period. Flashmining is better than premining. Add some ninja-lauch - perfect.
2) yes, bagholders keep staking and hoping it'll get somewhere without the dev who is already releasing the next coin to dump
3) discussion is ongoing
4) because it's not about adoption

Proof of Work originally was designed to do three things:

1. Secure the network
2. Provide a method of fair distribution of coins
3. Allow the network to be supported by the clients that used it

After a few years in the wild, proof of work has failed to accomplish any of the original goals. Security of the network has been on the brink of compromise due to large investors like Ghash.io that can afford to run mining farms larger than anyone else. It fails to provide fair distribution of coins now because to obtain newly minted coins you now must make massive investments which ensure only the rich will obtain the remaining bitcoins. And now the network is ran by mining farms ran by an elite few who can afford to fill warehouses with incredibly expensive equipment.

Proof of Stake is actually closer to how Satoshi originally envisioned the network, powered by the users who run clients. It uses far less energy to do this, allows for faster transaction times and Blackcoin's dev Pavel has been working to fix security issues with PoS.

Pavel has already patched transaction malleability and made 51% attacks even harder to accomplish with his new PoS v2.  So while it doesn't provide for point 2 it clearly is better at points 1 and 3. This is why Proof of Stake is clearly the next step in cryptocurrency. I think Blackcoin is the best contender for this because the developer Pavel works in the open, is constantly pushing fixes to the protocol and not just making fancy wallets. Neither protocol is perfect but PoS is clearly better overall for the environment and decentralization.

Thank you both very much for your answers on my questions. It has helped clear up some points about the two technologies.

[cbeast]

Proof of Work originally was designed to do three things:

1. Secure the network
2. Provide a method of fair distribution of coins
3. Allow the network to be supported by the clients that used it

After a few years in the wild, proof of work has failed to accomplish any of the original goals. Security of the network has been on the brink of compromise due to large investors like Ghash.io that can afford to run mining farms larger than anyone else. It fails to provide fair distribution of coins now because to obtain newly minted coins you now must make massive investments which ensure only the rich will obtain the remaining bitcoins. And now the network is ran by mining farms ran by an elite few who can afford to fill warehouses with incredibly expensive equipment.

Proof of Stake is actually closer to how Satoshi originally envisioned the network, powered by the users who run clients. It uses far less energy to do this, allows for faster transaction times and Blackcoin's dev Pavel has been working to fix security issues with PoS.

Pavel has already patched transaction malleability and made 51% attacks even harder to accomplish with his new PoS v2.  So while it doesn't provide for point 2 it clearly is better at points 1 and 3. This is why Proof of Stake is clearly the next step in cryptocurrency. I think Blackcoin is the best contender for this because the developer Pavel works in the open, is constantly pushing fixes to the protocol and not just making fancy wallets. Neither protocol is perfect but PoS is clearly better overall for the environment and decentralization.

1. The Ghash.io threat is a strawman. The "51% attack" is not a serious threat from a mining pool. The orphaned blocks will be seen and that mining pool is out of business and the owner may be prosecuted for fraud. It is only a threat from someone willing to throw away tens of millions of dollars for a one time double spend attempt, and anyone willing to accept a transaction for tens of millions without a few confirmations deserves to lose it.

2. The fact that coins are difficult to buy anonymously is not an issue with Bitcoin, but the laws of your country. As far as mining, you missed the 5 year long boat launch. You can earn them by working at something worthy of bitcoin remuneration.

3. Transaction malleability is another strawman. It's not been an issue since 2010 except for careless wallet developers.

You are right about PoS with number two. Number one is a matter of faith (not proof) until you have a way to prove that someone has not surreptitiously and anonymously acquired a majority stake.

[gielbier]

I can't find the original post , but saw this quoted in the vericoin topic, it explains the reservations some ppl have against PoS.

    Proof of Stake coins have many issues here are some:

    PoS is not backed by anything other than the belief there are worth anything and there will be an endless supply of PoS coins because one created today does not have a significant advantage over on created tomorrow, next week, next month.......
    What currently is happening is new coins are created with PoW, mined for a week until a fixed number is reached and then change to PoS and then you can claim your stake at buying xyz coin. The only advantage a coin released today has over on made sometime in the future is; somebody already bought into it. The advantage quickly disappears if the new coin has a better catch phrase a flashier webpage or bigger marketing capital....
    There is no end in sight for stake claimed coins and all promising x % return if you know a bit of programming you will have your very one coin too and everyone can buy into your claim based coin completely deluding the marked.
    Its a barrel without bottom and once it clicks by the herd run for the hills if you own a stake.

    With a PoS the richer get richer. The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.
    This is because the wealthy spend a much lower % of their net worth than the masses do

    PoS is a technological dead end. Once the coin is released the only thing to do is "claim your stake" no research, no new capital outside the buy in, no evolving industry..

    PoS can NEVER remain decentralized. Satoshi's Proof-of-Work is the only known solution to the Byzantine General's Problem (was a known unsolved problem since at least the 1970s).

    To 51% PoS is dead easy:
    You start buying aggressively or "willy" style until you have 51% of a PoS coin, and then sell off your coins so that you no longer have 51%, but your history of having once owned 51% makes it possible to attack the network at any time in the future at next to no cost only some computing resources (and thus electricity costs, etc.).
    As you once had a 51% stake, you can build a better blockchain than the other 49% can, starting from the point where you owned 51%. You develop this blockchain in secret, after you have sold off your coins (and profiting from it); and then release your secret blockchain to the world, and nodes will pick it up because it carries more stake than the 49% blockchain. Now not only do you have your profit from the original sales of the coin, you have your 51% back (to the extent that it's worth anything). Not all coins need to be in one address, in fact, doing so would prevent the attack in most PoS implementations.
    Unlike bitcoin where everyone can see if anyone comes dangerously close to 51, in PoS its all hidden, an attack can and will happen incognito.
    There is no way of knowing if any PoS chain is already "dead", as it could have been done at any-time in the past..

    But then there's is also the social 51% attack where a tiny majority hold a massive percentage of the currency. When this occurs the market is open to extensive manipulation for the benefit of the few, as with real world economics (the 1%).
    NXT is a good example of the social 51% attack, the top 33 accounts hold 51% between them. The top 50 accounts hold 61.2%. I'm quite sure the top 1% of accounts (400 ish) hold almost everything, with the other 99% playing with spare change. source
    In the case of nxt the coin will always remain at the mercy of alias "BCNext". And the other 71 aliases just got some nxt depending on the proportion of the bitcoins sent. As you can see here he received a total of 22 btc:
    https://bitcointa.lk/threads/ann-nxt-descendant-of-bitcoin.174166/
    Interesting the 3rd post got a quote where the original post is missing. Most be a lot of posts deleted it seems.

    Are all IPO coins scams? Whoever runs the IPO can send in x BTC with dozens or hundreds of fake accounts, get 90% of the coin count, then he pays nothing since all the BTC comes back to him anyway. It's just some bogus license to create as big of a premine as you could possibly want.



    PoW is a promise that x amount of energy has and will be used to make the coinis backed by energy, and energy is the only truly universally accepted wealth. There is no better backing than energy because everyone needs it, wants it and i will never have any problem selling it. To create a PoW coin you need x amount of energy and you can not cheat. The best you can hope for is to have a more efficient miner. Because the energy has been spent, the coin has a base value (many other things on top) and is a kind of a storage of it which you can exchange.
    (The same apply's for gold digging it up, storing..... only difference is it is awkward to exchange)
    Remember u can't create something without work. This is simple physics. There is financial commitment in proof of work which gives it value.

[yourstruly]

1. The Ghash.io threat is a strawman. The "51% attack" is not a serious threat from a mining pool. The orphaned blocks will be seen and that mining pool is out of business and the owner may be prosecuted for fraud. It is only a threat from someone willing to throw away tens of millions of dollars for a one time double spend attempt, and anyone willing to accept a transaction for tens of millions without a few confirmations deserves to lose it.

It still is feasible by them and if not them anyone else with big enough investment, there is no guarantee they would be persecuted for fraud, especially after Mt Gox got away with what they did. You are also assuming this could not be done without getting noticed, which is not necessarily a given. 51% is still a very real problem and ignoring it is absurd.

2. The fact that coins are difficult to buy anonymously is not an issue with Bitcoin, but the laws of your country. As far as mining, you missed the 5 year long boat launch. You can earn them by working at something worthy of bitcoin remuneration.

You completely misunderstood my point if you think it was related to anonymously buying bitcoins. Read the white paper put out by Satoshi, mining was intended to give fair distribution until the last block was h mined. It has clearly failed to do this, and instead of acknowledging this you are sidestepping it. Making all newly mined coins only go to an elite group who can afford mining farms will just give the network overtime to the plutocracy Satoshi was trying to free us from. Saying you missed the boat misunderstands the point of the Proof of Work system and a major flaw. 

3. Transaction malleability is another strawman. It's not been an issue since 2010 except for careless wallet developers.

It was brought up in respect that it has been patched in PoS where it could have been more of a problem. Security fixes are constantly coming out to make PoS more secure using vastly less energy, avoiding centralization and giving economic power to those who already have it.

You are right about PoS with number two. Number one is a matter of faith (not proof) until you have a way to prove that someone has not surreptitiously and anonymously acquired a majority stake.

You are correct about distribution, but with the flag ship PoS coin Blackcoin it is very clear that there is enough distribution to prevent a 51% attack especially with the new POS2 protocol implemented by Pavel, so it is not a matter of faith. Decentralized exchanges just realized by Blackcoin developers (BlackHalo, NightTrader) go a long way to help this problem too, because there is a fear that exchanges could leverage their holdings if they gained enough.

Don't get me wrong, I love the PoW protocol, it is ingenious but sometimes you don't realize flaws in something until years later and mass adoption. It is clear we need to move onto something else, and while PoS isn't perfect it does have clear advantages. Hopefully soon we can develop an even better protocol that addresses even more of the flaws and continue to push the idea of cryptocurrency forward. In my opinion, Bitcoin is akin to Napster, it started the p2p currency movement. Cryptocurrency as a concept will not go away at this point, it will only be refined and improved, hopefully by the community and in the open.

[yourstruly]

I can't find the original post , but saw this quoted in the vericoin topic, it explains the reservations some ppl have against PoS.

    Proof of Stake coins have many issues here are some:

    PoS is not backed by anything other than the belief there are worth anything and there will be an endless supply of PoS coins because one created today does not have a significant advantage over on created tomorrow, next week, next month.......
    What currently is happening is new coins are created with PoW, mined for a week until a fixed number is reached and then change to PoS and then you can claim your stake at buying xyz coin. The only advantage a coin released today has over on made sometime in the future is; somebody already bought into it. The advantage quickly disappears if the new coin has a better catch phrase a flashier webpage or bigger marketing capital....
    There is no end in sight for stake claimed coins and all promising x % return if you know a bit of programming you will have your very one coin too and everyone can buy into your claim based coin completely deluding the marked.
    Its a barrel without bottom and once it clicks by the herd run for the hills if you own a stake.

    With a PoS the richer get richer. The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.
    This is because the wealthy spend a much lower % of their net worth than the masses do

    PoS is a technological dead end. Once the coin is released the only thing to do is "claim your stake" no research, no new capital outside the buy in, no evolving industry..

    PoS can NEVER remain decentralized. Satoshi's Proof-of-Work is the only known solution to the Byzantine General's Problem (was a known unsolved problem since at least the 1970s).

    To 51% PoS is dead easy:
    You start buying aggressively or "willy" style until you have 51% of a PoS coin, and then sell off your coins so that you no longer have 51%, but your history of having once owned 51% makes it possible to attack the network at any time in the future at next to no cost only some computing resources (and thus electricity costs, etc.).
    As you once had a 51% stake, you can build a better blockchain than the other 49% can, starting from the point where you owned 51%. You develop this blockchain in secret, after you have sold off your coins (and profiting from it); and then release your secret blockchain to the world, and nodes will pick it up because it carries more stake than the 49% blockchain. Now not only do you have your profit from the original sales of the coin, you have your 51% back (to the extent that it's worth anything). Not all coins need to be in one address, in fact, doing so would prevent the attack in most PoS implementations.
    Unlike bitcoin where everyone can see if anyone comes dangerously close to 51, in PoS its all hidden, an attack can and will happen incognito.
    There is no way of knowing if any PoS chain is already "dead", as it could have been done at any-time in the past..

    But then there's is also the social 51% attack where a tiny majority hold a massive percentage of the currency. When this occurs the market is open to extensive manipulation for the benefit of the few, as with real world economics (the 1%).
    NXT is a good example of the social 51% attack, the top 33 accounts hold 51% between them. The top 50 accounts hold 61.2%. I'm quite sure the top 1% of accounts (400 ish) hold almost everything, with the other 99% playing with spare change. source
    In the case of nxt the coin will always remain at the mercy of alias "BCNext". And the other 71 aliases just got some nxt depending on the proportion of the bitcoins sent. As you can see here he received a total of 22 btc:
    https://bitcointa.lk/threads/ann-nxt-descendant-of-bitcoin.174166/
    Interesting the 3rd post got a quote where the original post is missing. Most be a lot of posts deleted it seems.

    Are all IPO coins scams? Whoever runs the IPO can send in x BTC with dozens or hundreds of fake accounts, get 90% of the coin count, then he pays nothing since all the BTC comes back to him anyway. It's just some bogus license to create as big of a premine as you could possibly want.



    PoW is a promise that x amount of energy has and will be used to make the coinis backed by energy, and energy is the only truly universally accepted wealth. There is no better backing than energy because everyone needs it, wants it and i will never have any problem selling it. To create a PoW coin you need x amount of energy and you can not cheat. The best you can hope for is to have a more efficient miner. Because the energy has been spent, the coin has a base value (many other things on top) and is a kind of a storage of it which you can exchange.
    (The same apply's for gold digging it up, storing..... only difference is it is awkward to exchange)
    Remember u can't create something without work. This is simple physics. There is financial commitment in proof of work which gives it value.

A lot of these problems don't directly relate to PoS such as IPO scams.

The issue of the rich get richer is a serious issue but to be fair it exist in all economic systems. This same problem exist in PoW because of mining consolidation and specialization. The mining farms use the profits to obtain the next generation equipment and continue to get richer and consolidate their power. That is why Blackcoin chose to have a very low interest rate of 1% (around a standard savings account), it is enough to account for lost coins but and not enough consolidate power.

The 51% problems have been fixed by Pavel in Blackcoin with his release of PoS 2.0, there is a great white paper on the subject.

There are two major issues with PoS:

1. centralized checkpoints.

Right now Pavel the developer of Blackcoin is working to resolve centralized checkpoint issues. He appears to the only PoS coin developer working on this issue and after all the other fixes he has done to the protocol that is why I consider his project the flag ship PoS coin.

2. Distribution

Distribution has actually been partially solved by blackcoinpool.com, the first multipool for a POS coin. The concept is miners mine other coins and automatically sell them for blackcoins, this gets blackcoins distributed to miners with various types of equipment. It also has the added affect of putting constant buying pressure on a fixed supply of coins creating price stability.

Also as more infrastructure is built and more services like CoinKite adopt blackcoin, making it easier for merchants to accept blackcoins will help increase distribution and further secure the network.

[cbeast]

Both PoW and PoS will both be eventually centralized, but there is one critical difference. PoW will be a temporary one and PoS will be a permanent monopoly. The central controller in PoW will be the competitor that invents the faster chip until someone else beats them. PoS will become owned by one controlling entity and not be able to keep it a secret forever, then the house of cards will fall.

1. The Ghash.io threat is a strawman. The "51% attack" is not a serious threat from a mining pool. The orphaned blocks will be seen and that mining pool is out of business and the owner may be prosecuted for fraud. It is only a threat from someone willing to throw away tens of millions of dollars for a one time double spend attempt, and anyone willing to accept a transaction for tens of millions without a few confirmations deserves to lose it.

It still is feasible by them and if not them anyone else with big enough investment, there is no guarantee they would be persecuted for fraud, especially after Mt Gox got away with what they did. You are also assuming this could not be done without getting noticed, which is not necessarily a given. 51% is still a very real problem and ignoring it is absurd.

Simply wait for a few confirmations if you are worried. As far as noticing orphaned blocks from major nodes, that's easy. There are warning systems in place and even wallets have them built in. Businesses can subscribe to node based warning systems if they want.

2. The fact that coins are difficult to buy anonymously is not an issue with Bitcoin, but the laws of your country. As far as mining, you missed the 5 year long boat launch. You can earn them by working at something worthy of bitcoin remuneration.

You completely misunderstood my point if you think it was related to anonymously buying bitcoins. Read the white paper put out by Satoshi, mining was intended to give fair distribution until the last block was h mined. It has clearly failed to do this, and instead of acknowledging this you are sidestepping it. Making all newly mined coins only go to an elite group who can afford mining farms will just give the network overtime to the plutocracy Satoshi was trying to free us from. Saying you missed the boat misunderstands the point of the Proof of Work system and a major flaw.  

Get a job and work for them or start a large mining node. He knew about their inevitability. Satoshi said in the white paper:

The incentive may help encourage nodes to stay honest. If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins. He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth.

3. Transaction malleability is another strawman. It's not been an issue since 2010 except for careless wallet developers.

It was brought up in respect that it has been patched in PoS where it could have been more of a problem. Security fixes are constantly coming out to make PoS more secure using vastly less energy, avoiding centralization and giving economic power to those who already have it.

You are right about PoS with number two. Number one is a matter of faith (not proof) until you have a way to prove that someone has not surreptitiously and anonymously acquired a majority stake.

You are correct about distribution, but with the flag ship PoS coin Blackcoin it is very clear that there is enough distribution to prevent a 51% attack especially with the new POS2 protocol implemented by Pavel, so it is not a matter of faith. Decentralized exchanges just realized by Blackcoin developers (BlackHalo, NightTrader) go a long way to help this problem too, because there is a fear that exchanges could leverage their holdings if they gained enough.

PoS is a very good protocol for a local currency. The advantage is that a sovereign can declare it legal tender and maintain capital controls. The whitepaper mentions that a 51% attack would probably devalue the currency. Local sovereigns can avoid this by premining their stake. This is an unavoidable flaw in all systems, but for a global currency, the difference is that it is much easier to anonymously buy PoS coins than it is to design and manufacture an entirely new mining technology and bring it online without anyone noticing.

Don't get me wrong, I love the PoW protocol, it is ingenious but sometimes you don't realize flaws in something until years later and mass adoption. It is clear we need to move onto something else, and while PoS isn't perfect it does have clear advantages. Hopefully soon we can develop an even better protocol that addresses even more of the flaws and continue to push the idea of cryptocurrency forward. In my opinion, Bitcoin is akin to Napster, it started the p2p currency movement. Cryptocurrency as a concept will not go away at this point, it will only be refined and improved, hopefully by the community and in the open.

Bitcoin metadata will provide far more liquidity than any other PoW or PoS could hope to yield.

[yourstruly]

Both PoW and PoS will both be eventually centralized, but there is one critical difference. PoW will be a temporary one and PoS will be a permanent monopoly. The central controller in PoW will be the competitor that invents the faster chip until someone else beats them. PoS will become owned by one controlling entity and not be able to keep it a secret forever, then the house of cards will fall.

I agree with PoW but your argument for PoS centralization makes no sense, if it is actively being used and started with good distribution like Blackcoin it would be very difficult for it to be controlled by 1 controlling entity. Over time distribution appears to get better not worse and with 1% interest it would take too long to become the controlling interest based purely on stake.

Also as mentioned above services like blackcoinpool allow miners to mine other coins and buy blackcoins and distribute them, this would always keep distributing coins as long as there are peoeple selling and PoW coins.

1. The Ghash.io threat is a strawman. The "51% attack" is not a serious threat from a mining pool. The orphaned blocks will be seen and that mining pool is out of business and the owner may be prosecuted for fraud. It is only a threat from someone willing to throw away tens of millions of dollars for a one time double spend attempt, and anyone willing to accept a transaction for tens of millions without a few confirmations deserves to lose it.

It still is feasible by them and if not them anyone else with big enough investment, there is no guarantee they would be persecuted for fraud, especially after Mt Gox got away with what they did. You are also assuming this could not be done without getting noticed, which is not necessarily a given. 51% is still a very real problem and ignoring it is absurd.

Simply wait for a few confirmations if you are worried. As far as noticing orphaned blocks from major nodes, that's easy. There are warning systems in place and even wallets have them built in. Businesses can subscribe to node based warning systems if they want.
[/quote]

There are other issues that arise from 51% mining power concentrated to one group beyond just double spending. Ignoring this is absurd.

2. The fact that coins are difficult to buy anonymously is not an issue with Bitcoin, but the laws of your country. As far as mining, you missed the 5 year long boat launch. You can earn them by working at something worthy of bitcoin remuneration.

You completely misunderstood my point if you think it was related to anonymously buying bitcoins. Read the white paper put out by Satoshi, mining was intended to give fair distribution until the last block was h mined. It has clearly failed to do this, and instead of acknowledging this you are sidestepping it. Making all newly mined coins only go to an elite group who can afford mining farms will just give the network overtime to the plutocracy Satoshi was trying to free us from. Saying you missed the boat misunderstands the point of the Proof of Work system and a major flaw.  

Get a job and work for them or start a large mining node. He knew about their inevitability. Satoshi said in the white paper:

The incentive may help encourage nodes to stay honest. If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins. He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth.

[/quote]

That doesn't address the issue of consolidation of wealth and power over the network to rich miners, that just says that a 51% attack would hurt ones own wealth. Throwing your hands up in the air and saying you should be rich to participate in the network ignores the foundation which it was founded on, it was meant to be decentralized and ran by the individuals running the client. PoS captures this vision better than modern PoW.

3. Transaction malleability is another strawman. It's not been an issue since 2010 except for careless wallet developers.

It was brought up in respect that it has been patched in PoS where it could have been more of a problem. Security fixes are constantly coming out to make PoS more secure using vastly less energy, avoiding centralization and giving economic power to those who already have it.

You are right about PoS with number two. Number one is a matter of faith (not proof) until you have a way to prove that someone has not surreptitiously and anonymously acquired a majority stake.

You are correct about distribution, but with the flag ship PoS coin Blackcoin it is very clear that there is enough distribution to prevent a 51% attack especially with the new POS2 protocol implemented by Pavel, so it is not a matter of faith. Decentralized exchanges just realized by Blackcoin developers (BlackHalo, NightTrader) go a long way to help this problem too, because there is a fear that exchanges could leverage their holdings if they gained enough.

PoS is a very good protocol for a local currency. The advantage is that a sovereign can declare it legal tender and maintain capital controls. The whitepaper mentions that a 51% attack would probably devalue the currency. Local sovereigns can avoid this by premining their stake. This is an unavoidable flaw in all systems, but for a global currency, the difference is that it is much easier to anonymously buy PoS coins than it is to design and manufacture an entirely new mining technology and bring it online without anyone noticing.
[/quote]

The reasons you claim someone would not want to do a 51% on PoW apply to PoS as well, also due to Blackcoin's new PoS v2 it is much harder to do this attack than in a PoW system. As coins get more distributed over time if it gets used as a currency the network would be even more secure.

So your point is invalid.

Don't get me wrong, I love the PoW protocol, it is ingenious but sometimes you don't realize flaws in something until years later and mass adoption. It is clear we need to move onto something else, and while PoS isn't perfect it does have clear advantages. Hopefully soon we can develop an even better protocol that addresses even more of the flaws and continue to push the idea of cryptocurrency forward. In my opinion, Bitcoin is akin to Napster, it started the p2p currency movement. Cryptocurrency as a concept will not go away at this point, it will only be refined and improved, hopefully by the community and in the open.

Bitcoin metadata will provide far more liquidity than any other PoW or PoS could hope to yield.
[/quote]
[/quote]

Currently this is true, but this kind of statement to me reads like Bill Gates saying no one will ever need more than 128k memory. Just because Bitcoin is the biggest cryptocurrency now does not mean it will always be. MySpace was the first mover on social networks but it is no longer on top. There are improvements that can be made to the system, there are a lot of flaws that came to light in PoW protocol over time. And PoS while not perfect solves more problems than PoW does while using vastly less energy.

[yourstruly]

Blackcoin clearly had a massive effective on the crypto eco system, because it seems like their model is replicated by every new coin. People confusing wallets for cryptocurrencies and ignoring the underlying protocol. It would have been better if those people had simply built their custom wallets ontop of blackcoin because they do not have the ability or will to maintain the protocol, they just want to add features to a GUI wallet.

[TheCloser]

And don't forget the main problem about POW and this is the most important one.... every investor or long term buyer has to pay to the miner for securing the blockchain. POS coins investor don't they them self are doing their part to secure it and get even PAID!

No one will be a slave to POW coins once they notice how the game is going on.

Imagine if the US dollar was distributed by proof of stake. 1% of Americans would get all the money!

Furthermore, money is created with work. If a currency isn't backed by work what gives it value? I feel commitment to the creation of wealth should require some financial backing by each of us (mining equipment and power - just like the US mint and their custom ASIC printers).  If you literally have no skin in the game then what is the point?

You have no understanding of what money is... Money is debt, it is not created by "work" (whatever that means). Currencies today are not backed by anything that is why the are referred to as fiat (latin for "it shall be"). The top 1% of Americans posses more than 40% of the nations wealth (all the money).

[/quote]

If you took a physics class you would realize in a closed system such as the planet Earth.....nothing can be created nor destroyed. Energy is just transfer through a process called work. There is a process of work in creating FIAT. It should be the same for creating digital currency.

[ChuckOne]

PoW is PoS with the stake being your mining rigs.