Proof of Stake

[petko]

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

I think you were already answered:

Wealth PUT AT RISK PROTECTING THE NETWORK = stake.

As soon as the cabal that holds 51% of the stake in PetkoCoin starts cheating, the trust in PetkoCoin will fall, a new currency - CBeastCoin - will appear (probably with same source code), and the cabal will lose the real-life wealth they have invested in PetkoCoin. This is what guarantees that the cabal (if any) will not be malicious. Of course, it is out of question that the currency software should be open-source (IMO).

[cbeast]

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

I think you were already answered:

Wealth PUT AT RISK PROTECTING THE NETWORK = stake.

As soon as the cabal that holds 51% of the stake in PetkoCoin starts cheating, the trust in PetkoCoin will fall, a new currency - CBeastCoin - will appear (probably with same source code), and the cabal will lose the real-life wealth they have invested in PetkoCoin. This is what guarantees that the cabal (if any) will not be malicious. Of course, it is out of question that the currency software should be open-source (IMO).

First of all, there is no way to prove a secret cabal exists because they would use darknets and other layers of obscurity. Second, they would not just start reversing transactions randomly, they would target their victims very selectively, such as corporations they wish to destroy or buy. Finally, PoS has no way to show evidence that an attack is happening. There are no mining pools to monitor their hashrate. The attack can come out of the blue without warning and leave no trace except the devastation is causes. They will have plausible deniability because the victim will have no evidence that they didn't try to double spend fraudulently. It's the perfect crime.

[Peter R]

So, apart from the guys shouting "rich will get richer"

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

+1

I am surprised that more people can't see this. 

[kokojie]

So, apart from the guys shouting "rich will get richer"

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

But with PoS they need 51% of the entire wealth of the currency, to do so, and at that point why would they do it? they will only undermine themselves when discovered because the value of the currency will plummet.

With PoW, they only need about 10% of the wealth to overwhelm the mining hashrate, because the current Bitcoin mining operations are worth about 10% of the Bitcoin marketcap.

[cbeast]

So, apart from the guys shouting "rich will get richer"

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

But with PoS they need 51% of the entire wealth of the currency, to do so, and at that point why would they do it? they will only undermine themselves when discovered because the value of the currency will plummet.

They would never allow themselves to be discovered. There is no method of tracing controlling shares to individuals. Everything would be done in secrecy using TOR or other darknets and disinformation campaigns would be waged.

With PoW, they only need about 10% of the wealth to overwhelm the mining hashrate, because the current Bitcoin mining operations are worth about 10% of the Bitcoin marketcap.

There are many countermeasures against PoW attacks precisely because the hashrates are known. There are still vulnerabilities with Bitcoin, but because the transactions are more transparent, there will be better engineering solutions.

[kokojie]

So, apart from the guys shouting "rich will get richer"

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

But with PoS they need 51% of the entire wealth of the currency, to do so, and at that point why would they do it? they will only undermine themselves when discovered because the value of the currency will plummet.

They would never allow themselves to be discovered. There is no method of tracing controlling shares to individuals. Everything would be done in secrecy using TOR or other darknets and disinformation campaigns would be waged.

With PoW, they only need about 10% of the wealth to overwhelm the mining hashrate, because the current Bitcoin mining operations are worth about 10% of the Bitcoin marketcap.

There are many countermeasures against PoW attacks precisely because the hashrates are known. There are still vulnerabilities with Bitcoin, but because the transactions are more transparent, there will be better engineering solutions.

What are you talking about "they will never allow themselves to be discovered"? I can assure you, they will be discovered once they start reversing transactions. The identity doesn't matter. This particular crypto-currency will crash and burn over night, the attackers will be only hurting themselves since they hold over 51% of the currency.

On the other hand, attacking a PoW currency only need about 10% of the marketcap in cost. How does "hash rate is known" make it any harder to attack?? I don't understand, I would think it only makes it easier to plan the attack. In a PoS currency, the "unknown" part is really a safety mechanism, since the attacker can't easily figure out if he could ever obtain 51%, because he don't know who's holding what, and 51% may never be achieved simply because they are not available for sale.

[cbeast]

What are you talking about "they will never allow themselves to be discovered"? I can assure you, they will be discovered once they start reversing transactions. The identity doesn't matter. This particular crypto-currency will crash and burn over night, the attackers will be only hurting themselves since they hold over 51% of the currency.

On the other hand, attacking a PoW currency only need about 10% of the marketcap in cost. How does "hash rate is known" make it any harder to attack?? I don't understand, I would think it only makes it easier to plan the attack. In a PoS currency, the "unknown" part is really a safety mechanism, since the attacker can't easily figure out if he could ever obtain 51%, because he don't know who's holding what, and 51% may never be achieved simply because they are not available for sale.

I don't think you will even get PoS supporters to back you up here. All currencies (including crypto) have weaknesses. If you claim that someone reversed your PoS transaction, how would you prove it? Everyone would call you a scammer. At least with PoW you can see orphaned blocks on hundreds if not thousands of nodes to show what happened. You may or may not get the network to help you, but at least they will watch for bad agents. In fact, major nodes are working diligently to prevent these types of problems.

[petko]

It appears that Nxt already implement my idea - proof of stake only, open source (since 1st of March 2014) and of course the developers are the initial stake holders as it should be. It is a good idea to include that in the wiki, in order to prevent newbies like me causing unnecessary floods like the one I caused (apologies for that)

[Meni Rosenfeld]

and of course the developers are the initial stake holders as it should be.

I guess the word "decentralized" means nothing to you.

[MegaHustlr]

and of course the developers are the initial stake holders as it should be.

As it should be.. Nope nope nope, it shouldnt be that way.. as with bitcoinexcept for satoshi.

[bluemeanie1]

and of course the developers are the initial stake holders as it should be.

I guess the word "decentralized" means nothing to you.

Keep in mind the cost parameters are quite different for a pure PoS block chain.  There are little computation requirements, and thus negligible capital requirements.  The notion of 'initial stakeholders' takes on quite a different meaning in this context.  As long as the code is open source[1] then there is little barrier to entry, and disagreeable initial disbursements are not likely to be adopted(due to higher competition).

[1] and observationally NXT is not open source.  Have a look at Reddcoin though, that's a bit more in the realm of what your considering.

[mighty jol]

anyone could explain the proof of stake velocity of reddcoin? honestly their paper is a bit foggy and i can't find anything detailed about it on their thread so if someone could enlight me it would be cool ^^.

[petko]

I guess the word "decentralized" means nothing to you.

No, it means something for me but there is apparently difference in the meaning for you and me.

Keep in mind the cost parameters are quite different for a pure PoS block chain.  There are little computation requirements, and thus negligible capital requirements.  The notion of 'initial stakeholders' takes on quite a different meaning in this context.  As long as the code is open source[1] then there is little barrier to entry, and disagreeable initial disbursements are not likely to be adopted(due to higher competition).

Long story short, at day one, the developers are the only ones who invested real-life efforts in this system, consequently they are the only ones interested in not destroying it.
More details about my point of view - here

[1] and observationally NXT is not open source.  Have a look at Reddcoin though, that's a bit more in the realm of what your considering.

I see a bitbucket project. But honestly I haven't fully examined this currency yet.

[bluemeanie1]

Keep in mind the cost parameters are quite different for a pure PoS block chain.  There are little computation requirements, and thus negligible capital requirements.  The notion of 'initial stakeholders' takes on quite a different meaning in this context.  As long as the code is open source[1] then there is little barrier to entry, and disagreeable initial disbursements are not likely to be adopted(due to higher competition).

Long story short, at day one, the developers are the only ones who invested real-life efforts in this system, consequently they are the only ones interested in not destroying it.
More details about my point of view - here

The proof of stake as alternative of proof of work is discussed almost 3 years already. The benefits are many, most important for me is that children will stop spending money for otherwise unnecessary hardware, hoping that this will provide them prosperity till the end of their lives. You cannot expect that, kid. You cannot expect that the society will provide you with food, drinks, car, apartment, etc, and the only thing you will give in return is 4 video cards set up in a crate. Things don’t work this way. Actually they work but only for a few initial adopters. This is why drug dealers still live with their moms. Better concentrate on education and creating real value.

I have to admit your writing made me laugh.

I do agree, the trust model of Bitcoin is flawed and it's worth examining.

I invented a chain model that uses predefined trust.  http://altchain.org

-bm

[kodtycoon]

So, apart from the guys shouting "rich will get richer"

It's not that. It's the rich will have untouchable anonymous power. There is no way to stop a cabal of people from taking permanent control and reversing transactions discretely.

But with PoS they need 51% of the entire wealth of the currency, to do so, and at that point why would they do it? they will only undermine themselves when discovered because the value of the currency will plummet.

They would never allow themselves to be discovered. There is no method of tracing controlling shares to individuals. Everything would be done in secrecy using TOR or other darknets and disinformation campaigns would be waged.

With PoW, they only need about 10% of the wealth to overwhelm the mining hashrate, because the current Bitcoin mining operations are worth about 10% of the Bitcoin marketcap.

There are many countermeasures against PoW attacks precisely because the hashrates are known. There are still vulnerabilities with Bitcoin, but because the transactions are more transparent, there will be better engineering solutions.

What are you talking about "they will never allow themselves to be discovered"? I can assure you, they will be discovered once they start reversing transactions. The identity doesn't matter. This particular crypto-currency will crash and burn over night, the attackers will be only hurting themselves since they hold over 51% of the currency.

On the other hand, attacking a PoW currency only need about 10% of the marketcap in cost. How does "hash rate is known" make it any harder to attack?? I don't understand, I would think it only makes it easier to plan the attack. In a PoS currency, the "unknown" part is really a safety mechanism, since the attacker can't easily figure out if he could ever obtain 51%, because he don't know who's holding what, and 51% may never be achieved simply because they are not available for sale.

with nxt you would need to hold 91% of the coins to do a "91% attack" against the network

your all guna get a big shock from nxt in the next few weeks lol

[ldgryvvh]

Hi guys, I'm struggling to grasp the block reward concept in Proof of stake algorithm. Does the lock reward remain consistent inside every block like say Bitcoin(25) because it's seems like they give off a percentage reward. So how does the block know how to reward according to percentage?

[Meni Rosenfeld]

Hi guys, I'm struggling to grasp the block reward concept in Proof of stake algorithm. Does the lock reward remain consistent inside every block like say Bitcoin(25) because it's seems like they give off a percentage reward. So how does the block know how to reward according to percentage?

"Proof of Stake" is a concept, it's not a specific method. The answer to your question will depend on the system implemented.

But generally, you have to distinguish minting new coins from transaction fees. In a PoS system, minting should be based on normal PoW just like in Bitcoin. But transaction fees will be replaced partially or wholly with fees paid out to stakeholders who sign blocks. The block knows how much to reward based on who signed the block(s), those who don't sign don't get paid.

[ldgryvvh]

The block knows how much to reward based on who signed the block(s), those who don't sign don't get paid.
[/quote]

Can u explain more about this? How does the block "know" how much to reward?

[Daffadile]

The block knows how much to reward based on who signed the block(s), those who don't sign don't get paid.

Can u explain more about this? How does the block "know" how much to reward?
[/quote]

Because POS coins have what is known as weight and this weight is how the block rewards are distributed. There is a formula for it like the amount of weight x X x (365)/*pos percentage* = Reward.

So you get rewarded based on weight and time. More weight = quicker stakes. So If you don't have enough weight you might not stake very well.

[CoinMenX]

I already announced this on two medium-long threads, but I figured why not announce it here as well.

Even if you don't agree with it, it's an interesting alternative/complement to Proof of Work, and worth reading about.

https://en.bitcoin.it/wiki/Proof_of_Stake

sorry i am newbie, mastercoin is omilayer now?