Scenario when a monopoly forms in a proof-of-stake network:
- Large mining pools merge or a monster miner emerges.
- The possibility of potential terrorist organizations take control of Bitcoin
- Enemies of the monopolist are targetted for reversals.
- Double-spend attacks are attempted.
- Stakes have no geographical location and can use rented servers, they cannot be shut down by any authority.
Solution A:Since the government regulators would be managing an unknown group that can be communicating covertly. This would be very difficult and expensive. It would require a central governmental clearinghouse of approved addresses for any business accepting Bitcoin, identification, and transaction approval of all commerce to prevent terrorists from controlling the network. Bitcoin is more likely to be outlawed. Either way
Bitcoin fails.
Solution B: Fork the blockchain.
Bitcoin fails.
Scenario when a monopoly forms in a proof-of-work network:
- Large mining pools merge or a monster miner emerges.
- The possibility of potential terrorist organizations take control of Bitcoin
- Enemies of the monopolist are targetted for reversals.
- Double-spend attacks are attempted.
Solution: Find allies to bring reserve mining power online before this attack has 6 confirmations and reject those attacks. Government miner stockpiles are brought online and thwart the attack. These stockpiles cost very little to maintain because they don't require electricity until they go online. These can even be patriot volunteer organizations. The attackers are identified by their IP addresses and shut down.
Bitcoin survives.
These are simply two different philosophies about how to operate a cryptocurrency. Trusting in a monopoly is hardly a disrupting enterprise. While monopolies can be efficient, historically
they require government regulation to prevent corruption. In a PoS model, the government regulators would be managing an unknown group that can be communicating covertly. This would be very difficult and expensive.
Lol! What?
Can someone translate for me? I don't speak idiot.