It's about time to turn off PoW mining

[CIYAM]

That sounds great, but you'll need to first implement your concept in an altcoin, so that it becomes a "proven" concept, otherwise I doubt it can be considered as a choice.

Yes - that is going to happen (although I am not going to promote it as an "alt-coin" due to the bad rep that those have).

[kokojie]

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

Being more security minded is not good enough. Good security is both difficult to achieve and hard to maintain even with security experts. What we need is a protocol that is secure intrinsically by several different methods by its innate design and not dependent upon how careful the users are.

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

This is a valid concern and why I suggested that your proposals are 1 step forward and 2 steps back. Mining centralization should be addresses by incentivinzing p2p pools and gettig more involved in mining, and a greater adoption of full nodes.

P2pool is a good alternative, but hacking is actually far from my biggest concern. My biggest concern with PoW is that continuous non-stop transfer of wealth from the Bitcoin community into the pockets of mining hardware vendors and electric company. This I believe is the biggest reason we are seeing the strange price action this year, with massive amount of good news and adoption, the price keeps dropping. I think this is due to the inflow of capital can not keep up with the insane mining cost (and wealth transfer rate out of the Bitcoin eco-system into the pockets of hardware/electric companies).

Can you imagine, if these hundreds of millions of dollars, instead of spent on pointless PoW mining, profiting the hardware/electric companies, if these money are directly invested in the Bitcoin eco-system, what it would do for Bitcoin?

[inBitweTrust]

P2pool is a good alternative, but hacking is actually far from my biggest concern. My biggest concern with PoW is that continuous non-stop transfer of wealth from the Bitcoin community into the pockets of mining hardware vendors and electric company. This I believe is the biggest reason we are seeing the strange price action this year, with massive amount of good news and adoption, the price keeps dropping. I think this is due to the inflow of capital can not keep up with the insane mining cost (and wealth transfer rate out of the Bitcoin eco-system into the pockets of hardware/electric companies).

All valid concerns and criticisms (additionally, environmental concerns) which can be addressed and will naturally be addressed through market forces by these means:

1) PoW mining is so competitive that it will only remain profitable with free electricity. This can be addressed by solar, wind and microhydro with initial investment sunk costs and than using part of that energy to perform tasks that need to be done by everyone anyways : heating water, heating food , heating air in cold environments with near 100% efficiency.

2) p2p decentralized mining pools can eventually become stable and large enough where fees are cheaper and we can even adjust the bitcoin protocol to incentivize or encourage p2p.

3) Mining hardware vendors have large costs and have to constantly reinvest , but I would love having one or multiple non-profit ASIC manufactures controlled by a large group of bitcoin users. Kickstarter/indigogo anyone? With a multisig wallet we can even vote on the companies behaviors in a decentralized manner without the risk of a ceo or accountant committing fraud.

Your concerns are all valid and perhaps a certain version of POS could exist that is secure. DPOS and POSV are all patches of POS that don't quite address the flaws within POS completely. POW has a huge advantage and disadvantage with attaching its security to hardware and electricity. Perhaps a hybrid of POSV/POW would be a good thing for bitcoin in the future.

Only the negatives of Bitcoin mining are focused upon without weighing the positive effects. The competition between ASIC manufactures will eventually influence and push new technology of faster micro-circuitry instead of the recent stagnant progress made by AMD and Intel. The competition has already spurred improvements in datacenter designs where more efficient heat extraction and density layouts are being implemented. The Mining race is driving the need for free and cheaper electrcity which will have to come from cheap and renewable energy sources. (You are already seeing mining companies moving to locations that use geothermal energy as one example) . Mining races will eventually spur heating appliances to secure the network and heat food/water/air so will make dumb appliance smart and serve more than one purpose.

[SgtSpike]

With your parameter tx estimated/needed what do you refer to, tx per block/10minutes?

Yes, tx per block is what I was considering in the spreadsheet.

[SgtSpike]

Assumptions:
- The cost of a 51% attack is currently $300M

I would like to know how you got to this calculation?  I believe the figure is about 1/2 of this.

You need just over 50% of total hash rate, and then need to house, cool and power it for a day.  Using an AntMiner S3+ with no discount for bulk purchase, and the price of $0.08 / kWh, we are talking about approximately $157M, or roughly the cost of 3 x F18 Hornets.

You need 101% of the current network hashrate to beat the current network hashrate.

[CliveK]

Pffft, of course. Sorry to waste your time with that!

My bad.

[SgtSpike]

Pffft, of course. Sorry to waste your time with that!

My bad.

No problem!  My number was a complete guess anyway, based on the fact that OP said it would cost "hundreds of millions" to gain enough hashpower for 51% attack.  You did the math, and it seems like $300M is almost spot-on.

[ensurance982]

I don't know... I really haven't seen a definitive reason why PoS is inherently better than PoW. PoW also is self-regulating, since people will turn off their gear when it becomes unprofitable! There can't be an infinite limit to the amount of SHA256 miners running around the world.

[leannemckim46]

It's no more far-fetched than they spending astronomical amount of money to attack a PoS system (and without guaranteed success, like attacking a PoW).

Okay - am coming around to your point of view now - but one point still bothers me which is the *hacking point*.

With PoW you can't *hack the proof* you have to "do the work" (unless a fundamental flaw is found with SHA256 which would probably screw up all cryptos that exist at the moment).

It may be much easier to *attack the wallets* of stake holders (via keyloggers, etc.) in order to gain the stake without having to spend "astronomic amounts" of money.

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

Keeping your wallet "hot" by definition is going to make your funds vulnerable. If any PoS coin ever had any meaningful market cap then the miners would be under constant attack, likely to the point they would choose to no longer mine and exit ownership of the coin.

[kokojie]

It's no more far-fetched than they spending astronomical amount of money to attack a PoS system (and without guaranteed success, like attacking a PoW).

Okay - am coming around to your point of view now - but one point still bothers me which is the *hacking point*.

With PoW you can't *hack the proof* you have to "do the work" (unless a fundamental flaw is found with SHA256 which would probably screw up all cryptos that exist at the moment).

It may be much easier to *attack the wallets* of stake holders (via keyloggers, etc.) in order to gain the stake without having to spend "astronomic amounts" of money.

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

Keeping your wallet "hot" by definition is going to make your funds vulnerable. If any PoS coin ever had any meaningful market cap then the miners would be under constant attack, likely to the point they would choose to no longer mine and exit ownership of the coin.

Not really, you will only get constantly attacked if you are running a website with the hot wallet.

If your PC is not running any service, not install any trojan/virus, and the network is properly firewalled, the chances of getting hacked, is practically zero. If it were that easy to hack someone, no one would be using Bitcoin anymore, since majority of the Bitcoin users are not using cold wallets neither, and the average Bitcoin user is much less security minded than a PoS miner, who probably has taken the correct security measures to keep his PoS mining PC safe. Plus the hacker would only be able to obtain an encrypted wallet, that he then have to try to crack, probably a fruitless effort.

Usually a Bitcoin user gets hacked due to 1. unencrypted wallet, 2. backs up wallet + password in the sameplace (ie dropbox), and account gets hacked. 3. installed wallet stealing malware, and password got keylogged.

Non of these will happen to a correctly set up PoS miner.

[johnyj]

PoS is just centralization (The term "share holder" says it all), it against the very basic fundation of bitcoin, we will see,  after 4 years, which PoS coins are still around 

[delulo]

PoS is just centralization (The term "share holder" says it all), it against the very basic fundation of bitcoin, we will see,  after 4 years, which PoS coins are still around  

Bitcoin is a company (at least more than a currency, currencies are issued by the state who forces ppl to use its currency and requires taxes to be paid with it, there is no such state force with Bitcoin, the role of the state is the only thing that makes the term currency different from the term money. Bitcoin can fairly be described as money but not as a currency. Other than gold or sea shells though Bitcoin needs transaction verification work which makes the company analogy interesting since Bitcoin and a company has employees (miners in case of Bitcoin). It is all just analogies. But one or the other analogy makes more sense with respect to analyzing Bitcoin. BitShares is conceptually based on this company analogy / framework https://www.youtube.com/watch?v=ZT9ICMfUDjk
https://www.youtube.com/watch?v=7mwmlJICyRA

[SgtSpike]

It's no more far-fetched than they spending astronomical amount of money to attack a PoS system (and without guaranteed success, like attacking a PoW).

Okay - am coming around to your point of view now - but one point still bothers me which is the *hacking point*.

With PoW you can't *hack the proof* you have to "do the work" (unless a fundamental flaw is found with SHA256 which would probably screw up all cryptos that exist at the moment).

It may be much easier to *attack the wallets* of stake holders (via keyloggers, etc.) in order to gain the stake without having to spend "astronomic amounts" of money.

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

Keeping your wallet "hot" by definition is going to make your funds vulnerable. If any PoS coin ever had any meaningful market cap then the miners would be under constant attack, likely to the point they would choose to no longer mine and exit ownership of the coin.

Not really, you will only get constantly attacked if you are running a website with the hot wallet.

If your PC is not running any service, not install any trojan/virus, and the network is properly firewalled, the chances of getting hacked, is practically zero. If it were that easy to hack someone, no one would be using Bitcoin anymore, since majority of the Bitcoin users are not using cold wallets neither, and the average Bitcoin user is much less security minded than a PoS miner, who probably has taken the correct security measures to keep his PoS mining PC safe. Plus the hacker would only be able to obtain an encrypted wallet, that he then have to try to crack, probably a fruitless effort.

Usually a Bitcoin user gets hacked due to 1. unencrypted wallet, 2. backs up wallet + password in the sameplace (ie dropbox), and account gets hacked. 3. installed wallet stealing malware, and password got keylogged.

Non of these will happen to a correctly set up PoS miner.

So you need a dedicated computer and internet connection to mine in a PoS schema?  Isn't that trending back towards the whole "wasteful resources" thing?  Certainly not using gobs of electricity, but it does dictate a hardware requirement of sorts.

[LeChatNoir]

I agree POW is doomed.
See here:
http://www.reddit.com/r/peercoin/comments/2f94tu/large_savvy_investor_the_coin_that_will_win_the/#ck97gpi
POS is stronger and it doesn't waste resources.

[kokojie]

It's no more far-fetched than they spending astronomical amount of money to attack a PoS system (and without guaranteed success, like attacking a PoW).

Okay - am coming around to your point of view now - but one point still bothers me which is the *hacking point*.

With PoW you can't *hack the proof* you have to "do the work" (unless a fundamental flaw is found with SHA256 which would probably screw up all cryptos that exist at the moment).

It may be much easier to *attack the wallets* of stake holders (via keyloggers, etc.) in order to gain the stake without having to spend "astronomic amounts" of money.

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

Keeping your wallet "hot" by definition is going to make your funds vulnerable. If any PoS coin ever had any meaningful market cap then the miners would be under constant attack, likely to the point they would choose to no longer mine and exit ownership of the coin.

Not really, you will only get constantly attacked if you are running a website with the hot wallet.

If your PC is not running any service, not install any trojan/virus, and the network is properly firewalled, the chances of getting hacked, is practically zero. If it were that easy to hack someone, no one would be using Bitcoin anymore, since majority of the Bitcoin users are not using cold wallets neither, and the average Bitcoin user is much less security minded than a PoS miner, who probably has taken the correct security measures to keep his PoS mining PC safe. Plus the hacker would only be able to obtain an encrypted wallet, that he then have to try to crack, probably a fruitless effort.

Usually a Bitcoin user gets hacked due to 1. unencrypted wallet, 2. backs up wallet + password in the sameplace (ie dropbox), and account gets hacked. 3. installed wallet stealing malware, and password got keylogged.

Non of these will happen to a correctly set up PoS miner.

So you need a dedicated computer and internet connection to mine in a PoS schema?  Isn't that trending back towards the whole "wasteful resources" thing?  Certainly not using gobs of electricity, but it does dictate a hardware requirement of sorts.

Not really a dedicated computer, it can be run in a VM if you want. Just a properly secured computer. Of course PoS still needs some hardware, nothing operates out of a vacuum. The difference is efficiency.

PoS does still use some resource, but it's maybe 0.00001% of what Bitcoin PoW uses. Also the resource usage doesn't have to increase when the eco-system grows in value. It's basically a static amount of resource needed. These resources are needed to have full nodes anyway, so they are not really wasted.

[Brangdon]

It's been addressed loads of times. It's a chimera. It doesn't exist in real life. PoS has been running long enough, with high enough market cap, so demonstrate it 's secure.

Bitcoin is still experimental with a market cap of 6-10 billion. Nxt has a market cap of only ~36 million for less of a history than Bitcoin which makes your claim laughable.

So 36 million isn't enough to motivate hackers? Of course it is. Nxt is under continual attack, eg from hackers scanning for weak passwords. If the core system was weak, it'd be broken.

Whether or not an successful attack has been made against a PoS coin doesn't address the valid security criticisms of the framework and is false as well:

http://www.cryptocoinsnews.com/mintpal-gets-hacked-pos-vericoin-fork-result/
http://coinjoint.info/navajo-suffers-double-spend-attack/

The first of those was about an exchange getting hacked, not the currency itself. The second was about a transaction getting accepted and then orphaned, which is something that can happen in any distributed crypto-currency and again does not mean the currency's security is weak. It's happened in Bitcoin, for example. Neither have anything to do with "nothing at stake".

Additionally, any bugs or flaws within a POS or DPOS exploited by a single hacker can be used to attack the network regardless of the intentions of delegates or the distribution of the POS pool. with PoW there are real resources being used so even if a vulnerability is exploited to hijack a miner they will quickly correct the issue because they are losing money and hijacking miners all around the world that use different equipment , different pools, and different uplinks is a whole lot more difficult than finding a flaw within a wallet of hijacking a few large stakeholders computers.

Bugs can arise in any software. There's no reason to think they will take longer to fix in PoS than in PoS. If anything, it's the opposite. Bitcoin has shown itself notoriously slow to fix flaws. Transaction mutability is still not fixed, for example.

[Brangdon]

POS and DPOS is essentially a framework where large stakeholders collect usury off the network and even if you have a very fair initial distribution model you will have unequal wealth accumulation over time because most of the profits are compounded instead of reinvested at a loss.

In Nxt, anyone can forge (possibly through leasing). It's not something reserved to the rich and powerful. The percentage returns are the same.

In Nxt, forging is something done to help secure the network. It's not done to make money. The income from forging is currently around 0.2%/year, which is trivial. It's expected to become lower once we reduce the fees. Validating transactions is so cheap in PoS,  it leads to a different mentality to PoW, because there aren't millions of dollars involved every day. (That's part of why "nothing at stake" doesn't apply. The increased income you'd get from forging on multiple forks isn't worth the loss of security. NaS is a criticism only someone from the PoW world would make.)

With PoW you can easily know in realtime if there is a mounting risk from a mining pool, ASIC manufacturer, or miner.

Only if they choose to reveal their power, and only if they aren't suddenly hijacked by another party.

So you need a dedicated computer and internet connection to mine in a PoS schema?

No. For example, I have two Nxt accounts. One I use for forging; it has a zero balance so it doesn't need to be secure. The other stores the coins and leases to the forging account; it doesn't need to be public.

PS I try to restrict my comments to Nxt because that's the PoS I know best. Other PoS may have other solutions and/or problems.

[jl2012]

I can see Bitshares eventually overtake Bitcoin.

You are not even accepting donation in Bitshares

/thread

[inBitweTrust]

In Nxt, anyone can forge (possibly through leasing). It's not something reserved to the rich and powerful. The percentage returns are the same.

In Nxt, forging is something done to help secure the network. It's not done to make money. The income from forging is currently around 0.2%/year, which is trivial.

Why would the ability to lease make any difference to my argument. Yes, the percentage returns are indeed the same, thus those with extremely large purses or very large leases profit the most and all others take a loss(when you subtract electricity) when forging Nxt.

See for yourself:

http://www.mynxt.info/forging_calculator.php
so unless you have 5million or more NXT (or can pay to lease that amount) than forging really doesn't cover the cost of electricity:

http://charts.nxtcrypto.org/cDistribution.aspx
This means that only the original investors can realistically profit from forging. With higher transaction velocity early investors can look to profit much more even if fees decrease.

This means the top 0.2% profit from Nxt forging and would explain why there are so few nodes despite it using so little electricity and having a trivial barrier to entry:

http://www.peerexplorer.com/
only 245 average nodes online. Bitcoin's 7k average active nodes is dangerous. 245 globally is just laughable.

Validating transactions is so cheap in PoS,  it leads to a different mentality to PoW, because there aren't millions of dollars involved every day. (That's part of why "nothing at stake" doesn't apply. The increased income you'd get from forging on multiple forks isn't worth the loss of security. NaS is a criticism only someone from the PoW world would make.)

A complete Non-Sequitur. People can have other motivations besides direct profit with a NaS attack.

[wasserman99]

It's no more far-fetched than they spending astronomical amount of money to attack a PoS system (and without guaranteed success, like attacking a PoW).

Okay - am coming around to your point of view now - but one point still bothers me which is the *hacking point*.

With PoW you can't *hack the proof* you have to "do the work" (unless a fundamental flaw is found with SHA256 which would probably screw up all cryptos that exist at the moment).

It may be much easier to *attack the wallets* of stake holders (via keyloggers, etc.) in order to gain the stake without having to spend "astronomic amounts" of money.

I'd argue PoS miners are much more security minded, since they have to pretty much keep the wallet hot (online), even if briefly, in order to mine with it (though I believe in DPoS system you don't have to, since mining is delegated to the delegates, you can put your funds in cold storage). Also they are very much de-centralized, instead of concentrated in a pool, can you imagine how hard it is to obtain the identity of 10,000 PoS miner, their IP address, and then some how access their mining PC etc...

I'd be much more worried that discus fish and ghash.io getting hacked simultaneously (imho a much more likely scenario) and the attacker instantly gain 51% in Bitcoin.

Keeping your wallet "hot" by definition is going to make your funds vulnerable. If any PoS coin ever had any meaningful market cap then the miners would be under constant attack, likely to the point they would choose to no longer mine and exit ownership of the coin.

Not really, you will only get constantly attacked if you are running a website with the hot wallet.

If your PC is not running any service, not install any trojan/virus, and the network is properly firewalled, the chances of getting hacked, is practically zero. If it were that easy to hack someone, no one would be using Bitcoin anymore, since majority of the Bitcoin users are not using cold wallets neither, and the average Bitcoin user is much less security minded than a PoS miner, who probably has taken the correct security measures to keep his PoS mining PC safe. Plus the hacker would only be able to obtain an encrypted wallet, that he then have to try to crack, probably a fruitless effort.

Usually a Bitcoin user gets hacked due to 1. unencrypted wallet, 2. backs up wallet + password in the sameplace (ie dropbox), and account gets hacked. 3. installed wallet stealing malware, and password got keylogged.

Non of these will happen to a correctly set up PoS miner.

So you need a dedicated computer and internet connection to mine in a PoS schema?  Isn't that trending back towards the whole "wasteful resources" thing?  Certainly not using gobs of electricity, but it does dictate a hardware requirement of sorts.

Not really a dedicated computer, it can be run in a VM if you want. Just a properly secured computer. Of course PoS still needs some hardware, nothing operates out of a vacuum. The difference is efficiency.

PoS does still use some resource, but it's maybe 0.00001% of what Bitcoin PoW uses. Also the resource usage doesn't have to increase when the eco-system grows in value. It's basically a static amount of resource needed. These resources are needed to have full nodes anyway, so they are not really wasted.

When you look at the costs for mining PoS vs mining PoW coins as a percentage of the value of the total coins then PoW is much more efficient. PoS actively discourages people from spending their coins therefore the economy will never mature and thus the value of the coins will always be small. This will result in the PoS coin always having a smaller potential market cap then any PoW coin to the point that the cost per dollar of market cap is higher for a PoS coin