It's about time to turn off PoW mining

[CoinHoarder]

It is against stakeholders best interest to roll back the chain on people who are unpopular or doing unpopular things.

Delegates can have all sorts of motivations or be coerced into having all sorts of motivations. I could easily imagine a scenario where 60% of stakeholders and over 80% of delegates preferred to implent changes that incorporated blacklisting to go mainstream , and you know for things like "think of the children!"

If 80% of delegates act differently from the wishes of stake holders, they can be voted out. So, I think the only major worry would be someone gaining 51% of the money supply and attacking. Even then, it would be a stupid waste of money, as you are killing something you own a majority in and spent a lot on to gain that stake.

If 60% of stakeholders decide something should be done differently.. Then that is there choice, no? The ones that don't agree can sell their stake and start a new chain on their own. That makes sense to me because Bitshares looks at cryptocurrencies as a business. If you own 51% of a business, you should be able to do as you please. It is like how a democracy would work or business would work in the real world.

On the other hand, if someone gained 51% simply to attack the coin the non attackers could just move to a new coin and start over. I don't see how that is a bad thing. Furthermore, it is highly unlikely. For one there is almost a certain likelihood that there will not be 51% of the coins on the market to be sold at any point in time. If there is not, then multiple users need to be hacked to gain 51% of the stake.

I just don't see how it makes any sense whatsoever for someone to attack th e chain after gaining a 51% majority, as they would need to spend a fortune to do so, or hack multiple people. There are also cold wallets, which is one thing DPOS allows users to do that other PoS implementations don't and remain just as secure as if the funds were in hot wallets.

[inBitweTrust]

What if an entity (a government, central bank, etc.) could maintain 51% of the hash power for an indefinite amount of time? Couldn't they repeatedly attack the chain? I find it hard to believe that sort of attack could be mitigated without switching algorithms.

In the unlikely event this happens(Governments cannot keep secrets well)  within 1-3 transactions the community would notice what was happening and most people would temporarily freeze transactions for a few hours to a day (like how some exchanges stopped processing transactions during DDOS attacks or the transaction malleability scare) and than developers roll out a hard fork.

When the new code is rolled out to prevent this attack(multiple ways to block these 51% miners ) than every individual would decide whether to accept the changes or not and install the new bitcoin core code wallet implementation or any other implementation codebase(Libbitcoin, ect...another reason Bitcoin is more robust than any other coin). The users that don't upgrade would be continued to be vulnerable to the 51% attack (which would now technically be close to a 100% attack) and all other users and miners will have hard forked the coin unmolested by the attack with half the difficulty rate.

Under such scenario it is likely that the miners that attacked the network would now control a version of the blockchain that would quickly fall out of favor and decrease in value and thus essentially spending billions of dollars(The equipment alone is just part of the cost of the attack) to slightly tarnish Bitcoins reputation and create a few fake transactions on the network.

[inBitweTrust]

If 80% of delegates act differently from the wishes of stake holders, they can be voted out. So, I think the only major worry would be someone gaining 51% of the money supply and attacking. Even then, it would be a stupid waste of money, as you are killing something you own a majority in and spent a lot on to gain that stake.

If 60% of stakeholders decide something should be done differently.. Then that is there choice, no? The ones that don't agree can sell their stake and start a new chain on their own. That makes sense to me because Bitshares looks at cryptocurrencies as a business. If you own 51% of a business, you should be able to do as you please. It is like how a democracy would work or business would work in the real world.

Exactly, DPoS works like a representative democracy. Bitcoin doesn't but is designed anarchistic in nature where a majority of the community nodes, miners, or developers cannot force any user or miner with new changes they disagree with.

There is a reason I used the figures of 60% DPoS stakeholders and 80% of the delegates. Ever notice how in representative democracies, politicians will campaign on one platform and than have no obligation to fulfill their promises once elected. Nowadays you can almost guarantee they won't do what they promised and often the opposite. What guarantees do stakeholders have that their delegates will fulfill their promises and remain true in character? You say it would be counter-intuitive for any delegate to do anything to harm his investment but I just gave one example where a majority of delegates could decide upon something harmful that they would assume is beneficial: blacklisting.

With Bitcoin you always have a choice , down to the individual, and the miners and developers are held in check by a revolt(hard fork) that could happen at any moment something controversial is proposed. Not so with DPoS , because by design all users whether they vote or not are under the "social contract" of going along with the majority and after all you cannot undermine the vote as that would undermine DPoS in principle.

[CoinHoarder]

If 80% of delegates act differently from the wishes of stake holders, they can be voted out. So, I think the only major worry would be someone gaining 51% of the money supply and attacking. Even then, it would be a stupid waste of money, as you are killing something you own a majority in and spent a lot on to gain that stake.

If 60% of stakeholders decide something should be done differently.. Then that is there choice, no? The ones that don't agree can sell their stake and start a new chain on their own. That makes sense to me because Bitshares looks at cryptocurrencies as a business. If you own 51% of a business, you should be able to do as you please. It is like how a democracy would work or business would work in the real world.

Exactly, DPoS works like a representative democracy. Bitcoin doesn't but is designed anarchistic in nature where a majority of the community nodes, miners, or developers cannot force any user or miner with new changes they disagree with.

There is a reason I used the figures of 60% DPoS stakeholders and 80% of the delegates. Ever notice how in representative democracies, politicians will campaign on one platform and than have no obligation to fulfill their promises once elected. Nowadays you can almost guarantee they won't do what they promised and often the opposite. What guarantees do stakeholders have that their delegates will fulfill their promises and remain true in character? You say it would be counter-intuitive for any delegate to do anything to harm his investment but I just gave one example where a majority of delegates could decide upon something harmful that they would assume is beneficial: blacklisting.

With Bitcoin you always have a choice , down to the individual, and the miners and developers are held in check by a revolt(hard fork) that could happen at any moment something controversial is proposed. Not so with DPoS , because by design all users whether they vote or not are under the "social contract" of going along with the majority.

Ok, well minus my misconceptions on how a Bitcoin 51% attack would go down it seems we are almost on the same page.

There are no guarantees that delegates will act in the best interest of stakeholders, or do as they campaigned that they will. However, they do have something at stake that is incentive to not go against a majority of the stakeholders will.. their job which they are being paid for. They could be bribed or collude to act in some way that is against the stakeholder's wishes, but any action that goes against a majority of stakeholders would be short lived as they can be voted out.

If my understanding is now correct from your insights, it would be much like a 51% attack on a PoW coin would work, they could only double spend one or a few transactions before being caught and voted out. Same with blacklisting or withholding transactions. So, IMO colluding delegates and/or hacked delegates would not be a "coin killer", as they can be voted out with minimal damage done.

I think delegate collusion is highly unlikely for the same reasons some people think a 51% from a government entity is unlikely, people would find out about it. If the colluding delegates contact only one delegate that is not on board with what they are doing, it is very likely he alerts the community to the plan and the delegates are voted out before they can even do anything. Needing 51 delegates I think makes this highly unlikely for someone to be so lucky to contact the 51 delegates that would be on board with their plan and not have 1 that isn't.

[inBitweTrust]

If my understanding is now correct from your insights, it would be much like a 51% attack on a PoW coin would work, they could only double spend one or a few transactions before being caught and voted out. Same with blacklisting or withholding transactions. So, IMO colluding delegates and/or hacked delegates would not be a "coin killer", as they can be voted out with minimal damage done.

As I understand Bitshares to be open source they could technically break away and essentially hardfork their own coin and install new delegates. Bitcoin has a much greater set of implementations, wallets , and developers so doing so would be much easier with Bitcoin.

From hours of research with Bitshares DPoS it appears that voting is done per client node despite what size stake they control. Is this correct?

If so this presents a large vulnerability. Couldn't someone create a botnet of DPoS nodes and control the vote?

[CoinHoarder]

If my understanding is now correct from your insights, it would be much like a 51% attack on a PoW coin would work, they could only double spend one or a few transactions before being caught and voted out. Same with blacklisting or withholding transactions. So, IMO colluding delegates and/or hacked delegates would not be a "coin killer", as they can be voted out with minimal damage done.

As I understand Bitshares to be open source they could technically break away and essentially hardfork their own coin and install new delegates. Bitcoin has a much greater set of implementations, wallets , and developers so doing so would be much easier with Bitcoin.

From hours of research with Bitshares DPoS it appears that voting is done per client node despite what size stake they control. Is this correct?

If so this presents a large vulnerability. Couldn't someone create a botnet of DPoS nodes and control the vote?

Voting power is directly proportional to the amount of coins you own, so if you own 1% of the money supply your voting power would be 1% of the total votes, regardless of how many nodes you run.

Votes are updated every time someone sends a transaction, or alternatively there is a command/button you can use to update your votes for the cost of a transaction fee.

[kingscrown]

if BTC had ie 1% PoS it would totally secure network but i dont think its doable at this point

[clout]

If 80% of delegates act differently from the wishes of stake holders, they can be voted out. So, I think the only major worry would be someone gaining 51% of the money supply and attacking. Even then, it would be a stupid waste of money, as you are killing something you own a majority in and spent a lot on to gain that stake.

If 60% of stakeholders decide something should be done differently.. Then that is there choice, no? The ones that don't agree can sell their stake and start a new chain on their own. That makes sense to me because Bitshares looks at cryptocurrencies as a business. If you own 51% of a business, you should be able to do as you please. It is like how a democracy would work or business would work in the real world.

Exactly, DPoS works like a representative democracy. Bitcoin doesn't but is designed anarchistic in nature where a majority of the community nodes, miners, or developers cannot force any user or miner with new changes they disagree with.

There is a reason I used the figures of 60% DPoS stakeholders and 80% of the delegates. Ever notice how in representative democracies, politicians will campaign on one platform and than have no obligation to fulfill their promises once elected. Nowadays you can almost guarantee they won't do what they promised and often the opposite. What guarantees do stakeholders have that their delegates will fulfill their promises and remain true in character? You say it would be counter-intuitive for any delegate to do anything to harm his investment but I just gave one example where a majority of delegates could decide upon something harmful that they would assume is beneficial: blacklisting.

With Bitcoin you always have a choice , down to the individual, and the miners and developers are held in check by a revolt(hard fork) that could happen at any moment something controversial is proposed. Not so with DPoS , because by design all users whether they vote or not are under the "social contract" of going along with the majority and after all you cannot undermine the vote as that would undermine DPoS in principle.

Bitcoin uses a representative democracy. Mining pools are the representatives and miners vote on those representatives with their hashing power. PoW and DPoS are not comparable to our current representative democracy, because they are completely liquid democratic systems, in so far as delegates and mining pools can lose their voting shares at any point and their task as a representative are easily understood and auditable by the public.

Your last point doesn't really make sense. You can hardfork a DPoS chain...

[inBitweTrust]

Voting power is directly proportional to the amount of coins you own, so if you own 1% of the money supply your voting power would be 1% of the total votes, regardless of how many DPOS nodes you run.

Damn, I must have read 20 pages on the site, wiki, and forums with regards to voting and they fail to clarify that.

Ok, that makes it clear the difference between Bitcoin and BTSX and reinforced some serious dilemmas within BTSX:

With DPOS the largest stakeholders can simply vote themselves as delegates to collect a salary and control the approval of transactions. Stakeholders could try increasing the delegate quantity above 100 but that would increase costs and thus it is likely that they will settle for a smaller amount of delegates. With Bitcoin the amount of "stake" you own is essentially tied to the amount of hashing power your own.

Thus the health of the network is comparing the distribution of hashing power in PoW to the largest stakeholders in DPOS. Unfortunately, we have no way of knowing what the distribution ratio is in BTSX unlike with Bitcoin where we can see the accumulation of miners within pools  and the quantity of miners and where they are located in realtime. A large stakeholder could make it appear that he is many users and make it appear that a fair vote exists. With PoW the expense of equipment and electricity decrease the value incentive of miners as it makes it very costly to conduct a 51% attack. With DPoS it would be much more costly if an outsiders tries to buy up a stake to conduct a 51% attack , this of course wouldn't need to be done as the existing stakeholders could "irrationally" attack themselves, or hackers could hijack the stakeholders, or a series of scams /ponzi schemes from grifters could slowly or quickly accumulate all the stake. A Mtgox scenario with DPoS is really dangerous (like with Vericoin) but with bitcoin Mark merely stole the coins and doesn't control the miners or nodes.

[inBitweTrust]

Bitcoin uses a representative democracy. Mining pools are the representatives and miners vote on those representatives with their hashing power. PoW and DPoS are not comparable to our current representative democracy, because they are completely liquid democratic systems, in so far as delegates and mining pools can lose their voting shares at any point and their task as a representative are easily understood and auditable by the public.

Your last point doesn't really make sense. You can hardfork a DPoS chain...

Correct, as I clarified that DPoS can be hardforked above as well.  The key difference is delegates (miners) within Bitcoin have large costs and constantly need to innovate in a competetive market where the benefit for being in that role of power isn't as good as with DPoS.

With DPoS you are king if wealthy as you can vote yourself into office and perform a profitable task that has a much higher net profit margin than mining.  Essentially, with DPoS early and large stakeholders are setting themselves up to dominate not only control of the vast majority of wealth in the money supply but the voting process. With bitcoin you can own a lot of coins but if you also wanted to control a percentage of the voting process you have to give up some of your wealth to innovating ASIC technology and paying for power. So with PoW it is difficult to maintain control of both as you have to pay the salaries of pools, asic manufacturers, solar/microhydro/ and other power sources, ect...

[clout]

Bitcoin uses a representative democracy. Mining pools are the representatives and miners vote on those representatives with their hashing power. PoW and DPoS are not comparable to our current representative democracy, because they are completely liquid democratic systems, in so far as delegates and mining pools can lose their voting shares at any point and their task as a representative are easily understood and auditable by the public.

Your last point doesn't really make sense. You can hardfork a DPoS chain...

Correct, as I clarified that DPoS can be hardforked above as well.  The key difference is delegates (miners) within Bitcoin have large costs and constantly need to innovate in a competetive market where the benefit for being in that role of power isn't as good as with DPoS.

With DPoS you are king if wealthy as you can vote yourself into office and perform a profitable task that has a much higher net profit margin than mining.  Essentially, with DPoS early and large stakeholders are setting themselves up to dominate not only control of the vast majority of wealth in the money supply but the voting process. With bitcoin you can own a lot of coins but if you also wanted to control a percentage of the voting process you have to give up some of your wealth to innovating ASIC technology and paying for power. So with PoW it is difficult to maintain control of both as you have to pay the salaries of pools, asic manufacturers, solar/microhydro/ and other power sources, ect...

PoW gives power to those that are willing to destroy the most resources at the lowest cost. It is not economically rational and tends more to centralization than PoS systems.  

[jabo38]

With DPoS you are king if wealthy as you can vote yourself into office and perform a profitable task that has a much higher net profit margin than mining.  Essentially, with DPoS early and large stakeholders are setting themselves up to dominate not only control of the vast majority of wealth in the money supply but the voting process. With bitcoin you can own a lot of coins but if you also wanted to control a percentage of the voting process you have to give up some of your wealth to innovating ASIC technology and paying for power. So with PoW it is difficult to maintain control of both as you have to pay the salaries of pools, asic manufacturers, solar/microhydro/ and other power sources, ect...

I'd rather not have another system where the rich just keep on getting richer and more powerful.  I think said systems are doomed to fail eventually and it can be long and painful process. Surely there has to be a way that voting can be done so the the rich don't get a monopoly on power. 

[Ondago]

DPoS suffers from a crucial problem which invalidates the whole system. There is no proof of stake, therefore there is no way to conclusively ascertain which chain is the longest and thus which spending is not a double spend. Meaning that DPoS does not prevent double spending.

I don't follow this reasoning at all. The shareholders are voting on the current transaction ledger. You can only change this by controlling how the majority of shareholders vote. You also have to manipulate the vast majority of delegates into participating.

[cbeast]

Surely there has to be a way that voting can be done so the the rich don't get a monopoly on power. 

Being rich doesn't make you smart. Just design a faster and more efficient bitcoin hashing processor. Nobody ever seems to dominate that field for long before a new technology comes along. Or find a cheaper source of energy and out hash everyone. Cheaper energy and faster computing technologies will be only two of many spinoff benefits of PoW.

[johnyj]

Did someone mention that PoW coins are backed by energy it took to create them?

Well, you guys should study history of money and definitions better.

'Backing currency with something' means you can convert the currency back to a pre-determined amount of the underlying asset, that's why it's called 'backing'. You can't convert Bitcoins or any other PoW currency to a pre-determined amount of energy any better than you can convert a PoS coin. The only value a coin has is utility value, which is what it can be used for. The more functions the coin has, the higher the utility value, and that's how the price is discovered on the market. The argument of 'PoW is backed by energy' doesn't hold water.

Gold also can not be converted back to the energy that were used to mine it. And gold's price are mostly decided by those energy (manufacturing cost)

It does not matter you use gold or use some paper(usd) or use a string of text to work as currency. The purpose of all currency is to act as a unit of value, so that they can be used to purchase goods/services with corresponding value

So where is the currency's value comes from? It is usually the manufacturing cost. If one ounce of gold cost only $10 to mine, can you sell it at a market price of $1200?

When people produce goods/services and get paid with the currency, the value of the currency is corresponding to their work, so it feels very fair and natural that everyone must work to get money, including those who produce money, all the value creation process must be equal

(Fiat money is an exception, it has value because all the people are forced to use it at its face value, but its value is based on a consensus)

[devphp]

Gold also can not be converted back to the energy that were used to mine it. And gold's price are mostly decided by those energy (manufacturing cost)

Your comparison makes no sense. Gold has a history of 5000 years of being valued by people, has unique features and cannot be cloned. Bitcoin has a history of 5 years and can be cloned and has been cloned/improved upon, including the mining network - just invent a different algo, that sha256 ASICs cannot hijack and voila! Or even introduce a PoS crypto. 5 years is not enough of a history to make it universally valued and accepted by people, it's even ridiculous to talk about comparing it with gold.

[kodtycoon]

Did someone mention that PoW coins are backed by energy it took to create them?

Well, you guys should study history of money and definitions better.

'Backing currency with something' means you can convert the currency back to a pre-determined amount of the underlying asset, that's why it's called 'backing'. You can't convert Bitcoins or any other PoW currency to a pre-determined amount of energy any better than you can convert a PoS coin. The only value a coin has is utility value, which is what it can be used for. The more functions the coin has, the higher the utility value, and that's how the price is discovered on the market. The argument of 'PoW is backed by energy' doesn't hold water.

Gold also can not be converted back to the energy that were used to mine it. And gold's price are mostly decided by those energy (manufacturing cost)

It does not matter you use gold or use some paper(usd) or use a string of text to work as currency. The purpose of all currency is to act as a unit of value, so that they can be used to purchase goods/services with corresponding value

So where is the currency's value comes from? It is usually the manufacturing cost. If one ounce of gold cost only $10 to mine, can you sell it at a market price of $1200?

When people produce goods/services and get paid with the currency, the value of the currency is corresponding to their work, so it feels very fair and natural that everyone must work to get money, including those who produce money, all the value creation process must be equal

(Fiat money is an exception, it has value because all the people are forced to use it at its face value, but its value is based on a consensus)

this is a pointless argument.. all nxt coins were produced for free.. yet it has 5th? highest marketcap.. this proves that zero production cost DOES NOT mean that it has no value/price. this is a perfect example of cost free production + limited supply + utility + demand = value.

[Oscilson]

this is a pointless argument.. all nxt coins were produced for free.. yet it has 5th? highest marketcap.. this proves that zero production cost DOES NOT mean that it has no value/price. this is a perfect example of cost free production + limited supply + utility + demand = value.

If Nxt innovates and has some adoption, then it can hold its value. How high, I don't know.

[johnyj]

Gold also can not be converted back to the energy that were used to mine it. And gold's price are mostly decided by those energy (manufacturing cost)

Your comparison makes no sense. Gold has a history of 5000 years of being valued by people, has unique features and cannot be cloned. Bitcoin has a history of 5 years and can be cloned and has been cloned/improved upon, including the mining network - just invent a different algo, that sha256 ASICs cannot hijack and voila! Or even introduce a PoS crypto. 5 years is not enough of a history to make it universally valued and accepted by people, it's even ridiculous to talk about comparing it with gold.

Silver and copper also has a history of of being used as currency, and their value also established from the manufacturing cost. You can create a new algo and start an alt-coin, but you have to invest equal amount of chips/energy in order to bring the manufacturing cost close to what bitcoins stands today, thus bring its market capital close to bitcoin

Although gold has a fixed total supply on earth, human has only digged out a very small percentage of gold near the surface of the earth, now many deep gold mines are opening up in China, who knows what the market price will be in the coming years, anyway it can not be consumed easily

[devphp]

Silver and copper also has a history of of being used as currency, and their value also established from the manufacturing cost. You can create a new algo and start an alt-coin, but you have to invest equal amount of chips/energy in order to bring the manufacturing cost close to what bitcoins stands today, thus bring its market capital close to bitcoin

Although gold has a fixed total supply on earth, human has only digged out a very small percentage of gold near the surface of the earth, now many deep gold mines are opening up in China, who knows what the market price will be in the coming years, anyway it can not be consumed easily

Silver and copper also have unique qualities that other metals don't have and cannot be cloned.