PoS is far inferior to PoW - why are so many people advocating switching to PoS

[devphp]

If Bitcoin remains PoW, they can still buy that vast majority of coins, but everybody will have a trump card.

You know perfectly well, that the overwhelming majority of people will never mine any bitcoins and will never be able to compete with professional miners, just like majority of people don't compete with professional miners of natural resources. What matters for the majority of people is unique use cases. How the crypto currency came into existence doesn't matter for them if they have to buy it anyway, as long as it's a decentralized blockchain, distributed consensus and secure network - that's all that matters.

The overwhelming majority might never feel the need to mine, but knowing that they can if they want to without permission, makes all the difference between PoW and PoS.

There is no difference, who would prohibit them from forging in NXT PoS and get a profit from fees? Do they somehow get mining equipment for free to mine Bitcoin? I'd like to get me a few free ASICs then, oh and free electricity too

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[phillipsjk]

There is no difference, who would prohibit them from forging in NXT PoS and get a profit from fees? Do they somehow get mining equipment for free to mine Bitcoin? I'd like to get me a few free ASICs then, oh and free electricity too

Unless I am mis-understanding, anybody with at least 50% stake can do that.

With PoW mining, a 51% attacker can not force you to stop mining (short of seizing or bombing your equipment).

[devphp]

Unless I am mis-understanding, anybody with at least 50% stake can do that.

With PoW mining, a 51% attacker can not force you to stop mining (short of seizing or bombing your equipment).

Please explain.

Why do you have status "Sold 50% due to mining concentration." then below your username?

[phillipsjk]

Unless I am mis-understanding, anybody with at least 50% stake can do that.

With PoW mining, a 51% attacker can not force you to stop mining (short of seizing or bombing your equipment).

Please explain.

This feels like a trap question. Transparent Forging is not implemented yet. For the sake of argument I decided to look at the link explaining how it works. It turns out that Come-from-Beyond is actually on my ignore list (due to general nonsense posts rather than sig advertising). The paper he cites is from 2011, and describes PoS, not "transparent forging" (and then does not go into detail). Here is CFB's description of the process:

And the most important feature:
The network can detect which miners don't take part in block generation and act accordingly.

The last point deserves to be described with more details.

Imagine someone is going to do a "51%" attack against Nxt and he owns 90% of all coins. The adversary must stop generating blocks for legit branch coz he won't be able to compete against 100% mining power with his 90%. So he decides to "skip" his turn to generate a block. The rest 10% of the network detects this and penalizes the adversary by setting his mining power to 0 and distributing it among other miners. Now the network is back to 100% power coz everyone got 10-fold increase. The adversary can mine other branch in a secret place but it won't be able to replace the legit branch. Of course, the 2nd branch will have 100% "hashing" power tied to it as well, coz the attacker will get his 90% bumped to 100% but this can be counteracted by some mechanisms of advanced consensus (still not revealed).

I fail to understand why an attacker has to choose which chain to participate in. CFB never explains this. If I had 50% stake, I can say "la,la,la I can't hear you!" and pretend all other participants are offline.

Why do you have status "Sold 50% due to mining concentration." then below your username?

Because Ghash.io did not understand that they were becoming a central point of failure. Under coercion they (with the majority of the hash-power) would be able to:

• prohibit unknown (with no ownership information) keys from spending BItcoin
• ignore blocks from other miners.

While other miners can counteract this by buying hash-power, it takes time. Some have argued that a lot of pooled hash-power can actually switch loyalties relatively quickly. However, it is not clear how much hash-power Ghash.io has in-house.

[cryptogeeknext]

If Bitcoin remains PoW, they can still buy that vast majority of coins, but everybody will have a trump card.

You know perfectly well, that the overwhelming majority of people will never mine any bitcoins and will never be able to compete with professional miners, just like majority of people don't compete with professional miners of natural resources. What matters for the majority of people is unique use cases. How the crypto currency came into existence doesn't matter for them if they have to buy it anyway, as long as it's a decentralized blockchain, distributed consensus and secure network - that's all that matters.

The overwhelming majority might never feel the need to mine, but knowing that they can if they want to without permission, makes all the difference between PoW and PoS.

There is no difference, who would prohibit them from forging in NXT PoS and get a profit from fees? Do they somehow get mining equipment for free to mine Bitcoin? I'd like to get me a few free ASICs then, oh and free electricity too

This is how I would conquer the world with Nxt, you might wanna take notes
I would identify major stakeholders and find the way to contact them.
I would establish a secret inner circle of stakeholders, which cumulatively maintain the majority vote.
I would make sure that public doesn't get spooked about the action by keeping a percentage of stake available for free trading on the exchanges to create an illusion of choice.
Now, because technological breakthrough and innovation cannot challenge the possession of stake within the circle to maintain control over transactions, I can now consider the first phase of my plan as stable and concentrate on the rest.

Not getting newer ASICs for free is exactly the point of PoW, because somebody someplace might be developing on-chip photonics that will make existing hardware obsolete. This happened with CPUs, happened with GPUs, will happen with ASICs. Keeping all the innovation within the established inner circle of control is so much harder, because you might never know what a nerdy prodigy kid is working on in his mom's basement.

[sadface]

lol that is the perfect plan.

[rocoro]

PoS is better.

Why?  Because money, greed and power take the path of least resistance.
PoS is easiest to obtain and generate, with little additional cost (ie. electricity to do staking)

[onemorebtc]

PoS is better.

Why?  Because money, greed and power take the path of least resistance.
PoS is easiest to obtain and generate, with little additional cost (ie. electricity to do staking)

yep, thats the reason why gold-rich people store their gold in their cellar because its cheeper than putting it in a safe with guards

</sarcasm>

[smoothie]

... Because PoS is a POS.

[cryptogeeknext]

lol that is the perfect plan.

I knew I was right on the money with Nxt, actaully created my account after learning about it.

EDIT:

A small remark.
With major Nxt promoters' names starting with Evil(Dave), Dark(horseofnxt) and eventually Sad(face) you are making our otherwise secret plan a little too obvious, we need more diversity in PR, devphp is doing good though, definitely a step in the right direction.

[fran2k]

People are advocating DPoS, not PoS

Read something about BitShares DPoS!

http://wiki.bitshares.org/index.php/DPOS_or_Delegated_Proof_of_Stake

[LiQio]

^
Could you elaborate: What would be the final goal of the banks?

In short: power.
They can print all the money they want.

[quotes removed]

Okay, power it is.

Again same problem with PoW and PoS. If an entity holds a majority of coins it can blackmail the market. It doesn't matter if more (=substantially more) coins can be created (nota bene at a decreasing rate and therefore slowly) in the far future.

The overwhelming majority might never feel the need to mine, but knowing that they can if they want to without permission, makes all the difference between PoW and PoS.

No, it doesn't. Very weak opium of the people, nobody's gonna fall for that.

-------

Bottom line we need a diversity (not hundreds but maybe a dozen) of cryptos using different technologies but easily tradable.
And if the worst comes to the worst for one of them copy the code and start from scratch.

[Buffer Overflow]

... Because PoS is a POS.

LOL. Good one.

[Fernandez]

PoS means the rich get richer automatically. Sounds great... if you're rich.

Same thing with Bitcoin, only the rich can afford the big mining equipment needed.

Besides, variants like PoI, DPOS don't follow this. Ther eyou get paid for being useful.

[Cheesus]

Answering the question in the title: it's easy - no one wants to spend their money on mining equipment that is constantly getting cheaper.

Another reason is - few people already have A LOT of hashing power and they get an advantage compared to a regular folk. And regular folk is not happy with this fact at all

It is a complex question, but the main thing is this.

In POS, wealth becomes more concentrated at the top over time and there is no way to break your way into the economy without the 'permission' of existing stakeholders.

In POW, although mining costs can and usually become prohibitive, there is always an entry into the economy.

I agree with you regarding the PoS situation, but strongly disagree with PoW.

Mining costs are ramping up with a speed of lightning and reward for block finding is going down. At some point there is no way to enter this economy since there are "top miners" who will simply outmine you.

[cryptogeeknext]

People are advocating DPoS, not PoS

Read something about BitShares DPoS!

http://wiki.bitshares.org/index.php/DPOS_or_Delegated_Proof_of_Stake

Ok, my secret inner circle plan will work there too, you with me?

Answering the question in the title: it's easy - no one wants to spend their money on mining equipment that is constantly getting cheaper.

Another reason is - few people already have A LOT of hashing power and they get an advantage compared to a regular folk. And regular folk is not happy with this fact at all

It is a complex question, but the main thing is this.

In POS, wealth becomes more concentrated at the top over time and there is no way to break your way into the economy without the 'permission' of existing stakeholders.

In POW, although mining costs can and usually become prohibitive, there is always an entry into the economy.

I agree with you regarding the PoS situation, but strongly disagree with PoW.

Mining costs are ramping up with a speed of lightning and reward for block finding is going down. At some point there is no way to enter this economy since there are "top miners" who will simply outmine you.

Unlike top PoS stakeholders, top miners need to remain competitive. It means they need to have a revenue stream to perform timely hardware upgrades in order to stay on top of the game. But that's not an easy task because in a balanced PoW system mining is a break-even game, not a revenue stream, unless some shady schemes are employed with various mining derivatives and paper gigahashes for sale. So people need to be properly educated to not fall for this. If you don't own a physical mining equipment it will all end sour, like with paper gold.

In the grand scheme of things miners need to also do something useful for society in order to have a revenue stream and maintain their position (again in a balanced system mining is neither losing, nor gaining money), but doing so would prevent other actors from gaining total control over network. Freedom is vigilance, it's not for free and miner is your weapon.

I have a new PR stunt for you guys:
PoW - Proof Of Warforfreedom
PoS - Proof Of Snakeoilsalesmen

Good day

[solid12345]

Just wait until SPOW launches next year from the Uro team, then everybody can be happy 

[devphp]

Just wait until SPOW launches next year from the Uro team, then everybody can be happy 

Everybody can never be happy and you can bet your last dollar on that )

[DumbFruit]

Mining costs are ramping up with a speed of lightning and reward for block finding is going down. At some point there is no way to enter this economy since there are "top miners" who will simply outmine you.

"Free Entry" does not mean "low capital requirements".

http://yadayadayadaecon.com/concept/free-entry-and-exit/

I fail to understand why an attacker has to choose which chain to participate in.

The built-in fundamental premise of PoS is that the stakers will mostly behave themselves because they have a lot of stake. Ultimately, if they misbehave the "trustworthy" will roll it back to their preferred chain.

The mechanism by which this roll back takes place in NXT is through trusted peer lists and a 720 block fork limit. (Not through formal "checkpoints" like I expected.)

So PoS does not achieve trust-free globally decentralized consensus, which is the entire point of the N@S criticism.

http://download.wpsoftware.net/bitcoin/pos.pdf

Though I think I'm preaching to the choir...

[Daedelus]

Kushti has been working on trying to define the "Nothing@Stake Problem" and is due to publish his findings.  You guys might be interested in it, hopefully it will be the first time we will be able to have a real discussion over an actual implementation rather than generalisation of an imagined POS implementation.

So, I'll leave it to the Maths/computer science academic with the PhD  I think I saw the first paper will be published on Monday.

Seems Nxt and other Proof-of-Stake currencies are suffer from lack of trust to the distributed consensus algo. There are some "threats" described e.g.  Nothing-at-Stake, "weaker consensus properties"  and so on. To clarify all claims around proof-of-stake currencies, investigate consensus properties and make the research widely accessible via executable parametric simulations we've started Consensus Research group with  crowdfunding via Nxt AE https://trade.secureae.com/#5841059555983208287 . First results will be published soon including the most clear and formal definition of Nothing-at-Stake to the moment!

Here is Kushti's website with his previous work: http://chepurnoy.org/blog/archives