Long Live Proof-of-Work, Long Live Mining - "there is no meaningful alternative"

[cbeast]

Let me rephrase the question since you seemed to just dismiss it. If you invented a miner that uses almost no electricity and is fairly cheap to produce and nobody else had anything close, what would you do?

If I found a way to mine Bitcoin for very cheap, I would mine the hell out of it. :-)  To some extent this is a flaw of the Bitcoin network because sometimes things like this come along; somebody develops a new tech and keeps it to themselves.  This to some extent happened when Bitcoin went from CPU to GPU and then again to ASICs.   The first ASICs were hoarded.  If there is another leap, it will happen again.  

The great thing about PoS is you can't really do this.

That's it! But I disagree with your viewpoint here. Competition is the essence of commerce and capitalism. It gives the edge to innovation. PoS is simply a numbers game that is solvable. Once you have a certain level of stake, nobody can take it away. At least with Bitcoin, if someone manages to get control, it can be taken away competitively.

Alphabet altcoins - copy/pasta from >1000 altcoins.
NXT - I'll wait for the next NXT. It's just another altcoin.
NEM - Claims to not be  coin, yet claims to be coin. Does that ripple a familiar vibe?

Bitcoin requires work. Why do so many people have a problem with work?

[jabo38]

I am all for people having to work to get something, but I also want to see it be efficient. 

[cbeast]

I am all for people having to work to get something, but I also want to see it be efficient. 

GPUs were more efficient than CPUs. ASICs more so.

[jabo38]

I am all for people having to work to get something, but I also want to see it be efficient. 

GPUs were more efficient than CPUs. ASICs more so.

Your talking about an energy per hash ratio.  Yes, ASICs are a lot more efficient at producing hashes than a CPU.  But what is the end game of that?

When I meant more efficient I meant on a network wide scale making the amount of energy consumed per block going down. 

When CPUs were standard some electricity per block was used.  When GPUs became popular the network was consuming more electricity.  And when ASICs came into being the Bitcoin network devoured even more electricity per block than GPUs. 

Why have a network use a lot of energy per block with expensive hardware when you can have a network consume a little per block with cheap hardware?  Somewhere that extra money for extra maintenance for the more resource heavy network has to come from somewhere.  It is an operating cost.   To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient. 

[cbeast]

I am all for people having to work to get something, but I also want to see it be efficient. 

GPUs were more efficient than CPUs. ASICs more so.

Your talking about an energy per hash ratio.  Yes, ASICs are a lot more efficient at producing hashes than a CPU.  But what is the end game of that?

When I meant more efficient I meant on a network wide scale making the amount of energy consumed per block going down. 

When CPUs were standard some electricity per block was used.  When GPUs became popular the network was consuming more electricity.  And when ASICs came into being the Bitcoin network devoured even more electricity per block than GPUs. 

Why have a network use a lot of energy per block with expensive hardware when you can have a network consume a little per block with cheap hardware?  Somewhere that extra money for extra maintenance for the more resource heavy network has to come from somewhere.  It is an operating cost.   To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient. 

Why does operation cost matter to you unless you are a miner?

[Flashman]

You'd think it would be obvious. Make it cheaper/less energy intensive for the average joe and it gets also cheaper and less energy intensive for joe the whale.

If it costs average joe just cents, then joe the whale can dilute his efforts 10 Million to 1, getting 9,999,999 payoff for every 1 average joe makes.

Then if by some miracle, some process turns up that makes it highly unscaleable, there will be whining that why would anyone bother because everyone can only make $10 a week maximum.

So the crux of the matter is, average joe just wants to be teleported into joe the whale's shoes, he doesn't really want anything to be fair, but highly biased in favor of him personally.

[jonald_fyookball]

 To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient. 

Amazing how people STILL, after 10 pages of the thread, are missing the point of
the article in the OP.

There is no "lower" operational costs regardless of the security model!   
Security costs will always rise to the level of the rewards being
given, due to competition.

[kodtycoon]

 To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient. 

Amazing how people STILL, after 10 pages of the thread, are missing the point of
the article in the OP.

There is no "lower" operational costs regardless of the security model!   
Security costs will always rise to the level of the rewards being
given, due to competition.

erm.. Actually no.. How do security costs rise in a pos system when rewards are tx fees? Did security costs rise for nxt when the asset exchange came out and transactional fees doubled or quadrupled and in turn rewards doubled or quadrupled? No they didn't so your theory that securty costs rise as rewards rise is wrong..

[jonald_fyookball]

 To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient.  

Amazing how people STILL, after 10 pages of the thread, are missing the point of
the article in the OP.

There is no "lower" operational costs regardless of the security model!  
Security costs will always rise to the level of the rewards being
given, due to competition.

erm.. Actually no.. How do security costs rise in a pos system when rewards are tx fees? Did security costs rise for nxt when the asset exchange came out and transactional fees doubled or quadrupled and in turn rewards doubled or quadrupled? No they didn't so your theory that securty costs rise as rewards rise is wrong..

Because people will game the system -- they will create alternate chains to try to earn more fees.
Why WOULDN'T they, as long as there's money to be made?

[kodtycoon]

 To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient.  

Amazing how people STILL, after 10 pages of the thread, are missing the point of
the article in the OP.

There is no "lower" operational costs regardless of the security model!  
Security costs will always rise to the level of the rewards being
given, due to competition.

erm.. Actually no.. How do security costs rise in a pos system when rewards are tx fees? Did security costs rise for nxt when the asset exchange came out and transactional fees doubled or quadrupled and in turn rewards doubled or quadrupled? No they didn't so your theory that securty costs rise as rewards rise is wrong..

Because people will game the system -- they will create alternate chains to try to earn more fees.
Why WOULDN'T they, as long as there's money to be made?

well why haven't we seen any increase of multiple nxt forks or any at all for that matter during the period of increased reward? Why? You say why wouldn't they.. But yet no one has done that.. Pretty much of proves your statement wrong..

And even if someone forged on multiple chains, only one is valid so they only get the fees from the valid chain because the rest won't be accepted. they won't earn any extra than if they only forge on the valid chain.. Your theory is pure tripe.

And your response does not address my disagreement with your statement that security costs rise as rewards rise regardless of security model.

Did security costs rise for nxt when fees per block increased? And if your answer is yes, where did the extra cost come from?

Someone forging on a fork does not get included in the security cost for securing the main chain of nxt simply because they are not securing the main chain. They are securing a fork. So even if your claim that people will game the system was true, that still doesn't increase the cost of securing nxt. Your trying to make an argument but it just doesn't stand under further scrutiny.

[jonald_fyookball]

 To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient.  

Amazing how people STILL, after 10 pages of the thread, are missing the point of
the article in the OP.

There is no "lower" operational costs regardless of the security model!  
Security costs will always rise to the level of the rewards being
given, due to competition.

erm.. Actually no.. How do security costs rise in a pos system when rewards are tx fees? Did security costs rise for nxt when the asset exchange came out and transactional fees doubled or quadrupled and in turn rewards doubled or quadrupled? No they didn't so your theory that securty costs rise as rewards rise is wrong..

Because people will game the system -- they will create alternate chains to try to earn more fees.
Why WOULDN'T they, as long as there's money to be made?

well why haven't we seen any increase of multiple nxt forks or any at all for that matter during the period of increased reward? Why? You say why wouldn't they.. But yet no one has done that.. Pretty much of proves your statement wrong..

I would guess its because there's barely any rewards.  What's the daily amount of fees being spent on NXT?  
Also, most of the stake is centralized to a few big players anyway, so they don't need to compete.

And even if someone forged on multiple chains, only one is valid so they only get the fees from the valid chain because the rest won't be accepted. they won't earn any extra than if they only forge on the valid chain.. Your theory is pure tripe.

Yes, they only get fees on the valid chain, but they spend resources trying all the chains.  That's the point.  That's why resources spent will keep rising until its unprofitable.  

Obviously it won't be both cases at the same time:  There will either be high rewards and competition over them, or there will be little rewards and little competition.
 
As the article explains, if you don't have block rewards, you don't have much to worry about as far
the security costs rising, but then you have other problems relating to the issuance itself.
 
 

[kodtycoon]

 To me the chain with the lower operational cost (all other things being equal) is better.  And that chain is the one that is more efficient.  

Amazing how people STILL, after 10 pages of the thread, are missing the point of
the article in the OP.

There is no "lower" operational costs regardless of the security model!  
Security costs will always rise to the level of the rewards being
given, due to competition.

erm.. Actually no.. How do security costs rise in a pos system when rewards are tx fees? Did security costs rise for nxt when the asset exchange came out and transactional fees doubled or quadrupled and in turn rewards doubled or quadrupled? No they didn't so your theory that securty costs rise as rewards rise is wrong..

Because people will game the system -- they will create alternate chains to try to earn more fees.
Why WOULDN'T they, as long as there's money to be made?

well why haven't we seen any increase of multiple nxt forks or any at all for that matter during the period of increased reward? Why? You say why wouldn't they.. But yet no one has done that.. Pretty much of proves your statement wrong..

I would guess its because there's barely any rewards.  What's the daily amount of fees being spent on NXT?   
Also, most of the stake is centralized to a few big players anyway, so they don't need to compete.

And even if someone forged on multiple chains, only one is valid so they only get the fees from the valid chain because the rest won't be accepted. they won't earn any extra than if they only forge on the valid chain.. Your theory is pure tripe.

Yes, they only get fees on the valid chain, but they spend resources trying all the chains.  That's the point.  That's why resources spent will keep rising until its unprofitable.
 
 

so your saying yes the cost would rise.. and the cost "should"/"would"/"could" come from people forging on forks?

why does the cost of forging on a fork get included in the security costs of securing the main chain?

the cost of forging on alternate chains should not be included in the cost of securing the main chain because they are not securing the main chain. the extra cost they incur is the cost of securing a fork. if the main chain costs 100 dollars a month to secure, and someone spends 10 dollars a month on forging on a fork and in turn securing the fork, how does that 10 dollars cost for securing the fork get factored into two different calculations for two different chains? that 10 dollars didnt get spent twice.. so was it spent securing the fork or the main chain? cos it can be both.. it cost him 10 dollars to forge on the fork so that does mean that it cost 10 dollars to secure the fork because hes securing the fork. not the main chain.

securing a chain, forging on it, and earning rewards on a chain are all part and parcel of the same mechanism right?

il repeat that.. 100 dollars is spent to secure the main chain. 10 dollars to secure the fork. that 10 dollars cannot be spent twice.. so which did it get spent on? the main chain or the fork? how much has it cost to secure the main chain in this situation? its pretty simple dont you think?

 if someone decided to fork bitcoin and pump 10 billion dollars into mining the fork, would that be included in the cost of securing bitcoin even though the bitcoins he mines would be worthless? regardless of whether it makes sense to do that(image someone is insane and wants to do it for the heck of it) would that cost be included? (remember we are not debating the economic incentive of mining or forging 2 chains.. we are debating whether the cost to secure a chain rise as rewards rise - your only argument so far is that someone would forge on more than one chain.)

your argument, that the cost of security rises as the reward rises regardless of security model would suggest that it should be included.. if i decided to pump 1 trillion dollars into mining on a fork, would people be saying tomorrow that the cost to secure bitcoin is over 1 trillion dollars? i highly.. HIGHLY.. doubt that..

"the cost of security rises as the reward rises regardless of security model"

that is a false statement.. plain and simple..

[jonald_fyookball]

the cost of forging on alternate chains should not be included in the cost of securing the main chain because they are not securing the main chain. 

That makes as much sense as saying "mining costs shouldnt be counted except when a miner wins a block and it becomes part of the blockchain".

[Basket Case]

They say they need work to get it done, but they are not doing any work. They are just wasting electricity and giving money to the those companies.

[kodtycoon]

the cost of forging on alternate chains should not be included in the cost of securing the main chain because they are not securing the main chain.  

That makes as much sense as saying "mining costs shouldnt be counted except when a miner wins a block and it becomes part of the blockchain".

actually it does make sense..

if i forked the nxt blockchain and maintained it on a server and say that cost me 10 dollars a month to do, thats costing me 10 dollars to maintain the fork right? it wont ever get accepted as the main chain and any coins i forge on the fork would be worthless right? but it is still costing me 10 dollars a month to run the server to maintain the fork.

so its costing me 10 dollars a month to maintain that fork. why should the cost of me forging my own little fork on my own little server thats never going to be anything more than an unwanted fork thats worth nothing get included in the cost of maintaining the main chain? and if it does get included in the cost of the main chain, does that mean i didnt spend the 10 dollars running my server to run my fork? im running the server so that i can maintain my fork and spending 10 dollars so i can keep it running thus the cost of THE FORK is 10 dollars.

please explain how that 10 dollars that i spent on the server to run a fork gets included in the cost of maintaining the correct chain?

edit: im done debating with you.. your statement is false.. simple as that and iv proved your are wrong.

[cbeast]

They say they need work to get it done, but they are not doing any work. They are just wasting electricity and giving money to the those companies.

The work they are doing is securing transactions. All work in physics is measured in terms of energy. PoS altcoins would rather we give money to them for nothing because they don't want to work.

Backing money with energy is the basis of the petro-dollar. It's good in theory, but Bitcoin does it more efficiently than the US dollar.

[jonald_fyookball]

the cost of forging on alternate chains should not be included in the cost of securing the main chain because they are not securing the main chain.  

That makes as much sense as saying "mining costs shouldnt be counted except when a miner wins a block and it becomes part of the blockchain".

actually it does make sense..

if i forked the nxt blockchain and maintained it on a server and say that cost me 10 dollars a month to do, thats costing me 10 dollars to maintain the fork right? it wont ever get accepted as the main chain and any coins i forge on the fork would be worthless right? but it is still costing me 10 dollars a month to run the server to maintain the fork.

so its costing me 10 dollars a month to maintain that fork. why should the cost of me forging my own little fork on my own little server thats never going to be anything more than an unwanted fork thats worth nothing get included in the cost of maintaining the main chain? and if it does get included in the cost of the main chain, does that mean i didnt spend the 10 dollars running my server to run my fork? im running the server so that i can maintain my fork and spending 10 dollars so i can keep it running thus the cost of THE FORK is 10 dollars.

please explain how that 10 dollars that i spent on the server to run a fork gets included in the cost of maintaining the correct chain?

edit: im done debating with you.. your statement is false.. simple as that and iv proved your are wrong.

LOL.  You don't maintain a child fork endlessly like that, that would be pointless.  You forge multiple chains and some of them are accepted as the main chain.  (duh.)
You constantly spend resources to forge child chains from the current main chain , as long as it is profitable to do so.
 
You can disagree with me, think I'm wrong, that's fine... But all I'm doing is reiterating the very
cogent points of the OP's article.  So, I guess you proved the article wrong according to you.  

If someone else would like to chime in and tell me how I'm wrong, I'm open to listening

P.S.  If you take it to the extreme and have a PoS coin with no fees to fight over, then
you have zero sercurity cost, but what incentivizes nodes to even participate in
the network at all?  Well, "stake", one might say.  But the problem with that
is it then makes more sense to attack the network than to participate
in it honestly, since there's no rewards.

[cbeast]

P.S.  If you take it to the extreme and have a PoS coin with no fees to fight over, then
you have zero sercurity cost, but what incentivizes nodes to even participate in
the network at all?  Well, "stake", one might say.  But the problem with that
is it then makes more sense to attack the network than to participate
in it honestly, since there's no rewards.

Because PoS systems have no capital requirements for security, they depend entirely on marketing and have nothing to benefit from grassroots startup. Fifth Avenue will have a new industry for which to develop advertising markets. The only PoS systems that will see any success will be backed by central banks and large corporations. The network attacks will be the advertisements bombarding every form of media.

It will also require something to back it because there is no incentive to invest in a commodity that cost nothing to produce. Banks will back them with worthless junk derivatives and promissory notes. They will become fiat currencies and as such become politically charged. PoS will become state sponsored and inflatable.

In a nutshell, PoS is little more than a technology to support fiat currency.

[devphp]

...PoS systems have no capital requirements for security...

They do have capital requirements (stake needs to be purchased first just like ASICs need to be purchased), just not as wasteful as PoW systems (ASICs life is 6 months and then you need to upgrade to new ASICs, not to mention electricity fees, datacenter rent fees, etc. and all that at an increasingly wasteful rate to compete with other miners).

Inflatable PoS is wrong, no doubt about it. Any inflatable PoS crypto should be avoided. Luckily, there are uninflatable PoS crypto 2.0 technologies, which are not wasteful as PoW.

[cbeast]

...PoS systems have no capital requirements for security...

They do have capital requirements (stake needs to be purchased first just like ASICs need to be purchased), just not as wasteful as PoW systems (ASICs life is 6 months and then you need to upgrade to new ASICs, not to mention electricity fees, datacenter rent fees, etc. and all that at an increasingly wasteful rate to compete with other miners).

Inflatable PoS is wrong, no doubt about it. Any inflatable PoS crypto should be avoided. Luckily, there are uninflatable PoS crypto 2.0 technologies, which are not wasteful as PoW.

Stake isn't capital. You can base PoS on tokens like travel points. Capital is fixed value hardware or natural resources. Bulldozers, ASICS, oil, and licenses are examples of capital. PoS tokens are speculative vehicles that may or may not have value except as a security token like a Verisign cookie.