Proof of stake mining of bicoin

[jonald_fyookball]

Improvements in PoW come in a form of advancements in energy-efficient computation

You mean improve on how to waste energy more efficiently?

I think he means greater actual security with the same security cost.

People keep making the claim that PoS offers lower cost.
This is only true (as far as I know) if the currency issuance
is lower, due to competition.

But, even if we can lower security cost, the question
remains if PoS is a fair system, as it tends to "ossify nobility"  
as Vitalik would say, and makes the rich richer, eventually
culminating in the hunger games

It may be true PoS offers some higher security though,
which is why I'd be interested in this:

https://en.bitcoin.it/wiki/Proof_of_Stake#Meni.27s_implementation

[Come-from-Beyond]

But, even if we can lower security cost, the question
remains if PoS is a fair system, as it tends to "ossify nobility"  
as Vitalik would say, and makes the rich richer, eventually
culminating in the hunger games

It's becoming quite popular to compare movies to coins. Let's talk about Bitcoin and Snowpiercer. Guess who play the miner roles...

[LeChatNoir]

Another 15 pages of POW vs POS debate, such WOW!  

In the end the truth is bitcoin is consuming 10% of its market cap each year (500 million $) to mantain a decentralized (not so decentralized lately) ledger.
That means if you have 100k $ of wealth in bitcoin you need to pray that the USA government don't change its mind about bitcoin while you work hard to earn at least 10k $ per year if you do not want to lose purchasing power.
Or...
you can just buy all the NXT you can for the current extra cheap price, sit on them and enjoy all the benefits of a natural steady deflation which increases your purchasing power.

[johnyj]

POS=no production cost=no value

If I can produce a coin without any cost, why should I pay any thing valuable to exchange it??? I will just go ahead to mine it

Fiat money can have value without production cost, because there is a law to force its circulation, and the cost to make that law can be a war, which costs millions of times more energy than POW mining

Pos concept still needs electricity to keep the computer on for a certain time period before the reward comes. There are certain systems that dictates at least minimum 2 hours so there is still some cost of production attached to here

Then that cost will decide its value. For PoS coins' value to rise, the mining cost must go up, and eventually it will be as energy hugry as PoW coin

If people can both mine coins and buy coins, they will always select the cheapest method to get coins (provided coins have some use). So eventually the mining will become so energy consuming that it costs almost the same as coin's market price, which makes PoS coin the same as PoW coin. Actually I don't think you can design a scheme to overcome this basic market behavior, unless you can make a law to force people to use PoS coins

And the concept of "stake holder" is so legacy: This concept typically coming from a very centralized organization in old times. With concentrated power comes more corruption and political unease, they are all against the idea of decentralized consensus spirit of bitcoin. Satoshi invented bitcoin to be a different alternative to legacy financial system. However, PoS designer walk the same path of legacy financial system, they even use the concept of interest to simulate the existing financial system, all these sounds very outdated and not well thought

[cryptogeeknext]

You should watch Hunger Games, it's one heck of a movie, that's the asymptote I refer to.

Is the sci-fi movie the only thing that backs your words?

No, I'm just saying that trying to furk bicoin might result in bi-furk-action.
So, bi careful and don't furk it up!

[jonald_fyookball]

Then that cost will decide its value. For PoS coins' value to rise, the mining cost must go up, and eventually it will be as energy hugry as PoW coin

If people can both mine coins and buy coins, they will always select the cheapest method to get coins (provided coins have some use). So eventually the mining will become so energy consuming that it costs almost the same as coin's market price, which makes PoS coin the same as PoW coin. Actually I don't think you can design a scheme to overcome this basic market behavior, unless you can make a law to force people to use PoS coins
 

Well sort of.  A coin's value is determined by supply and demand, not the mining costs; it is the mining costs that are determined by the value of the new coins being issued..

PoS coins like NXT have essentially no mining (minting) costs because they issue no new coins.

[inBitweTrust]

In the end the truth is bitcoin is consuming 10% of its market cap each year (500 million $) to mantain a decentralized (not so decentralized lately) ledger.

10% a year today,  6 % in 2016, 5% in 2017, 3% in 2019, and 0.5% in 2026.

you can just buy all the NXT you can for the current extra cheap price, sit on them and enjoy all the benefits of a natural steady deflation which increases your purchasing power.

That something I like about Nxt. Bitcoin is Disinflationary, while nxt has no inflation besides the ICO. This may be its undoing though because distribution wasn't the best initially. The nxt currency isn't deflationary in of itself .... are there any true deflationary currencies in existence? (I am not talking about deflationary in reference to minting vs adoption)

[jonald_fyookball]

One interesting thing about PoS, is that the only known way
around the nothing-at-stake problem is to use bonds (security
deposits).  However, this seems to further exacerbate the
wealth centralization issue, as now you need to not only
be a stake holder, but one that has enough capital to
continually post bonds every block.  Maybe its not a huge
deal?

[kokojie]

In the end the truth is bitcoin is consuming 10% of its market cap each year (500 million $) to mantain a decentralized (not so decentralized lately) ledger.

10% a year today,  6 % in 2016, 5% in 2017, 3% in 2019, and 0.5% in 2026.

you can just buy all the NXT you can for the current extra cheap price, sit on them and enjoy all the benefits of a natural steady deflation which increases your purchasing power.

That something I like about Nxt. Bitcoin is Disinflationary, while nxt has no inflation besides the ICO. This may be its undoing though because distribution wasn't the best initially. The nxt currency isn't deflationary in of itself .... are there any true deflationary currencies in existence? (I am not talking about deflationary in reference to minting vs adoption)

The 10% will not decrease, as shown by the last halving. If it decreased to 0.5% in 2026, then it will only cost 0.5% to attack the Bitcoin network, which is laughable as security.

[baby222]

POS=no production cost=no value

If I can produce a coin without any cost, why should I pay any thing valuable to exchange it??? I will just go ahead to mine it

Fiat money can have value without production cost, because there is a law to force its circulation, and the cost to make that law can be a war, which costs millions of times more energy than POW mining

You make a common mistake here.

PoS has a production cost. To invent a working PoS system, you need to do brainwork. To generate a PoS block, you need to do CPU cycles (and you need to have stake of course).

But that doesn't matter, because production cost != value

The amount of CPU power necessary to generate a PoS block is nominal at most. A single very old computer would be able to handle creating every single block of a PoS coin.

If it does not cost anything to produce a PoS coin then it does not cost anything to attack the network. As a result any PoS coin can be attacked for free

[jonald_fyookball]

yes, that is the so called nothing-at-stake issue.

And now that I think about more, I don't even
think security deposits solve the issue.

[LeChatNoir]

The amount of CPU power necessary to generate a PoS block is nominal at most. A single very old computer would be able to handle creating every single block of a PoS coin.

If it does not cost anything to produce a PoS coin then it does not cost anything to attack the network. As a result any PoS coin can be attacked for free

Blah blah blah, do it!

In the end the truth is bitcoin is consuming 10% of its market cap each year (500 million $) to mantain a decentralized (not so decentralized lately) ledger.

10% a year today,  6 % in 2016, 5% in 2017, 3% in 2019, and 0.5% in 2026.

you can just buy all the NXT you can for the current extra cheap price, sit on them and enjoy all the benefits of a natural steady deflation which increases your purchasing power.

That something I like about Nxt. Bitcoin is Disinflationary, while nxt has no inflation besides the ICO. This may be its undoing though because distribution wasn't the best initially. The nxt currency isn't deflationary in of itself .... are there any true deflationary currencies in existence? (I am not talking about deflationary in reference to minting vs adoption)

The 10% will not decrease, as shown by the last halving. If it decreased to 0.5% in 2026, then it will only cost 0.5% to attack the Bitcoin network, which is laughable as security.

I think you can actually try an attack spending 2 or 3% of the bitcoin market cap.  
When inflation drop to 0.5%, 0.1% of the bitcoin market cap will do the job, maybe even less then that if the mining has centralized further.
By then, not the government, not a terrorist organization, not an asteroid but speculation will have destroyed it.
And for those who think transaction fees will be enough to pay for the security i want to ask them how useful is bitcoin if you must spend 2 or 3 $ to do a transaction.
The bell shaped curve of yearly transaction revenues from fees, has a point of maximum which is not proportional to the market cap of the coin, if you raise fee beyond that point revenues will drop and the same will happen if you set minimum fee too low, i don't know how much total revenues from fees could be at best, but i'm sure it will not be enough and it is a very stupid idea imposing 100% of the costs on those who make transactions and will porbably result in a disaster.
Cost of security in a POW must be proportional to market cap, and must be paid by stakeholders via inflation like it's happening today.
That's why bitcoin economic model is actually working, neverending inflation is necessary for POW to continue working properly.

[Come-from-Beyond]

No, I'm just saying that trying to furk bicoin might result in bi-furk-action.
So, bi careful and don't furk it up!

Looks like you prefer to joke instead of defending your point of view. Ok, never mind.

[Come-from-Beyond]

If it does not cost anything to produce a PoS coin then it does not cost anything to attack the network. As a result any PoS coin can be attacked for free

Your claim perfectly explains why I've seen several successfully attacked PoW coins and none PoS ones. /sarcasm

[DecentralizeEconomics]

Centralization remains an issue

That's why PoW provides a 51% mechanism.
It works both ways, any 51% attack can be 51% attacked.

Don't make me laugh.  You think you can 51% the government?  lol

[johnyj]

Well sort of.  A coin's value is determined by supply and demand, not the mining costs; it is the mining costs that are determined by the value of the new coins being issued..

PoS coins like NXT have essentially no mining (minting) costs because they issue no new coins.

"Money's value is decided by supply and demand", this statement comes from legacy financial book, and they forgot to mention the most important prerequisite of this statement: You must be monopole in making such money and force it upon its users. For commodity money like gold/silver, its value typically tied to production cost because of free flow of capitals

I can create a PoS coin and hold majority of the coins or even all of them and hope others to use it, thus give it demand and increase its value. However in open source world the competition is almost instant, if it is enough profitable, some others will also do this by using similar code, and possibly with a even higher marketing effort, eventually the demand will be spread in many different coins thus each coin's value becomes diluted

The problem in the above PoS clone scenario is inflation: If there are so many different clones out there, then the aggregate inflation will destroy each coins value and people will just leave. Many people come to cryptocurrency world seeking for protection from inflation, they will evaluate the situation and eventually only select one currency with limited supply to achieve that goal. From this point of view, any clone (including PoW coin clone) will only get minimal capital inflow

[Pierre11]

Improvements in PoW come in a form of advancements in energy-efficient computation

You mean improve on how to waste energy more efficiently?

Energy cannot be wasted, just transformed.
Do you play computer games, do you watch tv, engage in sports maybe?

Do you realize how much energy humanity 'wastes' by simply existing?
Yeah, the whole Universe is just an utter waste of energy, this needs to stop, teh Big Crunch will save us

I wonder how much energy has been wasted in this circlejerk of a thread.

If you really want to see energy waste, go check out reddit.com/r/bitcoin.

It is one huge circle jerk, and r/buttcoin makes fun of them (us)

[sumantso]

If it does not cost anything to produce a PoS coin then it does not cost anything to attack the network. As a result any PoS coin can be attacked for free

Yet another with no idea how it works. If it can be attacked for free how are those coins surviving? Take a look at Coinmarketcap, the top list is dominated by non-PoW coins. Surely, if its that easy they would've been attacked by now - the incentive is there.

[jonald_fyookball]

If it does not cost anything to produce a PoS coin then it does not cost anything to attack the network. As a result any PoS coin can be attacked for free

Yet another with no idea how it works. If it can be attacked for free how are those coins surviving? Take a look at Coinmarketcap, the top list is dominated by non-PoW coins. Surely, if its that easy they would've been attacked by now - the incentive is there.

well, sort of.  doge, lite coin, and bitcoin are still on top.  you can't even count stellar and ripple as they aren't decentralized.  paycoin is new, but partially poW anyway.  

As far as attacking, yes you do need some stake at least initially to attack a poS coin, so it's not truly free.  probably you would need something on the order of a 1% stake.  But on the other hand, it doesn't necessarily mean poS will work at larger scales; many have serious concerns about the security model.  You are right that the concerns are theoretical as of now.

[cryptogeeknext]

Centralization remains an issue

That's why PoW provides a 51% mechanism.
It works both ways, any 51% attack can be 51% attacked.

Don't make me laugh.  You think you can 51% the government?  lol

That's why we have an anarchy of competing governments.
Putting governments' spending onto blockchain would allow for greater transparency and accountability.
BTC blockchain might become the DNA of humanity, as a single healthy organism, that would evolve beyond the confines of a single planet.

Looks like you prefer to joke instead of defending your point of view. Ok, never mind.

I have rehashed most of my arguments up thread. Provided that this isn't the first time there is a discussion on the topic, there isn't much to add. I'm glad that debates have continued, though. Debates is what keeps us alive: https://www.youtube.com/watch?v=WpMPu5p_QXU

By the way, you might notice some parallels in the video above and the movie I referred to earlier, so my concerns are not completely unfounded. PoW and PoS may and should co-exist and can even be friends