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Author Topic: Peercoin vs bitcoin - A comparison  (Read 1197 times)
K210 (OP)
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January 27, 2015, 08:22:01 PM
 #1

A comparison between two popular cryptocoins: http://youtu.be/oIqsSmwEY44
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January 28, 2015, 11:53:24 PM
 #2

The Achilles Heel of Proof of Stake is debt (or borrowed stake) where stake does not equal exposure. Given the history of pirateat40 and his massive short position in Bitcoin built up during late 2011 and 2012 an attack on POS named after him is apt.

The "Second Pirate Savings and Trust" attack on Proof-of-Stake. https://bitcointalk.org/index.php?topic=897488.msg10182752#msg10182752

There can other variants of this such as an exchange gone bad leading to a "Goxing" of the POS coin or the use of derivatives to short the coin.

In all of these scenarios the attacker has both a significant stake combined with a net short exposure to the coin.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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January 30, 2015, 10:37:33 PM
 #3

The video is a bit basic and contains many words that are not understandeable for crypto newbies. And it contains a pretty severe error: It is not necessary to get 51% of all coins in existence to attack it, but 51% of the staking coins. I know, it's difficult to explain to a newbie, but you should at least try it (perhaps "51% of the coins that participate in network maintenance" or something). Also, the "rich get richer" disadvantage is disputed, as in the Peercoin system every user gets the same stake rate, although richer people will find blocks more often and can collect fees.

@ArticMine: This kind of attack would be possible only in an "intermediate" stage of the coin evolution: when there is enough volume/liquidity to borrow that many coins from newbies, but the community is not mature enough that most of coins are hold by people who never would trust a "pirateat40-like" system.

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February 01, 2015, 10:26:58 PM
 #4

...
@ArticMine: This kind of attack would be possible only in an "intermediate" stage of the coin evolution: when there is enough volume/liquidity to borrow that many coins from newbies, but the community is not mature enough that most of coins are hold by people who never would trust a "pirateat40-like" system.


Pirateat40 did it when Bitcoin was smaller than many of today’s POS coins. I do agree that one does need a certain amount of maturity in the coin for a significant debt market to develop. It is for this reason that we have not yet seen this kind of attack on POS coins. At the other end of the spectrum we see the failings of the fiat currency system in particular the collapse of 2008. This again was driven by the same issue: Stake with little or negative exposure. So if instead of pirateat40 one can consider the Conrad Black attack. https://en.wikipedia.org/wiki/Conrad_Black Pirateat40 and Conrad Black have one thing in common: Legal problems with the United States government.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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