PoS coins

[exoexo]

Hello. Could someone explain or give a link to read about it - why PoS coins are popular and some people say that's the future of cryptocurrency? I understand PoW/PoS hybrid - this is really nice, but just 100%PoS? Why the hell anyone would need this? Why there is this hype about NXT, f.e.?

[NeuroticFish]

PoW+PoS or just simple PoS, they all end up being 99% of the time PoS.

The difference is the way the initial coins are spread to the people.
Starting PoW is more fair, some say, especially because pure PoS means that you have to pay for the coins and the devs just cash in.


The future of crypto? I don't agree with that, but it may be related to the fact PoW is expensive as equipment and power, while for PoS you need only your money (and a working wallet).


Hype? Well, some coins do heavy advertising, some don't.. you have to think long term, based on a lot of things (features, devs, community, ...)

[exoexo]

Your answer hasn't make it clearer x)
I understand how PoS works, i just don't understand why would anyone buy huge amount of coin just to get some percentage(?)
I'm interested how much of PoS coin you need to have in order to get something in return? If it's like a deposit, and it's impossible to mine a coin, who would sell it to you and how the coin flow works? Any PoS coin should be 100% pre-mined, right? How come it's fair in any way?
You see, all questions. I would appreciate a link or something, i'm sure this subject was discussed before.

[uki]

PoW+PoS or just simple PoS, they all end up being 99% of the time PoS.

The difference is the way the initial coins are spread to the people.
Starting PoW is more fair, some say, especially because pure PoS means that you have to pay for the coins and the devs just cash in.


The future of crypto? I don't agree with that, but it may be related to the fact PoW is expensive as equipment and power, while for PoS you need only your money (and a working wallet).


Hype? Well, some coins do heavy advertising, some don't.. you have to think long term, based on a lot of things (features, devs, community, ...)

for pure PoS coins, you don't necessarily need to pay to the Dev for the coins. There are several examples of coins, where all coins where distributed for free, and dev/dev team were just among the participants of the distribution, e.g.,
KTK: https://bitcointalk.org/index.php?topic=606809.0
PMP: https://bitcointalk.org/index.php?topic=673760.0
Then you have free and fair distribution, answering most of the questions of the OP.

[achimsmile]

If we assume that all current bitcoin miners hash at 1GH/W, then the whole network uses 340MW, which is a lot.
One of the advantages of PoS is energy efficiency. you don't need to waste so much energy for generating blocks, you only need to have stake (and a Raspberry Pi or regular PC for example).

The difference from a miners perspective is this: When trying to mine bitcoins, you have to buy expensive specialized hardware, which may or may not give you ROI (probably not if you're a hobby miner).
When forging with PoS, I have to buy coins, that then act like "virtual miners". The coins don't degenerate over time.

Difference: The hardware value of PoW miners tend to decrease quite fast, it's hard to sell them at a good price. Whereas I can easily sell my PoS coins again, and they don't necessarily loose value (lately they lost value, but so did bitcoin).

How pure PoS works (I only know Nxt, sorry):
After an open IPO of 1 1/2 months, 1B coins are issued at once to everyone who invested (I consider this fair). Max amount to invest is 1BTC, so that 1 person does not claim most of the coins (make sure to check for sockpuppets as good as possible.) You can't really talk of a pre-mine, since there is no mining at all. Fyi The Nxt dev made a whopping 21BTC (I thought he didn't even keep the money for himself, but not sure).

Someone sells 1M to me at an exchange (maybe because he wants crappy fiat).
Now I have 0.1% of the total supply.
I begin to forge. Each block, I have a chance of 0.1% to generate the block.
When I actually forge a block, I get all transaction fees in this block.
Each Nxt transaction costs 1 Nxt.

Please notice that bitcoin will have to run on tx fees too once all 21M coins are mined.



Why would anyone buy huge amount of coins just to get some percentage?
-> Why wouldn't they? Making money is not such a bad idea. Other question: Why would anyone buy huge amount of miners just to generate some blocks?
To be honest, if you look at Nxt for example, you won't get rich quick. Atm you get around 0,5% profit per year (still more than most banks interest).
This number could increase if there will be more transaction in the future.

[shogdite]

Hello. Could someone explain or give a link to read about it - why PoS coins are popular and some people say that's the future of cryptocurrency? I understand PoW/PoS hybrid - this is really nice, but just 100%PoS? Why the hell anyone would need this? Why there is this hype about NXT, f.e.?

There's a decent write-up by mullick on PoS here

https://cryptocointalk.com/topic/700-proof-of-stake-explained-rough-draft/

So overall what are the benefits to POS?

First off proof of stake is the most effective way of preventing 51% attacks. The malicious person would need to invest a lot of money to gain a substantial amount of the currency. Through either purchasing 51% of the entire currency or mining with 51% of the network hashrate for over 51% of the blockchain life.. Costing them lots of money in hardware and electricity.

Secondly is encourages miners to hold there coins and earn what people like to refer to it as interest. Which can make for a much more stable market value. It encourages a sort of storage of your "digital wealth". Where you know the market value should be more stable ( after the initial dump phase of course refer to the NVC price over the last few months )and you will earn interest on your coins just by helping secure the network on which the coins are stored. Its self reinforcing in the idea that you get rewarded for POS minting. On many different fronts. Not just your POS rewards.


When the POW block reward rounds to 0, The only reward miners or "nodes" will receive are transaction fees. People might lose interest in mining. Dropping the difficulty leaving the network open to 51% attacks. Proof of stake minting will still earn users the extra income. As they can mine for tx fees at a pool and POS mint at the same time. POS will take over as the main security for the network and help give incentive to miners also further stabaliizing the marrket vaklue. If pos reward is too high everyone will POS mint and the currency will become too rare. Either skyrocketing or plummeting in value. Too low and miners will lose incentive and the network will be open for 51% attacks again. It is a fine balance.

[ciocgun]

PoS value after 1 or 2 months is 30% ot the coin value with Pow..
so it could not be a huge investment

[achimsmile]

PoS value after 1 or 2 months is 30% ot the coin value with Pow..
so it could not be a huge investment

Sorry I did not get that?

[Amph]

because they are like giveaway basically, with safe coin generation(pos)

also they are anti-instaming, and their launch is considered somehow safe, or more safe than pow, due to 100% distribution

[exoexo]

Thank you all guys for being so helpful, followed your links, understood more about it) Live and learn!

[kepo07]

You can mine on POS coins on any computer even raspberry pi but the return are usually very low. Most of the POS coins are pump and dumps which makes you lose money.

[GreenStox]

Hello. Could someone explain or give a link to read about it - why PoS coins are popular and some people say that's the future of cryptocurrency? I understand PoW/PoS hybrid - this is really nice, but just 100%PoS? Why the hell anyone would need this? Why there is this hype about NXT, f.e.?

Pos has many many vulnerabilities already discussed in this forum, sure it has advantages by blocking the 51% attack, but if the market cap is small then if some1 buys up 51% of the coin supply they can perform the attack easily, so since because of this a few guys will own 51% of the coins in the start era to make sure nobody can aquire more than 51% fast enough.

This makes all POS coins unevenly distributed, and basically a pump and dump because if lets say 10 guys own 51%, then what if the market cap reaches 1 billion $? You bet that all of them will sell it and buy some sports car with it, they dont care about the coin.

So because of this its hard to find a long term POS coin. I think NXT is a good coin, but it needs more features though.

[achimsmile]

if the market cap is small then if some1 buys up 51% of the coin supply they can perform the attack easily

I disagree. Coins with very low marketcap usually  have very low liquidity. You can't "easily" buy 51% if there's ony 1% available on exchanges.

many vulnerabilities

please name one

[Amph]

many vulnerabilities

please name one

many newbiew leave pos coin on exchange, and we see what happened with mintpal

[achimsmile]

many vulnerabilities

please name one

many newbiew leave pos coin on exchange, and we see what happened with mintpal

same with PoW. This has something to do with newbie behavoiur rather than proof of x

[Ingatqhvq]

Hello. Could someone explain or give a link to read about it - why PoS coins are popular and some people say that's the future of cryptocurrency? I understand PoW/PoS hybrid - this is really nice, but just 100%PoS? Why the hell anyone would need this? Why there is this hype about NXT, f.e.?

Are you one of the EXO coin stakeholders?
I just guess it from your name,.
If yes, then explain why you didn't like NXT as pure 100% POS, and like PoW/PoS hybrid.

[Amph]

many vulnerabilities

please name one

many newbiew leave pos coin on exchange, and we see what happened with mintpal

same with PoW. This has something to do with newbie behavoiur rather than proof of x

not really, because pos coin on exchange mean that the exchange can earn lot of interest, and control more coins than what they should have , with pow you can't do that

[GreenStox]

I disagree. Coins with very low marketcap usually  have very low liquidity. You can't "easily" buy 51% if there's ony 1% available on exchanges.

No but you can bribe many of the big stakeholders to sell it to you anonymously and then you can use the network maliciously.

When the exchanges have enough volume to contain 51% of the coins, then just a well placed buy order simultaneously on all exchanges could do the trick.

It would not be profitable, but a government could do it only for the purpose of disrupting the coin.

many vulnerabilities

https://en.bitcoin.it/wiki/Proof_of_Stake

You find many of it there.

[achimsmile]

I disagree. Coins with very low marketcap usually  have very low liquidity. You can't "easily" buy 51% if there's ony 1% available on exchanges.

No but you can bribe many of the big stakeholders to sell it to you anonymously and then you can use the network maliciously.

When the exchanges have enough volume to contain 51% of the coins, then just a well placed buy order simultaneously on all exchanges could do the trick.

It would not be profitable, but a government could do it only for the purpose of disrupting the coin.

many vulnerabilities

https://en.bitcoin.it/wiki/Proof_of_Stake

You find many of it there.

Can you outline one specifically? I only saw strengths:

Unless attackers own a large share of stake, all types of PoW attacks are computationally infeasible.

Monopoly is still possible under proof-of-stake. However, proof-of-stake would be more secure against malicious attacks for two reasons.

a proof-of-stake network will be many times more costly to exploit than the proof-of-work network

[achimsmile]

many vulnerabilities

please name one

many newbiew leave pos coin on exchange, and we see what happened with mintpal

same with PoW. This has something to do with newbie behavoiur rather than proof of x

not really, because pos coin on exchange mean that the exchange can earn lot of interest, and control more coins than what they should have , with pow you can't do that

You are talking about two pairs of shoes:
1. newbies loose their PoS coins if an exchange runs away with their funds:

My answer: This has nothing to do with proof of x
It is not a weakness of a ferrari if I don't drive it correctly and crash it into a bridge.
Neither is it a weakness of PoS if users give their coins to strangers on the internet and loose everything.


2. The exchange can stake user deposited coins and get interest, "and control more coins than what they should have"

My answer: The interest may be nice for the exchange, but I don't see the weakness.
The largest exchange of a relatively prominent PoS coin had max. 5% of the total stake. Not enough to do any damage.
Exchanges are for PoS coins what mining pools are for miners: You give your power to potentially sign a block to someone else.
The largest mining pool I saw of BTC produced 51% of all blocks. Enough to destroy the coin.