
Proof of Stake or Proof of Work, What's the Difference? - jungong
https://www.dapp.com/article/proof-of-stake-or-proof-of-work-whats-the-difference
======
lalaland1125
For an alternative point of view, I highly recommend that people read
[http://www.truthcoin.info/blog/pow-
cheapest/](http://www.truthcoin.info/blog/pow-cheapest/).

One issue that proof of stake proponents often ignore is that proof of stake
has its own costs that are roughly equivalent to the dollar cost of PoW. The
issue is that you need to lock up money for PoS in order to mine it. That has
a cost as you are forgoing interest on lending that money to an actually
productive enterprise that is creating value. The net result is that funding
and investment becomes more scarce because private investment is "crowded out"
by people simply staking their Ethereum. This is the same harm caused by too
much government debt "crowding out" private investment.

Also, if the PoS staking rewards are too low, you are vulnerable to the exact
same 51% attacks as PoW. So it's very unsure how this would significantly
reduce fees unless you are also significantly increasing your vulnerability to
attack. (Now, there are caveats about the fungibility and the ease of renting
PoW miners vs renting PoS tokens, but many of the same principles apply).

~~~
saurik
> One issue that proof of stake proponents often ignore is that proof of stake
> has its own costs that are _roughly equivalent to the dollar cost of_ PoW.

> Also, if the PoS staking rewards are too low, you are vulnerable to _the
> exact same 51% attacks as_ PoW.

"We all theoretically agree that I could have burned the most oil today (and
in so doing, I will not be able to do something I could otherwise have done as
my funds are locked up, which feels like a waste)" is a way way way _way_
better scenario than "I guess we will all have to burn a bunch of oil to make
sure I'm right (and in so doing we destroy our habitat, which more than feels
like a waste)"... it really doesn't matter if it provides a better result than
proof-of-work as long as it doesn't provide a worse one and has fewer
externalities (if nothing else, as the people willing to play this game at all
will have a selection bias for people who don't think the environment is
important; we are already at the point where 1% of humanity's CO2 impact is
from cryptocurrency mining, which is _insane_ : "the economy is moving 1%
slower as we are locking up capital in silly ways" is roughly harmless in
comparison).

~~~
gruez
>"We all theoretically agree that I could have burned the most oil today
[...]" is a way way way way better scenario than "I guess we will all have to
burn a bunch of oil to make sure I'm right [...]"

note this argument only works if the costs of burning oil (habitat
destruction) is being externalized. thus, this is more of a problem with
externalization than a pos vs pow issue.

~~~
topmonk
The realization of that sort of idealism is so far fetched it doesn't change
the argument. Sure, you could possibly get the USA to create laws to stop
externalizing the costs of co2 production, but everyone, everywhere? Including
the most corrupt, war torn, and penniless places in the world? And what about
the deep state? They once sold cocaine to us citizens in order to raise money
for black ops. Would they think twice about mining PoW?

~~~
cabalamat
> Sure, you could possibly get the USA to create laws to stop externalizing
> the costs of co2 production, but everyone, everywhere?

If you got 2 out of (USA,EU,PRC) to do it, and those countries all put big
import tariffs and other sanctions on other countries that didn't, that would
switch over the world economy to lowering CO2 emissions.

> Including the most corrupt, war torn, and penniless places in the world?

Corrupt and war-torn places still interact with the global economy. Penniless
places aren't going to have enough of an economy to emit much CO2.

> And what about the deep state? [...] Would they think twice about mining
> PoW?

If there is a worldwide effort to shut down PoW cryptocurrencies, they will
become useless and the deep state won't be able to achieve anything with them
that it couldn't do more easily by other means.

~~~
topmonk
I can see your argument up to this point:

> If there is a worldwide effort to shut down PoW cryptocurrencies, they will
> become useless and the deep state won't be able to achieve anything with
> them that it couldn't do more easily by other means.

The whole discussion is about whether PoS is equivalent to PoW in terms of
environmental harm, and I'm arguing that PoW is more costly. I don't
understand what your general point is. Do you think PoW is more harmful than
PoS or not? The parent was saying that it's an externalization problem. I
don't think it's realistic to think that the damage to the environment could
be charged back to the miner in every case, therefore PoW would always be more
dirty than PoS. Could you clarify what your main point is in light of this?

~~~
keymone
> The whole discussion is about whether PoS is equivalent to PoW in terms of
> environmental harm

it's wrong question anyway because it implies PoW necessarily causes
environmental harm. PoW is consumption of energy, just like vast majority of
other human activities. consumption of energy is not what harms the
environment, at least not as directly as production of energy. the two are
only closely related because of unwillingness of political elites to punish
harmful producers, because those producers _are_ the political elites or are
closely related to them.

~~~
EGreg
This is not strictly true.

That’s like saying that in the US where factory farms are the norm, a new game
causing people to buy as much veal as they can and throw it in the garbage has
absolutely no responsibility for how many calves are raised in terrible
conditions, because they COULD have been raised in good conditions, regardless
of how many there are.

The fact is that human production capacity for energy is finite. The more
pressure you put on this production capacity, the more it will cause companies
to pop up and produce more energy. AS LONG AS the proportion of FOSSIL FUEL
sources among these new companies will be high, you are indirectly
contributing, via induced demand, towards more CO2 pollution. Yes if the world
had moved to 99% sustainable energy then Bitcoin and Ethereum would not be
contributing to the CO2 pollution problem in a meaningful way. But the current
disitribution of energy production is relevant in assigning responsibility.

Just as if we all moved to fake lab grown veal, then maybe the game of
throwing veal in the trash would not be harming animals in any meaningful way.

~~~
keymone
Nothing is strictly true except truisms, but I still disagree. Unless bitcoin
consensus rules necessitated energy source that is harmful for environment, it
is not fair to blame energy consumer for environment impact. Energy producer
is the villain and spineless politicians that won’t enforce punishment for
harmful energy sources.

~~~
EGreg
I disagree, just as in the food example. Consumers are also to blame. If you
know that your induced demand will be filled in the same way that current
demand is being filled, then creating more demand is irresponsible, if it can
be avoided. What benefit does wasting so much energy have? At least Siberian
homes using mining to heat their house in the winter have a good side effect.

~~~
keymone
> If you know that your induced demand will be filled in the same way that
> current demand is being filled, then creating more demand is irresponsible,
> if it can be avoided. What benefit does wasting so much energy have?

I think you misunderstand PoW. Energy is not wasted, energy is spent to
provide the security level that is demanded by the market. Nobody will spend a
joule mining bitcoin unless it is profitable.

> At least Siberian homes using mining to heat their house in the winter have
> a good side effect

This is actually a bad thing, because it means mining is inefficient. Primary
purpose of mining is to convert energy into PoW, if you get heat doing that -
you’re not getting as much PoW as you could’ve got.

~~~
EGreg
You always create heat. That’s where the energy goes. Google “reversible
computing” for theoretical approaches for computations that release zero heat.

Look, I can come up with a terrible sorting algorithm and get everyone using
it as a requirement to participate a network protocol that will never change
and then say look, it’s useful, it’s sorting stuff.

People have long invented far better things than PoW to secure distributed BFT
systems. The transcations they can handle even scale with the number of
machines, which is the case with the vast majority of applications on the
Internet. If there was no alternative then MAYBE it wouldn’t be a waste (I
think it would still be a bad trade-off). But you can literally just have a
coin on another protocol which doesn’t use PoW arms race.

~~~
keymone
You always create heat but at different efficiency levels. If you create
enough heat with your miner to keep your siberian home warm it’s fair to say
you’re not being very efficient at computing.

I don’t know if a single system where mutually untrusting parties can find
consensus in distributed ledger other than PoW or it’s energy (but not
complexity) equivalent PoS. If you do - make a money out of it and be a
trillionaire, nobody is stopping you.

So far the only thing that probably works is PoW.

~~~
EGreg
Tell me again what’s wrong with Ripple or Stellar? How are they centralized?

~~~
keymone
So rather than addressing my points you start the cycle again by suggesting
implementations of PoS coins? What’s wrong with Ripple and Stellar is that
they are PoS coins. PoS doesn’t address any existing issues but adds layers of
complexity. And both are centralized pre-mine scams anyway.

~~~
topmonk
You made a pretty bold statement saying that no Proof of Stake systems are not
immune to grinding, although they're are some currently major ones in
existence, EOS, Carsano, etc. If you can grind away at these systems, why
don't you do that and make a trillion dollars yourself?

~~~
keymone
Just because something can be attacked doesn’t mean it can be attacked
cheaply.

Besides, your argument cuts both ways - if you think PoS are so much better
and PoW will eventually be worthless, show me how much BTC you shorted today
or ever. I bet it’s zero.

~~~
topmonk
I think PoS is much more environmentally friendly than PoW. That's not the
same as whether I think either will increase or decline in the short term,
which is a different question entirely.

Anyway, you have yet to prove the core of your argument, that any current PoS
system can be defeated by an equivalent amount of work as a PoW system through
grinding. Again, this is a bold statement. Can you at least begin to try to
defend it?

~~~
keymone
First, talking of environmental impact of PoW is misguided. It’s producers of
energy that do harm, not consumers.

Second, stake grinding is an attack. You’re the one who has to prove your PoS
system is not affected by it. As far as I’m concerned cost of attack is the
same as in PoW except PoS shifts costs into political spectrum via totally
redundant layer of complexity.

~~~
topmonk
No, it's the chemical reaction that the oil plants use, not the owners of the
said plants. See how silly that sounds?

You can't assert that every PoS system is vulnerable to a grinding attack
without specifying what the attack is. Every PoW system has a centralization
of mining problem due to economy of scale. Now prove that isn't true.

~~~
keymone
> No, it's the chemical reaction that the oil plants use, not the owners of
> the said plants

poor attempt, try again.

> without specifying what the attack is

stake grinding, long range and other attacks are widely known. all
complexities that deviate from trivial PoS system exist solely to address
these attacks. are you really pretending they don't exist?

> Every PoW system has a centralization of mining problem due to economy of
> scale. Now prove that isn't true.

the only centralizing factor is energy subsidies. it's still a far cry from
issues with PoS systems.

~~~
topmonk
>> No, it's the chemical reaction that the oil plants use, not the owners of
the said plants

> poor attempt, try again.

I like how you deleted the "See how silly that sounds?" part, which is what
I'm getting at. Anyway, who to blame is philosophical question and has no
absolute truth, we might as well blame God for making humans greedy and
shortsighted. I think we have to agree to disagree here. The fact remains
though that in today's world if BTC switched over to PoS, we'd save about 1%
energy usage today and the corresponding co2 production to go along with it.
If BTC continues to grow, this number will go up correspondingly. Are you
denying this?

> stake grinding, long range and other attacks are widely known. all
> complexities that deviate from trivial PoS system exist solely to address
> these attacks. are you really pretending they don't exist?

I'm saying they've been solved. You can see their justifications against the
attacks you talk about in the white papers. If you have a specific attack
against a specific coin, then we have something to talk about. Otherwise, just
repeating over and over, "But there are attacks!" doesn't disprove anything
they are saying.

> the only centralizing factor is energy subsidies. it's still a far cry from
> issues with PoS systems.

Again, economies of scale. Please at least try to address my arguments.

~~~
keymone
Who is to blame for environmental harm is not a philosophical question. Act of
consumption is not harmful, act of production is harmful. The fact that demand
creates incentive to produce from shitty sources doesn’t change the actor that
is doing harm.

And it’s not 1%, so you’re wrong about that too.

If BTC switched over to PoS it would cost the world exactly the same amount of
resources, shifting some energy consumption into political plane. Fiat money
is 100% political plane. Going towards fiat money is antithetical to bitcoin.

You’re saying attacks have been solved without citing any sources. There is no
solution to PoS attacks that doesn’t make the system less trustless or less
decentralized and introduces a layer of attackable complexity.

> Again, economies of scale. Please at least try to address my arguments.

I haven’t seen an argument so far, only a buzzword.

------
gvhst
An interesting idea I've been pondering is PoS' effect on wealth distribution
and inequality. Its clear that this system exhibits the phenomenon of "wealth
begetting wealth," which isn't that different from our current society.
However, the real kicker here is that the more wealth you have on a PoS
network the more control you have over the network. This is baked into the
system by construction, whereas in our current framework of wealth this is
merely a correlation which can be controlled via legislation.

~~~
api
PoW has economies of scale that reward existing wealth too.

~~~
konschubert
Not just economies of scale. PoW IS a proof of capital. "I can buy one million
dollars worth of mining hardware and wait a year to earn my money back" is a
proof of capital.

~~~
xwvvvvwx
While it's true that the barriers to entry are quite similar in both (Eth 2.0
PoS depost is approx the same as 1 good bitcoin ASIC).

However, the dynamics wrt capital are different in PoW, and it's probably more
accurate to say that it represents proof of captial _burned_ (miner
depreciation & electricity costs).

~~~
konschubert
Not capital burned, because it's reimbursed by the network via fees.

~~~
wmf
With PoW all you get back are block rewards and fees; your hardware and energy
are burned. With PoS you get block rewards and fees _and you get your original
stake back_. Of course at equilibrium this means the rate of return from
staking can be much lower.

~~~
konschubert
It also means that a network based on PoS is much cheaper to maintain if we
assume equal RoI between PoS and PoW. This is great and should give PoS a
competitive advantage.

------
h1d
> energy consumption won't get any better unless some incredible technological
> achievements are made in processing capabilities or clean energy production.

How would power consumption decrease if there's a technological advancement on
processing capabilities? They'll just put more money to increase their
hardware and not everyone will somehow feel easy on earth to never expand
their hardware.

> the fact that the 51% mark is becoming achievable is at best unsettling

Seeing 51% should be treated as a given. The point is the system should not
give incentive for them to act as such.

Are you feeling unsettling to know U.S, Russia and Chinese army can combine
their forces one day to take over the world?

------
esotericn
The difference is that there exists no proof that PoS is even possible.

It exists purely as a rhetorical tool, used to attack the energy consumption
of PoW.

~~~
pontifier
I'm still unconvinced about proof of stake. I've never seen a satisfactory
answer to what happens if the chosen stakeholders are unwilling or unable to
forge the next block in a timely manner.

I'll do some more research, but this problem still nags at me.

~~~
DennisP
There's a similar attack in PoW: a 51% attacker can just make empty blocks.

Either way, if your attacker is persistent and too dominant to beat, you can
fix it with a hard fork. In PoW you change hash functions; you can generally
do this only once for each hash implemented in ASICs and then you're down to
general-purpose hardware and new functions don't help you.

In PoS, you can make a fork that simply eliminates the attacker's stake. You
can continue this as many times as necessary.

This is, of course, the last-ditch remedy, applicable to any PoS protocol.
Researchers do aim for "liveness," and can prove how dominant an attacker has
to be to break it.

------
EGreg
CAN CRYPTOCURRENCY HELP SAVE THE WORLD?

I have an idea. What about a cryptocurrency that is generated by proving you
planted a tree, or other type of carbon sink? Maybe some viral MLM scheme?

I originally wanted to make a cryptocurrency that encourages good, a “pay it
forward” cryptocurrency. But I have come to realize that ultimately the
priority is undoing the pollution and deforestation and desertification.

If we can harness the power of viral mechanics and of greed but make a system
that rewards only REDUCING the CO2 and other pollution, then this system would
actually make a very significant impact motivating large groups of people,
including those organized into corporations and other organizations, to take
action.

Maybe put carbon credits on a blockchain, for a start. But I would want
reforestation, curbing other types of pollution, etc. to generate currency
too.

[https://u.today/ibm-launches-carbon-credit-cryptocurrency-
on...](https://u.today/ibm-launches-carbon-credit-cryptocurrency-on-stellar-
blockchain)

We have markets for crypto to trade vs fiat. The problem is, who will really
prove that you did the good, and why can’t they just collude to issue more
money? They would need something bigger to lose...

If you have some desire to do this, please contact me at greg and the domain
is qbix.com

------
DINKDINK
PoW is a proven method to reach Byzantine-fault-tolerant consensus.

PoS is a deceptive marketing ploy that the Ethereum "Foundation" has been
using _since 2014_ [1] to dupe people into buying ethereum believing that PoS
will replace Proof-of-Work.

[1] [https://blog.ethereum.org/2014/01/15/slasher-a-punitive-
proo...](https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proof-of-
stake-algorithm/)

~~~
fastball
There are other coins that already use PoS.

How is it a ploy?

~~~
DINKDINK
>There are other coins that already use PoS.

There are some coins that use PoS as a voting mechanism not a consensus
mechanisms. If you so desired, you could do the same in any PoW chain.

>How is it a ploy?

Broadly small-game fallacy[1]. If PoS would work at scale ethereum developers
would have already deployed it. It doesn't work. Why?

An physical analogy for why PoS can never achieve BFT is: Assume 1) A
cryptographic hash function is not broken 2) you live in a cave and you cannot
talk the outside world

You are given a letter with a series of nested hash pointers that could have
only been produced if they expended resources to created. There is no way this
could have been faked, even though you live in a cave, you can trust the
message. PoW is a stable BFT solution.

Another version of you in PoS land is also in a cave. You receive a message.
It has a list of Arcade tickets that are signed by other Arcade tickets. In
order to trust the veracity of this message you have to hope that someone else
outside of your cave also saw this message to you because if they haven't, you
could be being eclipse attacked, consequently defrauded. You cannot trust that
this message hasn't been forged without contacting other people or hoping that
other people have see this message. It's not stable it's not a solution to
BFT. It's why after 4 years and counting Ethereum still hasn't implemented it.

[1] [https://unenumerated.blogspot.com/2015/05/small-game-
fallaci...](https://unenumerated.blogspot.com/2015/05/small-game-
fallacies.html)

~~~
DennisP
Why? Easy, people kept figuring out attacks so they kept working on better
designs. Figuring out a solid PoS protocol is nontrivial.

A few days ago Vitalik went through the history of Ethereum's proof of stake
research at the annual Devcon, if anyone's interested:
[https://www.youtube.com/watch?v=Km9BaxRm1wA](https://www.youtube.com/watch?v=Km9BaxRm1wA)

At this point they're pretty happy with the protocol, the spec is mostly
written, and eight teams are working on clients. The new design includes
blockchain sharding for about 1000X better scaling.

Regarding your analogy, regardless of protocol you have a certain amount of
"weak subjectivity," in that you at least have to know what client software to
run. Otherwise you might be accepting invalid blocks.

The attacks you mention can be handled by requiring stake to be locked up for
several months, and slightly broadening the subjectivity you accept to include
a periodic known blockhash. You have to use off-chain social means to find out
the correct recent hash, but you have to do the same to find out the correct
software to run. [https://blog.ethereum.org/2014/11/25/proof-stake-learned-
lov...](https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-
subjectivity/)

~~~
aeternus
>you at least have to know what client software to run

The beauty of PoW is that you don't. By examining a PoW blockchain one can
determine the relative amount of work expended. That provides trust with
little to no external information. (All you need to know is the relative
difficulty of hash functions and what info is hashed to form a block, both
independently verifiable).

With PoS there is no analog. You must get your 'trust' externally, through
deciding which codebase/client you want to use. Without external information /
sidechannels, you have no way of determining which client nor which history to
trust.

~~~
DennisP
If a 51% attacker makes an invalid transaction, you actually don't want to
accept it just because they have more hashpower; if you did then 51% attackers
could arbitrarily steal funds. If you don't accept invalid transactions, then
you're using external knowledge of current validation rules.

Also, if you really assume that only the chain with the most hashpower is the
valid one, then you have to ignore all other blockchains. And even then,
you're assuming you know the correct hash function; given ASICs it's not
practical to know what hash function requires the most economic effort just by
looking at it.

~~~
keymone
Knowledge of consensus rules _is_ the knowledge you’re building consensus
upon. It’s a given.

~~~
DennisP
But you have to get that knowledge, and the specific software to implement it,
from some source other than the blockchain. In practical terms, it barely
changes the security model if the download for new users includes a known
blockhash from several months back, instead of only the hash of block zero.

~~~
keymone
Barely but importantly. With bitcoin for every user it is still feasible even
on raspberry pi to download and verify the whole chain for themselves. Not so
for ethereum even with high end computers. I guess that is their way to phase
in PoS scam, but it has nothing to do with “preserving the security model”.

Utxo commitment is definitely a shortcut that bitcoin will eventually
implement, but it can only work reliably for long timeframes especially when
you have “disturbances in the force” like what happened with BCH last year.

“Known” blockhash from several months back is something that can easily be
faked unless you actually fetch all the history and verify.

------
teslaberry
the 'post 2017' bubble truth of the answer is this:

any successful network running proof of work will become a massive
supercomputing cloud where only commercially centralized entities , including
mining farms, and successful mining POOLS , are able to participate in a vast
network which becomes dominated by a cartel of players who can bring the COST
OF WORK DOWN AT SCALE. this doesn't necessarily mean the network dynamic leads
to LESS decentralizatin over time, but it sort of means it does at the 'non-
commercial' level of doing work. this is WORK WORK at the industrial scale.

proof of stake is everything else, where network participation doesn't require
WORK as the core of ensuring a cryptophraphic signing system for a bunch of
data.

in the modern sense, work is electricity or some proxy for electricity ( proof
of compute cycles in the case of 'compute' coins like golem )

------
verdverm
Does proof of authority have the most alignment with the legal infrastructure
and existing wealth?

~~~
gitgud
Proof of Authority would be regular _fiat_ or centralised currency right?

For example; Visa is the authoritative source of all _Visa_ transactions...

------
dr_teh
Can't believe after all this time, this is still up for debate... Proof-of-
work is the only 'solution'. Proof-of-stake is a pipedream. You can't secure a
system using itself, just ask Gödel.

------
cipherpro
Proof of stake is a solution to both the mining problem and scalability. Proof
of stake, from a hardware perspective means professional machines being wholly
dedicated to block production. This filters out smaller market participants
who host nodes. This centralizes the network a bit, but not enough to make it
not state power resistant. The trade off is enough scalability to fit current
demand, and better and more efficient service as a global open computer. The
bet of proof of stake vs work is really how much do we think states can
influence the meme of blockchain’s uncheatable ledger, and if increases in
performance is worth the risk. Either, due to the open properties of
blockchain, we’ll likely see both situation play out in the open market.

------
mirekrusin
So what amount is going to be roughly at stake for a single block? A lot? How
much in %age if ether is going to be at stake? After X years, assuming better
performance that is claimed by PoS?

~~~
wmf
Given that so many people are using cryptocurrency as a store of value we
should expect a large fraction to be staked.

------
buckie
The problem with Proof of Work is that it is too inefficient and _not_ that it
consumes too much energy. If bitcoin could do 100k transactions per second
globally, no one would be talking about Proof of Stake. We'd be talking about:
_how do we make mining green?_

~~~
Theodores
We don't. It will be bypassed.

Remember those happy times when you could mine crypto at home? We know how
that story unfolded and ended.

Remember those happy times of a year ago when the greater fool game was being
played out? We know how that story unfolded and ended.

The shape-shifting blockchain moved on.

There will be plenty of people that pursue their blockchain ideas with
promises of revolution with people able to get kidney transplants extra
betterly due to blockchain, promises of freeing people from the slavery of the
'fiat' printed money, promises of helping remote farmers in Africa have title
to their land, promises of vegans able to buy their avocados with added
blockchain goodness and so forth. There will be a lot of big words tantamount
to pseudo science uttered complete with 'playground voices' (shouting louder
if questioned) so these people will be able to get on with their save-the-
world by blockchain things, in good faith, no arguments needed, picking up
investors as needed. People like myself that ask the questions out of concern
that folks involved don't get burned will learn to shut up.

This group of people that are ideologically invested in blockchain will be
making promises for solving the problems of 'making it green', leave them to
it and watch how the market for crypto investments shakes out. I think that
the problem will get bypassed.

Bitcoin futures did not take off, really this was a failure of marketing
rather than a fundamental problem. Next time round you will be able to invest
in a fund with your 'fiat' currency (or real money if you want to see it that
way). The bank will invest your money in Bitcoin but they won't be trading in
it or using it as a means of exchange. Other crypto-currencies including
Ethereum will go by the wayside and the Bitcoin maximalists will kind of win.

In time this Bitcoin will be as originally promised - as good as gold. It will
sit there in a bank and not in your wallet. It won't be vulnerable like a
normal stock (even Apple isn't totally golden) or even property come the big
crash. I am not saying that there will be a big crash in late stage, post 2008
capitalism, but what goes up must come down. Many perceived disadvantages of
Bitcoin will become advantages. Not being able to do transactions quickly will
become an advantage, it being too complicated for your grandma will become an
advantage.

When the world was on the Gold Standard the gold just sat there in Fort Knox,
none of it being transacted. Bitcoin will be just the same, it will just sit
there, not having to have blockchain things actually happen to it. It is in
this way that the PoW problem, the slow speed problem as well as the mining-
green problem gets solved.

Already there are moves afoot for this new model of acceptance of how Bitcoin
is going to be. Once Bitcoin is in the digital vaults of the financial
institutions it will have a different store-of-value to today, people will be
happy to invest in these products. It will work out fine and the people who
are a tad zealous about saving-the-world-with-really-complicated-blockchain-
ideas-and-no-domain-knowledge will just be heard from less and less.

I am not trying to be nasty or dismissive of blockchain out of any bitterness,
this is just my assessment of how things actually are panning out.

~~~
mythrwy
Why is this comment downvoted? It's a well reasoned opinion and guy has balls
to make a solid prediction. You may not agree, ok fine. But he put it out
there, it's not a stupid comment, not a "metoo" comment, it's a considered
viewpoint and that's worth more than casual cheap dismissal. Slap it if you
want to but this reactionary downvoting makes the site worth less.

~~~
Theodores
Human psychology is far more interesting than Bitcoin. Time for an analogy.

In theory I could be getting a nice sweet pay-cheque for keeping a server room
running like clockwork. This server room could be for a new startup paid for
by the Danish Bacon Marketing Board and the product could be 'mySpace for
pigs'. I could have my reservations about whether the target demographic
('pigs') might really be tech-savvy enough to post their squeals and grunts
online.

Despite the reservations the pay-cheque might be very handy and I might also
get to learn lots about 'sys-ops' along the way. For me the compromise might
be worth it.

If a vegan Muslim friend disliked what I was working on, claiming that I was
part of some evil plan to further enslave our animal friends, how would I
respond? I could go ad-hominem on them, calling them a hypocrite for wearing
blue suede shoes and skipping their prayers.

If a normal friend pointed out the doubts I already had then I could deny my
reservations and quote some statistics about engagement claiming that it will
only be a matter of time before the pigs will get with the programme. I could
keep digging and cite how genetic modification will handle the lack of
opposable thumbs. Or I could claim that the problems will be solved with new
A.I. algorithms that will convert those squeaks into beautiful Unicode.

Alternatively I could explain the scam and why it works for me, i.e. that nice
fat pay-cheque, my realistic chances of getting 'a proper job' and how that
the client is absolutely loaded, that they need this project to work to show
the government that they are doing their best for pig welfare and that they
know that they know full to well that the project is bogus.

If I went with the latter option - being honest about my motives and the
compromises I have made to pay the mortgage then I wouldn't need to put crazy
arguments out there to defend myself. We could move on.

This analogy is not far off some of the projects I have worked on over the
years, sometimes you take the money and experience gained knowing full too
well that the business has a dubious future.

With Bitcoin and the wider cryptocurrency gig there are very few people who
are able to express what they are doing with full appreciation for the
contradictions given.

I have one friend who is honest about it and the irony is that his coins
really are the proceeds of crime. He is up-front about playing the greater
fool game and massaging income from the black economy into legitimate assets.
He does not care about feeding the starving of Africa by Bitcoin and does not
pretend to have any noble ambitions for making the world a better blockchain.

Meanwhile I find others who have no history of actual crime are less than
willing to admit that they might have ulterior motives for doing what they
doing with cryptocurrency. I get the 'this problem will be solved' nonsense.
They will get louder and louder in this not-so-constructive one-way discussion
which is a waste of time. There is no need for them to go off into the post-
truth world this way. It just makes me wonder if they have been drinking too
much of the Koolaid and might be delusional.

I would prefer to move on to the more interesting discussion to be had on the
real long term future of the blockchain and where real money can be made. And,
as I understand it, the problems really can be solved by selling financial
products that are backed by bitcoin and not any of the other cryptocurrencies.
Bitcoin is a commodity, not centralised at all. The other coins have someone
with a name and an address who might talk the decentralised talk but financial
authorities aren't going to necessarily see it that way forever - someone
controls the code or the website effectively meaning there is a central point
of control. Bitcoin is the unicorn, with all of its flaws, the work around for
financial products is as per my earlier post and there is evidence that is
happening.

------
sandGorgon
I went through a nice twitter exchange with Craig Wright of BCH about the math
of Pow . It was an awesome learning experience . Craig explained Pow as a
multi-leader-follower Stackelberg game. While POS degrades to an oligopoly

[https://twitter.com/ProfFaustus/status/954320533654507520?s=...](https://twitter.com/ProfFaustus/status/954320533654507520?s=19)

~~~
h1d
Craig is the guy who states himself as Satoshi, except he failed to provide
any proof.

~~~
drexlspivey
Even worse, he tried to fake a proof.

