> Proof of stake is a scam. When I say that, I mean that proof of stake is (1) claimed to be a consensus system, and (2) constitutionally incapable of actually producing a consensus.
Ok. Go break one of the many existing systems that operates using proof of stake then. If you've done this, you should be leading your article with it. If you haven't, you shouldn't be speaking.
Proof of stake is not some theoretical thing being proposed in the abstract. Many systems operate on it as we speak.
"Because of all the arguments above, we can safely conclude that this threat of an attacker building up a fork from arbitrarily long range is unfortunately fundamental, and in all non-degenerate implementations the issue is fatal to a proof of stake algorithm’s success in the proof of work security model. However, we can get around this fundamental barrier with a slight, but nevertheless fundamental, change in the security model." —Vitalik Buterin, saying the quiet part out loud
Security model in PoS = trust the rich. Some like having masters, whatever floats your boat.
Miners do not set the rules, they are merely a service that provides immutability to a ledger, with a nuclear option that will bankrupt all the billions they have invested, should they misbehave.
Large stakers can rent-seek and extract your wealth, PoS is the same system we have now, plus some code.
You are quite literally being exploited right this minute, by the same methods outlined in the article.
> Miners do not set the rules, they are merely a service that provides immutability to a ledger, with a nuclear option that will bankrupt all the billions they have invested, should they misbehave.
Stakers do not set the rules any more than do large mining pools.
> Large stakers can rent-seek and extract your wealth, PoS is the same system we have now, plus some code.
I'm not really knowledgeable about all this, but mining of PoW currencies right now seems to rely a lot on mining pools. Isn't there a risk that they are "the rich" and people trust them? What's the difference with PoS there?
Crypto currency weather PoW or PoS boils down to "give the few rich all the power while giving the many less rich a illusion of security".
In PoW it just slightly tweaks "richness of money" into "richness of computation resources (which you get through money)".
This difference has complicated effects like:
- benefits anyone with cheap electricity (i.e. either places with no environmental protection, government support in some way, or the few places with cheap clean power)
- benefits anyone with good connections to chip factories
- the investment needed for gaining power being less bound to the currency itself but computation power instead
If you'd read the article till the end, perhaps you'd understand where the author is coming from: PoS systems aren't getting hacked today because they aren't truly decentralised. You can't have decentralisation and security with POS, you have to choose one of these. All the projects currently active have chosen security for obvious reasons - they control the majority of validators to make sure nobody steals, and are just fancy centralised mints.
Sure, but if the majority of validators are actually run by the project owners it's effectively centralised. And it's easy to maintain this control if you have the majority of coins to stake. It's not Sybil resistant for this reason - all validators could be owned by one person and you would have no way of knowing.
> all bitcoin miners could be owned by one person and you would have no way of knowing....
Sure, it's entirely possible that BTC is also centralised and controlled by wales. I was merely suggesting that the reason PoS systems haven't been hacked (much) yet is because the validators are controlled by project owners, so they are really centralised payment systems in disguise.
There's a difference though: buying initial stake in PoS may be similar to buying an ASIC in PoW, but mining a chain has a real cost (electricity) in PoW. In PoS there's no cost to mining, so validators have an incentive to stake all possible forks. There's no way to have consensus on the correct chain, because real resources haven't gone into building one up.
It's incredible how people who read a few articles think they have found the smoking gun, against a technology on which a lot of crypto researchers devote years of their time to make and analyze. They must think themselves are geniuses, and researchers are fools. Oh well, nothing new under the sun.
Ok. Go break one of the many existing systems that operates using proof of stake then. If you've done this, you should be leading your article with it. If you haven't, you shouldn't be speaking.
Proof of stake is not some theoretical thing being proposed in the abstract. Many systems operate on it as we speak.