GoofAckYoorsElf t1_iz9uxsj wrote
Isn't proof of stake essentially the opposite of what crypto currency originally wanted to be, a democratic currency without central control? As far as I understand PoS, it means that the rich control the block chain, right? Those who own more currency have more control?
ItsAConspiracy t1_iz9y04c wrote
No more than with mining. Those giant datacenters aren't free.
Some of the older staking protocols are pretty centralized because they use a handful of full staking nodes, with everyone else delegating to those. Ethereum got lucky, there was a breakthrough in cryptography that allowed them to do things in a much more scalable way and support millions of full staking nodes. Currently there are over 400,000.
boife1 t1_izbj8k5 wrote
Bitcoin is limited supply if it goes POS then someone or a group can buy 51% and control every aspect of it. With pow anyone can setup miners so it cannot be monopolized the same way. BTC should never and will never go proof of stake.
KruppJ t1_iz9y4je wrote
No different from how in proof of work the people that own the most amount of mining power (aka the richest people that can buy the most mining rigs) control the chain the most.
GoofAckYoorsElf t1_izaadkz wrote
Touché. And without burning the planet. PoS wins.
printers_rock t1_izaatrc wrote
The current state of crypto in general is opposite of its goals. Because the natural tendency of any complex system is to centralize, and here we are. 4 Mining pools control ~70% of bitcoin hashrate. Proof of Stake just codifies this inevitability for Ethereum.
Meet the new boss, same as the old boss.
Crypto is fucking DUMB.
prodoosh t1_izd46v1 wrote
But why does that matter? People with stake/work don’t have any additional control of the network. It’s still just as decentralized.
99% could be in one pool and it would be no different in terms of centralization
phreakwhensees t1_izaohye wrote
Bitcoin mining pools are not as much of a centralization point as you think they are. First of all, if a pool publishes an invalid block, the non-mining nodes in the network reject the block and it does not get propagated to the rest of the network and the pool never gets the block or the payouts. At most, a nefarious pool could censor transactions or publish empty blocks since those are technically valid blocks. At this point, it is obvious they are acting nefariously and miners can easily switch to another pool or solo mine in a matter of minutes.
Lastly, upgrades to the mining protocols such as Stratum v2 make it so that pools don’t even have the ability to do transaction selection. The only ability they have is to take a proposed block from a miner, publish it, and distribute the rewards.
grinr t1_iz9xokk wrote
Proof-of-stake changes the way blocks are verified using the machines of coin owners, so there doesn't need to be as much computational work done. The owners offer their coins as collateral—staking—for the chance to validate blocks and then become validators.
Validators are selected randomly to confirm transactions and validate block information. This system randomizes who gets to collect fees rather than using a competitive rewards-based mechanism like proof-of-work.
imafraidofmuricans t1_iza3rtt wrote
You've misunderstood the purpose of crypto.
The purpose of crypto is to make more money.
Kinexity t1_izaaclc wrote
*to squeez money out of suckers. Crypto itself isn't and never will be money because of unavoidable built-in flaws and the fact that everyone uses it like a casino.
sagenumen t1_izazofd wrote
I've purchased actual, tangible items with crypto from registered businesses. Your premise is false.
JWarder t1_izb12me wrote
I can trade Pokemon cards for actual, tangible items. Do you count those as money too?
sagenumen t1_izbd9nz wrote
What do you think gives any currency any actual value? You think $100 note is $100 worth of paper and ink?
JWarder t1_izbhley wrote
The fact that I might be able to wheel and deal my way into an exchange of trash or treasure doesn't automatically make any the goods being exchanged "money". If you think "value" is an alias for "money" then that's a you problem.
sagenumen t1_izbnj57 wrote
You avoided the question. And you chose Pokémon cards, not I.
But let’s consider some remote part of the world without access to the means to easily counterfeit these cards. They decide to exchange the various goods and services within their local economy for Pokémon cards. What are the cards, if not “money?”
JWarder t1_izbu8mi wrote
Ha! You avoided the question.
You don't need to imagine remote areas of the world. Back in reality, we do have exchanges where cards are traded. Among collectors they will even directly trade cards for other non-pokemon goods. Some form of value clearly exists, and assessments of that value are (mostly) shared between participants. However, outside of that niche, pokemon cards have no value as "money".
We don't even have to use silly examples like collectable cards, you can also look to stocks and bonds. Stock exchanges are a large participant in modern financial systems. Enormous amounts of exchanges happen in routine and standardized ways with little friction. And yet, despite all the utility have have in the finance system, stocks, bonds, etc have limited utility as a form of "money".
Kinexity t1_izb5qv2 wrote
This doesn't prove that it's money - only that someone agreed to exchange something else. Real money has economy in which it circulates as a means of exchanging work (putting aside things like speculation for the sake of simplicity). You only made the exchange you made because the other party had a way to sell crypto you gave them.
sagenumen t1_izbcb5w wrote
I exchanged it for goods with a party that could then exchange it further for other goods. How, exactly, does that not fit your description?
Kinexity t1_izbfzvm wrote
You did something more of a barter trade. This crypto isn't going to be spent by the next party but sold on the exchange. No circulation in the economy.
sagenumen t1_izbmxai wrote
There’s already an economy around crypto. You may not be a part of it, but it’s there.
Further, exchanging one currency for another is still circulation.
Kinexity t1_izbp8v9 wrote
Do you get paid in crypto? Do you buy food in crypto? Could you live for the rest of your life without touching money because you can buy every product in crypto? If an answer to any of those questions is yes - are you actually using crypto or is there an intermediary which actually converts it and gives you a false sense of existence of crypto economy?
It is circulation but it's not currency circulation in the economy when most of it is buying and selling the damn thing because of speculation.
sagenumen t1_izbqg6j wrote
Don’t hurt yourself running those goalposts all over the place.
OP said it’s not money. That’s false. People use it every day to pay for things. You might not be a part of that economy, but it exists. I can’t live my life with the stack of Colombian Pesos on my desk, either. It’s still money.
Anposter t1_izbt23e wrote
That is not definition of money and you are trying to argue about semantics. It could fall under fiat money definition but it's not issued by government so it doesn't. It is not representative money which you think when you think about pesos, because it has no intrinsic value. You can consider it as a salt back in the day which was used as means of trading, which is not money by any modern definition.
[deleted] t1_iza9e1m wrote
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Wikilicious t1_iza38qs wrote
POW has economics of scale… the bigger you are the more discounts you get. In PoS you don’t get discounts.
GoofAckYoorsElf t1_iza9pp3 wrote
True. PoS does not need this additional step. Your power in the block chain is directly connected to your size, not just indirectly through discounts.
IsThereAnythingLeft- t1_izawqdu wrote
Not it doesn’t vacate as it scales the price would go up so would the mining reward and hence the energy wasted
prodoosh t1_izd4lly wrote
Not really? In POW it’s: whoever has more computational power gets to collect fees. In POS it’s whoever has a larger stake gets to collect fees.
POS works just how interest works. It’s basically replacing pointless computation (work) for a system of collateralized debt.
You stake your crypto to validate transactions. You get paid to validate transactions. If you’re found falsifying transactions (essentially impossible to hide) your crypto is gone and you lose your entire investment.
GoofAckYoorsElf t1_izdawef wrote
What is a larger stake? More invested money. So it's the same old the few rich rule the system and get richer. That's not particularly democratic, is it?
prodoosh t1_izeut06 wrote
No it’s pretty much how the current system works. It’s the time value of money. Nothing we can change about that. It’s just more efficient to be decentralized an digital than a huge legacy financial system.
You can’t argue that interest; the single biggest invention of financial history, is a bad thing.
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