Paul Sztorc

I used to think Vitalik was earnest as well. I was an ETH believer up until a few years ago. My distrust in him was the crack that in the end spread and became a distrust in ETH. I'll just provide 2 sources for this, fossuser, and then you can judge for yourself. Cause I just feel bad if someone else trusts someone I know to be intellectually dishonest at times. [0] https://www.truthcoin.info/blog/pos-still-pointless/ (Vitalik being intellectually dishonest in his responses, which is proven by Paul in his follow-up article) [1] https://twitter.com/adam3us/status/1273353652447608834

Proof of Stake is a mechanism by which people who own a lot of ethereum (notably the foundation and insiders) can get the mining rewards instead of the miners. It also means locking up the supply of ethereum draining liquidity and thus pumping the price. Technologically it is not good for security: http://www.truthcoin.info/blog/pow-cheapest/ But as a pump and dump, it's an excellent thing to do.

This blog post does a great job explaining some of the economics behind mining and why it is not wasteful, in the context of showing proof-of-stake is nonsensical: "Long Live Proof-of-Work, Long Live Mining" http://www.truthcoin.info/blog/pow-and-mining/ And the follow-up post: "Nothing is Cheaper than Proof of Work" http://www.truthcoin.info/blog/pow-cheapest/ Both are highly recommended read, but a quick TL;DR: if you're going to incentivize the security to of your network with $X of rewards, then up to (and probably very near to) $X would be necessarily "wasted" to obtain that reward. And these incentives and security model are not "waste" in any way - they're the entire premise behind blockchain systems! edit: removed quotes from truthcoin.info, added tl;dr

The people who would very likely sway a decision on the block size are currently opposed to increasing the block size because (1) there is no immediate need to do so and (2) there is risk that there can be unintended consequences (one of which is making the network more centralized). Some people, including Hearn (who is more vitriolic than the average) believe that #1 is false and #2 is a necessary risk. If you are coming at this from reading Hearn's words, you are coming at this from an extreme perspective that would be balanced by reading Gregory Maxwell's words. I recommend http://www.truthcoin.info/blog/blocksize-conversation/ for a critical, outside and rational perspective.

A couple of decentralized prediction markets[1][2] powered by blockchain technology are trying to move regulatory compliance from centralized betting exchanges to the users themselves, which could be construed as an attempt to minimize regulatory liability, similar to DMCA Safe Harbor provisions. [1] http://www.truthcoin.info/ [2] http://www.augur.net/

for better or for worse, the establishment of decentralized prediction markets will essentially make insider trading laws moot. Who cares if you can't bet on the original market when you have another unregulated market where you can bet on the veracity of the first? http://www.augur.net/#what-we-do http://www.truthcoin.info/

>https://www.truthcoin.info/blog/pow-cheapest/ By the logic of that article asymmetric cryptography doesn't, because the value equal to what's protected by the key is magically wasted somewhere. Of course, that isn't true, because it's not possible to break asymmetric cryptography by brute force with expenditure equal to whatever is protected. Same applies to PoS. It's maliciously created nonsense, which is most visible when he slyly equates locked tokens to wasted glucose. Wasted glucose is _real_ energy, while locked tokens are inherently worthless patterns of bits. Locking them is just a _trick_ to convince people to cooperate with each other - a game theory setting where everyone finds it most beneficial to cooperate. The whole point of the economy is to manipulate real resources - various forms of matter and energy [1] and locking tokens is just a different way of social organization. "Liquidity" (of digital tokens) isn't a real resource. "Money" isn't a real resource. If there's less _real_ energy wasted, the new social organization system is more efficient. That's the objective metric underneath it all, and clearly PoS is a more efficient way of organizing massive human cooperation than PoW. [1] theoretically matter is a different form of energy, but at the current technological level they are separate inputs to the human economy, except for nuclear power

For an alternative point of view, I highly recommend that people read 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).

"Nothing is Cheaper than proof of work"[1]. The best that can be said about Proof of Stake is that you get marginally better security while sacrificing liveliness / allowing the consensus layer to be captured by regulators [2]. PoW forces the machine to advance, if you refuse (or are forced to ignore) a block, the business dies but the network moves forward. If PoS was new and research was underfunded, you might have a plausible claim that it might turn into a workable solution. The fact of the matter is, it's been 6 years since PoS' proposal and millions of dollars in R&D funds have been pumped into trying to unsuccessfully obviate PoW. [1] http://www.truthcoin.info/blog/pow-cheapest/ [2] https://twitter.com/NickSzabo4/status/956461360161935361 "Conjectured governance under proof-of-stake seems to involve programmers & other amateurs making legal & accounting decisions. Bitcoin governance does not. Even when lawyers & accountants properly take over PoS governance, PoW governance will likely be far more socially scalable."

There’s also the overall economic argument that Proof of Work is actually just the least obscure version of anything else: https://www.truthcoin.info/blog/pow-cheapest/ Overall I’d just argue that because PoS doesn’t involve external resources to create blocks, the cost of producing a block won’t be well understood and thus there will be opportunities for rent extraction - which we’re already seeing with Lido staking.

The Bitcoin network is a global energy buyer with properties unlike any other. It will continue to bid for stranded and excess energy that cannot be used for other applications. With last year's Chinese mining ban the network has become more distributed than ever and is likely to be very resilient to US domestic energy-price swings. PoW is the solution to an important set of interconnected problems, and as long as the network has value, PoW will keep bidding for energy to secure that network. It's been said, correctly IMHO, there is only Proof-of-Work and obfuscated Proof-of-Work. Rephrased, nothing is cheaper than Proof-of-Work: https://www.truthcoin.info/blog/pow-cheapest/

Here something to read for those really interested in knowing both sides of the argument (PoW side in this case, as the potential benefits of PoS are clear to everyone): https://medium.com/coinmonks/blockchain-myth-5-proof-of-work-wastes-en… https://www.truthcoin.info/blog/pow-cheapest/ https://medium.com/coinmonks/proof-of-work-vs-proof-of-stake-for-real-… That's a bit to read, but not a topic that one should just think he knows about (and these articles have quite a lot of overlap)

PoS will not solve anything. PoS is just obfuscated proof of work. The same amount of "resources" will be wasted in a PoS system, its just going to be a different type of resource. Required reading http://www.truthcoin.info/blog/pow-cheapest/ HN Discussion https://news.ycombinator.com/item?id=16451187 Also newer article http://www.truthcoin.info/blog/pos-still-pointless/

The $/W/Block profile is where the security comes from. Insofar as a miner can spend dollars to increase their chance of getting the block, they will, until MR=MC. See this article which explains it very well, though it is talking about PoS: http://www.truthcoin.info/blog/pow-cheapest/

I don't care much if the waste is in energy or hardware or in any other resource. And the level of waste depends only on the block reward and the price of ETH, not the algorithm used, because as long as it is profitable people will burn resources to get the rewards. In free competition people will do that until it gets unprofitable and it gets unprofitable when they burn as much value as they get from the reward. This is MC=MR argument - first presented in: http://www.truthcoin.info/blog/pow-cheapest/ . I believe it is possible that PoS is still more efficient than PoW - by being more secure with the same block reward: https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-proof-of-wo… , but still the main point holds: the waste depends on the reward not the algo.

> read http://www.truthcoin.info/blog/pow-cheapest/. Modern PoS protocols prevent stake grinding with per-verifier VRFs and multi-round verification procedures.

Any system that generates value will create an incentive to waste an equal amount to get it. In proof of work all of that wasted energy is on chain, since that's the most efficient way to get the benefit. Every other protocol provides the same incentive to waste work. Just look at how much work financial institutions spend to chase the money released by the US government in the form of debt. http://www.truthcoin.info/blog/pow-cheapest/

Not sure if I totally buy it, but the economic argument here [1] is interesting. Essentially the claim is that proof of stake actually takes just as much resources as proof of work (marginal cost = marginal revenue), as no participant in the market is able to extract a rent. 1 - http://www.truthcoin.info/blog/pow-cheapest/

Elsewhere in this thread I posted this: http://www.truthcoin.info/blog/pow-cheapest/ If this is correct then if we had a cryptographic lottery players would devote the same amount of "work" to attempting to game the lottery that they presently burn by pumping electricity into mining ASICs.

Nothing is Cheaper than Proof of Work (2015) http://www.truthcoin.info/blog/pow-cheapest/

Some good thinking about forks and upgrades: http://www.truthcoin.info/blog/forks-and-splits/

It might be possible if the work was provably altruistic. Otherwise, any value the miner gains will be factored into the cost of mining. http://www.truthcoin.info/blog/pow-cheapest/

Proof of stake doesn't work in practice unless we can find a source of randomness that is globally available, non-influencable and everyone can agree on [1]. At the moment, that source of randomness is completely elusive. It might be possible to create a random source from some form of binary astronomical event which can be widely verified but it would have an incredibly low bit rate of new randomness. One possible candidate is randomly nulling pulsars [2]. Unfortunately, the equipment required to observe this phenomenon is probably not widely available outside of large observatories. Having said that the costs would still be lower than the energy costs of the Bitcoin network. [1] http://www.truthcoin.info/blog/pos-still-pointless/ [2] https://arxiv.org/abs/1706.05407

In defense of PoW: http://truthcoin.info/blog/pow-and-mining/ http://truthcoin.info/blog/pow-cheapest/

> pointless busywork just to secure the blockchain Well if it's securing the blockchain it can't be that pointless. Some good arguments here for why "useless" proof-of-work is actually quite useful: http://www.truthcoin.info/blog/pow-cheapest/

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin white paper describes, but could be mistaken.

Understanding Bitcoin is hard. Here is a response to some of the criticism: > Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ > The system already features a rather steep cost per transaction, and hardly any of those transactions are for the purchase of goods and services Second-layer scaling allows an arbitrary number of off-chain transactions based for a single on-chain transaction. See https://lightning.network

PoW is the cheapest way to have secure transactions compared to alternatives. It's not energy wasted - this energy ensures the safety of the global financial system, which is a net positive. http://www.truthcoin.info/blog/pow-cheapest

Try this article from Paul Sztorc: http://www.truthcoin.info/blog/pow-cheapest/ Definitely not ELI5 material though.

Not an expert, but it seems that proof of stake is just obscured proof of work. http://www.truthcoin.info/blog/pow-cheapest/