Opinion on proof of stake in future

Summary:

The topic of the effectiveness of Proof-of-Burn (PoB) versus Proof-of-Stake (PoS) in cryptocurrency is a debated issue. While PoB has some advantages over PoS, such as sunk costs and "hashpower" being "offline," concerns about the lack of definition of the heaviest chain and difficulty adjustment, the nothing at burn problem, and a trivial attack against the scheme by a wealthy attacker have been raised. The debate continues, and some argue that PoS should be rejected until an actual way of solving its issues is invented and demonstrated.In an email conversation between Erik Aronesty and Lloyd Fournier, PoB is suggested as a more secure alternative to PoS. Fournier argues that PoS is not fit for purpose for a global settlement layer like Bitcoin since it requires coin holders to take on responsibilities they cannot handle. He also points out the disadvantages of on-chain delegation systems like Cardano's Proof of SquareSpace and Algorand's pure PoS approach. Fournier concludes that the market will decide what is real digital gold and whether technical trade-offs are worth being able to say it uses less electricity.The debate around the security and feasibility of PoS versus Proof-of-Work (PoW) continues. Proponents of PoS argue that it can be made more secure than PoW through a higher capital requirement for attacks and the potential for greater loss by attackers. However, PoS has been accused of being oligopolistic and requiring permission to gain tokens. Finally, there is a suggestion that a "burned coin + VDF system" may be more secure in the long run, and a hard-fork could be initiated if the entire space agreed that such an endeavor was worthwhile.The discussion in the email thread revolves around the use of Verifiable Delay Functions (VDFs) to enable more constant block times. ZmnSCPxj suggests a two-step Proof of Work mechanism where a VDF is used to resolve over 9 minutes, and then the current PoW mechanism with lower difficulty is used for finding a block that takes an average of 1 minute, subject to as-is difficulty adjustments. This would greatly reduce variation in block times. However, ZmnSCPxj also points out the weakness of VDFs, which are not inherently progress-free and could potentially lead to even worse competition and energy consumption if miners focus on improving the amount of energy they can pump into the VDF circuitry. Michael Dubrovsky, Founder of PoWx, also weighs in on the discussion.Overall, the debates surrounding PoB, PoS, PoW, and VDFs continue, with arguments for and against each consensus mechanism.

Updated on: 2023-06-14T21:29:38.496220+00:00