Author: Erik Aronesty 2021-06-24 21:50:51
Published on: 2021-06-24T21:50:51+00:00
Proof of Stake (PoS) is not suitable for use as a consensus system because it is constitutionally incapable of producing a consensus. The basic problem with PoS is that it's not actually a consensus system ("weak subjectivity"). To put it more plainly, for PoS to work, you need a consensus on which block was seen first. But if you had that, you could presumably apply that method to determine which *transaction* was seen first, in which case you could do away with the blockchain entirely. Real-world implementations of PoS, such that they are, do away with this requirement, scrapping the global consensus on ordering in favor of having each node decide for itself which block came first.The barrier to entry in PoW is the matter for hardware and energy, which is permissionless and exists all over the universe while the barrier to entry in PoS is being given permission by the previous owner of a token for you to have it via transfer or sale. Proof of stake is not in any possible way relevant to permissionless protocols and thus not possibly relevant to decentralized protocols where control must be distributed to independent (i.e., permissionless) parties. The idea that proof of stake is not permissionless is invalid. If there is a healthy exchange market for PoS Coin X with tens of thousands of participants bidding to buy and sell the coin for other currencies on the market, then there is no significant permission needed to enter the market for minting blocks for PoS Coin X. If the premise above is true, then participation in *any* decentralized system requires the permission of at least one user in that system.The PoS equivalent of buying mining hardware is setting up your own validator and not outsourcing that to anyone else. So both PoW and PoS have the professional/expert way of participating, and the fraud-prone, amateur way of participating. The only difference is, with PoS, the professional/expert way is accessible to anyone with a raspberry Pi and a web connection, which is a much lower barrier to entry than PoW. Bitcoin's existing consensus can be used to maintain that consensus using references to prior state once you have used PoW to bootstrap the system; you can "recycle" that work. However, it is important to limit reorgs to not go back before PoW was abandoned in favor of PoS/PoB (assuming all incentive problems are solved).In conclusion, Proof of Stake (PoS) is not suitable for use as a consensus system because it is constitutionally incapable of producing a consensus. The idea that proof of stake is not permissionless is invalid if there is a healthy exchange market for PoS Coin X with tens of thousands of participants bidding to buy and sell the coin for other currencies on the market. The PoS equivalent of buying mining hardware is setting up your own validator and not outsourcing that to anyone else. Bitcoin's existing consensus can be used to maintain that consensus using references to prior state once you have used PoW to bootstrap the system.
Updated on: 2023-06-14T20:44:36.947073+00:00