Opinion on proof of stake in future

Summary:

The email thread discusses various aspects of Proof of Work (PoW) and Proof of Stake (PoS). One person argues that requiring the "permission" of one of millions of people in the market cannot be reasonably considered a "permissioned currency". Another person points out that both PoW and PoS could mine/mint blocks twice as fast if everyone agreed to double their clock speeds. Both systems rely on an honest majority sticking to standard time. The discussion then moves towards specific suggestions for improving PoW and PoS protocols. One person suggests using VDFs solely as a means to make the time between blocks more constant. However, another person points out that VDFs are not inherently progress-free, which could potentially lead to even worse competition and more energy consumption. Another individual proposes a burned coin + VDF system as a potential alternative to PoW, which might be more secure in the long run. They suggest that if the entire space agreed that such an endeavor was worthwhile, a test net could be spun up, and a hard-fork could be initiated. However, they clarify that they would never suggest such a thing unless they believed it was possible that consensus was possible.Lloyd Fournier argues that Proof-of-Stake (PoS) is not suitable for a global settlement layer in a pure digital asset like Bitcoin. He believes that PoS gives responsibilities to the holders of coins that they do not want and cannot handle, unlike in Bitcoin where large unsophisticated coin holders can put their coins in cold storage without affecting the underlying consensus. Fournier states that PoS has severe disadvantages such as creating new social attack surfaces and the potential for oligopolistic control. Additionally, PoS requires other trade-offs that are incompatible with Bitcoin's objective of being a trustless digital cash, specifically the security vs. liveness guarantee. However, Billy Tetrud argues that there is a PoS consensus protocol that could have substantially higher security while costing far less resources without compromising any of the critical security properties that Bitcoin relies on. Proof-of-Burn (PoB) solves the "nothing at stake" problem in PoS since nothing is held online. In PoB, burn investment is always "at stake", and any redaction can result in a loss of burn. Therefore, miners no longer have an incentive to mine all chains, making PoB more secure than PoS and even more secure than Proof of Work. However, Fournier disagrees and believes that PoB cannot get around the conflicting requirement that the keys for large amounts of coins should be kept offline but those same coins need to be online to make the scheme secure.The discussion ends with one person emphasizing the importance of distinguishing between oPoW and other "alternatives" to Hashcash.

Updated on: 2023-06-14T21:08:13.288299+00:00