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Comment by dragontamer | Hacker News Reader

I dunno. Proof of Stake is simply codifying an old rule of economics: The rich get richer. You prove your stake and get more Ether out of the deal. A "Dividend" if you will.

I don't think its very good for the cryptocoin community, but hey, I'm up to see the grand experiment unfold.

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I feel like proof of work reduces to proof of stake because the rich get richer, there's just an intermediate step of buying miners with your dividend.

PoW is generally even less balanced than PoS, because poor people can't afford to take advantage of economies of scale with ultra-efficient mining farms. Meanwhile everyone will get the same % return in PoS.

Both are "rich get richer" schemes in the grand scheme of things, except that Bitcoin PoW started out as a completely open network which anyone could start mining from, so technically it's our own fault that we didn't realize the potential of Bitcoin in the early days and jumped onto Bitcoin. Otherwise we would be all billionaires. So I don't think it's the same. Just because you can label two things "Rich get Richer", doesn't mean they have precisely the same quality of "rich get richer scheme". Bitcoin PoW is completely capitalistic where people who mined to get their bitcoins deserve their wealth--they "worked" for their coins. So in Bitcoin it is true that "the rich get richer", but also "poor can get richer" too, as long as they started out mining early. This is not the case for PoS systems where bootstrapping PoS requires external capital, so this one is truly "Rich get Richer" in a sense that ONLY the rich can get richer.

That said, talking about this "fairness" is totally missing the point. As I mentioned, in the grand scheme of things it's all "rich get richer" and that's how capitalism works. The truly important question is how immutable an stable the ledger is, because that's what makes these blockchain projects meaningful.

If you ask anyone who has a thorough understanding of these technologies they would say PoW is superior to PoS in this sense. And Yes, this includes even the guys who are working on PoS blockchains. The only reason people bother with PoS is because PoW is having a hard time scaling and many people think maybe there may not even be an ultimate solution just with PoW.

... there's the other small detail of the appalling electricity consumption of PoW. Blockchains with PoS are more appealing to people who care about the rest of the world.

Congrats you've just repeated myself. Look for the part where I said PoW doesn't scale.

You probably didn't even read my comment. Because it wasn't about whether PoW or PoS is more efficient.

That’s a rude way to say “thanks for clarifying, I agree with you.”

“doesn’t scale” usually refers to technical difficulty with throughput. If you meant that Bitcoin et al cause massive environmental damage, you sure didn’t say it clearly.

I suggest that you would get a lot of mileage out of improving your writing skills first before trying to flame people. As it is, you’re just playing yourself.

PoW is theoretically better in this regard.

I mean, in theory the market should push the profit down to a minimum, forcing the miners to spend their revenues in order to keep mining.

It is however extremely more inclusive. Everyone in the world right now has very good chance to join. Unlike traditional capitalism where it can do lots of things to keep others from joining, keep many dependent on their salaries just to survive.

It won't be perfect. But it is definitely tons better than the current capitalism.

Another very important feature here is the ability to easily fork. So if we need to fix something, it can easily be done (no need to wait for an organized citizen revolution)(although this is probably better attributed to the idea of Free Software).

No better than the stock market in this regards. Except the stock market explicitly hands out profits from the biggest and riches companies, and our tax system is designed to give more of those profits to poor people.

A low-income person getting into Ethereum today has no hope to ever get as much ethereum as anyone else in the early adopters.

Hell, a low-income person was too busy trying to buy food today and/or pay off credit card debt to even think about investing into Ethereum, the Stock Market, Bonds, or other securities.

Pretty sure getting into Ethereum is easier and fairer than getting into Stock Market.

If you wanted to be an early investor of facebook and you are a pleb, then you're out of luck. And you should have a big capital to join.

If you wanted to be an early adopter of Ethereum, then you only need an internet connection and a computer. You invest put practically any amount, so any pleb can join.

There's also a law that requires you to be big capitalist before you can do early big investments right?

Pretty sure this is better than stock market.

> Pretty sure getting into Ethereum is easier and fairer than getting into Stock Market.

Robinhood offers free trades on anything in the Stock Market. Literally free, you can't beat that.

> There's also a law that requires you to be big capitalist before you can do early big investments right?

That's not the stock market. That's venture capitalism. The stock market is literally open to everybody with an internet connection from a variety of well trusted sources (RobinHood, E-trade, TD Ameritrade, Vanguard, etc. etc.) and a variety of pricing schemes. ($0 for Robinhood, although it seems like their execution is not as good. You get what you pay for afterall)

Furthermore: the stock market is regulated. The National Best Bid and Offer (NBBO) system in the USA ensures that everyone in the USA pays relatively consistent prices, or at least more-consistent than BTC / ETH. Unlike ETH or BTC, no one is going to steal your money Mt. Gox style as the SEC is a strict watchdog.

You get no assurances with Eth or BTC. Coinbase has different prices than Bitfinex. And some of these exchanges look like they're running scams (ie: Bitfinex's support of Tethercoin).

I think more "plebs" have been burned by Mt. Gox and other such failures in the cryptocoin marketplace. Its a hugely unregulated, and highly risky market. Cryptocoins are just not mature enough for mainstream speculation yet.

Ok, I stand corrected. It was Venture capitalism I had in mind.

I wanna note though, regarding crypto exchanges. One does not need to use them to invest. Use your own wallet. Use decentralized exchange if you don't wanna risk using centralized exchange.

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