So with PoS, we recreate a system where a few rich pool have decision over the network. Can someone enlighten me on how this is different from the current fiat system?
This doesn't fix the problem but it does fix the environmental impact.
This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously).
Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.
Specifically you are punished for:
- Being offline (the penalty is small, and roughly equal to the rewards earned by being online
- Running the same validator twice (huge penalty, be careful!)
It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
Plus, due to slashing, you are uniquely responsible for mistakes your validator makes. So, staking comes with both responsibilities and consequences for breaching them, just like any legal contract.
The fact that you can rent a turnkey cloud solution to do all this work for you and split the profits isn't really relevant to the argument IMO (I consider staking with Coinbase "renting cloud computing" in a specialized way).
But as soon the switch happens, people will want to be staking their ETH in pools that will earn them money.
I don't have any problem with this in general, I don't think it is wrong to do business like that. But I personally prefer PoW because it looks like it naturally separates the mining work from exchanges, creating more decentralized economy.
How's that decentralized.
The times of home mining with CPU/GPUs are long gone
so do Ethereum users.
>In a PoS system there is an incentive for large stakeholders to increase block sizes.
this doesn't work because of Ethereum's social contract, just like it wouldn't work with Bitcoin.
Just because you stake a lot of ETH doesn't mean you suddenly have unilateral power to increase block sizes. There is a thing called consensus, and the entire community needs to achieve it to implement changes. Good luck trying to convince the community that bigger blocks that make it harder for small users to validate the chain is a good idea.
PoS also does not come with the property of innovation and disruption. In a PoW (especially ASIC-based) system you will find new ways to outperform your peers and disrupt old players.
PoW incentivices cheap energy in developing countries more than anything before. It is the fix for environmental problems.
That can only become true if and when governments decide to suddenly ban PoW, so that all that cheap energy services anything other than crypto. I don't think it works as an argument in favor of PoW, for the same reason "we're only spreading knowledge of chemistry and democratizing process engineering" doesn't work as an argument in favor of drug cartels.
Also, 'SR2Z is right - "cheap energy in developing countries" == coal.
IMO: it's much better than PoW as long as it doesn't end up too centralized. I'm not too sure how I feel about the minimum amount required to stake though, that seems a bit odd.
Mining has been concentrated in the hands of a few gigantic mining pools for a while, and PoS will actually make Ethereum more democratic. Again, this is based on documentation, there might be unforeseen consequences
Unforseen? This has been known before the miners eliminated the soft cap on EIP 669.
With endgame PoW only the rich can acquire mining ASICs and locate them in cheap/free (stolen) electricity zones. The vast majority of the world is entirely excluded from PoW mining BTC because the cost of electricity in their region makes mining unprofitable.
The main difference with the fiat world is that with Ethereum you have transparency, and there is no corruption. You can't just bribe a politician to enact a rule you want. Everything that happens in the network is recorded permanently, and rules are not a suggestion, but a practical reality that can't be circumvented.
Also the current fiat system is debt based, which means that the vast majority of money is printed by banks and the money printing power is at the highest ranking sales person, and hidden.
If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
Fiat works, and works well. You're advised to keep some cash on hand, but it works multiple orders of ↑↑↑ [1] better than bitcoin
This is the genesis of a new crypto universe. It's hugely hyped, and a lot of it is clearly BS. But underlying the hype and hysteria there's a kernel of a new paradigm emerging.
Crypto applications promise to provide disintermediation on a scale not seen before. Direct peer to peer transactions, conducted transparently, without a need to verify trust and happening simultaneously anywhere in the world.
Not only that but smart contracts bring with them the potential to do stuff that simply is not possible right now. For example, providing instant conditional transactions (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price) etc etc etc. We don't know what this means, but it could be a revolution. Or not. :)
Smart contracts, and all the other buzz words turn regular folk away. I'm hedging my bets on the coin with a dog on it for mass adoption. Even the word "Ethereum" (and "Eth") is less user-friendly to "Doge".
For me, all this ETH stuff is just hype (very few ETH owners actually care about the currency side of things and its already gone too far into pyramid scheme territory to ever recover imo). The dog coin works just great as it is right now for the amount of users it has. Any upgrades should be manageable before they are ever necessary.
They don't. All of "disentermidation" immediately turns around and restores all the institutions based on, you know, trust.
> Direct peer to peer transactions, conducted transparently, without a need to verify trust
Yup. Until you pay for something, and that something never arrives.
> (if my fave rental car is available book it, otherwise search for another solution, but only from these sources at this price)
Literally nothing prevents you from doing it right now, with existing technologies... Oh, wait. All rental car companies are closed to any integrations of any kind. Smart contracts will do literally nothing in this scenario.
Besides. If I go and rent a car from, say, Hertz, I get a contract written in plain language. It may be a little obtuse, but I can read and understand it. Smart contracts on the other hand are written in obscure esoteric programmming languages. Good luck telling people "don't worry, you won't be scammed out of your money because it has 'smart' and 'crypto' in it".
In practice it has never been more that a nuisance, as I've just gone to a different bank's ATM and it's been fine.
Count me among the people who have travelled and never encountered problems. I always bring two cards in case something weird happens, but I’ve never had to use the backup.
If established banking cards aren’t working in a country, it seems unlikely that relatively recent cryptocurrency would be working any better at their banking institutions. If their banks can’t take your bank card in exchange for cash, I doubt they’re going to be set up to take your Bitcoin.
Yes, this can be a real problem when traveling.
> Bitcoin always works …
This is obviously a completely bullshit statement. Bitcoin almost never works in places where credit cards or ‘fiat’ are accepted.
> If a person thinks that fiat payments work well, he hasn't really travelled yet to different cultures.
‘Fiat payments’ covers everything from the ATM network to cash to western union to Hawala. All aspects of fiat payments indeed have problems.
However the idea that today, Bitcoin solves these problems outside of a tiny fraction of contrived cases is a delusional fantasy.
Almost nobody in the world trades in Bitcoin. Almost everybody in the world trades in ‘fiat’.
However as a speculative instrument eth and Bitcoin are not my cup of tea.
How does that work? Is it a vanilla Eth transfer, or is a contract generated each time and you review the Solidity code before proceeding?
Similarly, you shouldn't necessarily trust a central bank when they want to print money. (I'm not inherently opposed to it and think the pros probably outweigh the cons for some situations and intents; just saying accountability in cases like these isn't as simple as "it's the people's will".)
Who has the highest amount of power in Bitcoin, and why haven't they done anything, for example increase the issuance?
How would that benefit them?
It's besides the point though, you can certainly benefit from holding power of the protocol but the reality is that there is very little of this dynamic.
Hence the impetus to try something different and more befitting the future of our species.
So, do you think that the dollar - and specifically the inflation schedule and distribution mechanisms of the dollar - can be reasonably said to be under democratic, rather than plutocratic, control?
But let's face it: most of the hype is in well-functioning democracies. Here, I cannot fathom why anyone would wanna replace fiat currencies with this crap.
In the "well functioning democracy" U.S. You have:
- Mistrust in institutions
- An insane asset inflation bubble fueled by the biggest fiat printing spree ever
Sure, the state hasn't failed. But are you really surprised people want to expose themselves to a new paradigm with different fundamentals for money and finance, this year?
Good luck paying for things with cryptocurrency-of-the-day without electricity. Or without authorities to call if your trading partner pulls a gun on you. But I'm sure the American solution is a diesel generator and an even bigger gun ;-)
Obviously he's biased in favor of PoS for various reasons, but I think it's a worthy read.
The delusion that crypto is or can be the best thing humanity has ever created has to come to an end.
Let crypto just be another moderately useful system in society and let the speculation game die out.
Unfortunately, our representatives don't really represent us, so we're much closer to oligarchy than democracy.
Also, a full democracy it terrible. It's basically the equivalent of facebook... having representatives who's full time job is to be knowledgable is much better than giving everyone an equal say on everything.
We could bring microtransactions to the web, and replace a lot of advertising, if transaction costs were zero.
This doesn't even begin to consider long term debt.