In other consensus systems like PoS, whoever has the most capital controls pretty much everything and has 0 incentive to sell what they get since they aren't really spending any energy for their cryptographic signature.
It literally says "rich gets richer" in the protocol which is fundamentally broken in my humble opinion.
And my reward is linear with how much I stake or put down, whereas with economies of scale in mining the reward is more like quadratic. Seems to me that with PoS the rich get richer linearly, with PoW the rich get richer ~quadratically.
If I spend 0.01% of what the Chinese miners spend on my mining setup, I’m not getting 0.01% of the rewards.
So whatever Bitcoin reward you get barely covers your running cost + small profit margin. Imagine like you're running from a monster, you can't stop or you'll become irrelevant.
Whereas with ETH, I can buy 100M$ worth of it, I'll get say 5% back which means I'm making 5M$ every year, thing is I don't have any pressure to sell it whereas the poorer stakers will have to sell to cover their cost of living or other reasons, so over time the % of my stake in eth grows. Things get even worse when you include custodians into the mix, exchanges will have much larger wallets and get much larger rewards which they may not share with the actual holders or keep a small % for themselves.
PoW on the other hand will lead to consolidation around inexpensive energy: volcanoes in El Salvador, hydro in some northern countries, solar somewhere else, etc. However, those places will have some abstract voting power in the Bitcoin world, but exchanges, people, node operators, and businesses also have abstract voting power to balance against the cheap energy locations.
I should mention that the upside of all of this is that we can now choose the option to have accessible digital banking around the world, and people who print money will have less of an impact on world affairs.
However, PoS has an important role as the layer for specific applications and markets, since it acts more like central banking with the tradeoffs of such.
B) ensuring that third parties like banks are unable to steal my funds. Through fees, charges, unauthorized transfers or just plain theft…
C) portability of funds around the globe, independent of foreign or domestic currency. Ever tried to wire funds globally on a weekend? Trade?
You are still looking at bitcoin like it’s a dollar bill. It’s not — it’s digital gold with more computational security than any system ever built by humanity.
B: This is probably the strongest argument for Bitcoin and the original vision.
C: Sending BTC is immediate but since you can’t really use BTC to buy much (yet) you still need to sell and wait for funds to clear, which takes about as long as just wiring money.
A deflationary currency doesn’t mean no one will ever spend or invest. It simply means that there is less forced incentive to spend and consume in order to avoid inflation.
Inflationary currencies are like a tilted playing field, they artificially force savers to spend or invest in risky assets while skewing economic metrics to make the economy look better than it is.
While the gold standard was not deflationary, the relatively fixed supply resulted in strong stable economic growth until countries in Europe began secretly debasing their currencies in the run up to WWI.
Inflating fiat currencies gave the European countries the power to perpetuate the first endless war - I strongly believe if they had been forced to tax their citizens to pay for WWI instead of stealing the wealth of the people by inflation, the World wars would not have been so severe and so prolonged.
So why do governments prefer slight inflation? A slight amount of inflation first allows governments to print a bit more money than they're collecting, which allows them to spend a bit more. Comparatively, in a deflationary world, they would need to collect more taxes than they spend, which would be tough both politically and tough for balanced budgets, since government spending is useful.
Deflation would mean that you basically get a net worth bump just from holding on to cash. You would have a real, tangible benefit of not spending money but rather keeping it in a bank account. Money in a bank account does not contribute to productivity. Money spent, or invested in companies doing productive work, is preferable. To counter inflation you at the very least need to invest in something like a CD, which the bank can then use to loan out mortgages and the like, keeping the money flowing.
I could assert that I need a Maserati and no other vehicle will fit my requirements, and it would be pretty easy for others to counter that either my supposed need is really a want, or the requirements are arbitrary and unnecessary.
Likewise I think your needs regarding crypto are more of a want. What would be the consequence if you didn't get that? Would you die? Would your quality of life significantly decrease? How did you live most of your life already without Bitcoin?
This has been invented. If it didn’t exist now for some reason, it would significantly decrease quality of life — I would be powerless to watch my saving erode into nothing. I would be powerless when the state decided it wanted to adjust interest rates to be negative (again, attacking saving). I would be powerless when any state decided that another state should be disconnected from the legacy financial networks. I would be powerless when they payment card networks started enforcing morality de jour. It would be like being arrested - some liberty taken from the individual and make them beholden to the state.
They call it being “orange pilled”. Once you get it, there is no other option to avoid growing poor slowly.
So holding stock in companies that, I don't know, actually produce something isn't an alternative? That just doesn't pass the sniff test.
The valuation of companies should reflect production, however any sensible extrapolations of thus in recent times are no different than speculation in cryptocurrencies. It’s all perception. That’s all money is — a shared delusion that something stores value.
Avalanche already provides a compelling and less wasteful alternative, and it might not even be the last word.
This idea that Bitcoin got it all just right has become a quasi-religious belief, fueled by the motivated reasoning of monetary interest and ideological fantasy.
There's nothing "hard" about money that requires a nation's worth of energy simply to continue to exist.
Proof of stake isn't fundamentally flawed, and proof of work isn't perfect. They both have many variations, and there's certainly many more to explore yet.
The only free lunch I see people pining for is the idea that they can squat on a wasteful, moribund asset, expecting it to be worth much more in the future.