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Comment by inter_netuser | Hacker News Reader

PoS is Plutocracy on Steroids.

You've outlined only one, the most obvious and least probable, mode of failure.

The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth.

It's already visible on smaller scale in DAOs, every vote resembles a banana republic: "90% voted, 90% in favour". No matter what smaller stakeholders do/say, the early big investors and dev team always win. Why would they structure it otherwise? The same dynamics exist in PoS, just not as grotesque.

Perhaps that's OK for a private company governance, but for a global currency?

You want the multibillionaires to dictate the properties of the medium of exchange that serves the entire globe? Seems rather strange that so many have such a burning desire to be governed by someone much richer than them.

View on HN

And Proof of Work is better because the haves buy equipment the have-nots can't buy to vote?

Unless you have a citizenship based voting of some short where a single person gets a single vote and they actually vote (automatically I guess and assuming without delegating to the big whale because "I am bored") what do you think agreement via resource scarcity implies?

P.S. Also lobbying...

This is a common misunderstanding.

Proof of Work does not get you any votes at all.

PoW is a service to the network, to create an immutable ledger. It comes with a very real nuclear option that will bankrupt miners if you misbehave and get fired by hashing algo change.

It's just a boring industrial business, like smelting aluminum or iron.

Smelting metals actually produces something, proof of work just burns electricity for the random chance of winning a lottery

Simply because something is intangible and invisible, like atoms, does not make it any less valuable.

It's a system with an immutable monetary policy. Literally unprecedented in human history.

> Literally unprecedented in human history.

Hardly unprecedented, considering that until very recently nations did not have a monetary policy.

Monetary policy goes at least as far back as the Roman Empire, which adulterated their money supply over time.

I don't think this what economists understand by monetary policy.

> It's a system with an immutable monetary policy.

Is it though? It seems minor protocol tweaks aren't uncommon and hard forks managing to eclipse the original protocol in popularity are also conceivable.

https://en.wikipedia.org/wiki/List_of_bitcoin_forks

Every time there is a fork, the market decides how much to value each of the forks.

Personally, I think people will value bitcoin as good money if fiat money fails. And because they are seeking good money, will value the fork(s) that preserve bitcoin's prior monetary policy.

A fork that changes the monetary policy drastically (particularly, changing the 21M cap) would obviously make for bad money in practical terms.

> Every time there is a fork, the market decides how much to value the forks

So literally the same as every monetary policy change involving every currency that didn't use PoW in history...

No, not true. Nodes can literally just choose to use the version of software that provides the best money. You can’t choose to use the US monetary policy from 1960, for example.

This has happened multiple times with attempted hard forks of Bitcoin which have failed because once you change the monetary policy once, the promise of hard money effect disappears. So the original monetary policy remains in place and the original network continues as the reigning champion.

I imagine the idea of a hard fork of Bitcoin may become more popular as the supply limit is approached and transaction fees go up. The current transaction fee is only a few dollars but the cost is over a hundred. Eventually the fee will have to cover the full cost and a hard fork may start to look more interesting.

If this happens I can technically stay on the original protocol, but that would be rather pointless if a sufficient majority abandons it.

The natural scenario is that as the mining reward goes down, hash rate will dwindle until mining is profitable again.

The only real problem with that is that with a small hash rate, bitcoin can be attacked more easily.

If bitcoin is the monetary backbone for many nations, they will subsidize miners to maintain the balance of power. That is the actual scenario that I'm optimistically predicting.

If bitcoin isn't the monetary backbone for many nations, by then, then it's probably a failure, and should probably be allowed to die.

It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network.

I don't see why many nations would jump at the opportunity to make Bitcoin their monetary backbone. For example because an immutable monetary policy won't be seen as a feature.

> For example because an immutable monetary policy won't be seen as a feature.

Each nation would love to be able to manipulate the supply itself—why not, if people will let you get away with it?—but the fact that other nations can't do the same could be seen as a feature.

If that's how it's going to work, what stopped nations from making a treaty in which everyone commits to an immutable monetary policy so far? And how does Bitcoin result in whatever it was not being a showstopper anymore?

Many countries already use money internally such as the USD (outside the US) or Euro (outside the EU) for which they do not control the policy. Explicit agreements to use a common currency across nations and share control of the policy are relatively rare; no examples come to mind apart from the EU, and that hasn't always gone according to plan, as Greece can attest. But hard currency is still a fairly common basis for exchange between nation-states, and other countries' currencies are more likely to be adopted when they are governed by relatively immutable policies. Of course, if those policies change to be less immutable it can take time for the effects to manifest. The USD was relatively stable until recently, but other countries are probably reconsidering their dependence on it at this point given the increase in the supply over the past few years.

If Bitcoin does eventually become a common instrument of trade at this level it will fill the same niche currently occupied by gold and other precious metals.

> It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network.

I have to admit that I have no idea how much work is actually needed to secure the network. My point of view is that the current rate of energy expenditure outweighs whatever benefit Bitcoin does or could provide to society. But if this rate is a transient result of still-significant minting going on, things could definitely look different in the future.

Do you know of any analyses on how much work really has to be continuously expended in order for Bitcoin to remain reasonably secure at a given market capitalization?

I wouldn’t worry about it. Bitcoin incentivizes energy development. As the world moves to a Bitcoin standard, we will unlock new types of energy that were previously unproductive. It’s likely that energy will more cheap and plentiful under a Bitcoin standard, leading to downward pressure on transaction prices as mining is more economical. Also, more transactions are likely to move off chain to Lightning Network and sidechains.

Still plenty of scaling left in the Bitcoin ecosystem.

I agree with this. Just want to add, bitcoin mining can happen in remote locations with available power (hydro, geothermal) which are too far from cities to be transported by power wires. There is a limit to how far you can transmit electricity through wires. So, there are tons of untapped natural energy sources.

And precisely in places like these, such as Niagara Falls, you see coin mining displacing tangible goods production due to both needing cheap electricity and one being more profitable than the other. In this case the market is not thinking very clearly in long term priorities, nor is infinite development of hydro and geothermal possible. Actually, this is about realizing that we live on a finite planet with finite resources that a finite amount of humans can finitely exploit finite parts of before the whole thing goes catawumpus. POW and current cryptocurrency systems are thoughtlessly and needlessly wasteful and represent inelegant architecture and brute force hackery like lightnig to correct what ultimately isn’t scalable: blockchain ledgers and fast transaction speeds vs centralization and speed. Look at DNS, for example, and how slow that is, and it’s architecture amd full vs partial copies of ledgers and jeiraexhical canonical lookups etc.

You're ignoring the potential good of bitcoin there. All economic activity looks like a waste if you ignore what it's good for.

Niagara Falls is not what I had in mind. There is lots of untapped hydro power in extremely remote parts Canada where nobody lives, for example.

I don't see how cheaper energy would help. Bitcoin needs a certain amount of power in units of cost to be tied up mining to secure the network. If the cost of energy goes down ten times then the same PoW requires ten times the energy.

“as mining is more economical”

Mining doesn’t use a fixed amount of energy. As it becomes more economical more people will mine.

Bitcoin proof-of-work difficulty must always increase, the electrical needs are always ever-growing. While you claim that incentivizing electrical production is what POW does, in reality it is a large drain of electricity on a finite electrical grids capacity and it DOES take away from other uses of electricity LIKE aluminum smelting or running hospitals. It is an active and actual source of pollution and uses more electricity than most countries. You can’t handwave this away or insist upon your rhetorical framework when. The apparent physical real world consequences of POW cryptocurrency cannot be evaded or ignored.

Bitcoin difficulty does not always increase and needs not always increase.

As for the rest... so what? It uses a lot of electricity and there is some pollution---but a lot of bitcoin mining is done with hydro or geothermal (and will be nuclear if bitcoin continues to grow), so, so what about some pollution?

Some mining is powered sustainably. And for some of THAT power it is true that it wouldn't be used for residential anyway. But for the majority of BTC's power needs the sources are not renewable.

So there's a simple question: how much value do we get out of this tech per CO2e it emits and per ton of e-waste it creates. And AFAICT the answer is: not enough to keep tolerating it in a time where humanity as a whole is seriously worried about climate change for the first time ever.

If you can magically move _all_ the miners to sites with excess renewable electricity and permanently slash the hash rate by 99.9% then maybe it can be tolerated. Until then I would welcome more China-style crackdowns on mining activity across the world.

I can't tolerate the global exploitation of non-ruling people in every nation by their rulers via fiat money manipulation. (And every nation calling itself a "democracy" is actually a "bureaucracy.")

If you aren't upset about this, you probably haven't studied it. I say that in a spirit of helpfulness. Fiat money grossly distorts all of humanity's economic output and therefore retards our progress on all things, including fixing climate problems. Just one example: The US is becoming a nation of renters because enormous funds are buying up the houses with fiat money they borrow nearly for free.

Fortunately, with bitcoin, we can do something about that, without (eventually) harming the environment.

The difficulty does and has (in the short term) decreased when the amount of hashpower being used goes down.

Presumably if the price went down by a substantial chunk and stayed down for a while, the hashpower would also decrease, and so the difficulty would also decrease.

Also, if electricity prices went up, or if CO2 emissions were taxed, then hashpower would decrease, and the difficulty would go down in turn.

Everything is mutable with the possibilty of physical destruction and long time scales. Even the existence of humanity is mutable when we play stupid games in MAD geopolitics, have foolish energy policy, and lack an ability to cooperate to mitigate tragedy-of-the-commons problems like, for example, what Proof of Work is causing.

If we do not bound the growth of PoW energy usage, I think it could easily destroy itself in a roundabout way: by destroying the fragile global order that keeps humanity going.

It's burning electricity (that could in an ideal world be renewable, maybe one day) to provide a service to the network, therefore making it more secure by providing additional processing capacity that is controlled by a good actor, making it harder for a bad actor to get 51% of the pie. It is a waste, but there are also a lot of other sources of wasted resources/energy that we could tackle first and get larger returns from.

You get compensated for your service, it may seem like a lottery, but if you do it for a long enough time, you'll get fairly steady returns as in theory it should be random and proportional to your hashrate.

I don't mine, and I think it's definitely overhyped at the moment, but maybe it will settle in the future and actually provide a useful service to us folk. It doesn't seem to be going away for now, and it is really easy to send money to friends and family, whether they're nextdoor or in another country.

It is not a waste, as it provides physical security, exactly the same as idle nuclear missiles on standby do, or standing armies that are "doing nothing", until a war happens.

The vast majority of mining today uses sustainable energy (70%+), because it is actually cheaper.

Dishwashers and heated swimming pools use WAY more energy globally, but because pleasant luxuries are quite enjoyable, nobody seems to attack them.

> It is not a waste, as it provides physical security, exactly the same as idle nuclear missiles on standby do, or standing armies that are "doing nothing", until a war happens.

You don't think those get very wasteful in the real world? And there's no equivalent to a real war situation. You can set it up so you don't need to defend against the equivalent of enemy armies.

> The vast majority of mining today uses sustainable energy (70%+), because it is actually cheaper.

What kind of sustainable?

When miners locate next to hydro, and buy it up, that doesn't help anything. That hydro could have been sold as somewhat less cheap power elsewhere, after going over long wires, and then it would have reduced the load on coal plants.

Miners that eat up excess solar can theoretically do a lot to encourage the installation of solar, but they need to be happy letting their machines be turned off a large fraction of the time. If it's still profitable to run 20 hours a day, then they're still encouraging fossil power plants.

> Dishwashers and heated swimming pools use WAY more energy globally, but because pleasant luxuries are quite enjoyable, nobody seems to attack them.

Dishwashers are better than hand-washing, aren't they? Having plates is a lot more important than running cryptocurrencies in a particular way.

If heated swimming pools use that much, then sure let's go after that and use some kind of billing or taxes so they pay extra and encourage sustainable power sources.

I disagree that standing armies and nuclear weapons are a waste. They guarantee your security, which you seem to take for granted. Your views on this could change if you spend a few years in a warzone under artillery fire.

It is of course not 100% perfect analogy, nothing is, but I believe you understood the point I tried to get across: it's a security service, and that costs money. Blackwater stationary guard roles are 180-220k a year for someone with years of experience. I'd imagine monetary networks use a lot of physical security, some central banks are literally located in bunkers under mountains, with a backup site in a similar setup on a different geological plate.

I have not seen any PoS schemes so far that provide anything other than plutocracy as a service. There is a reason why ETH with a 100mil R&D budget is still on PoW, Vitalik is not a dummy.

as for the cheap sources of sustainable energy, those are usually stranded hydro and wind that's too remote to be economic, and stranded natgas (for natgas "green" might be a better term, i've used sustainable in the sense that CH4 is far more damaging that CO2. I've been told by regulators it is actually better to burn off CH4 from stranded wells)

Balancing of the grid also does happen, but I believe primarily with wind and hydro.

I, of course, agree that we should not pollute the Earth we live on. High energy usage in itself is not bad, only if it's a harmful polluter. I've only pointed out dishwashers and pools (don't have the stats handy, but they do indeed use a lot more, like a magnitude more), as a common hypocrisy.

We must rapidly scale up non-polluting energy sources, as it seems unlikely humanity can become a spacefaring species on a self-imposed tight energy budget, and this self-imposed handicap coupled with an unexpected asteroid impact can end us.

Pools in the US use 14 billion kwh it's hard to imagine it being even global orders of magnitude more than Bitcoin.

It's also hard to see how push button Armageddon has possibly made us more safe than nobody having nukes. We are only more safe than if only our enemies had them. The same could even be said of armies.

There is zero waste in PoW. It’s all useful service, therefore waste term doesn’t apply.

If you use 100 watts incandescent light bulb to light your room with 1 watt LED would do, that is waste.

usefulness is subjective.

> but they need to be happy letting their machines be turned off a large fraction of the time

Or they need batteries. Or some other means of energy storage, for that matter; at the scale of a large mining farm, thermal (e.g. heating water) or kinetic (e.g. spinning a flywheel) might be practical.

> standing armies that are "doing nothing"

Armies have to practice. Smart generals don't let their armies do nothing; to be any good at warfighting, they have to fight wars. Effective standing armies have to constantly be finding new wars to fight.

Nice to see you rationalizing expenditure that goes towards murdering people. Are you the people talking down to bitcoiners about being wasteful and not caring about future of humanity? Give me a break.

How many people aren’t murdered because of armies though? Humans have been grouping and fighting each other for thousands of years now. You’re under the impression everyone should just… what… pretend it doesn’t happen?

When attacking a neighbor state costs more (because your neighbors have arms too), it’s less likely to happen.

The cold war had plenty of awful hot action with proxies and third parties but the entirely hot version obviously would have been far more calamitous.

I suggest reading Herodotus’ Histories, or you can read up on Genghis Khan, Napoleon, Hitler, Alexander, the Crusades, or the myriad other conquerors and conflicts that have occurred.

But when conflict is resolved by energy expenditure, it involves even less suffering.

I was presenting a case against large standing armies!

> The vast majority of mining today uses sustainable energy (70%+)

Do you have an source for this? I remember the same number being flaunted before but it turned out not to be true. What was true was that 70%+ of miners use any amount of renewables in their energy mix.

You’re right. The correct number is somewhere around 50%, probably over the line already, which is significantly better than any other big industry.

> The correct number is somewhere around 50%

Do you have some source for this? I see random numbers being thrown around a lot, would be nice to have a citation for yours.

https://bitcoinminingcouncil.com/wp-content/uploads/2021/07/...

The service is worthless if you can trust a central authority like a government that 99.99% of people do.

There are many countries where people cannot trust a central authority like a government to keep their savings remotely safe and stable in value.

Even in those cases you can use dollars and trust the US government

PoW produces something intangible. You're probably basing on an assumption that tangible products are more worthy or justifiable of resources consumed than intangibles.

If you work with software development - which you probably do - I'd suggest checking what you do for a living, how much energy it consumes and how much physical product it generates.

It produces just what the person said. A lottery win.

That argument could even be somehow valid if it were only possible to demonstrate that these intangibles improve life for people, like contributing to food, housing, education or even only entertainment. They do not. We do not have to care for those who are affluent enough to burn electricity just in order to gamble. Those people have the resources to gamble in less harmful ways without raising electricity prices and polluting the air the way they do. Those people could even do something helpful and productive if they chose to. Cryptomining is wasting energy for the sake of wasting energy. You may argue we (the 99.999% who do not cryptomine) are too stupid to see the value of your imaginary intangibles but that's not true. We are the ones who want no part in a pyramid scheme, who do not want to succumb to gambling, and whose time and money are too scarce and too precious to be put on the line. Sure, all activity has its price, its waste, and sure, there are other occupations whose overall usefulness is doubtful and askew with the accompanying resource consumption. Doesn't mean you have too excuse bad behavior just because there are other guys doing no good.

Just as an aside, when you move a newspaper or a magazine from print to only existing as a web page, you certainly have 'dematerialized' it to a degree. However you still need hardware to keep and display the data and energy to move it around and light up the screens. In so far it does not stop being physical. The 'intangible' is somewhat of a red herring. Yes, it is less haptic, but it's still physics, physical all the way down. Other than that, currencies, freedom, equality, education, entertainment—we've been having intangibles all the time, at least from the dawn of human culture onward. Cryptomining does not bring anything genuinely new to the table in this respect. It's not even new in being a fraudulent, volatile scheme that betrays traits of a cult, one that benefits a few and hurts the many.

When I write code for my work does it not exist? I'm in essence minting new programs using my time as proof of work.

No, I'm quite sure the proof of work is a program which works.

Perhaps we should insert humans in the loop, to verify whether useful work was performed.

Or some AI because humans are prone to bribery to some extent.

Or we could make it democratic. "Jeff Bezos asserts that he provided useful work for society and that he therefore deserves $1B this year. Please cast your votes".

PoB: Proof of Bullshit

PoW should actually stand for Proof of Waste. It's not even unprecedented in nature: many species will intentionally waste energy or resources to demonstrate mating fitness, as with a peacock's tail.

https://en.wikipedia.org/wiki/Signalling_theory

... or people going to the gym.

The problems start, of course, when you take a concept to its logical extreme.

I'm less concerned with wasting resources (which is highly subjective), than with ecological and systemic harms. I don't care whether a terawatt is "wasted" on pointless SHA256 hashes, or calculating triangles for Yet Another Marvel Movie, so long as the externality is being paid for [0].

[0] https://en.wikipedia.org/wiki/Pigovian_tax

Exactly. And by forcing the internalization of that externality, that forces the market to consider things which lack that externality.

The trick is to enforce it in such a way that it can't be easily dodged via e.g. offshoring.

> Proof of Work does not get you any votes at all

Within protocol, no. But when weighing a fork, those with the gold choose the rules.

forkwars have shown in practise this isn't the case.

Status quo will be incredibly difficult to overcome for attackrs, even with a large chunk of industry, exchanges, miners and whales against the status quo, it prevailed.

The fork-wars of old will never happen again, IMO, on any chain of significance. These days, fork winners will be decided by the stablecoin operations they host. If ETH forks, for instance, hash power will follow whichever chain Jeremy Allaire deems the winner.

Do you consider nuclear energy sustainable?

It's probably not renewable (well, neither is the Sun on large enough timescale), but do you believe nuclear, either fission or fusion, will play a large role in the future?

You make it sound like I need a new hobby - which I might haha.

> Do you consider nuclear energy sustainable?

Low-carbon, yes. Sustainable, yes. Renewable, not until we productionize extraction of uranium from seawater. [1]

> ... but do you believe nuclear, either fission or fusion, will play a large role in the future?

Fusion if we can crack it, totally. Seems like a clear winner. Fission probably will if there's some political will behind it, but not unless there's a change in sentiment.

[1] https://www.forbes.com/sites/jamesconca/2016/03/24/is-nuclea...

This article is complete FUD.

> of which the following sources are considered to be renewable

in other words, it attempts to define the world "renewable" along favoured political ideologies.

From Wikipedia:

> Advances in breeder reactor technology could allow the current reserves of uranium to provide power for humanity for billions of years, thus making nuclear power a sustainable energy

TL;DR: nuclear is just as renewable as solar (beyond any likely duration of the human civilisation).

I saw the renewability as more of a thought exercise, because I agree with you, there's more than enough nuclear feedstock to keep us going indefinitely.

So literally one guy has control of Ethereum?

and every other PoS chain that relies on USDC and major exchanges.

So probably more than 1 guy. maybe 5-10.

And how is that better than a government?

It’s not. There is a huge gulf between Bitcoin and the rest of the crypto space. Bitcoin is certifiably decentralized hard money with an ossified monetary policy. I believe it is reasonable to conclude that something like Bitcoin can only happen once. The rest of crypto space isn’t really trying to be money, or is only pretending to be.

& what about Monero?

Regardless of Monero's technicals, new upcoming updates to BTC will infuse with privacy, therefore making Monero et al redundant.

BTC is also getting smart contracts soon, which makes ETH redudant as well, but it will take a while before it catches up in terms of possible complexity of the contracts.

> hashing algo

You mean Proof of Work algorithm. Which is not quite the same as hashing function [1].

[1] https://cryptorials.io/beyond-hashcash-proof-work-theres-min...

hi tromp! good to see you are on here too.

...just re-using the terms for continuity and simplicity sake.

yes, a PoW algo is probably better generic term, although I am not confident complex algos would be accepted as first-line replacements by the wider community.

am I wrong in that assessment?

Some of the hashing functions used with hashcash are exceedingly complex, such as RandomX used in a popular coin. Even scrypt, an extremely popular choice of hash function, is relatively complex, long after its 128KB memory footprint briefly served its purpose of resisting ASICs.

You're right that Bitcoin will never accept a change of PoW. At least not until SHA256 shows signs of being broken.

At the limit, proof of work and proof of stake converge - they are the same thing, except for the Kazakh coal that is burned in the former along the way.

PoS staking is simply committing a portion of your capital to the task of validating transactions. You benefit by receiving a reward in the form of additional tokens.

In a PoW system, the same exact thing can be accomplished by using your tokens to purchase a stake in a mining pool. You will similarly be unable to access your capital, be rewarded with additional tokens, and at the end of a period of your choice, you can liquidate your position in the mining pool to reclaim your tokens.

[edit] PoW in this context is a bit worse because PoW miners can rent out their hash power maliciously without being slashed.

In this world, the "nothing at stake" problem also manifests in proof of work, where I believe ownership in the mining pool makes you agnostic to the outcome of any chain splits - although I'm still working this bit through in my head. Opinions welcome!

> PoW in this context is a bit worse because PoW miners can rent out their hash power maliciously without being slashed.

Sounds wrong. Slashing is a means to prevent people from staking on multiple chains. In PoW, computing power is scarce, so if you allocate some compute time to one chain then you have less of it on another chain. You automatically get slashed. The difficulty in designing a PoS chain is in artificially re-creating this slashing and thereby solving the "nothing at stake" problem.

Where is the difficulty in making miners expend their tokens (i.e. in a way that is irrevocable) instead of merely depositing them somewhere?

In a blockchain, the chain keeps splitting. Your tokens live on multiple competing chains simultaneously. In PoW, you are forced to pick one of those chains to mine on. In PoS, you can stake on all of them simultaneously.

The splitting is unavoidable and happens constantly. Multiple competing future states are constantly being created, and the network has to eventually arrive at a consensus about which possible future is the true one.

> Where is the difficulty in making miners expend their tokens (i.e. in a way that is irrevocable) instead of merely depositing them somewhere?

Figuring out how to make spending your tokens irrevocable is the whole point of PoW/PoS. Your question reads to me like "In trying to solve problem x, why don't you assume that you've already solved problem x, and use that to solve problem x."

> Figuring out how to make spending your tokens irrevocable is the whole point of PoW/PoS.

Maybe I'm missing something... if miners are required to send the tokens to an invalid address, are these tokens not lost irrevocably?

No. Did you not read the comment you were responding to?

Yes, I read it. As far as I can see, it talks about 'staking', so it doesn't address what happens when the tokens and 'expended' as opposed to 'staked'.

You have two competing chains: Chain 1 and chain 2. On chain 1, you spend a token on a good. On chain 2, you spend no token. You wait for chain 1 to win the race. You then stake on chain 2 to get your money back. If chain 2 then overtakes chain 1, you've executed a double-spend attack.

An equivalent attack wouldn't work on a PoW chain. If you do the equivalent of "staking" on chain 2, then you're computing hashes, which is costing real-life resources. In the PoS case, without slashing, staking on chain 2 is free. In fact, this is the rational move to make every time you spend a token; stake on competing chains to get your token back.

Thanks for explaining (I'm a different someone)

There was a PoS mechanism that makes people who cheat lose all their coins? I wonder if it is relevant here

... Aha, that's "slashing" -- the other members in the network would look at the two chains, and notice that you were misbehaving, and add transactions that remove parts of your coins? (They'd add to both chains? Or just the winning one?)

What stops miners from sending their tokens somewhere, then hard forking from a previous block where they didn’t send them?

This has a clear answer in PoW, but not in your scheme

Easy, you put the transaction in the previous block. So the miner can only mine a block if they have already made the expenditure.

What stops me from doing a hard fork to roll back both blocks?

If you spend more tokens than the tokens that were spent mining the last two blocks you can erase the transactions in those blocks, but isn't that also the case with PoW?

You aren’t following. The hard fork lets me double spend the tokens from those blocks.

Indeed, I'm not following your argument.

Stop asking people to do your homework.

What if I create a whole new chain? Will the transactions at the very beginning of that chain have to be added to the big, old chain? How far back do the common ancestors of two chains have to be for your auto-merging to happen? What happens if two histories conflict? Then in Version Control parlance, we have a "merge conflict".

> Proof of Work does not get you any votes at all.

It only buys you the right to append a block of transactions to the ledger, which is the same thing as having 100% of the votes.

You have it backwards.

Nodes decide if they will append your block to their chain.

A miner that decides to mine out of consensus blocks is just burning money, and will be on their own fork with their “100% votes” that nobody else uses.

Give it a try, spend a few million on mining equipment and then try forcing something on the network.

It’s not a democratic system, never was.

Nodes have zero decision power, as far as I understand. They just go with the chain that is the most expensive to produce.

That’s incorrect.

The proposed block must comply with the rules your node enforced, or it will not be accepted. It’s not just work, but also the entire consensus-set they must abide by.

Miners cannot force new rules, if there is no consensus.

No, you're misunderstanding everything. The consensus mechanism is about agreeing about the contents of the blockchain, not about the rules that make up the bitcoin protocol.

Eh? Can't miners refuse to include transactions that don't adhere to new conditions in addition to old ones?

If 51% of miners decide to, after block #N, not include any transaction that doesn't satisfy the predicate P in any block they produce, nor mine on any chain which has a block after block #N which has a transaction that doesn't satisfy predicate P, then the longest chain will have all the transactions after block #N be ones which satisfy P, and furthermore, if the other 49% of miners are aware that this is happening, if they want their blocks to be in the longest chain, they have incentive to follow the same rules when mining.

This is the logic behind soft forks, is it not?

Nonsense. Mining gives you zero votes. Miners don’t control the protocol. Governance is not determined by hashrate. This is just another major flaw that all PoS shitcoins have.

No one is talking about governance. The term "consensus" refers to the decision about which transactions to append to the ledger, and the decision is to go with whatever set of transactions the miner that has spent the most money has chosen. It has nothing to do with governance issues.

then if you're not talking about governance, you're still wrong. there's no voting, only if you insist on re-defining what words mean, at which point i won't be interested in continuing the discussion.

Of course there is voting. Who do you think decides which transactions go in the chain, and in what order? The miner who wins leader election during this round (in Bitcoin anyway) does, and the rest of the nodes decide whether to accept its vote. The other nodes can also choose to reject this vote for a while, as long as after seeing it they don't accept a chain with less hashpower, and still follow the protocol (more or less).

The leader can even opt to put no transactions in the current block, something that has actually happened on many occasions: https://www.theblockcrypto.com/post/67928/bitcoin-miners-are.... Obviously, the leader was making a decision here, there were not actually zero transactions to process :)

You have zero clue how bitcoin works.

No, there is no voting and there is no leader election. Miners construct blocks with transactions and if they manage to find a signature - that block is appended to the chain. If somebody does it faster - they append their block.

Please at least get the basics before you start arguing with people.

What, exactly, do you think the purpose of computing a SHA prefix is? It's to perform distributed, decentralized leader election. The leader who wins has the privilege of proposing the next block. "If somebody does it faster" is the voting aspect--nodes vote on who they think did it faster, and it is quite possible that they disagree (which can only be resolved by another round of leader election, since the next leader can choose which block to continue from). In the event that there's a longest chain, of course, nodes will go with the longest chain as a tiebreaker scenario.

I know far more about Bitcoin than I ever wanted to, believe me. You really should not be making these kinds of ad hominem arguments when you don't understand terms like "consensus" or "leader election."

> The leader who wins has the privilege of proposing the next block.

No, the hash that you win with, deterministically points to the only possible block that you can “propose”. Your understanding is completely backwards. You seriously don’t know how bitcoin works.

Whether leader election happens at the same time as the block is proposed or not is completely irrelevant to the nature of the problem from a distributed systems perspective. The point is that in each round, the leader both wins the election, and proposes the next block. There are other variants of proof of work in which the leader is allowed to continue generating new blocks for a period of time and (AFAIK) these inherit all of Bitcoin's security properties.

Here is my question to you: if the node that wins the election (and the ones that accept its mined block, of course) is not the one voting on which transactions get to go into the chain, rather than be stuck in the mempool somewhere, who is? Do you genuinely think there is no decision being made there?

There is no leader election. You trying to insist on this terminology is like trying to explain that the earth is really flat by proposing some very special space metric.

All miners “vote” by hashing and one of them wins. They don’t win because somebody voted for them, they win because they happened to find a satisfactory hash. The chance to win that hash faster than other miners is proportional to hashrate. The hash is determined by the block of transactions entirely, so once you win the race, you don’t get to propose anything other than that one predetermined block.

Which transactions go into a block is decided before any mining for that transaction happens.

Just read, please.

> Just read, please.

You're coming off worse in this argument because you seem to realize on some level they're just using different (possibly wrong) terms in their accurate description of the mechanisms, but then you keep making snide remarks that imply they don't understand the mechanisms.

i in fact do insist on them not understanding the mechanism. trying to force incoherent terminology is just the largest red flag signifying that lack of understanding. snide remarks is my bad, i definitely lost my patience, it's hard to argue with somebody saying that sky is pink because they've changed what pink means.

Red flag, sure. But when they say things like "The peer-reviewed paper to which I linked, which I am not proposing as a replacement for Bitcoin, explains (to those who are willing to read it) why the block being chosen before or after the leader election does not matter when it comes to the security and consensus properties of Bitcoin." it seems very clear to me that they do understand the mechanism, despite that red flag.

I think your analogy to flat earth was better. Because sure, treating the earth as flat isn't correct, but it's often a perfectly good approximation, and arguing about whether a big field is flat or not is a giant waste of time. Don't completely dismiss someone because they use those terms.

"Leader" or not, it's basically equivalent. And the process of letting miners input yes/no values for whether they support a proposal into their block, averaged over thousands of blocks, gives you the same result as "voting". So talk about whether those results are useful.

There are variants of PoS where stakers can delegate their "votes" to other stakers and there are variants where validators compete for "leader" timeslots. These words carry certain meaning and none of it is useful or applicable to bitcoin. As with flat earth analogy, I agree that it's possible to have this perspective, i just think it's harmful for conveying the idea of bitcoin correctly.

You are really stretching, man. The term “leader” does not really apply in this mechanism.

You're confusing the discussion by trying to force the "leader" terminology. That term does not appear in the BTC whitepaper and the protocol's approach to consensus is different than a traditional leader elected system.

There is no "voting" and no "leader" except in the most abstract sense and I'm not sure why you're so determined to use those terms.

> No, there is no voting and there is no leader election.

Every 10 minutes a miner wins the right to append a block to the chain, by guessing a secret number. The chances of winning are proportional to the amount of money each miner has expended in the process of guessing the secret number. This is equivalent to holding a vote every 10 minutes in order to choose who gets to append the transaction block. Therefore, you're wrong. There's a vote. And if you can't understand this obvious fact about bitcoin, you have no business discussing bitcoin.

Obviously I can’t change your decision to use this terminology, but ponder this: when the leader is elected every 10 minutes, do they get a choice of what block they append to the chain? No they don’t. So was it election of the leader or election of the block? And if it was an election, wouldn’t the result always be the same with largest miner always winning because they have most votes?

As I said in a sibling thread, it’s like arguing the earth is flat by proposing a very special metric of space. Feel free of course, I just don’t accept it.

> do they get a choice of what block they append to the chain? No they don’t.

Of course, they have a choice. If didn't, miners would serve no purpose. We would just have one block and that would be the block that would be appended. The consensus would be achieved automatically, without any need of guessing secret numbers.

> And if it was an election, wouldn’t the result always be the same with largest miner always winning because they have most votes?

No, because the miner is elected at random. The crucial point to understand is that their chances of getting elected are proportional to the money they spent. That doesn't mean the largest miner will get elected 100% of the time.

> Of course, they have a choice

lol, no they don't.

a certain hash wins, every ~10 minutes. that hash is calculated from sha(block, nonce), where nonce is the randomized part that miner mutates to get different hashes. once a hash that satisfies the protocol is found - that's it, you can't choose a different block to append to the chain.

it is just laughable that i have to explain this level of basics.

Okay, and who chooses the block? (Hint: it's the node that wins leader election).

Maybe this article will help you understand just how nonessential the fact that the block is part of the SHA actually is: https://www.usenix.org/system/files/conference/nsdi16/nsdi16.... Please read the whole article, and then come back so we can have a discussion on equal footing.

> Okay, and who chooses the block?

well certainly not the winner of the "election", because by the time that "election" starts, the block is already constructed.

and i'm not going to read any of your links until you actually start understanding the basics of bitcoin protocol. though your lack of understanding explains perfectly why you fall for scammy bells and whistles of competing bitcoin-wannabes. "bitcoin new generation". lol, give me a break.

The peer-reviewed paper to which I linked, which I am not proposing as a replacement for Bitcoin, explains (to those who are willing to read it) why the block being chosen before or after the leader election does not matter when it comes to the security and consensus properties of Bitcoin. It is important for you to understand that this does not matter so you can understand why when the block is chosen does not change the fact that leader election is being performed.

Again, I'll ask you, since you keep dodging the question: if the node elected as leader is (according to you) not choosing the block, who is choosing the block? Why are you so obsessed with whether the value was chosen "before" or "after" the election, which is an irrelevant detail of the protocol? If you can't answer these things and won't read the paper, I don't really see any reason to keep talking to you, because all you've done is make the same irrelevant point over and over.

Where do you think the transactions included in the block come from? The miner picks them.

and now the weaseling starts. i asked a very specific question:

1. once the "leader" is "elected" 2. do they have a choice of what block to append?

you said they do, which is fundamental lack of understanding of how bitcoin works.

The question that you asked was:

> when the leader is elected every 10 minutes, do they get a choice of what block they append to the chain?

and the answer is yes, the miner that gets elected chooses which transactions to append to the chain. Do they pick the transactions after getting elected? No, they pick them before getting elected. In fact, it doesn't matter whether they pick the transactions before or after getting elected, because their chances of getting elected are unaffected by which transactions they picked. Therefore, it makes absolutely no difference. The fact that you think it makes a difference tells me you're very confused about the role miners have in the bitcoin network.

The answer is no and you’re clueless if you think otherwise. The “leader” has no choice in blocks or transactions after they “win” the “election”.

The "leader" has no choice after they win the current round but they do have a choice as to what to include in the winning block before they start hashing.

Maybe they act like all the other rational miners and optimize by mining fees.

Maybe they include no transactions and only take the miner reward.

Maybe they they don't like the Dutch so all their transactions are excluded.

It really doesn't matter as all y'all have been arguing over is what to call the person who won the current round.

Everybody has that choice before they win the election, so are they all leaders?

You really don’t see how this terminology is completely incoherent for this scenario?

They become a "leader" when they get elected, so only one of them becomes the "leader". There's nothing incoherent about this terminology.

lol, they don't understand you

I’ve been reading this thread. I have no idea why these people insist on using the word “leader” when it doesn’t fit. Is there some ideological reason for this?

There is no "ideological" reason. I don't even own cryptocurrency. It's just a fact that the entire purpose of proof of work is to perform leader election. The defining characteristic of leader election is that only the leader commits new values, and there should only be one leader eventually chosen for a given round; the definition has nothing to do with using some sort of majority vote or anything like that. To see how it differs from "ordinary" consensus, I want you to tell me how a Bitcoin-like system could be used to decide on any value other than either (i) one known in advance by all parties (which doesn't require a consensus protocol at all), or (ii) one chosen by the node that wins the block lottery.

This is expanded upon in the peer-reviewed Bitcoin-NG paper that both of you are refusing to read, which breaks down the Bitcoin protocol into distinct parts (which was why I linked it--not because I am proposing that it replace the Bitcoin protocol, but because I thought it would be useful for you to understand how Bitcoin performs leader election already). Specifically, it analyzes the effects of splitting up leader election and block commit parts of the protocol. As it turns out, it has essentially no effect on Bitcoin's security guarantees, which is not surprising--because the fact that block selection and leader election happen at the same time is an implementation detail that doesn't actually matter! Once you realize this detail that you are obsessing over (the block being decided at the same time the leader is) is not important for the protocol, you will also see that the leader election is in fact the critical part.

I think you're missing the larger picture of accruing blocks over time, and deciding what is the "canonical" largest chain.

A miner can choose which block to build on. At any given moment Bitcoin can have several competing "in progress" forks. This is why most exchanges require... 7, I think?... blocks on top of yours to consider the transaction more or less confirmed.

> And if it was an election, wouldn’t the result always be the same with largest miner always winning because they have most votes?

Yes, this is a 51% attack in Bitcoin. If you have a majority of votes, you can disregard the current chain, fork from behind, and catch up.

> when the leader is elected every 10 minutes, do they get a choice of what block they append to the chain? No they don’t.

Yes, they do get to choose the block. Transactions to include in the block are (usually) chosen from the mempool, which is unique per node (it’s similar but never exactly the same between any two nodes). Miners can also choose to include transactions that were never publicly broadcasted, and therefore never appeared in another mempool. Typically the transactions with highest fees are chosen, although fees can also be paid (or bumped) outside the mempool.

The miner of a block doesn’t get to choose the contents of every transaction, but they do choose which transactions to include when they win a block.

It seems like you’re hung up on terms that aren’t commonly used in the context of bitcoin mining, but are valid and are commonly used in the broader context of distributed systems.

You’re not paying attention. Does miner have a choice what transactions to include after they win the “election”? Don’t rush, take your time.

And stakers in PoS do exactly the same thing. They don't have any more "votes" than miners do.

> It comes with a very real nuclear option that will bankrupt miners if you misbehave and get fired by hashing algo change.

Changing the hashing algo isn’t a realistic punishment for targeting misbehaving miners.

You end up with two choices:

1. Change to an algorithm that uses gpu/cpu instead of ASICs (and is ASIC-resistant), but then your algo runs on general-purpose computing and you can’t fork miners off ever again.

2. Move to another algo that benefits from ASICs. This has the extra overhead that you need to spin up manufacturing and distribution of these ASCIs to honest miners, which takes quite a long time to do and while you’re waiting, your network is being attacked.

In either case, you aren’t just punishing a misbehaving miner, you’re punishing *all* miners who now all need to get funding to buy and rack new hardware. You’re making a big assumption that the misbehaving miner won’t be able to get financing or sufficient capital while the honest ones will. If the dishonest miner’s attack was profitable while waiting for the fork, they get to keep all of that money and can spend it on new hardware.

In PoS, the attacker will lose their stake, meaning they lose the money they had before, and earned as a result of, the attack. It may be much more difficult for that validator to get access to capital and lenders will be hesitant to lend to an entity that now has a history of burning capital.

> Proof of Work does not get you any votes at all.

Hmm, maybe I’m ignorant, but in practice, don’t miners (socially, not technically) have substantial say in issues like the block size debate?

If you want to create a hard fork of the chain for any reason, whether people accept your fork as legitimate will in part reflect the total hashing power of that forked chain, right? So in practice what miners choose to follow will have a big impact.

Maybe not quite the same as PoS in-chain voting, but it still seems to give large miners outsized power, no?

PoW at least provides a decent and somewhat fair coin distribution mechanism.

With PoS, the coin creators can assign themselves an arbitrary fraction of the coins, concentrating the wealth. Even if there is a public record of all the funds raised in a public sale and all expenditures made (which is rarely the case), it's possible for the creators to participate in the public sale and recover large parts of funds used to buy their own token by generous expenditures on software development and such.

Do you believe PoW can be used as bootstrap mechanism, and then some combo of PoS/Pow in the maintenance mode?

Who is the top researcher on this subject these days?

It could be interesting to bootstrap a PoS network using the wallet keys for all existing public blockchains, by allowing users to initialize their PoS wallet with the fiat value of their PoW keys held at some agreed moment in time. I toyed with this idea for a while, but I don't know how you could keep the network secure until a significant proportion of the total value has been claimed.

Anyway, I'd also be interested to know if there's existing or active research along these lines.

I think this is organizational more than technological.

There are plenty of PoW coins with unfair or absurd distributions, and plenty of PoS coins with somewhat equitable distributions.

Yes, PoW coin emission curves often leave something to be desired, tending to emit too much in the first few years, which leads to some wealth concentration as well.

In my opinion a fixed block subsidy would be most equitable, but that's a very slow emission, taking 100 years to reach a yearly supply inflation under 1%.

Yes PoW is way better because miners need to constantly expend resources to maintain their right to participate. PoS validators keep their throne for life at virtually no cost.

But like PoS, PoW returns all spent resources and more back to the miner - both are designed to be profitable and self-sustaining.

I don't see much difference between a PoW mining setup that does $1000/day gross, $990/day expense, $10/day profit and a PoS staking setup that does $12/day gross, $2/day expense, $10/day profit. Both earn $10/day, both require maintenance, and both are run not at a net cost but at a net profit.

You can't transmute Bitcoin back into electricity and ASICs. You have to generate more of both, which is extrinsic to the protocol and thus available to currently-non-participating actors. PoS does not have this property.

The main difference is that the top miners don’t stay the top miners. There is constant churn. The top stakers remain the top stakers at virtually no cost, and they will almost always be custodians/financial institutions.

Additionally mining isn’t always profitable. There is financial risk and miners can go bust and take financial risk. Staking is basically always profitable if you don’t misbehave.

> Why would they structure it otherwise?

It gets a lot more complicated than that because setting up competing systems is cheap. It is like saying "nobody would write this piece of software for free". What we learned with open source is if the cost of distribution gets low enough then there needs to be just one person somewhere on earth willing to maintain it and it can work.

If the cost of creating trustworthy local (or international) monetary systems is basically 0 then it isn't obvious that plutocrats have an advantage beyond the one they already have by virtue of being powerful. If they can force you to use their system they already control the government so didn't need any technical help.

You can't fork gigawatt powerplants and silicon foundries by clicking a button on Github.

You can't even fork a stablecoin. in case of a split in a PoS chain, the correct fork will be decided for you by USDC and Coinbase.

You can fork decentralized over (crypto) collateralized stablecoins even if you can't force a fork of a centralized stablecoin operated by incorporated entity to be recognized by them.

Unless we're going to pretend that there is only one way on and off networks and only in one currency denomination…

how do I send a wire to DAI?

Just because you may not be willing to swap cash/gold/anything a local counter party values in whatever jurisdiction you reside in for a random networks gas and/or tokens that trade on them, doesn't mean others cannot.

If you want to use coinbase to buy crypto and tokens, that's on you.

You don't. You send a wire to someone who's willing to send you some DAI in return.

You can fork decentralized over (crypto) collateralized stablecoins

In practice the value of the forked collateral is likely to be low, leaving the stablecoins insolvent.

If you are forking the chain state and not just the vm, that could be the case.

However, if you are only forking the vm and allowing for people de deploy other protocols (or forks of other protocols), this is not the case (they just start off at lower total supply relative to the native collateral available on that network from a lower demand base).

I don't consider it a fork unless it includes the state. For example, ZCash is based on Bitcoin code but nobody considers it a fork of Bitcoin and there are various chains like Avalanche that support EVM but they aren't forks of Ethereum.

> I don't consider it a fork unless it includes the state.

I think id agree for things like ZCash/Dash etc compared to BTC, but I'm not sure I'd agree when it comes to the all contracts deployed on all EVM networks and none of this has anything to do with decentralized stablecoins.

For example, you can mint MIM (a decentralized stablecoin) on both avalanche c-chain and ethereum (as well as polygon, fantom, bsc and arbitrum), and they are both worth $1, but have different collateral backing it on both networks. If users wanted to leave one or the other, they could just redeem their mim for the underlying, sell it and buy the collateral on another network and mint it on the other network. The collateral might trade lower on one network based on market factors (like if the narrative shifted to that the chain became too centralized or w/e, and this assumes that even the price movement of the underlying overwhelms the over collateralization ratio, it might not) but it would just mean that there would be more or less mim on that particular network as assets are liquidated and not that the MIM itself would be worth less.

PoW and PoS are exactly the same, 1 dollar gets you 1 vote. If you want 1 person, 1 vote you need 1) a census, and 2) a mechanism to prevent the sale and purchase of votes.

> The more subtle and wildly prevalent failure mode is that the consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players, which will include most later adopters, aka the entire population of Earth.

And that's where competition between currencies provides checks and balances against such pathological behaviours.

> in DAOs, every vote resembles a banana republic: "90% voted, 90% in favour"

I've been wondering about that recently - for all of the excitement about DAOs and Governance Tokens, are there any good examples of interesting decisions being made via their voting mechanisms?

What are some places I can go to see recent votes and their outcomes?

How is that different from PoW or our current political system?

miners go bankrupt in PoW for misbehaving. Large stakers can be rewarded for misbehaving, at your expense.

They only go bankrupt if they don't hold the majority of the mining power, if they do they take over. How is this different from PoS?

Actually in PoS if you try to attack and you don't have a majority you will lose all your coins. in PoW if you try to attack and somehow you miscalculated you will lose a couple of hours worth of electricity after which you can go back to mining normally so much lower stakes for an attack.

Because money can't literally buy votes. no matter how many ads you show me I would never vote for Trump.

PoS in Ethereum is not a plutocracy...There is no voting with the token or any other governance. The stakers do not control the network, by design. The whole system works only if everybody (holders/users/stakere/devs) cooperate together.

Only some, it seems, are more equal than others.

https://twitter.com/vitalikbuterin/status/760232885483806720

I'm not sure what you are linking to. This looks like a tweet from 2016.

I think what the parent referring to is the DAO hack (from 2016) and how Ethereum’s response was to renege on “Code is Law” (and the integrity of the blockchain) in order to void those transactions (smartcontract exploits), which is a case of centralization resurfacing because VB could subvert the proof of work system when his own money was at risk.

Ethereum Classic is the fork that refused to rewrite the blockchain to void the hack, and the linked tweet is VB affirming that he’s only working on the main (reneging) Ethereum fork (which goes by ETH), not Classic (goes by ETC).

Not sure why the parent linked that tweet, maybe Twitter just makes it too hard it identify what tweet you actually want.

"Code is Law" was never part of Ethereum's ethos. It was some meme created by the company behind The DAO, and perhaps many people in the community supported it, but it wasn't part of Ethereum.

I've recently read that the blockchain was not rewritten or unrolled. It was actually executed forward through an "irregular state change". In other words, it made a new transaction instead of erasing or modifying old transactions, and that was done with consensus of all those who ran the ETH client. Those who didn't agree went to ETC, but the market chose ETH in the end.

Regardless of how you word it, it amounts to the same thing: the protocol and signed, validated history say this happened, now we act like they did not, which is a violation of blockchain integrity.

No, that's not what happened. No history was changed, and nothing was re-validated as you suggest. There was no "violation of blockchain integrity". The only thing that happened was that the upgraded version executed what's known as an "irregular state-change" which moved the ETH from TheDAO's smart contract to a new secure contract. So, it wasn't a roll-back, but a roll-forward, and the change was mined using PoW in accordance with all the blockchain block selection rules.

The hackers ("hackers") made valid transactions.

The hard fork reversed those transactions.

No matter what fancy spin you put on it, that was absolutely a violation of the blockchain's integrity, as it violated the principle that accepted transactions can't be reversed after the fact, even if you call it an "irregular state-change" that just keeps things secure.

You can absolutely defend the position that this was best for the ETH ecosystem. But it was absolutely a reneging on the blockchain rules.

That’s absurd.

People will opt out of currency regimes that are abusive. This is not like a terrestrial government where you are fucked for life because a bureaucracy controls the land you live on. You don’t have to immigrate to escape a corrupt currency. And you don’t have to all-in in one currency.

If you own dozens of coins, you liquidate the shitcoin that is controlled by corrupt tycoons.

> You want the multibillionaires to dictate the properties of the medium of exchange that serves the entire globe?

Somebody tell him about the r-family.

That’s going to be the effect with every currency as the people starting it are going to have the most.

Just how it works.

PoS validation does not have to include any more power than a bitcoin miner has.

>> consensus will be set by the few whales, who will maximize their rent extraction at the expense of numerous small players

Aren't you just describing capitalism here? The people that created the system and own the biggest share of it have gigantic influence on it. Matter of fact, isn't that exactly what happened in ethereums PoW network, too? The developers decided to switch to PoS regardless of what the current participants want.

In general, isn't the idea of using PoS that if you aren't happy with the current system, you can easily fork into a competitor? If enough people think the current system is unjust, then you can switch to the new one, where you will be part of the development. At the beginning of the fork you also wouldn't need that much compute, as PoS is more efficient and you aren't going to have many users/transactions in the first place.

Since it's easy to switch currency (at least easier than privately setting up a Dollar 2.0), members of the original currency have to behave fairly, else people are going to switch. Note: The thing people are switching to doesn't even have to be better in any way than the original currency. It just has to have different controllers to influence the members of the original system.

The way I see it, is that there's no meaningful way in which PoS based currencies are worse than the current monetary system: large stakeholders in current global currencies also have gigantic leverage (think of money printing during the pandemic or bailouts after the 2008 financial crisis). The real advantage I see with PoS systems is not the system itself, but the tooling that comes with it and allows for the development of competitor currencies that check the power of each other. With current global currencies there's no checks-and-balances system inside the monetary decision making process, while a fleet of independent PoS has the chance for checks and balances to be induced through competitive pressure.

> Aren't you just describing capitalism here?

It fairly describes every political system and economic system that has ever existed or will ever exist. What's being described is how humans always organize systems in regards to political and economic power.

See: Socialism, Communism, Fascism. It applies just the same to those. Except in those systems they'll murder you and your entire family, then burn your village/town to the ground, if you attempt to compete with the rulers or party (Chavez, Castro, Stalin, Lenin, Mao, Hitler, Mussolini, Pol Pot, Kim, Putin, Erdogan, Lukashenko, etc.).

Whereas I can freely compete with Coca Cola, Tesla, Salesforce, Splunk, DigitalOcean, Cloudflare, Starbucks, 3M and most other companies if I'm able to. Nobody is stopping me from inventing a new coffee drink and going after Starbucks with it, or setting up a better coffee chain on the corner. Nobody is stopping me from inventing a better soda-competing drink (see: Monster or Red Bull or 5hour Energy; those people weren't assassinated by the soda cartel). Nobody is preventing me from starting the next great convenience store (ask 7-11 how they feel about upcoming Sheetz; or ask KFC how they feel about Chic-fil-A).

“Meet the new boss, same as the old boss…”

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