> Bitcoin, for example, is massively deflationary to the point of someone having spent $800 million on a pizza
Cryptocurrencies are not Bitcoin, Bitcoin is a cryptocurrency. I can use an algorithmic stable coin that matches any asset.
A currency also doesn’t require stability. I spend cryptocurrency all the time even though the price fluctuates.
The point is that it can be used as a currency, though you may not see most people doing that in practice.
> Any such recovery mechanisms are also an attack vector.
Sure they’re attack vectors, but they can be mitigated quite easily if you’re afraid that someone might kidnap your friends to recover your private key. I can timelock my funds or have alternative keys that can challenge any attempt to move my funds. These aren’t hard problems to solve, but building the right UX is hard and often times traditional financial institutions still do a bad job at implementing those.
> I've heard the analogy that PoS is like a presidential election where only the richest can vote.
Most solutions in life are trading one set of problems for another, you just choose the solution with the fewest issues.
People often criticize PoS by saying it reinforces the wealth of the already wealthy. The same can be said of PoW (mining at scale to be competitive is capital intensive), banking, or any industry. There’s a reason that poor people have a harder time starting businesses.
PoS makes it easier for small players to pool funds and have shared validators that can earn them all money without needing the time and expertise to run mining hardware.
PoS also comes with some nicer solution than PoS, including the ability to punish dishonest network participants.
In PoW, you can’t actually kick a single dishonest miner off the chain. If you switch to a new PoW algorithm, all miners need to buy new ASICs and there’s no guarantee that the attacker won’t buy up the majority of the hash rate. Because of that you might choose to use an ASIC-resistant algorithm and rely on GPUs, but if your attacker buys sufficient GPU hashing power, they are now in control for as long as they can afford to run.
In PoS, you burn the attacker’s capital and they have to rebuy the stakes token to resume the attack. This will cause a massive increase in asset price, followed by the attacker losing all of their funds again as they are burned.
The only downside to PoS is that you have weaker properties for knowing what the “true chain” is when you initially sync a node (there’s no concept of ‘work’). You can mitigate that via trusting a third party, or buy getting the network state in aggregate from a large number of unique nodes.
> This is the only force behind crypto. Many are obsessed at jumping on the next Bitcoin so you see people jumping on NFTs, having wallets with 300+ different coins in them, etc. If the belief that crypto will only go up in value is the only thing propping up the network what happens when that belief goes away/ Every bubble can burst.
Perhaps from your limited engagement with the community, you think this is true. To be fair, it is the most vocal part of the community and I certainly wish there were fewer speculators and people hoping to become overnight millionaires.
Perhaps when you say “the only force behind crypto”, you mean behind the price of crypto, but that’s not a very interesting topic if you ask me. I don’t care about the bubble or the price of crypto, so arguing from that perspective is arguing against points I haven’t made.
There are plenty of people who focus on the technology and the advantages that decentralization brings. You can find a great community of these people in the Eth R&D discord or ethresear.ch.