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Comment by px43 | Hacker News Reader

PoS pays the people who run the infrastructure. Someone has to run it, and it's trivial for anyone to participate. If you have 5 dollars you can stake it in the PoS network and earn rewards. The barrier for entry in the legacy financial system is way way higher. Have you ever applied for a banking license?

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False equivalence, why is your equivalent to staking (investing crypto) applying for a banking license rather than opening a brokerage account (investing dollars)? With the advent of fractional shares anyone can buy $5 of stocks too, but it requires zero technical know-how.

When you stake, you are still processing transactions and creating blocks/forming consensus similar to what mining did. This isn't really comparable to investing in a security.

Just because you can join a staking pool which often takes a cut and makes it easy doesn't invalidate what is actually going on.

Sending $5 to a third party pool so they stake it in your stead under the promise it remains your $5 does not make you a bank. It's more like sending $5 to Robinhood so they buy $BAC in your stead under the (legally backed up) promise it remains your $5. IMO.

That’s not really staking. It’s just lending your eth to a staker which is completely different.

Maybe I am misunderstanding what "staking" $5 means then, because I believe you need 32 ETH to be a validator.

[edit: misunderstood the initial statement; disregard the part that was previously here]

> The barrier for entry in the legacy financial system is way way higher. Have you ever applied for a banking license?

One doesn't have to have a banking license to use the local fiat currency of one's nation (basically, one is born into it). And one must do almost nothing to get a check from the government if they decide to stimulate the economy by handing out money to those who showed they had very little on their last tax return.

You don't need to be a staker to use Ethereum either. You can also stake with a few clicks on a website if you're using a web3 capable browser. You don't need to buy anything fancy or even open up a terminal if you don't want to.

If you're into UBI type stuff, yeah, there are multiple UBI projects on Ethereum https://www.proofofhumanity.id

There are a ton of other projects that allow people to share storage space, compute, art, information, etc to earn cryptocurrencies. People contribute what they can to the network, and are compensated for their efforts. Projects like gitcoin are raising millions of dollars for people who volunteer to provide public goods, from performing security audits on large open source projects, to cleaning plastic out of rivers (https://gitcoin.co/grants/). Seems to me like the Ethereum ecosystem is far more altruistic than many current governments.

Yep. Parking your ETH in a staking pool much better than in a traditional bank saving accounts. There’s a proliferation of services that make it easier and easier and can put any amount.

My bank account didn't drop 63% YTD though

Or 100% when it got hacked.

Nor did it go up thousands of percent over the past decade

Nobody parks cash at a bank looking for returns. They're looking for a stable store of value. ETH appreciation is not a selling point for replacing a bank, even if the return happens to be positive (right now, with hindsight).

My loss, I guess

1 ETH = 1 ETH still.

The numbers are irrelevant over time. Can you buy the same things for 1 ETH now as you could then?

That all depends on the time points you are comparing to. 1 ETH now is $1400. 3 years ago it was $180.

Can you buy the same things for 1 USD as you could then? (no)

No, but it's close. USD's swings are a hell of a lot less wild, even in high-inflation years.

They certainly are less wild. It also only trends in one direction.

Dollars have similar problems, for more depraved reasons.

You are conflating several topics. (Background: through Ternary we run the Red Bike validator nodes on Cardano).

1. If you want to run a validator node, i.e. run the architecture you need to have 32 ETH to be eligible to provide this service. And it does not mean immediately that you will earn something. https://ethereum.org/en/staking/

2. If I stake the equivalent of 5 USD I will likely get a 5% return on it per year making it much less interesting from an investment perspective given volatility and opportunity cost.

3. Staked funds are locked and can't be used anywhere else or for anything else. At least GPUs can be used for mining AND general purpose computing.

4. It is much easier to go to any random money exchanger and go USD/EUR or USD/JPY

5. Getting a retail bank account can be done in a matter of minutes online.

>PoS pays the people who run the infrastructure

Both Ethereum's and Bitcoin's regular nodes don't make any money.

you have to have 32 ETH, which is around $50K USD, but agreed other than that.

You need 32 ETH to run your own staking node, but there are many options for liquid staking, which can be done with any denomination of ETH.

Pooling should be possible, same as mining earlier. Collect ETH from a bunch of people and split the gains by ratio.

How will PoS not deflate the currency to zero? Why would you spend eth at all when you can make more money holding it via guaranteed returns?

Couldn't somebody ask the same about getting interest rate on their savings? Why spend money when you can use the money to grow more money?

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