Don't invest in any coin that use Proof of Stake - it won't work

in #cryptocurrencies6 years ago

I have been doing some deep reading into Bitcoin, Ethereum and comparing PoW and PoS.

I will post a longer explanation soon but the 30 sec version is:

Proof of Work

  • is properly incentivised and cannot be 'gamed' i.e. it you get more money to mine coins honestly thant to falsify old blocks
  • is the fairest, most open and transparent way of converting a real commodity (energy) into a crypto-asset
  • has been tested at scale and is proven
  • is truly decentralised (as in the bitcoin implementation)
  • is criticised for non-linear economies of scale, a misplace argument that really is about making your PoW algo ASIC-resistant (not the same subject)

Proof of Stake

  • claims to not waste energy, but creating a stake in the ecosystem cost energy, economic activity and is probably as expensive as PoW
  • claims to be 'democratic' but large players can falsify past blocks based the incentive to profit from cheating
  • is not proven at scale
  • is not tolerant of malicious actors on the network nor
  • is proven to work without some central authority (why bother with a blockchain if you are going to be centralised eh?)
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