The Battle of Our Times - PoW vs. PoS
Proof-of-Work and Proof-of-Stake
Every now and then a battle sparks up in the crypto-community, be it reddit (the Mecca of all disagreements) or bitcoin.org forums, or private chatrooms or even Twitter; is Proof-of-work really worth all the energy that we put in?
This question has been the central point of a lot of fiery debate. Everyone seems to have an opinion of their own. The stage is not unlike a street fight, where members of both sides go down to calling each other names, exchanging abuses and branding the other side as un-visionary. Most bitcoin maximalists side with PoW, recounting the game-theoretic incentive structure that it implements to solve the age-old Byzantine Generals’ Problem. Other skeptics argue that PoW isn’t really worth all the energy consumption it brings along with it. And then there’s the other side that proudly proclaims the simplicity and elegance of Proof-of-Stake and similar concepts that implement all of PoWs infrastructure excluding its infinite appetite for energy.
Criticisms are necessary and all, but when are we finally settling on a serious real-world use case?
Source: HackerNoon
The Argument For
For POW
The basic argument made by PoW supporters lies in the fact that it solves the most fundamental problem traditionally existing with a protocol for money on the internet; a legitimate medium to verify value flow without the possibility of duplicity. Since the dawn of the Internet, it has been both lauded and criticized for its ability to multiply information. Due to its infrastructure that basically involves the transfer of packets in a pre-defined protocol, it is easier to copy stuff on the internet than it is to gulp down water. Thus, by combining an authentication of work with information transfer, PoW solved the problem of multiplicity in the only remaining void that remained to be filled on the internet. An article by developer Paul Sztorc titled ‘Nothing is cheaper than Proof-of-Work’, does a really good job of arguing for the use of PoW.
For PoS
On the other side, skeptics of PoW almost always point out the energy consumption problem going as far as proclaiming that if not kept in check, bitcoin mining operations could lead to an acceleration of the already threatening problem of Global warming. The mining operation of bitcoin alone consume more electricity than 159 countries. Plus, there’s the tedious task of building and maintaining rigs that carry on the tasks of problem-solving for PoW.
The Argument AGAINST
Against PoS
PoS uses a time-stamping method to reach a consensus about a block by betting on it. This process alone opens a variety of criticisms. Say the betting amount is said to 10,000 ABCoin, and the average holder has about 20 ABCoin. So anyone with the minimum betting requirement is bound to get richer with each block while the others wait for the chance to place a bet until. Not everyone can afford to be a staker. It can be argued that over a period, the gap will become significant, and therefore, the power to influence the ABCoin network will lie in the hands of a few, not unlike the current state of the Bitcoin PoW network.
Against PoW
The major difference in PoW and PoS lies in how each treats a malicious node. As PoW follows the longest chain wins philosophy, meaning the chain with the most hash power committed is the legitimate chain, it could allow malicious nodes to escape if enough hash power is committed. In PoS, the dishonesty is penalized instead. Because forgiveness is the default in the former, there’s nothing stopping people from being dishonest. On the other hand, the PoS makes sure that dishonesty is severely discouraged by putting the penalty. Most users also view PoW as an inevitable monopoly. At least with respect to bitcoin. As the difficulty increases, it becomes more and more costly to operate hardware necessary to calculate the PoW algorithms. Thus, given a long enough timescale, a few entities might rise Hugh enough to control all the hash power as most users cannot afford high end, pricy equipment.
“In proof of stake, besides incentivizing honesty, dishonesty is discouraged.”
Mohit Mamoria, Is Proof of Stake really the solution?, HackerNoon
Conclusion
Without constructive criticism, it is not really possible to move ahead and leave behind all the flaws. To side with a particular mechanism cannot be seen as the right thing to do as there are a lot of intellectually capable people behind each side. Numerous research papers, articles, and discussions have been put forwards, arguing for both sides of the debate.
Experimentation had been steadily going on, such as Ethereum’s much-awaited Casper FFG, with its planned shift from PoW to PoS, making all the hardware devices dedicated to the network obsolete. It would also mean an increase in adoption as it becomes more cost effective to be a part of the network. Similar advancements are also being implemented by EOS, NEO, XEM, Reddcoin, Lisk and so on, trying to sway the market towards the staking mechanism. Some iterations of the algorithm such as delegated Proof-of-Stake (dPoS) and Hybrid PoS + PoW are also being experimented with.
On the other side, there’s the continuous research by Monero, ZCash, DASH among others, continuously trying to perfect the PoW algorithm by making them ASIC resistant, decreasing energy consumption and simplifying problems without compromising on the security. This show the dedication towards the original Proof-of-Work algorithm developed by Cynthia Dwork and one Naor, ultimately perfected by Satoshi Nakamoto in the Bitcoin Whitepaper.
It remains to be seen which way the market sides, which algorithm pushes itself towards the top. But one thing is for sure, the general audience is definitely going to b benefitted due to the internal fights within the community.
Sources
- Expanding Bitcoin use will push global warming above 2C in two decades, finds study
- BITCOIN MINING IS A SIGNIFICANT CONTRIBUTOR GLOBAL WARMING, WARN SCIENTISTS
- Bitcoin’s energy consumption isn’t as bad as you think
- Critique of Buterin’s “A Proof of Stake Design Philosophy”
- A case against Proof of Stake Velocity
- Is Proof of Stake really the solution?
- SB
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Personally, I believe that PoS and PoW are becoming obsolete. STEEM requires "Proof of Brain" mixed with a computationally cheap PoW. Gridcoin uses an ASIC-resistant "Proof of Research" with PoS. Chia has proposed " Proof of Space " with "Proof of Time."
So, it looks like the future of crypto lies in mixed ASIC-proof computationally-efficient proofs.
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That is something I've never even heard about ... Great comment @rufusfirefly
Yours
Piotr
Interesting thought @rufusfirefly. PoW is increasingly facing criticisms and PoS has so many internal issues that need solving.
I didn’t know Gridcoin implemented proof of research. Will check that out soon.
China’s proposition is interesting, sure, but it remains to be seen how a centralized authority can successfully research and implement a good enough protocol. Time will tell.
Thanks for the stimulating reply. Cheers.
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Chia.net has some presentations and articles you can look at if you have the stomach for high-powered math.
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@martin.mikes coordinator of @kedjom-keku
You just planted 0.10 tree(s)!
Thanks to @rufusfirefly
We have planted already
7371.69 trees
out of 1,000,000
Let's save and restore Abongphen Highland Forest
in Cameroonian village Kedjom-Keku!
Plant trees with @treeplanter and get paid for it!
My Steem Power = 32180.31
Thanks a lot!
@martin.mikes coordinator of @kedjom-keku
I believe that in the beginning the coins being POW can maintain a greater dispersion of the coins thus guaranteeing that they do not have few people holding a great amount of tokens. Then, over time, you can change the protocol to turn fully POS, ensuring that there are no problems of 51% attack.
Good point @robertoueti
Thanks man.
I think that could be the best for some cruptos project.
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That could be one possible strategy. I think that’s also a brief roadmap of Ethereum. Their eventual shift to Casper.
Thanks for the comment @robertoueti. And sorry for the late reply.
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Dear @reverseacid
I just received your kind memo:
I would gladly help you get some exposure with this post. Every week Im trying to support 2-3 quality posts published by valuable authors and I will be happy to help.
I can bring some traffic already to this post, but I would need to ask you to help me little bit with task of promoting it:
you will reply to every comment?
could you open accounts of those who comment you would consider interesting and check if they published something you could like to read about. And then show your own support?
consider setting up steem-bounty worth of 5 STEEM (this will bring some extra traffic plus will provide commentators with some extra reward).
I need to ensure that you will give back to community and show your support to others as well. 3rd point is not a MUST, but first two really is.
Let le know what do you think.
Yours
Piotr
Hello dear @crypto.piotr, how are you mate? thank you 🙏 for the writer tips you just sended to me a minute ago, i think you would like to know that i was already following these two steemians before you introduced them 😁 And it shows to me that you introduce people to some good content, and you are on your path to be a great influencer (you have my support) This is btw one of the articles that are definately a good read,
Hello @elektropunkz and @skramatters. Thanks for the support. Will definitely help you out by going through your posts. @crypto.piotr sure does know how to connect people in need.
Oh man, my posts probably need a disclaimer lol.. I've been less than warm and fuzzy the last month or so. There's a random feel good post here and there, but generally speaking a lot of piss and vinegar haha.. I'm not one to sugar coat anything but you'll soon realize this after seeing some of my posts.. Cheers
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Posts that need disclaimers ... i’m following you now buddy 😁 because i like it when things are sharp.
Hahaha don’t sell yourself too short, @skramatters. Let the community be the judge of that. We will definitely try to promote all good content you’ve put out there.
Also, appreciate the honesty. Cheers.
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Dear @elektropunkz
What a small world this Steemit platform, isnt it? :)
Thank you. Each time I promote something it takes 2-4hours of my life to do it and to engage with people, so I always am making sure to help those who are active and create quality stuff :)
If you would ever post something interesting and would like me to bring some traffic then please let me know (mention me or send memo). I will do my best to show my support :)
Yours
Piotr
Appreciate your contribution as always.
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That is great to know, and in the future, when i have something important and really interesting, i will keep you on that promise.
Untill then, i am working on my quality of writing english, and just leaching and reading along.
Hi @elektropunkz
Arent you native english speaker?
Yours
Piotr
No, i am not ...
Born, raised in Europe
Do you mind sharing with me from which part of europe are you @elektropunkz?
I was born in Poland. I wonder if we're neighbours :)
ps. Friend of mine is looking for crypto writers and social media marketers. Perhaps you or someone you know would be interested in such a position (check out my latest post).
Cheers
Piotr
Also here at the bequest of @cryoto.piotr and am glad to support the symbiosis we are attempting to spread here..
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Hello, @crypto.piotr, thanks for the speedy reply. We are very happy to know we have you by our side.
Definitely we will be willing to adhere to what you have asked us to do. We will try to be as engaging as we can. Thanks for everything in advance. Cheers.
P.S. would it be too much to ask if you can show us how the bounty procedure works? It's an interesting proposition.
Dear @reverseacid
I will try to shortly explain how steem-bounty.com works.
Step 1: transfer few steem to steem-bounty, as a memo send link to your post (my suggestion 5-10 STEEM)
Step 2: visit wwww.steem-bounty.com and admire your new created bounty :)
Ok, what does it do?
Not only it will bring you some new traffic of those who are looking for any bounties, but mostly it will allow you to reward those who create valuable comments.
Example: if you will transfer 5 STEEM to pay for bounty then during payout this 5 steem will be divided between those, who's comment you upvoted.
Consider it as a small marketing tool.
Cool. I will do my best to help you guys tomorrow.
Yours
Piotr
hope you got my previous comment @reverseacid? :)
We did @crypto.piotr. Next time when we have good content that might need good reach, will definitely implement your suggestion. Thanks.
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Hi @reverseacid
You mentioned "we". Who is "we"? :)
Hey @crypto.piotr
ReverseAcid is actually run by 2 of us (friends from college). It's in the SteemIt bio as well. We have our focus on different things in the crypto space so it helps cover a lot more content than we could individually! Both of us are incredibly passionate about cryptocurrency, blockchain, and technology in general. We see this as an outlet to help people understand what we've learnt so far!
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dear @reverseacid
Does ReverseAcid have an website by any chance?
Are you mostly passionate about blockchain or you want to actually find a way to make some business in this industry?
Yours
Piotr
It's me again @reverseacid
If you would ever publish something around thursday/friday ((related to blockchain and crypto) then I can help you promote it (I only can do it on weekends). So if you like my help then just send me link to your post via memo and I will do my best to show my support.
Yours
Piotr
Hey thanks for the post! It is a very important topic and one that I am interested in.
I use to be a bit of a POW maximalist, but the hash battle between BCH and BSV has shifted my thoughts on it. I'm not certain I can support a switch to POS though, to be honest.
Some circumstances might require POW and other circumstances might benefit more from POS. For example, honestly, I wish Steem was SHA256. I don't care if it would hurt performance, because to me Steem needs to be more about immutable free speech. That is its true and key use case.
Immutability and decentralization are not the same thing. In my mind, immutability is paramount to free speech on the internet, and SHA256 is the most powerful method we have of protecting that.
It is possible for POS to do it, maybe, but I'm not sure any POS system can effectively prevent mutability yet. This is very important to me, and at times I have thought that it is for this reason that a free expression app should be built on Ethereum Classic, which would likely be the best platform for that purpose.
Hello @hobo.media. Thanks for the comments.
Same feelings here mate. PoW and its simplicity was the only thing on my mind for a long time. But slowly the fanatic approach began to die as I discovered the flaws and alternatives. I am not necessarily a PoS maximalist either as IMO it still has a lot of problems need to be solved. That's why I ended on a note about trying to find a symbiosis between the two or figuring out an entirely different algorithm altogether. Let's see what the market has to offer.
Amazing comment @hobo.media
Thank you for sharing your knowledge with us.
cheers buddy, Piotr
I did mine crypto before and the amount of time spent on it was not worth for me, if only i had a pc and good internet connection in 2012 it would had been a different opinion from me 😅
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Doesn't everybody wish that @khussan :P
Bitcoin at next to nothing prices is a dream every investor and enthusiast has.
Thanks for the comment.
All i had was a crappy Java powered phone
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Didn’t we all? :P
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😂😂😂😂 i guess so
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now i like steem and dogecoins. bitcoins are trash
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Ah I sense hostility. What’s your vendetta against bitcoin @khussan?
Also, if you don’t mind I’d like to suggest you to read a previous article of ours on Dogecoin. I’m sure you’d love it. It’s a part of our ongoing attempt to evaluate valuable communities that stimulate growth.
https://steemit.com/doge/@reverseacid/crypto-analysis-series-part-4-dogecoin-such-meme-much-value
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dogecoin is much better for me i just love it 😍
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i dont like it because it has too mucb of a price fluctuation not ideal for hodling
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Dogecoin is a great payment protocol. Bitcoin is truly edging toward being a speculative asset right now. There's a great community with some very dedicated people; unfortunately it's mostly filled with speculators
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This issue unfortunately will never be resolved, it's just one of the rivalry that springs up with technology. There's been a number of such sharp arguments involving Linux text editors or programming languages.
In any case, those that side with one or another do so because of their investment above anything else. And this isn't even the end of the proofs, have you heard of Proof of Importance?
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Very true @naijauser. There is libraries worth of precend for internal fights of the same kind. But these are very important for constructive growth, provided people act ethically and respectfully. Not like some of the "diehard" fans ruthlessly trying to put forward their agenda.
Definitely. That's the main idea behind NEM's harvesting protocol right? There's also delegated PoS, PBFT, DAG and a dozen more. Each more complex and intriguing than the other. I chose to talk about these two specifically as they are the most famous ones.
Thanks for the comment. Much appreciated.
Cheers
Amazing comment @naijauser
Thank you for sharing your knowledge with us.
cheers buddy, Piotr
Good
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Really
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Thanks @freshindia
I was directed to this post by @crypto.piotr, then I got here and Im impressed, really. This is a wonderful article well put together, informative also.
Yes the world is concerned the consumption of energy through mining of bitcoin, hence it is a debate which protocol really fits well for blockchain technology.
There's new debate as well about using green energy for PoW. From recent data, it shows we are still at least 30-35 years away at minimum from being more dependent on renewable energy than fossil fuels.
PoW consumption issues aren't going anywhere for a while. That's one of the reasons we like IOTA; simple and lightweight PoW hashing
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Thank you for dropping by and your comment @kryptarion :)
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