Pools; the beggining of the end for Proof of Stake?

in #cryptocurrency6 years ago

In the crypto world people have been pooling resources on the Proof of Work algorithms for a long time. Its not really relevant if the pool is made of CPUs, GPUs or ASICs, pools are bad...

Why?

A pool is operated by an owner, the owner of that pool is the one fully interacting with the block-chain, the pool owner mines the blocks with his address, and then re-disrtibutes the shares to the operators of the hardware providing the hashing power. The pool owner has all the power, Satoshi said 'one CPU one vote' but in the pool system the owners of the 'CPU' have given up their vote to the pool owner. Its the pool owner that can choose which forks succeed, mine consecutive blocks, choose which transactions get included, its the pool owner that could launch a suprise 51% attack. Pool owners need to be trusted, and in a crypto-currency, that is a bizarre concept.

PoS; the solution.

Proof of Stake is different, buy some coins, leave them staking. Many PoS coins can be staked on a Raspberry Pi zero, it costs $10 to buy and consumes 1 watt of power. It doesnt matter if you have 1 coin or 1 million coins, eventually with PoS you will stake a block. So there is no need for a pool, we can keep a properly decentralised system, where 'one CPU' remains as having 'one vote'. In PoS splitting coins between more devices has no advantage in terms of earning rewards.

PoS Pools

Yet still I see at least two companies now offering a pool option for PoS coins. This is inherently bad, because you are giving over contol of your coins to a centralised entity, its also completely un-needed. I understand some people might not be able to, or not want to spend time to set up their own staking operation. For them there are excellent hardware sellers like StakeBox who will sell you a fully configured low energy staking box, that you can just plug in and send your coins to.

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