Proof Of Work versus Proof Of Stake
As part of my efforts to better understand the Steemit ecosystem, I recently played with mining Steem. Pease note that I already maintain a witness node (currently in the 52nd position, thanks to everybody who voted me). Mining, though, it's a different thing.
To make a long story short, I will just say that, at least for me, mining for Steem is simply irrelevant. For a couple of days I was able to produce around 7-8 blocks per day (which meant 1SP/block = 7-8SP/day) but then something happened, and the mining queue was "hijacked" again by much better machines. I think it's about the same machines that were mining before the equihash change in the algorithm, change introduced in HF16. But it's irrelevant if they are the same, what is relevant is that there is enough hash power out there to dominate an entire crypto ecosystem.
Admittedly, the ecosystem is minuscule, only 15-17k active users. That's very small compared with the available hash power on the market, hash power created and maintained with the intent of competing with crypto giants like Bitcoin. But still, the fact that just one or two players can get in, take the money and run, just like that, it's important.
That poses a very interesting question, one that @dantheman recently talked about: is POW really a viable solution for maintaining the integrity of a blockchain? In Dan's article, the main issue was that control of the farming mines is in the hands of government controlled electricity factories. Which basically makes Bitcoin centralized at the fundamental level, although at the superficial level it behaves and feels and "looks like" a decentralized network. Government can shutdown electricity for mining in hours, if they'd really want to.
That issue is real but I think it''s secondary. The main issue is a structural one. POW is doomed to be controlled by someone, sooner or later, because there's no insertion point for human decision (good or bad decision, doesn't matter). The more circuits you put on a plate, the more power you have, hence the bigger the control you can exert. It's just raw computing power. No decision.
Proof Of Stake, on the other side, can overcome this. By creating multiple insertion points at the decision level, it can maintain the integrity of the blockchain outside of the computing power circle. There are, of course, disadvantages. A poorly designed POS can be hijacked by a group or can slow down the blockchain or whatever. But it looks like a much more flexible alternative to POW.
I've been playing with POS only in Steemit and only for a few months. Do you guys have other experiences? Any insights? Any criticism of this?
Would love to start a discussion on this topic!
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
They only dominated it due to a flaw in a 3rd party equahash library that wasn't performing all of the required validation checks. Subsequently, the proof-of-work degraded to SHA256 (same as BTC).
Thanks for clarifying this, @dantheman, didn't know why this happened. So basically it's all back to GPU / ASICS mining for now? Any ideas about when / if this will go back to equihash again?
Later edit: I saw on github it's been taken care of already.
Another point is that after the 0.16 hardfork, miners get the same as a top 19 witness per block, which is about 0.185 SP.
Thanks for the heads up.
Thanks for writing this, helped me learned a little bit more about POS and POW! I been hearing POS is a better system overall but I really still don't understand enough!
I didn't understand POS as well in the beginning, but it proved to be much easier to understand than POW. It's like proving you have a share in a company, at its simplest level.
Yeah, I just know the basic aspect of it; Instead of hashing out algorithms (that waste processing power) being solved with POW, POS focuses on your "stake" that you have invested in the crypto world!
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