what exactly are issues with Proof of stake ?

[Dashmaximalist]

hi Geeks

so what are the main issues with POS ? POS looks like a very neat idea , why do you want to waste tons and tons electricity which could put to good use otherwise ?

ETH is hell bent on moving to POS and scaling 100x type of thing.

i understand some economic issues with POS like if Govt arrest all the key POS holders of the coin , its game over for the currency , but apart from that are there are some real technical issues out there ?

 

[GrandMasterDash]

PoW secures the past. PoS secures the now. I wouldn't rule out either.

AFAIK, Eth has unlimited supply yet it somehow maintains a steady price, remarkable really, but true.

 

[Dashmaximalist]

can you explain in more detail , how PoS cant be a currency as some people suggest , consider both technical and economic aspects ( like a country banning a coin and if its Pos it cant penetrate that market , where PoW can etc )

 

[Dandy]

The biggest problem that I see with Proof of stake is that's it's not tested and understood enough.

Also, when the network becomes big enough, stake in itself will not be a guarantee that the node can handle the work that is needed.
I much more like the Proof of service that MNO network in Dash uses. I think we currently have the best of two worlds.

 

[Dashmaximalist]

The biggest problem that I see with Proof of stake is that's it's not tested and understood enough.

Also, when the network becomes big enough, stake in itself will not be a guarantee that the node can handle the work that is needed.
I much more like the Proof of service that MNO network in Dash uses. I think we currently have the best of two worlds.

stake in itself will not be a guarantee that the node can handle the work that is needed. ?? what do . you mean by this

 

[Dandy]

Even in Proof of stake system, the node must do the work to add all the transactions to the block and add the block to the blockchain. What happens when we get to 500 MB blocks that require a lot of bandwidth and processing power to process?

 

[Dashmaximalist]

oh ok i get that , thanks. thats true , thats exactly dash labs is working custom hardware that can run the 400 MB blocks , unlike anyone else in the whole crypto space.

Btw @GrandMasterDash when you say POS secures the future compared to the past , what do you mean by that ?

 

[GrandMasterDash]

oh ok i get that , thanks. thats true , thats exactly dash labs is working custom hardware that can run the 400 MB blocks , unlike anyone else in the whole crypto space.

Btw @GrandMasterDash when you say POS secures the future compared to the past , what do you mean by that ?

A 51% PoW attack would be short lived; very expensive and needs to be sustained. A 51% PoS attack would be game over for everyone.

Might find this helpful:
"If producing a block has no cost, then neither does attacking the chain - that is the key problem with POS"
https://bitcointalk.org/index.php?topic=1171311.60

OTOH, there are various versions of PoS and it seems to be maturing quite nicely. Decred, for example, is kind of interesting, though I'm not entirely sold on it.

 

[arjunyg]

Some more philosophical than technical thoughts of mine on PoS, in no particular order:

PoS is a plutocracy. Personally, that really isn't my favorite type of government. Classic democracy is more my style, but that requires proof of individuality to ward off Sybil attacks. Somewhat of a partially unsolved problem in the cryptoanarchy world.

PoS grows the wealth gap. Admittedly, ROI is not terribly strongly competitive with classical investments especially in a growing economy, so perhaps this is fine. However, if masternodes offer low ROI compared to other forms of investment, few people would invest in them for the monetary gain, and a 51% attack on the government might be more feasible.

 

[arjunyg]

AFAIK, Eth has unlimited supply yet it somehow maintains a steady price, remarkable really, but true.

So do most fiat currencies by the way. As the Ethereum constantly gains in real value due to new technologies being built on it, demand for the currency rises, and consequently so does the price. This counteracts any inflation due to supply increases. As for the US dollar, we have slight inflation (1-2%), but that's okay too. Actually it causes the velocity of money to increase, since there is no fear that if they buy a $3 loaf of bread today it will cost $2 tomorrow. Bitcoin and most other cryptocurrencies have had this deflation problem throughout their growth phases: the value of their economies is constantly skyrocketing, causing demand and price to skyrocket as well. This means that no one wants to spend them, which is a huge barrier to their further adoption.

Let's hope Dash can solve this though the numerous value-added services being developed, like Evolution. Potentially if enough people want to use Dash for other reasons, it will develop a sufficiently substantial economy, independent of its fiat currency value. That is the real pipe dream for a payments-based cryptocurrency.