Bitcoin shatters $60K milestone for the first time

ET3D

Posts: 1,754   +400
You really think "real" money is not fundamentally flawed...?
I think that it's a lot less fundamentally flawed than proof-of-work crypto. I also assume that if this is your answer then you agree that my points are valid, so I'll move next to misconception 4. I don't have time to go into it now, but will hopefully post tomorrow.
 

ET3D

Posts: 1,754   +400
In the US, the top 1% owns 99% of wealth.

Misconception 4: Proof-of work-crypto is "socially just"

Let me start like this: There are two main ways to make money: work for it or turn money into more money by investing it. (I'm ignoring stealing, inheriting, etc.)
Working is something that, in general, everyone can do, and, in general, contributes something to society. People provide some service, produce something, or entertain others, and get money for it. Those who do it better tend to get more money.

Crypto falls into the second category. People who have some money can use it to make more money. In these systems people already who have more money find it easier to make even more money, and that's true for crypto too, with the exception of early adopters, who get a disproportionate part just for being "in the know". The other ways to get crypto are to buy it and, for proof-of-work, to mine it.

I'd be surprised if the division of wealth in crypto isn't much worse than in society at large. The early adopter crowd is a very tiny part of the population to begin with. Those who buy crypto will be a little worse in terms of division than money in the general population, because crypto is high risk, and so more fitting for those with money to spare.

Mining seems to be even worse. Regardless of the risk involved, people need to have a computer with a decent GPU. That's already not trivial. When crypto isn't profitable, such hardware would seem like a waste of money for those who struggle to put money on the table. When crypto is profitable, GPU become pricey and hard to get, so only those with money and spare time (or connections) can get them.

That's because a handful of people do most of the mining. They have connections with the OEMs or distributors, and get large bunches of hardware for their farms, which they run at a big profit at locations with low electricity costs. So people with money make most of the money.

Even if you exclude farms (and mining viruses), all mined crypto does is give lazy geeks a way to make more money. That doesn't help one bit in providing a more just division of wealth. Geeks can usually already get more money than a lot of others. Want something that's really more socially just? Support basic income
 

NightAntilli

Posts: 558   +661
I also assume that if this is your answer then you agree that my points are valid, so I'll move next to misconception 4. I don't have time to go into it now, but will hopefully post tomorrow.
It's more about me not being motivated enough anymore to counter every single point I disagree with. You have some valid points, but I disagree with the conclusions you make.

Like the last one, about it being socially just. I actually never heard anyone say that before... But above all, it is as socially just that one can get, in the sense that there is still an equal opportunity to participate. It's not going to get more 'just' than that.

And you really think that the division of wealth is more unequal in crypto than in society at large...? I mean... There is a huge difference if you're born with minimum wage parents or if your father is Bill Gates. Nothing in this world is 'socially just'. And it can never be, because you can give two people a million dollars, and one of them is going to be a billionaire in a couple of years, and the other one is broke in less than one year.

Basic income is a nice concept, but it inevitably comes with inflation that ultimately devalues the basic income and people will find themselves having to work anyway. Not to mention that this concept is pretty much a catalyst for slavery; Obey, or you lose your income. Yeah... Not great.

I think the majority of your criticism comes from some misconceptions and/or disagreements about how money and the world works. It's not that useful to try and discuss what the best way is to create a pencil, if we can't agree that pencils require wood to make.
 

ET3D

Posts: 1,754   +400
It's more about me not being motivated enough anymore to counter every single point I disagree with. You have some valid points, but I disagree with the conclusions you make.

Fair enough. But you hopefully do understand the gist of things: proof-of-work crypto has serious down sides, while it offers little in return. The last point was partly a response to those who think that proof-of-stake is somehow for "rich people", while proof-of-work is for everyone. It's the other way round, the way I see it.

Proof-of-work crypto is something that shouldn't continue. There's nothing advantageous about it, and it's a burden on resources.
 

NightAntilli

Posts: 558   +661
Fair enough. But you hopefully do understand the gist of things: proof-of-work crypto has serious down sides, while it offers little in return. The last point was partly a response to those who think that proof-of-stake is somehow for "rich people", while proof-of-work is for everyone. It's the other way round, the way I see it.

Proof-of-work crypto is something that shouldn't continue. There's nothing advantageous about it, and it's a burden on resources.
It's not that simple.

With PoW, you can mine even on a Gameboy, as an article on here just stated.
With PoS, generally you need a minimum allocation, that not many are able to afford.
But it goes even deeper than that...

Take ETH as a PoW reference. At this point, what you need is a GPU with 6GB of VRAM. Right now everything is too expensive, but technically you can mine with a GTX 980 or an R9 390. There are ways to mine with lower VRAM amounts, but that's another story. More importantly, you don't need to participate in a pool. You can choose to mine on your own if you so wish.

Take ADA as a PoS reference. All you need to stake is to have an amount of ADA larger than 0. But, you are required to stake on a node. You cannot stake on your own unless you run a node yourself, which has a bunch of other requirements that are more challenging than PoW. For example, you need to stake for over 25 days (varies) to be able to start receiving rewards, unlike PoW where it is pretty much immediate. Additionally, your node needs to be online 24/7 with the same IP. Generally that means running your node on centralized cloud services like Amazon Web Services, Microsoft Azure, or Google Cloud. This is more strict here, because if you do it at home and your internet drops out, or your ISP decides to change your IP address, you need to wait weeks again before you can receive your rewards.
In the case of PoW, if your internet drops out, it's a short bummer, but as soon as it's back up, you can earn your rewards again.

The fact is that PoW is still more decentralized than PoS. And I don't see that changing. Not until cloud services themselves become decentralized.
 

ET3D

Posts: 1,754   +400
I really should come by more often. :)

You can choose to mine on your own if you so wish.

Going by this (and I can't tell how true that is, you tell me), mining one ETH can take half a year on a really fast GPU. That's not really "you can mine on your own if you wish", and also puts in doubt the idea that one can effectively mine on a gameboy. Yes, mining on bad hardware is possible, it's just not practical.

As the Etheruem page on PoS says, one can join a staking pool. Since from the above it seems clear that any PoW users who don't invest a huge amount of cash also need to to use a mining pool, the difference isn't that great. One the plus side of PoS, there's no need for specialised hardware if you use a staking pool, there's no need for technical knowhow (you don't need to be a geek or have one at hand to know what to buy and how to operate it) and you don't get better hardware by knowing people in the supply chain and such. So division of earning with PoS should be a lot better.
 

NightAntilli

Posts: 558   +661
Going by this (and I can't tell how true that is, you tell me), mining one ETH can take half a year on a really fast GPU. That's not really "you can mine on your own if you wish", and also puts in doubt the idea that one can effectively mine on a gameboy. Yes, mining on bad hardware is possible, it's just not practical.
Well, the argument was about centralization, and PoW is generally more decentralized than PoS. And one of the arguments is that you can mine on your own, and don't need to join a pool, although if you want a profit, that's generally a good idea.
In other words, if you do it purely from a profitability perspective, it's not viable to mine Ethereum without a pool unless you have cheap electricity and a mining 'farm'. Believe it or not, some people mine simply to support the network.

As the Etheruem page on PoS says, one can join a staking pool. Since from the above it seems clear that any PoW users who don't invest a huge amount of cash also need to to use a mining pool, the difference isn't that great. One the plus side of PoS, there's no need for specialised hardware if you use a staking pool, there's no need for technical knowhow (you don't need to be a geek or have one at hand to know what to buy and how to operate it) and you don't get better hardware by knowing people in the supply chain and such. So division of earning with PoS should be a lot better.
True. But the difference is that the ones running the staking pool DO require some very hefty hardware. So much so that it is generally outsourced to cloud services of centralized companies like Amazon and Google. This doesn't happen to the same degree for PoW, because the miners are the servers themselves, so to speak.

If you take Monero as another PoW example, pretty much any CPU can mine it, no special hardware required. The user has the choice of joining a mining pool or not.
Ultimately, both PoW and PoS have their merits. It depends on what you want.
 

ET3D

Posts: 1,754   +400
And one of the arguments is that you can mine on your own, and don't need to join a pool, although if you want a profit, that's generally a good idea.
Well, if "you can" is something that few people will do, and even if they do it will be a miniscule percentage of the mining power (when the vast majority of mining power is centralised in big mining farms or big pools), then it's not really a practical argument.

PoS only needs an entry level modern PC to work (I've seen the Raspberry Pi 4 mentioned as a viable platform). It'd be much easier for a group of people to buy enough ETH together to stake and a simple PC than it is for a group of people to buy enough PC hardware to create a farm for themselves.

So it seems to me that in practice, PoS is much easier to make decentralised.
 

NightAntilli

Posts: 558   +661
Considering you've chosen to ignore the main part, which is the higher centralization of the pools compared to PoW at centralized cloud servers, I simply have nothing more to add to this discussion.
You have already made up your mind, and nothing will make you think otherwise. So, I will spend my time doing something else.
 

ET3D

Posts: 1,754   +400
Considering you've chosen to ignore the main part, which is the higher centralization of the pools compared to PoW at centralized cloud servers, I simply have nothing more to add to this discussion.
I'm not sure what your assertion is based on. If you look at Rocket Pool or Stkr, that's likely to end up a lot more decentralised than any PoW pool, because it rewards users for putting up their own PCs for staking.

That's something that PoW pools just can't do. With staking it's easy for a user to set up a node. Sure, they need enough ETH, too (16 ETH in the case of Rocket Pool, 4 ETH in the case of Stkr), but both this and a basic PC (or Raspberry Pi) are easier than setting up your own pool, so I think are much likelier to happen. There's nothing similar for PoW, so I think that a big PoS pool is likely to end up a lot more distributed than a PoW pool.
 

NightAntilli

Posts: 558   +661
I'm not sure what your assertion is based on. If you look at Rocket Pool or Stkr, that's likely to end up a lot more decentralised than any PoW pool, because it rewards users for putting up their own PCs for staking.

That's something that PoW pools just can't do. With staking it's easy for a user to set up a node. Sure, they need enough ETH, too (16 ETH in the case of Rocket Pool, 4 ETH in the case of Stkr), but both this and a basic PC (or Raspberry Pi) are easier than setting up your own pool, so I think are much likelier to happen. There's nothing similar for PoW, so I think that a big PoS pool is likely to end up a lot more distributed than a PoW pool.
You argue that PoW is centralized at the pool, yet at the same time you argue that PoS uses pools too, but is somehow more decentralized because of it.
 

ET3D

Posts: 1,754   +400
You argue that PoW is centralized at the pool, yet at the same time you argue that PoS uses pools too, but is somehow more decentralized because of it.
I think you need to re-read to understand, but I will repeat and try to make it clearer.

Outside of pools, anyone with a 32 ETH and a basic PC can be part of the network. What PoS pools provide is the ability to run such a staking node with less money. This means that even more people can create such nodes. A staking pool also encourages this by rewarding them. A staking pool is therefore a collection of nodes which are completely distributed. The pool provides additional stakes for them, to make up for the missing money, but these nodes are independent. If the pool is offline, the blockchain still gets the validation it needs.

A PoW pool, on the other hand, is centralised. It gives work to workers and collects the results. If it's offline, no work gets distributed and no work gets back. The entire work of that pool is gone from the blockchain.
 

terzaerian

Posts: 800   +1,132
Outside of pools, anyone with a 32 ETH and a basic PC can be part of the network. What PoS pools provide is the ability to run such a staking node with less money. This means that even more people can create such nodes.
True, but unless you were an early adopter 32 Eth is pretty rich these days - that's more than 1 BTC. Accordingly, that means a lot of bag-holders with less than that amount are going to have no other choice than to stake with services like Coinbase, which kind of breaks the decentralization argument here.

The Tezos model I think works a lot better for POS. If you have 8000 XTZ, you can be your own full baker, but if you have less, you can delegate your XTZ to a full baker without otherwise relinquishing control of it, often from inside your wallet application, and there are many bakers besides Coinbase, and a fairly rich, developed infrastructure already established.
 

ET3D

Posts: 1,754   +400
True, but unless you were an early adopter 32 Eth is pretty rich these days - that's more than 1 BTC. Accordingly, that means a lot of bag-holders with less than that amount are going to have no other choice than to stake with services like Coinbase, which kind of breaks the decentralization argument here.
I'm not sure why you're ignoring all the details I posted, such as about Stkr only requiring 4 ETH per node.