I appreciate this whole PoS discussion is going a little off topic, but I didn't start it so I've no guilt joining in.

I think the main advantage of PoS (and one that many people neglect when considering it from a purely speculative investment perspective) is the fact that producing coins does not waste oodles of (irrecoverable) real world resources. This is what would make it attractive to miners (especially later on) - yet because current PoS coins (like PPCoin) are scrypt-hybrids, which are not easily ASIC mined, there is little incentive for new miners with lots of start-up capital but no PPCoin "stake" to start large mining operations, which would then provide an incentive for these companies to advertise/lobby on behalf of the coin; so it could take a while to really kick off, in particular it will require both the mining difficulty of bitcoin to increase much further and mining other coins to be less profitable.

The fear I have about proof-of-stake coins is this: imagine a miner holds a 10% stake of the entire economy, but the company has huge debts and needs to liquidate its coins to fiat in order to pay its creditors, so sells them off cheap, flooding the market with cheap coins and crashing the economy. This is of course a theoretical fear, and the in practice the larger and more distributed the network, the less likely this is to happen.


Given that PoS will likely take a long time to come into its own (decades), there is a chance it could (possibly) challenge bitcoin - by that time bitcoin will be far more ubiquitous, thousands (millions) of services will be accepting it as a payment method and millions of people will be familiar with it (and the notion of digital currency), and with enough co-ordinated impetus behind another coin it should not be too difficult to get merchants/service providers to directly accept payments in that currency, especially if it becomes significantly more cost-effective for miners that they take action to actively promote it. But this is nothing like certain and the network effect of bitcoin could very easily prove too strong for a very similar crypto with no real difference in usability - and I shall remain sceptical until I see some real signs. If there is to be a transition, it will first require the wide-scale success of bitcoin.