Quote from: BldSwtTrs on February 14, 2014, 02:43:24 PM

Quote from: AnonyMint on February 14, 2014, 10:25:41 AM

I don't believe PoS (proof-of-stake) is secure and it is inherently top-down control not decentralized crypto-currency. See my upthread explanations linked as follows. I have deleted your post, because you quoted the entire OP and only wrote the one sentence above.

When the price increase there is a huge selling pressure on those who have the largest stakes. That can be seen with Bitcoin where there is a 17% dishoarding rate every doubling and also with NXT for instance (https://bitcointalk.org/index.php?topic=345619.msg5098747#msg5098747).

Basically the more adoption, the more the stakes are decentralized, the less trust is needed. Price increase (i.e time) is a force of decentralization.

I really appreciate challenges of this quality. Thank you.

A fundamental tenet of investing is buy low, sell high. So if we view these coins as investments, we would expect the larger holders to cash out on price rises, and buy back in on dips. And generally to lighten holdings as price trends higher. Because the wealthy could get trapped in an illiquid investment if they end up owning most of it at a very high valuation.

Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.

However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.

If there was some profit to be made from processing blocks in PoS, then there would be a profit motive for obtaining more shares in the currency. Otherwise, the interest in monopolizing PoS shares will only come when the currency is a dominant political and economic factor in the real economy. At that point, the wealthy buy up say 50 - 80% of the shares, then the remaining shares become the cash in the economy and the wealthy hold their shares as if they are shares in a central bank. The point is that nobody will sell off the currency at this point because it is the dominant one. At that point, you are right back to a fiat system. Buying up that 50 - 80% share would likely drive the price higher, thus further cementing the dominant role in the economy and the lust to hold it. If they do this as a transfer of dollars to the coin, i.e. hyperinflation of the dollar, then there is no dollar to return to any more.

I rather think they will long before that take control of these PoS systems with the much easier (less drastic) route of tax and regulation. Since I am looking at the design of how anonymity is achieved by integration with PoW mining (and that is a hint about my secrets), I am doubting that PoS anonymity can be made as strong. Thus PoS will be more susceptible to this form of government takeover.

Also I think PoS will be insecure at all times, because the ordering of who is selected to process a block can be gamed, e.g. who selects the initial seed of the pseudo-random generator and who selects the ids of the shares.

Quote from: BldSwtTrs on February 14, 2014, 02:43:24 PM

And I don't see how the fact that you cannot distribute new coins is relevant to the security issue.

How do you dilute the shares of the wealthy who will otherwise own all wealth due to guaranteed ROI of usury backstopped by their control of government and that they don't spend their wealth on consumption?

Additionally I have explained above how I think PoS devolves to a fiat which I explained is a vacuous form of security if the threat is the boogeyman of fiat (thus Paypal, VISA, and Mastercard), thus only PoW is decentralized. And I also explained upthread why I think funding PoW from transaction fees destroys its decentralization. Thus only perpetual new coins will sustain PoW.

But the really big marketing problem with PoS is how to distribute the new currency in the startup phase to maximize interest and adoption? Adam Beck discussed that towards the end of this interview:

Quote from: AnonyMint on February 13, 2014, 05:52:28 AM

Adam Back discusses centralization due to pools at 25 min, regulation at 30min, and non-anonymity coin taint fungibility at 49 min:
http://letstalkbitcoin.com/e77-the-adam-back-interview/#.UuK0zWTTnrk

By distributing new coins via mining, miners are motivated because they can compete to gain a more competitive ranking in the coin ownership. If the PoW is cpu-only as Bitcoin was when half of its coins were mined, can potentially get the entire population excited about mining.

How can PoS attain similar marketing and adoption?