Quote from: superresistant on July 06, 2014, 07:22:10 AM

Quote from: BombaUcigasa on July 06, 2014, 02:16:25 AM

Quote from: rpietila on July 05, 2014, 12:53:53 PM

PoS put to rest:

Quote from: justusranvier on July 05, 2014, 11:27:15 AM

Quote from: kodtycoon on July 05, 2014, 10:38:22 AM

that mechanism is far less than optimal for many reasons and excludes those who don't have mining gear and favours those with higher powered mining gear. It's no different to "rich getting richer" in nxt. In that respect, pow is elitist

This is the problem with proof of stake: it was invented by people who have no idea what problem mining is supposed to solve and have some agenda other than solving that problem.
Mining is not about allocating the issuance of new coins. The fact that they are tied together in Bitcoin is a temporary coincidence. Mining is about solving the problem of distributed consensus - how do a bunch of independent nodes spread all over the planet agree on a precise ordering of transactions when every node must operate with an incomplete view of the network and anybody might be trying to cheat?
This problem has nothing to do with elitism or notions of fairness or populism. Overlaying those agendas into the solution is a great way to not solve the problem.
As nodes on the network continually work to establish a consistent of narrative of what has happened in the netwowk based on their own incomplete knowledge, there will be times where two nodes disagree. Mining is nothing more than a signalling mechanism which provides an objective basis for choosing which version of history to treat as correct, whenever a conflict occurs such that more than one alternative version exist.
The design criteria for what makes a good mining algorithm comes from signalling theory:

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Two individuals have access to different information.
They could both gain if they could honestly share this information.
However, their interests do not coincide entirely, and so each has an incentive to deceive the other.
How can honest communication be ensured?

How can honest communication be ensured despite conflicting interests between a signaller and a signal receiver?
Economists and biologists independently proposed that the costs associated with producing signals can provide a solution to this problem. Loosely paraphrased, the solution typically takes the following form.

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Suppose that signals are costly, and that for one reason or another, lies cost more than honest signals.

If telling the truth is cheap enough and telling a lie is costly enough, it may be worthwhile to communicate honestly but not to lie.

There's a reason that when Wei Dai proposed b-money in 1998, he didn't even bother to explain why calculations in a proof of work system, "must be easy to determine how much computing effort it took to solve the problem and the solution must otherwise have no value, either practical or intellectual." He assumed this statement would be so obviously true that no explanation was needed. Apparently this is no longer the case.
The signal sent by proof of work is the amount of opportunity cost the miner has paid in order to produce the block. The fact that mining calculations are completely useless outside the signalling system itself is what makes lies more expensive than telling the truth, thus satisfying the conditions for honest signalling. The opportunity cost the miner pays to produce a block only represents a profitable trade for the miner if the network accepts their block. So when it comes to a node in the network choosing between two valid blocks, choosing to accept the block with the higher PoW means choosing the block which produced by the miner who has the most at stake in terms of opportunity cost paid.
Note that if the miner has to use specialized hardware for which there is no possible use other than mining, the signal is even better than performing otherwise-useless calculations on general purpose hardware. Higher opportunity costs = more reliable signal.
Proof of work is a proof of stake system, the only one that actually works.

PoS coins use the number of coins held as the basis for their signalling system. Since coins have an exchange rate, they obviously do not fulfill the criteria of having no value, either practical or intellectual. Thus PoS is not an viable mechanism for honest signalling.

Latter emphasis mine.

Related of the cost of PoS and PoW, two identical blockchains with identical parameters but only one difference, the method used for block generation (and reward generation) will cause the PoS chain to consistently require LESS and less costs to secure.
This might look like it's a good idea, to have more security with less costs, except it's not so. With less costs to secure the chain, someone with a higher budget can execute forks more easily, as time passes even more so.
What's the utility provided by a less secure blockchain compared to a more secure one? Obviously smaller, so it will be used less. A less used blockchain will have a lower price per transaction/coin/reward, it all spirals down into nothingness.
Private keys should not be valued based on their past properties, only current properties (for example the Bitcoin core update to allow redemption of unspendable outputs creates value for previously used but empty private keys that could reclaim those funds in the future). As such, an address that used to have more coins than any other should be valued at 0 if it has 0 coins in it now. Instead PoS values empty private keys above other empty private keys. I didn't even mention the demurrage ideas, where free to use funds are taxed, so you have even less utility for your coins if you intend to store value. It's really messed up, why would you use this shittier lower utility version?!
Bottom line: if your coin is cheaper to mine/distribute (because of PoS), it will have a lower value compared the PoW version. Why would you store and the lower value coin?

Why don't people understand that the goal of a PoS crypto is not to be just an other 'coin'.
The value of Nxt, that I know well, doesn't come from the coins but from the services it provide.
You want to build your business on Nxt, send encrypted message, vote, exchange cryptos on a decentralized exchange, send automated transactions, you want to have your P2P good store on that crypto because it cannot be taken down.

Talking about 'coins coins coins' is pointless.

Moreover, a PoS crypto doesn't fork by itself, it has to be intentional. It is the same as forking a PoW.
So the value of the crypto must come from it use and from it's community, not from pumping 'coins'.

EDIT :
On a PoW, a miner doesn't care about the crypto. He just want to convert is ASAP to FIAT to pay his bills.
On a PoS like Nxt, the people interested want to build something from it.
Every business or service added to a PoS crypto make it more resilient.

Maybe some people are hard-headed. The primary purpose of cryptocurrencies is to provide a means of transfer of value, with much of the individual token value being derived from the value of it's utility and cost to produce. It's quite weird that a bitcoin can be worth more or less than it's cost to issue, depending on whether there is a demand or not for the transfer of said bitcoin. The value of NXT and the value of Bitcoin comes from the services it provides.

Sending messages, voting, exchanging and p2p transactions are all utilitarian purposes, and their cost to offer is proportional to the cost to sustain them. If the price to sustain those activities is lower (lololol PoS = I just sit around doing nothing while a 19$/month PC/VPS keeps my wallet connected), then the value of the transacted tokens is lower. If the demand is higher, then more infrastructure will be added to increase the cost and offer security.

Consider the scenario of cheap altcoins that can be forked or attacked with less than 1000$. How much are you inclined to transfer more than 1000$ using those blockchains? What about creating a contract on the bitcoin blockchain which is sustained by millions of dollars daily?

What you are talking about is hype and marketing. And don't forget about competing hypes. Once people decide to cash out and chase the next hype or use the better service, the previous service is worth nothing, whoever invested loses everything. Also the infrastructure (lololol basic PC/VPS that can be reconfigured for new coin) goes away, it's not like you have multi-thousand ASICs that can't be re-purposed. And again, if you stake value, you can't use it. If you don't stake value, you lose it. As time goes by, costs go down and the value of the service goes down. If a better service appears, everyone jumps ship.