HI GATRA!
dpos has the drawbacks of pos while adding centralization.
I agree, and am/will-be trying to deter Ohad from going dpos over the course of our irc discussions. I'm personally not as concerned with the "drawbacks of POS" (particularly in this case) as I am with the "adding centralization" but I understand that both concerns are quite valid.
@gatra - Can you describe what you consider to be "the drawbacks of PoS", because all PoS systems are different and have a different set of pros or cons. One drawback in one PoS algorithm may not be applicable to others.
@both of you - DPoS works under the realization that all forms of PoW tend towards centralization anyways, and it gives a way for stakeholders to manage that centralization. I see it as being better than PoW in terms of centralization.
PoW centralizes around centralized mining pools where users aggregate their hash power. For instance, with Bitcoin about 50% of the hash power is centralized to 3 Bitcoin pools. I would venture to say DPoS is less centralized than this, seeing as though there are 101 delegates that thus control less than 1% of the network's processing power. Furthermore, centralization is mitigated by being able to vote in and out delegates... stake holders choose who secures the block chain and if they are doing a poor job of it then they can be removed. This also provides another benefit as with PoW you cannot decide who profits off of securing the blockchain, but with DPoS you can vote in delegates that are developing code for the project, marketing, or building 3rd party services. It is a form of funding development for the cryptocurrency that uses DPoS.
If the PoW algorithm you choose, or you make a new one an Zennet is wildly successful, is a popular one then ASICs are sure to be made eventually as soon as it is economically feasible. This centralizes mining power to big mines which are setup in places where power is cheap and cold environments where the equipment can be cooled cheaply. Furthermore, people with deep pockets get advantages by developing their own hardware for a fraction of the cost consumers can purchase it and via bulk discounts. With DPoS this type of centralization will not occur.
If you had PoW, I see many cool forms of arbitrage happening: being a provider and "outsourcing" to cheaper providers, using coins to pay a provider to mine coins for you, etc.
Possibly, but it is likely that the system will be self-balancing such that the arbitrage smiles are very rare and short lived. If a publisher could profitably mine with some providers' resource then rationally that provider would pull that resource from the network and instead apply it to the same mining process themselves for even greater profit - as they will not need to be paying some provider's fee on top. In fact, this briefly came up in discussion just yesterday, after someone out there (and "out there", heh) mistakenly inferred that people might rent resource to mine bitcoins - in something of a decentralized cloud mining style - which is ofc highly irrational.
You guys bring up a good point here and this (although you don't seem to realize it) is another reason against PoW. Zennet will be renting out people's processing power, and it is foolish to think that the people renting out this processing power will not act in their best interests. The Zennet supercomputer could become unusable during times when mining is more profitable than renting out the processing power, rendering the service useless for a matter of time. With DPoS this would not be cause for concern.
The coin is degined for micropayments. I'm not sure (yet don't know) if it'll be economic or convenient or safe for other uses.
what does this mean? I can't think of any design decision that would be influenced by that, because... aren't micropayments handled off-chain?
You may want a fast block generation rate, but, what else?
No, the micropayments will be on-chain! Precisely the reason that this system uses zencoin instead of bitcoin or othercoin is because it will require a chain specifically oriented toward facilitating continual micro-payments for accounted resource.
This was one of the most difficult points for Ohad to get across to me, but since he has I now agree with him... the particular nature of this coin/network likely makes it of lesser utility for general purpose use. I'm sure it will still see general purpose use, especially for things like services/add-ons related to zennet itself but the architecture is being assembled explicitly
without this being a design goal, unlike most coins.
It is ironic that all of these topics can be tied into DPoS... DPoS is more suited for micro payments than Bitcoin... as I said it is a fast and efficient consensus algorithm. Block times can be reduced to as fast as 10 seconds with an average confirmation time of 5 seconds, and each confirmation is more secure than one Bitcoin confirmation (or any other coin that is based off of Bitcoin's PoW). In the time it takes Bitcoin to produce a single block a DPOS system can have your transaction verified by 20% of the shareholders and by the time Bitcoin claims the transaction is almost irreversible (6 blocks, 1 hour) your transaction under DPOS has been verified by 100% of the shareholders through their delegates.
I don't think DPoS should be written off as a valid option until all of the details are discussed. There is a lot of misinformation that exists about it and some are "set in their ways" so to speak around these forums as to PoW being the only answer for consensus. I know there are a lot of other people that disagree with this sentiment, although they might not be here posting in this needle in the haystack.