Excerpt from my post on the ANN Inflation control and network security
And a thought I had after reading Nicolas Courtois on Bitcoin:
No such problem with HyperStake, where incentive to run HyperStake node is present (as long as HyperPool and future clones do not become prevalent). This is something we should advertise.
In any case, since for HyperStake (except for HyperPool), "mining is noding", this should not be an issue.[/quote]
We recently reached an all-time-high of 5.3 in diff. Which is extremely high for PoS. Since HYP is pure PoS, the fact that it is very low compared to PoW difficulty doesn't mean much (for a hybrid PoW/PoS, that would be a different matter).
Note: we are considering implementing a feature to smoothen the diff. Sure, 5.3 is nice, but this is a peak, with high volatility (approximately 50%) in diff. Since a chain is only as strong as its weakest link, we shall consider the current low point more than the ATH. Smoothening the diff is a way to address the issue of volatility. Consequence: we'll probably not break the ATH anytime soon once the smoothening is implemented but all in all, the network will still be more secure.
In other words:
1. Taking control over the HyperStake network would be hard. It has the highest PoS security in the world (and can't be attacked with PoW)
2. HyperStake intrinsically ensures more node-per-miner than even Bitcoin, so more security
That being said, pure PoS runs the risk of the rentier system, because it reduces upward mobility. Since in pure PoS, "holding is hashing", once you're at the top, you're pretty sure to stay at the top. Barring laziness (not running your wallet), the only way for coin repartition to change is to buy and sell. A motivated actor refusing to sell at any price could get 51% of the staking power and keep it. Granted, the same could hold true for PoW, but in order to maintain leadership, such an actor would have to spend money to constantly buy more hashing power - whilst for PoS, there would be no such need of spending more money, of "running to stand still" - a variant of the longstanding "nothing-at-stake" issue.
Any ideas about how to address this governance concern?
Any ideas about how to market the high diff?
Quote
What is this "security of the network" thing? To understand it and why it matters, a bit of background in necessary here.
Contrary to proof-of-work, where the security of the network comes from miners using electricity to solve complex algorithms (like SHA256 for bitcoin, scrypt for Litecoin, X11 for Truckoin, the mother coin of HyperStake...), proof-of-stake only simulates these calculations. It requires much less electricity and can be done on a regular computer, which is much better for the planet (one of the main selling point of Peercoin, the first proof-of-stake) and is also better for fighting "mining centralisation" (where basically miners are more and more professionals and less and less ordinary citizens - the opposite of the dream of Satoshi in 2009).
Both PoW and PoS are meant to ensure the security of the network. A common misconception is that mining (and its PoS equivalent, staking) is meant to give you more money. This is not the case and the confusion is understandable, since the real-world mining (mining ore like gold and silver) is really meant for just for that - moar munnies. Instead, the real goal of PoW and PoS is to secure the network, to be sure that the network is reliable and can be trusted. The reward (block) is really only an economical incentive to encourage people to secure the network. Once again: goal is security; reward is just an incentive. When you mine a bitcoin (or stake a hyperstake), this is only the network telling you "thank you for securing me". That's all. Satoshi solved the Byzantine Generals problem by introducing an economic incentive to cryptography.
In cryptocurrency, security comes from... greed.
Contrary to proof-of-work, where the security of the network comes from miners using electricity to solve complex algorithms (like SHA256 for bitcoin, scrypt for Litecoin, X11 for Truckoin, the mother coin of HyperStake...), proof-of-stake only simulates these calculations. It requires much less electricity and can be done on a regular computer, which is much better for the planet (one of the main selling point of Peercoin, the first proof-of-stake) and is also better for fighting "mining centralisation" (where basically miners are more and more professionals and less and less ordinary citizens - the opposite of the dream of Satoshi in 2009).
Both PoW and PoS are meant to ensure the security of the network. A common misconception is that mining (and its PoS equivalent, staking) is meant to give you more money. This is not the case and the confusion is understandable, since the real-world mining (mining ore like gold and silver) is really meant for just for that - moar munnies. Instead, the real goal of PoW and PoS is to secure the network, to be sure that the network is reliable and can be trusted. The reward (block) is really only an economical incentive to encourage people to secure the network. Once again: goal is security; reward is just an incentive. When you mine a bitcoin (or stake a hyperstake), this is only the network telling you "thank you for securing me". That's all. Satoshi solved the Byzantine Generals problem by introducing an economic incentive to cryptography.
In cryptocurrency, security comes from... greed.
And a thought I had after reading Nicolas Courtois on Bitcoin:
Quote
[satoshi] forgot to create monetary incentives for people to run bitcoin nodes and their number (some 5,000) is MUCH LOWER than the number of bitcoin miners (maybe 100,000). Bitcoin peer network is in steady decline and at dangerously low levels!
No such problem with HyperStake, where incentive to run HyperStake node is present (as long as HyperPool and future clones do not become prevalent). This is something we should advertise.
In any case, since for HyperStake (except for HyperPool), "mining is noding", this should not be an issue.[/quote]
We recently reached an all-time-high of 5.3 in diff. Which is extremely high for PoS. Since HYP is pure PoS, the fact that it is very low compared to PoW difficulty doesn't mean much (for a hybrid PoW/PoS, that would be a different matter).
Note: we are considering implementing a feature to smoothen the diff. Sure, 5.3 is nice, but this is a peak, with high volatility (approximately 50%) in diff. Since a chain is only as strong as its weakest link, we shall consider the current low point more than the ATH. Smoothening the diff is a way to address the issue of volatility. Consequence: we'll probably not break the ATH anytime soon once the smoothening is implemented but all in all, the network will still be more secure.
In other words:
1. Taking control over the HyperStake network would be hard. It has the highest PoS security in the world (and can't be attacked with PoW)
2. HyperStake intrinsically ensures more node-per-miner than even Bitcoin, so more security
That being said, pure PoS runs the risk of the rentier system, because it reduces upward mobility. Since in pure PoS, "holding is hashing", once you're at the top, you're pretty sure to stay at the top. Barring laziness (not running your wallet), the only way for coin repartition to change is to buy and sell. A motivated actor refusing to sell at any price could get 51% of the staking power and keep it. Granted, the same could hold true for PoW, but in order to maintain leadership, such an actor would have to spend money to constantly buy more hashing power - whilst for PoS, there would be no such need of spending more money, of "running to stand still" - a variant of the longstanding "nothing-at-stake" issue.
PoS coins, fiat coins, always end with centralization because, as I have said, once someone, or some nation, gains majority possession of the units of money, they control the currency forever.
To sum it up: on a technical standpoint, the HyperStake network is very strong. But on a governance standpoint, there are some concerns.Any ideas about how to address this governance concern?
Any ideas about how to market the high diff?