Of course, whatever functions longer has more credibility: PoW ~6 years, PoS -1 year, PoI - 0 (still in testing). However, dismissing flaws and vulnerabilities in systems that have run for a long enough time is not constructive. "Good enough" may be not enough for some rare case situations, which can happen under certain conditions, those rare case situations should be foreseen and measures should be applied prior to such events, it's only common sense in engineering.
Precisely. Its always good to look at ways to innovate rather than stagnate. PoW has flaws, that can be accepted or a better alternative may be searched for.
Besides being wrong about there only being a dozen Bitcoin miners when there are hundreds or thousands, what other flaw do you think exists?
I am still wondering about this....
Poor villagers in remote areas do work every single day and are not lazy, but a wage is not there proof of work. That is a western concept. For them a good is the product of their work. They literally have fruits from their labor whether it be meat, a house, or a plate of food. They can exactly look at their labor and judge if the amount of labor is worth the end good.
With Bitcoin the system gets way more complicated. Whereas the African has a simple one to one judgment of asking himself "was today's work worth the fruits?", in Bitcoin there are multiple parties involved asking themselves this question. I'll leave the developers out of the equation and just focus on the miners and the end users.
The case for the miners is quite simple. If I run this ASIC, will I get a just reword for my work/waste of electricity and computational power? I say waste because most of the power being used doesn't actually produce an end result. An African farmer might only have a 25% success rate per seed to plant. The other 75% of his effort was wasted in trying to get that 25%. If he could improve efficiency, he would be much better off. His cost per fruit would be much lower. How many hashes does a miner waste before finding the productive one? I think the answer is, A LOT. Now when a good hash is found a large reward is given. And so miners can justify whether or not it is profitable to run an ASIC. It is a simple question of work done for reward, just like the farmer. And for the miners it is a system that works well.
But what about for the end user? What are they paying for and is the service they pay for worth the service received. When a person puts a record into the blockchain it costs about $0.04 which all things being considered is pretty cheap. Somebody just recently moved millions of dollars worth of Bitcoin for that small fee. What a great deal! But how much did it cost the whole system. See that exchange only paid four cents to make that transaction, but the real price of that transaction came from me and you. It came via the fact that the miner that made the block was rewarded bitcoins. Those bitcoins diluted the total supply. Effectively taxing me and taxing you a little bit for his transaction. That guy didn't pay the fee for the transaction, we did. The miner didnt mine that block for the transaction fee, he did it for the block reward, a reward that is a tax me and on my existing bitcoins because they are now worth less because of the dilution.
So the question I need to ask as an end user is, "am I getting a good service for what I'm paying?" The service I'm getting is trust with a community of people that can see my record of bitcoins. They can trust I have Bitcoins and I can trust that they can trust that and vice versa. Anonymint has some pretty weird ideas but sometimes he comes up with a
good point. I don't know if his numbers are right but he said the real cost in miner rewards is $30 per transaction. This comes via dilution of your and mine money. It's easy to figure out. Just figure out how many transactions were processed and divide it from the block reward. That's how much a transaction really costs.
A system where a user only pays $0.04 per transaction but the community as a whole was taxed $30 is simply just not sustainable. When I as an end user pay more for a good or service than its actual value, then a bubble is created. Right now there is an effective bubble of $29.96 per transaction out of $30.
Now we are in an early stage of Bitcoins development and PoW whether you consider it work or waste is actually a very successful system right now. But will it always be? When the block rewards go down dramatically, then I as an end user am no longer being taxed for the action of others putting a record in the blockchain. It's a big win for me. At that point the miners are working more for the transaction fees, so now we need to ask ourselves "is it worth it for them?" Remember right now the network is currently subsidizing miners at a rate of $29.96 per transaction via taxes on the people. We all know that miners are selfish. If they won't continue to be paid well then they won't work. Just like farmer that can't get a certain crop to grow moves on to a new crop, a miner of PoW will move onto a different chain or just stop being a miner all together. Here in lies the problem with a system of waste to secure the blockchain, in the long run it just feels like to me it can't continue. The end users and miners need to come to an agreement on how the chain will be secured. With PoW so many hashes are being wasted per transaction. What we need to find is a way to increase our hash per fruit of labor ratio. That way the system isnt being taxed and subsidized so much.
To sum up: Miners are getting paid the equivalent of $30 per transaction they process. The sender of the bitcoins only pays $0.04. That means the miners are being subsidized $29.96 from somewhere else per transaction they process. That extra money is coming from what is effectively a tax on the prior owners of Bitcoins. They are not having bitcoins directly taken from their accounts to subsidize the miners, but they instead they are having their current stash of Bitcoins diluted. On average there are about 144 blocks a day (that is 24 hours times 6 blocks an hour) and each block is releasing 25 bitcoins. That means each day 3,600 bitcoins are being created to pay miners. The value of those bitcoins at today's market prices are $1,332,000. The more than 1 million dollars a day being paid to the miners comes from dilution of mine and your bitcoins, effectively taxing us. Now the miners love this, because they are getting paid well, more than a million a day. But what happens when those block rewards keep on halving? They won't be getting paid nearly as much. Will they still want to mine then?
At some point when block fees drop, then fees for senders have to go up. Miners won't mine for free. To me it just doesn't seem sustainable. If miners weren't being subsidized today, then each sender would have to pay a $30 fee. How many people are really going to want to do that? Western Union actually doesn't look so bad then.
I do think PoW has been a truly amazing system and I am very glad it exists and I own a lot of Bitcoin, but the system as it is right now to me doesn't seem sustainable in the long run.
Some kind of different system where people processing blocks don't need to be paid so much seems a much better way to maintain the blockchain to me.