> In the case of POS, the incentives are aligned and the coin owners

Biggest owner wins. That's why it is not trustless. The only long-term game-theory outcome for the system is a monopoly. Owners own the miners, and dictate the rules to the users. Otherwise known as our world financial system.

> In the POW case, what underpins the value of the coin?

The network effect of the decentralization, i.e. the nodes. It is the nodes that are peers in the peer-to-peer cash of bitcoin. It is they who hold the blockchain, validate transactions, and validate blocks. Because there are so many of them (185,000 and counting) unless you can effectively convince all of those nodes to adopt consensus changes, the existing consensus rules apply.

PoW alone doesn't make something valuable. Its successful implementation does.

Not sure I follow. Biggest owner has the same incentives as the smallest owner - to keep the dollar price of the coin as high as possible. So, what I am asking is, in the case of a POW coin like bitcoin, what is the force, beyond pure speculation that keeps the coin worth X and not 0.5 X?

> Biggest owner has the same incentives as the smallest owner

Biggest owner can steal smallest owners money because biggest owner controls the consensus rules. So no, the incentives aren't aligned.

> what is the force

The only one that matters : Supply and demand, and no ability to cheat the system. The only thing that is happening is more and more people are recognizing it.

Biggest owner can steal smaller owners money, maybe, depending on the POS design. But that would make no sense. I mean the biggest owners have the biggest stake in the integrity of the network, no? supply and demand can clear at X and at 0.5X, so that doesn't answer the question for me.

Then you fail to understand the incentive structure. The only game-theory outcome to a PoS system is a monopoly. That's the reason why there aren't any successful ones. Because they require trust.

Agree, I fail to understand what you mean. If I'm a large owner of a POS coin, why would I want to steal smaller owners' coins ? Don't I want them to trust the system and keep buying more coins ?

What about a hybrid PoS/PoW system? In reality, bitcoin as PoW is also near monopoly, more like oligopoly, still requiring trust.

If you think this you don't understand the technology, and therefore don't understand its value.

Elaborate? I mean mining pools in China with the oligopoly bit. Are you saying that's not a problem? I would say the current bitcoin PoW scheme is inherently seeking to end up in a few actors having most of the power due to the higher and higher barriers of entry to mining on custom silicon. ELI5 why I'm wrong?

Nodes define and police consensus in bitcoin, not miners. Miners have a single choice : mine for bitcoin according to node consensus rules, or don't. That is the only power they have.

in theory. But in practice, if tomorrow fork XYZ comes out and miners decide to mine that fork, instead of the current one, the current one is finished. So, don't they hold all the power in practice ?

No. You completely don't get how it works. Only by mining according to bitcoin consensus rules do they get bitcoin rewards. Their fork relies upon you using their node client in order to give them tokens. If nodes don't switch clients, no one even knows the fork exists.

This entire episode over the past year has demonstrated this again and again. Miners talk a big game, but in the end, they do as they're told.