A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment.

PoW requires constant investment or you'll be left behind.

I wish there would be more debate about the equity of a cryptocurrency amongst the tech community. Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders? Ultimately the social compact of the economy you create will involve everyone, so we should design a coin that solves hard problems, not just narrowly defined ones that conveniently benefit a narrow minority.

Bitcoin had by far the fairest distribution and the largest holder (Satoshi) hasn't touched his coins and for all practical purposes they are gone. You just can't replicate the same conditions which lead to it's existence today.

From what I've seen, the main purpose of like 90+% of altcoins is to benefit their developers and investors and they'll likely all die and disappear.

> Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders?

They shouldn't, what Bitcoin is enabling is the ability for whoever to use whatever kind of coin they want. Bitcoin opened the whole pandoras box where anyone can create their own coin if they want.

However, for each crypto coin there is clear incentive to make the coin more useful in transactions, both for those more well off and for those less fortunate. Typical BTC holder wants to make BTC useful for everyone, because that adds value for their holdings. That usefulness might add value to those less well-off. If not, they can use something else - in the end there is more choice in the marketplace which should (in theory) benefit everyone.

> Why should the least well off in society be part of a crypto-coin whose supply has been given to early adopters and insiders?

Just taking a stab at it, maybe bc we haven't come up with a notion of how a viable crypto-coin could be started by the least well off, who are -by definition- at a competitive disadvantage in launching successful projects.

I'm not saying it's an impossible problem, just that these systems tend to be driven by economies of scale, whether it's new/disruptive, or the product of an older, more established regime.

And to be clear, I am not suggesting this with the finality of a foregone conclusion, but merely thinking aloud about the dynamic of the underlying problem.

> A PoW miner has to spend to cover their costs, a staker doesn't have any cost to cover, providing a cryptographic signature requires no energy on an ongoing basis, just an initial investment.

And that is great news for crypto holders, cause that means PoS rewards can be way smaller than PoW rewards, which means less devaluation of existing coins and lower transaction fees!

It's good news for current holders with large holdings, it's bad news for new people coming into the system which is why I said it makes it exclusionary over time.

That isn't a counter argument to the rich get richer. POW is still a race to the bottom that favors the well funded.

What commercial activity doesn’t “favor the well-funded”? That’s a rather moot point, wouldn’t you say?

Staking coins just means clicking a button and receiving a financial yield proportionate to your initial investment. Simply showing up with money on day one is enough to earn money on your money.

People financially invested in staking frequently pretend like button-clicking auto-yield is the exact same thing as A) procuring powerful computers which rapidly become obsolete year after year, and B) paying for electricity and hosting facilities for those computers over a long period of time. But the difference between the two scenarios is night and day, and no amount of waxing poetic over “commerce favoring the well-funded” will change that fact.

To act as if staking has exactly the same economic properties as mining is false equivalence.

There's a difference between a billionaire generating yield on their money by investing and taking risks vs the Fed just sending them x% of freshly printed money because they are already a billionnaire.

PoS requires constant investment in terms of lost time value of money.

Are you implying you can’t get liquidity from staked coins? This can be worked around by posting your stake as collateral.

There are more effective ways to make money in PoS networks than staking.

Staking is not all that profitable, really. The rich get richer at a rate which is comparable to a Vanguard ETF but the price volatility is much higher than a Vanguard ETF.

It's exactly opposite.

When rich, with POS, you need to do nothing at all. No investment, no risk, no competition, you can just park your money and tap new money.

With PoW, you do nothing except maintain your mining hardware and burn electricity.

With PoS, you do nothing except maintain your staking hardware and burn the time value of the money you are staking.

From that perspective there is no difference. The difference is that with PoW, the richest participants can afford the most efficient hardware, giving them a super-linear advantage. In PoS, it's still true that the "rich get richer", but only at a linear rate, since there is no way to improve the efficiency of staking (which is basically the best you could ask for).

Mining coins is a risky business, you can very easily lose money there. Proof of stake isn't, you have codified it into the inner workings of the coin that the rich gets richer. Not through interest or banking or investment returns, its just the fundamental law that the rich get richer. That is a significant difference.

It is like, imagine if USA had written in the constitution that the rich should get richer? Would you defend that move by saying "Well, the rich gets better investments anyway so this wont make a difference!".

You can lose money staking too, in exactly the same way. The staking reward needs to be greater than the return of whatever else you could have invested your money in instead. If the staking reward ends up being lower, then you are effectively losing money. Just like how when mining in a PoW coin, you are effectively losing money if the coin reward becomes less than the electricity cost. It's no different from that perspective.

It is a "fundamental law" in both PoW and PoS that you get rewarded for doing the work/staking. I don't really understand your point about the US constitution -- what I am saying is that PoS systems minimize the effect of the "rich getting richer" as much as possible by forcing it to be at most a linear effect. Whereas there is no need to include such language in the US constitution at all.

You have a very odd grasp of reality.

If I invest in Bitcoin and its price increased by 10%, I did not lose money if it turned out that real estate would have gained by 20%. I still gained 10%. Actually, only if I sold it.

That's not "losing money", it's not maximizing returns.

Further, you're still missing the double effect of staking. With staking your portfolio value will depend on the price of the token, yet since you staked it (it's locked up), it's a paper win/loss. Further, regardless of that, you get NEW coins for free.

Further, it's not linear at all. It's whatever the token does, which can be linear, parabolic, anything.

That aspect is the same as PoW. PoW rewards also depend on what the value of the coin does.

You are right that you wouldn't normally consider alternate investments like that. But with PoS, where the only cost is the time value of the money staked, it is the only thing to compare.

Are you serious? You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"?

If you reason like that, I suppose in your world fireworks is the same thing as a rocket bringing us to Mars?

Is running Amazon and making a profit the same thing as just milking interest from a bank account?

These differences aren't trivial, they are massive. In a PoW world, most rich people don't mine, they just hold the crypto. In a PoS world, said rich people auto-mine by just holding crypto.

> You equate running a complicated, deeply competitive business with highly variable yields (can even be negative) with just parking money, and call both "doing nothing"?

No, what I am really saying is that PoW mining and PoS staking aren't so dramatically different in complexity like you are saying. They are actually both complicated businesses with variable yields. The only difference is that with PoW, the benchmark is electricity cost, whereas with PoS the benchmark is the other investments which you could have invested your staking money into.

Staking takes a few clicks, mining require physical setup, maintenance, rent, buy, to me that’s orders of magnitude more steps than staking.

Staking requires all those things too. Or you could pay a service to do it for you, but that applies to PoW mining as well.

Nothing against staking, but you and many other posters ITT are creating a blatant false equivalence between button-clicking and datacenter-construction. It’s not beyond the pale quite yet — we’ve all seen far worse from cryptocurrency promoters over the years — but you’re leaving open minded third parties little choice but to interject.

When’s the last time a billion dollar staking operation had to build multiple mining datacenters and fill them with hundreds of millions of dollars worth of hardware? That’s just not required for staking. It just isn’t. They’re not equivalent operations. Not in any way. Not by any stretch of the imagination.

> button-clicking and datacenter-construction

Which of these two scenarios seems to favour the rich, in your mind?

They both favour in different ways. You’d need to have huge initial capital, time and energy for mining, that’s quite a barrier to entry. Staking you’d need just large capital as the barrier.

I would say it’s harder to compete with miners than stakers.

Running a proof-of-work mining business isn’t risk-free: being wealthy alone is no guarantee of success. Conversely, with button clicking for autoyield, success is all but guaranteed.

There’s really no comparison. Running a business with high fixed and variable costs, and considerable competition is far more difficult to pull off successfully than a passive investment. Which one do you think favours a “gilded elite” more?

You're operating on the assumption that the elite make their money passively.

Putting money in a bank isn't even enough to keep up with inflation at the moment, the same is true for Proof of Stake coins, too.

With PoS you tap new coins but your share of the chain stays the same. The only thing happening is that you are not penalized by inflation. This is just a mechanism to incentives hodlers to participate in the security of the network by staking.