Re:Ethereum just activated its ‘London’ hard fork
by spottybanana on Thursday August 05, 2021 @02:49PM
(#28077882)
In practice exchanges end up holding most of the crypto, and they will decide how to use the crypto in PoS. With PoW it looks like miners/pools will quite rarely work as exchanges, so the powers tend to be separated. With PoS, it looks like exchanges will basically run Ethereum, and it look something like Blockstream Liquid, where group of exchanges basically mint the blocks.
Re:Ethereum just activated its ‘London’ hard fork
by jyu on Thursday August 05, 2021 @07:43PM
(#28081501)
To add onto this, is it so hard to imagine the US gov't asking coinbase, gemini, etc to stop payments from "terrorists" and block their transactions?
Where is censorship resistance when the on ramps and stakers become centralized?
Re:Ethereum just activated its ‘London’ hard fork
by drdeca on Thursday August 05, 2021 @08:41PM
(#28081939)
Er, in this scenario, are the exchanges acting as block proposers, or as validators, or both?
Re:Ethereum just activated its ‘London’ hard fork
by ypeterholmes on Thursday August 05, 2021 @02:12PM
(#28077415)
This is exactly right. Too many folks assume PoW is more decentralized because it's not tied to money, but what's the difference if mining requires money? As you note, PoS lowers the barrier to entry and actually creates a more egalitarian system, despite with Bitcoin maximalists think.
Re:Ethereum just activated its ‘London’ hard fork
by j_walter on Thursday August 05, 2021 @02:29PM
(#28077628)
PoS doesn't exactly lower the barrier to entry. Anyone with a GPU can mine (very unlikely to be profitable as a stand alone miner)...but staking 32ETH is a pretty high cost right now ($90Kish).
However both can be overcome by pooling money or hash power...but then again that doesn't lead to more decentralization.
Re:Ethereum just activated its ‘London’ hard fork
by pa7x1 on Thursday August 05, 2021 @02:38PM
(#28077736)
Decentralized pools like Rocketpool do lead to more decentralization and are almost not affected by the economies of scale issue mentioned above (there is a small commission to pay to the operator).
While pooling hashpower doesn't solve the economies of scale mentioned above. If your hashrate per kW is bad you will get a very poor yield on your investment. There is also a commission to pay to the pool operator. Pooling in PoW serves only to receive a more consistent revenue stream.
Re:Ethereum just activated its ‘London’ hard fork
by j_walter on Thursday August 05, 2021 @04:45PM
(#28079517)
Pooling in PoW still means the pool operators are the ones to vote on proposals through the block mining. That is the whole point of decentralization...if one or two large pools (Ethermine and Sparkpool) get too big then they can sway proposals almost single handedly (they have 45% of ETH hash rate now).
Re:Ethereum just activated its ‘London’ hard fork
by nybble41 on Thursday August 05, 2021 @06:31PM
(#28080891)
> That is the whole point of decentralization...if one or two large pools (Ethermine and Sparkpool) get too big then they can sway proposals almost single handedly…
If the pool operators don't actually own the mining hardware then their power is limited to what the participants in the pool, who do own the hardware, allow them to do. If as an individual miner you don't like what your pool operator is doing you can always switch to another pool and take your delegated influence with you. Most proposals require supporting votes in many blocks before they take effect, so you have time to choose a more representative operator.
Re:Ethereum just activated its ‘London’ hard fork
by voidnullnil on Thursday August 05, 2021 @02:43PM
(#28077810)
Can't you just stake more coins in PoS and receive more income? I though this was how PoS coins worked. How else would you even have a notion of people requried to satisfy the condition "all people get the same amount"? Surely not photo ID?
Re:Ethereum just activated its ‘London’ hard fork
by everfree on Thursday August 05, 2021 @05:58PM
(#28080509)
Everyone gets the same percentage, not the same amount in absolute terms.
Re:Ethereum just activated its ‘London’ hard fork
by jcbrand on Thursday August 05, 2021 @03:51PM
(#28078708)
Concerning economies of scale, usually AFAIK the more coins you stake, the more of a say you have in how blocks are propagated.
That's to me similar, if not worse than with PoW.
Re:Ethereum just activated its ‘London’ hard fork
by miguelmota on Thursday August 05, 2021 @04:13PM
(#28079066)
Stakers in a PoS system are incentivized to do what's best for the network. It wouldn't make sense for them to stake large amounts of funds and do something that could make Ethereum less valuable. The current marketcap of Ethereum is $325B, so a 51% attack in a PoS system means the attacker would need $165B. Even if a really bad attack occurred, the majority of validators can decide to fork (eg DAO fork). The social layer of Ethereum is a hidden force and I believe the majority are honest actors that would support any Ethereum improvement proposals that make the network more fair and decentralized.
- Fixed costs that act as barrier of entry
- Economies of scale that lead to centralization
- Geographic factors (operation costs being different in different parts of the world, regulation/taxation, supply chain...)
This is how I see each factor playing out in both scenarios:
- Fixed costs: PoS runs on consumer-grade hardware, while PoW requires specific HW (ASICs or high-grade GPUs). PoS requires a minimum amount of stake but there are pooling solutions, which effectively make this minimum non existent. All in all PoS is at advantage here, unless you want to insist on solo staking in which case PoW is at advantage.
Analogy: This would be equivalent to flat fees to open a savings account or a minimum amount balance required to open it.
- Economies of scale: In PoS they are almost non-existent. You don't stake more efficiently by having a more powerful machine. You just get to reuse the same HW for more nodes but since fixed costs are low this has a very small impact. In PoW there are economies of scale, though, better/more expensive ASICs can mine more efficiently than smaller/cheaper ones. Same with GPUs. Someone with more initial capital can get ahead faster in PoW, while in PoS earns at a same rate as everyone else.
Analogy: This would be equivalent to the interest rate you get in your savings account being dependent on how much money you have. In PoW, the richer you are the higher interest rate you get from your bank, in PoS everyone gets the same.
- Geographic factors: Cheap access to energy has a large impact on PoW as it dictates most of your OpEx. In PoS this is largely irrelevant (PoS is 99.95% more energy efficient than PoW). Taxation/regulation would need its own analysis but I imagine is equally spread across both alternatives. Supply chain is again in favor of PoS as it can run on general-purpose HW, while ASICs are heavily centralized around a single manufacturer.
Analogy: This would be equivalent to different geographic locations resulting in different conditions for maintaining open your bank account or taxing your accrued interest.