Bitcoin is PoW for many reasons, a fork of bitcoin could switch it to PoS and end the discussion, but its decentralized nature where one hash = one vote is part of the core of its economic policy.
Ethereum and other PoS chains take trade off but advantages from utilizing PoS one that it desires to be a blockchain that can settle contracts on its layer 1.
This Portman-Warner amendment favors PoW chains dissuading competition between the two.
Even if you don't like PoS, you still shouldn't like the Portman-Warner amendment.
(source: https://twitter.com/jerrybrito/status/1423429377459736577)
The exclusion is for "validating distributed ledger transactions through proof of work (mining)" -- is that meant to cover validation by any full Bitcoin node (e.g. random person who wants full control over transactions involving a personal wallet), or adding new transactions to the ledger via mining?
(I guess, this basically comes down to what's meant by "validating through proof of work" -- the actual PoW is provided by the miner, but other full nodes are needed to validate the actual transaction.)
Because to me, either the validators are affected (thereby significantly impacting the overall robustness of the network, which I would hope reduces its trustworthiness and therefore the currency's value as a result, as well as the ability for individuals to control their own wallets), or miners are affected directly.
A mistake like this really suggests that the proposed regulation is not well thought out, and that it should probably be revisited after further education and discussion.
Worth saying a million times: the massive uproar in the crypto industry this week is not because we don't want to be regulated. It's because these proposed regulations are:
+ massively over-reaching + proposed at the last minute + attached to a must-pass bill + given very little room for proper discourse
This is an attempt to expand surviellance to make revenue collection easier for the state.
Excuse me if I'm not thrilled about the state having even more information about our lives. I pay my taxes to avoid being jailed, but they're never satisfied until they have complete control over society.
I guess my point is that even PoW systems won't be entirely unaffected (albeit not quite to the extent that PoS systems are), since validators are crucial to the integrity of the blockchain.
To attempt to extend the electric car ban analogy: this feels like adding onerous/infeasible reporting requirements to pipeline operators (PoW validators) and power plants (PoS stakers), neither of whom know anything about the end customer refueling at the pump / charger station, but not the oil refineries (PoW miners).
And yes, the reporting requirements would also be in place for the electric utility (PoS validators), which still doesn't know anything about the charger station's customers.
For many reasons this regulation would be unenforceable and/or impossible to comply with. How would a miner be able to fill out a 1099?
What kind of sarcasm is most appropriate here? A coy shocked face or faux outrage?
In Bitcoin, it could either be interpreted as exempting both miners and node operators or neither. That is because the Bitcoin node software does both validation and mining, but the economic environment and network topology means typically people running the software will only do one of the two. Very strange turn of events.
In PoS, as in PoW, security comes from computations done by network participants. For example, in Algorand, nodes generate a proof that they ran a lottery with the correct seed. That's still work, is it not? Does it matter that it's more efficient work than the work that is done to maintain the Bitcoin blockchain? Can someone formulate an argument as to why this should be excluded from the definition of "mining"?
Without rigorous technical definitions, the result may just be that PoS networks adopt terminology like Efficient PoW and Efficient Mining.
Proof of Stake relies almost entirely on the internal game theory of the system and while external influence (such as some level of proof of authority via gov oversight or hybrid PoS/PoW) can be used as a crutch, they open the system up to a new set of vulnerabilities.
Additionally, while the bills are "just" changing the reporting requirements, those new requirements are incredibly vague and whether read in a narrow or a wide sense they impose such a significant reporting requirement that it would be anywhere from very difficult for an individual on their own to legitimately impossible even with unlimited funding and manpower. The reporting requirements would effectively impose KYC reporting on any validator (including full nodes) or software developer involved in a cryptocurrency ecosystem for all users of the ecosystem. This effectively prevents US validators or SW devs from even participating in the ecosystem outside of creating a completely siloed "US only" cryptocurrency ecosystem.
The originally proposed wording is bad, the Warner amendment is worse. The Wyden-Lummis-Toomey amendment is a reasonable compromise that provides some capacity for tax compliance oversight without burdening the entire ecosystem with reporting requirements that are mutually incompatible with 99% of networks.
When you hear about the environmental consequences of crypto, the massive amounts of electricity, the GPU shortages, that’s all PoW. PoS is designed to eliminate that and make crypto no more resource intensive than any other p2p network like BitTorrent.
Regardless of your view on crypto, there’s no defensible justification for the Portman-Warner amendment. It’d be like passing a bill banning electric vehicles but not gasoline, or shutting down solar plants but not coal plants.