There only has to be a barrier for receiving rewards. Bitcoin full nodes validate everything but receive no rewards, and need no barriers.
I run one of the eth validator serious for LIDO. We have 10 validator keys for testnet (prater/goerli now just Goerli) and around 1000 for mainnet ethereum on the beacon chain (which will be the consensus chain post mainnet merge).
Why would anything change when the economic incentives haven't? Mining isn't getting less lucrative or necessary.
Put another way, if you know the true chain at time T, you also know it at time T+1. But if you're just joining the network, or you went offline for a bit, that means you don't know which chain is the true one and need some outside-of-protocol way of determining which fork to trust.
You might argue that Bitcoin is defined as the chain with the most hashpower, period. That would remove all subjectivity from Bitcoin, but it would mean that a 51% attacker could arbitrarily change the rules and steal people's funds. That's not how it actually works; a 51% attacker still has to follow the rules of the protocol for their blocks to be accepted by the non-mining nodes, and that means there's social consensus on the correct software to run the protocol.
There's no consensus needed on which rules to use. Everyone can use whichever rules they want, by using different versions of the software. Different rules define a different currency, like euro or dollar. Using the best currency with the best rules is just a game theoretic focal point. Everyone chooses to use the best version of the software, because they assume that everyone else does so too, even in the absence of communication. There is no "correct, current" software in Bitcoin, because it would be a single point of failure.
There's no objective protection against long-range attacks in PoS, because there's no hashpower to prove the canonical chain. It requires the provider of the "correct, current" software to decide which chain is the right one.
No, hash power and the rules decide it. If you have invalid signatures in your blocks, it doesn't matter how much hashpower your fork has, it won't be accepted as canonical by other forks.
- wait a bit to make sure that you can talk to different people on the network and see what each of them see
- check checkpoints on twitter or websites like etherscan (are they seeing the same thing I’m seeing?)
In projects like Mina, since you do not download the history of the chain (there’s a single zero knowledge proof of a few kB that covers the whole history) you must rely on a marker for “chain quality “ to differentiate potential forks.
Note that there was also some research on how to get signal from the transactions you see that you’re on the correct fork (from some ex colleagues working on libra): https://eprint.iacr.org/2019/1440.pdf
A long-range attack is when a validator withdrawals their stake, waits the withdrawal period (e.g. the 6 month delay delay mentions above), and then creates a fake chain starting from before they withdrew their staked eth.
Because in the "real" history (e.g. the ones that most nodes have seen over the past 6 months) the validator doesn't have Eth locked up still, there's no way to punish them. Thus, these long range attacks get very cheap (you could even imagine someone who pays validators for old keys -- aka, you don't even need to be a validator yourself).
These two facts together mean that PoS blockchains require some "weak subjectivity" - which pretty much means when you download and start syncing your node, you need to know a "finalized" block hash from the past 6 months (or within the withdrawal delay). This ensures you won't get tricked by a cheap long-range attack.
In practice, I don't think this will be much of a problem - clients can just do a new release with a new block has every few months for new users!
Let's say I'm an attacker and I do this. But now none of the subsequent blocks on the original chain will validate anymore because of hashes mismatching. I could of course validate new blocks but 6months+ of blocks from only one or a small number of validators (depending on how much validator capital one can amass for the attack) is going to be pretty obvious.
Unless the attacker can get a significant percentage of validators part of the attack, I can' see it work out in practice.
PoS is, as usual, vulnerable to attacks like grinding, and you can only paper over this.
That being said, the adoption of layer 2 technologies has taken off, and significantly impacted the demand for layer 1 blockspace.
I'm still confused at what happens if you create a valid block with the Ethereum you stake and then that block doesn't end up being part of the main branch.
So at any given time only one validator is going to create a block. If you create it, it's going to be included in the blockchain. If you don't create it (or you create but due to network problems fail to communicate it), then the blockchain skips a beat and someone else will create the next one.
If you want a user friendly introduction I recommend you Ben Edgington's book (WIP): https://eth2book.info/altair/
Or straight from the source: https://github.com/ethereum/consensus-specs
In proof of stake, the more crypto tokens you have, the more lottery tickets you get to win the right to write the next block.
In PoW the lottery is solving puzzles, that’s the energy inefficiency, in PoS the lottery is decided like a real lottery: with a random number generator (a distributed one at that, so that people agree that it was generated honestly)
Each block is published with a hash which is based on all the previous blocks plus its own data. All participants are racing to solve a puzzle: basically a big guessing game where the first to guess the winning number gets to make the next block. The game is to find a number which when combined with the previous hash and put through an expensive hash function comes up with a result which has a specific number of binary zeros at the end. Since hashes are one way functions the only way to solve the problem is for everyone to guess until the solution is found.
The first participant to find the solution gets to create the new block. They also check the last few blocks to see if anyone's been cheating by adding fraudulent transactions. If fraud is detected they just ignore those nefarious blocks like they never happened.
The algorithm scales with the number of participants by automatically making the "difficulty" higher by changing the size of the pattern that needs to be matched.
Lots of exciting features to land very soon that include Timelock Encryption, among several others.
Technical explainer can be found here: https://research.protocol.ai/tutorials/resnetlab-on-tour/dra... and documentation here: https://drand.love/docs/
How do you get verified (true) randomness without an oracle and without a connection to the analog world (proof of work)?
It would be amusing if the answer was randomness that came from a proof of work algorithm.
def totally_random():
return 42
It's almost certainly better for the environment / our continued existence than proof-of-work, if we must suffer cryptocurrency, but I don't trust people who were willing to continue to engage with proof-of-work for years to create an ethical (or even functional) alternative.
But this is always the way; leveraging trust where appropriate can allow great increases in efficiency, this is how society works, so you have a political spectrum where Ethereum is “responsibly pro social” and Bitcoin is still a kind of super trust less money with enormous energy costs to enable this somewhat superficial security property.
The "true" chain according to the new protocol is the one that has more signatories. Validators sign blocks as they're produced, and when a block gets more than 2/3rds of the signatures, it's finalized on the chain and won't be rewritten. (Well, it's much more complicated than that, but that's the general intuition.) When you sign a block, you get a reward on that chain, to incentivize people to participate in consensus.
So the question is, when there's a fork, what stops people from just signing blocks on both forks so they get the signing reward no matter which fork "wins"?
The protocol disincentivizes this by requiring validators to put up a stake of 32 eth, that gets "slashed" if you do that. Put another way, if there's a fork and you sign blocks on both sides of the fork, you lose part of your stake.
But that threat only works if you actually have a stake to lose. If it's been ${withdrawal_delay} months and you no longer have any eth staked, you can start signing blocks from a long time ago and the protocol can't slash you as punishment. So a group of 2/3rds of the former-validators could freely start a fork from ${withdrawal_delay} months ago, sign a bunch of blocks on it, and if their fork loses they'd face no penalty. Someone currently participating in consensus can see this is happening and won't be confused, but someone just joining the network will be.
The solution is pretty easy, if inelegant. When entering the network for the first time, if there are multiple competing forks, you'll just find someone you trust IRL and ask them which chain is the real one. If you've been offline for less than ${withdrawal_delay} months, you won't have to worry about this, but it is a problem for fresh users.
If you set ${withdrawal_delay} to infinity, this isn't a problem, but probably you don't want to do that. Once withdraws are enabled, there'll be some tooling to make it easy to figure out which chain is the real one, but I don't expect there'll be many forks that are remotely convincing.
To make up for this risk, Ethereum then relies on distributing recent 'weak subjectivity' snapshots (through other known nodes, block exploers, baked into client releases, etc) to make sure new folks can join the legitimate network and ignore an attacker's. Those snapshots basically rely on social legitimacy to help folks get going with the 'legitimate' chain. It is a trust assumption.
In contrast (at least in theory), in a proof of work network you can 'objectively' determine which of competing forks of a chain is the legitimate one by a simple metric, the 'longest chain with the highest difficulty'. The presumption made here though is that you will have an open internet and honest client software that will not censor the legitimate chain. A trust assumption is still made that those that introduce you to the p2p network aren't hiding a longer chain from you.
You are using that "social legitimacy" to know you are downloading the legitimate software, or viewing the legitimate source code, or documentation.
Your computer can't calculate if ethereum.org is the legitimate "Ethereum", or it's ethereum.io (just making it up).
2. The 'demand' from mining for GPUs is over-rated. It was a brief problem years ago. You are correct that energy usage for validation will go down.
3. One difference between bitcoin and eth... ethash is a memory hard algo so it doesn't require the fastest GPU. 4-5 year old GPUs are more ROI efficient. Everything is bound in the speed of the memory controller.
4. To be seen.
5. 'staking' today is just depositing ETH into an ETH1 contract that doesn't have a withdraw function. It will require forks to add that functionality.
6. Correct.
7. Correct. Although this likely won't have an impact on price like people think.
8. A fork could always change things.
https://www.pcmag.com/news/inside-the-gpu-shortage-why-you-s...
https://gamerant.com/nvidia-gpu-shortage-not-due-crypto-mini...
https://www.pcgamer.com/why-crypto-mining-wasnt-the-only-cul...
Like #2 is a statement by Nvidia who has a vested interest in lying, and has lied about the exact same issue so blatantly that they got fined by the SEC for it.
https://www.theverge.com/2022/5/6/23059930/nvidia-sec-charge...
Scalpers only come in when there's a shortage already, they don't cause shortages except at launch, they just delay items getting to the real users.
There's image and video evidence of dozens to hundreds of GPU mining rigs in a single room if you care to look.
Eg. https://cdn.discordapp.com/attachments/788512140322406473/90...
https://old.reddit.com/r/pcmasterrace/comments/r39ph3/found_...
https://old.reddit.com/r/pcmasterrace/comments/wganva/posted...
You're wrong about scalpers too. They know the market... of course they know to prey on every opportunity.
Your 'evidence' is really nothing. That's a few thousand gpus... not that many, honestly. They are also not top of the line gpus... which gamers want to buy. older rx470 polaris class gpus are more than enough for large mining farms.
full disclosure: i'm a huge gpu miner, so i definitely have some experience in this area.
> They are also not top of the line gpus... which gamers want to buy. older rx470 polaris class gpus are more than enough for large mining farms.
Way off the mark there, gamers not in the 1% don't buy top of the line GPU (as reflected in the Steam survey), they buy the budget to mid range price. When miners started buying GPU left and right in pallets, NVIDEA and AMD saw it and shift the manufacturing to the top of the line GPU where they have the highest margins even if the waffer would yield a lot less, because miners would buy them ASAP anyway. This reduced the amount of lower tier GPUs in the market.
Funny you mention the RX470, a GPU famously never in stock because of this dumb piramid scheme.
Nope, not at all. My business model doesn't depend on mining forever. I'm not playing down anything. I'm just saying that mining isn't the only reason (and at most 30% the reason) that GPUs were hard to find.
> Funny you mention the RX470, a GPU famously never in stock because of this dumb piramid scheme.
It came out 5 years ago and newer models replaced it.
Scalpers are a symptom of the supply/demand problem. Not a cause.
Scalpers buy up GPUs. There is less supply. That creates a problem.
Those GPUs are then sold immediately to real users. Scalpers do not increase demand.
Scalpers provide a service. They have automation or a way to buy stock fast at MSRP or closer to MSRP. Then they sell it to people who are willing to pay more in order to have the product now or avoid spending time to search for stock.
Scalpers cannot exist unless demand is greater than supply.
That changes what you said previously and isn't what I responded to. We are talking about supply, not demand.
Scalpers do not increase demand.
Scalpers offer a service to users to buy hard-to-find-products now without waiting or searching.
We are going to have to agree to disagree on this one. In the second link, it is in reference to tickets. At the end of the day, tickets are all the same. If you can't get the front row of the show, you'll accept something back a bit... because you want to see the show.
GPUs are different. Miners want specific brands and models and won't / can't accept anything else.
[1] https://www.reddit.com/r/buildapc/comments/pqcrg8/are_there_...
The only issue I’m still confused about is the incentive to add hardware to the network. Obviously the network needs to be resilient to attack on consensus but it also needs networking and physical hardware resilience. How is that incentivized in the PoS?
This incentivizes them to have reliable networking and hardware, running 24x7.
However they are heavily penalised if they are seen to do things like double-voting by accident, so they can't just put up duplicate systems and forget about it. High availability failover is something they can only do carefully.
This is different from the current proof-of-work miners. If a miner stops or screws up, they won't gain mining fees during the stop, but they don't lose anything either.
Now you might say well isn’t that a good thing for less resources but without an incentive to decentralize physically won’t there be a risk of centralization and potentially catastrophic outcomes for the network?
For the same reason that there are a number of mining companies too. But you're right, PoS doesn't 'fix' that problem.
One of the largest ones for eth and several other chains ($7B TVL) is LIDO, of which I’m an eth mainnet and testnet validator node operator. They distribute stake over many high quality validators and have very rigorous operational guidelines to ensure high quality operators only are allowed. I’m not shilling for LIDO but they are a very professional and well ran DAO that truly cares about what’s they’re doing.
One of the cool things they do is liquid staking. In most PoS networks, your funds are locked during a given time boundary, generally referred to as an Epoch. You start staking at an epoch beginning and can not access funds until the beginning of the next epoch. Validators are rewarded for reliably and securely (no double signing!) performing their task via staking rewards. Staking rewards are quite akin to inflation in more traditional monetary systems.
If the reward for staking is fixe at 5%, what keeps the issuance rate from being net positive?
Overall issuance can potentially be negative due to the burn effects of eip1559 - where the base transaction fee of an eth transaction is deleted from the network forever (akin to using oil/gas/petrol & then it's gone)
If 2>1 then net issuance is negative
It is your opinion that it in uninformative, for you, but for myself and many others, it is quite informative.
whats changed in that plan?
Also it started looking like zkrollups could do everything without loss of security or convenience, and with way better scaling than they ever hoped to get with the original sharding plan. So they removed execution from sharding, using it instead as just data for rollups.
Then someone came up with "danksharding" which is more like a RAID system than actual sharding.
The plan now is described in some detail here: https://members.delphidigital.io/reports/the-hitchhikers-gui...
Also, this is only 5% returns, which might really be negative if crypto crashed relative to USD.
This is a direct parallel of issues like home and car ownership. If you're not rich enough, you have to trust a 3rd party, and also get less for your money.
The only one I can see would make me the "cryptobro", to use the currently-popular phrase.
It's also quite ironic that you suggest the basis of Eth consensus be based on the strength of inter-personal trust. If that's how it works, then why bother with the complexities of Eth?
1. Transactions will get slightly cheaper, but only because they're increasing the block rate from every 13 seconds to every 12 seconds, not anything specific to the other cool stuff in the merge
2. The network will switch from proof-of-work to proof-of-stake, meaning that there will no longer be GPU demand or substantial energy consumption attributable to the Ethereum network.
3. For a cryptocurrency to be secure there has to be some barrier to participating in consensus. Now, instead of having to have a fancy GPU to run an Ethereum validator, the barrier will be that you instead have to "stake" 32 Ethereum (and risk losing it if your validator misbehaves). A staking reward of (I think) 5% a year will be issued for your trouble.
4. The Ethereum network will be more resistant to "short-range" forks, that is, forks that diverged from the proper chain "recently". (More resistant in the sense that it will be more expensive to execute an attack like that.)
5. Once you've staked your 32 Ethereum, you currently can't "unstake" it. The ability to withdraw your stake will be added in a future eth fork. It will have to be gated by some delay (maybe you can only withdraw your stake 6 months after you staked it). Attacking the chain via a "long-range" fork, that is, a fork that diverges from the proper chain longer ago than the withdrawal period, will be much cheaper or possibly even free.
6. Ethereum will still favor liveness over consistency. An attacker can't stop the chain, but they can prevent it from finalizing for a time (at expense to themselves).
7. Token issuance will go down, probably to below the burn rate, so the base Ethereum supply will go down over time
8. The chain will get deterministic finality after some number of blocks (I think something like a day's worth). That means that, once a block is finalized, it will never be rewritten. Network outages or attacks can prevent blocks from finalizing.