Nothing is worse than Proof of Stake

  • PoS is permissioned by internally held tokens owned by a central party that can deny entry to independent external parties
  • There is no mechanism in PoS that forces anyone to ever give up control they already have. Ever.
  • PoS gives the internal (central) parties a mechanism (staking) to guarantee perpetual growth in fraction of control they have
  • Proof of Stake slashing variants are self-damaging and incentivize attacks

PoS is permissioned by internally held tokens that can deny entry to independent external parties

There is NO mechanism in Proof of Stake that forces anyone to ever give up control they already have. EVER.

  1. PoW forces continuous costs for everyone with no exceptions
  2. Equipment ages out forcing rotation & replacement costs (an external type of stake in the network)
  3. Miners join w/o permission until costs ≈ rewards, and that costliness on scale of the rewards forces miners to sell majority of new coins to continue mining
  4. The never ending costs are forcing never ending re-distribution of block subsidies and fees via markets. This is effectively continuously distributing control available to anyone with access to the markets of these coins.
  5. The markets, in return, get to price the value of incentives that the miners depend on for recovering value.

Proof of Stake slashing not only cancels part of itself out, but can even be abused to attack others

Other issues with PoS

  • Nothing at Stake : the idea based on fact that all and any PoS blocks cost nothing to produce unlike PoW (1, 2, 3). This is also given as the reason some implementations invented slashing conditions that only break the protocol further.
  • Cost of attack is unknown, humans are not good at consensus, resiliency (1, 2)
  • history key attack or history revision attack (1) : idea of using previously known keys by large owner (e.g. premine, exchange) to create a more valid long chain.
  • checkpoints, weak subjectivity, long range attacks (1, 2, 3)
  • False equivalency with “centralized miners in China”: miners don’t control the blockchain (1,2)
  • Reliance on subjectively manually deleting attacker’s stake:
Figure 4. Blaming maximalism is not proper security design.
A centralized network falsely called a cryptocurrency & terrible for Proof of Stake

Possible alternatives & “Virtual Mining”

  1. unforgeable equivalent costs for all (to force distribution of control)
  2. permissionless access via external resources available to any independent parties (to allow independent parties)
  3. low barrier to access (maximize number of parties to distribute control to)
  4. environmentally friendly (PoS’s only upside)

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