To participate in PoS, you need an existing stash of coins, which is inaccessible for many individuals from countries where cryptocurrencies are outlawed. Not forgetting to mention that participation in consensus would indirectly require going through KYC.
PoW, on the other hand, is akin to buying Bitcoin with electricity - a borderless natural resource.
I dislike the way that cryptocurrencies have managed their initial allocations, but it's way better than the way that fiat currencies have managed their initial allocations (usually encoding generations of violence, rascism and oppression).
To 'participate' in PoS (by which you mean mining a block I suppose), you can buy all the stake you need from other people, just like if you want to 'participate' in stock ownership, or land ownership or ownership of nearly anything else in the world.
> PoW, on the other hand, is akin to buying Bitcoin with electricity - a borderless natural resource.
Well.... if you try to mine BTC these days with a standard computer on a standard electricity tarif, you're not going to have a fun time.
Given the fact that to reasonably 'participate' in PoS you need only the kind of computer you already have and an easily acquired stake, while to reasonably 'participate' in many forms of PoW you need unusual, expensive custom hardware and cheap electricity, I'm not at all convinced that PoW has anything better to say about 'fairness'.
> I dislike the way that cryptocurrencies have managed their initial allocations, but it's way better than the way that fiat currencies have managed their initial allocations (usually encoding generations of violence, rascism and oppression).
Just a nit, but I would argue that those encoded privileges are still present; just now with the added indirect layer of "People who were adjacent to the cypherpunks mailing list circa 2009"
Moreover, anyone who can stake their tokens to produce blocks will never sell you enough tokens that you'll be able to compete with them for future block rewards. Put another way, the value of a staker's token-minting stake is at least equal to the expected ROI over its lifetime (much like how the value of a stock is worth its expected dividends over time). PoS is a digital manifestation of a hereditary aristocracy -- you can almost never buy your way in; you have to be a first mover.
You need WAY more than just electricity. In order to have any chance of receiving any amount of bitcoin, you also need specialized equipment, connection to the network, and access to a mining pool.
Those three things would give a government interested in banning cryptocurrencies plenty of leverage to disrupt mining operations in their country.
All they would need to do is regulate the import of ASIC mining hardware; sinkhole any traffic that looks "bitcoin-y" (damn the collateral damage, we're fighting fascist communist pedophile terrorist drug traffickers here!) and similarly block access to any known mining pools.
They could go even further and introduce severe and draconian penalties to anyone producing, possessing, or using cryptocurrencies (which of course would be selectively enforced).
At this point, once you factor in the real-world element, the fact that, in theory, you only need electricity to produce bitcoin becomes such a small part of that equation.
I think at that point why not use PoS (or better yet, a DPoS scheme), if there isn't any real-world benefit to PoW? I think the tradeoff of introducing a small amount of revocable trust in exchange for RADICALLY reduced energy consumption is pretty clearly worth it, given the real world constraints.
You can participate in most(all i am aware of) PoS chains with any amount of underlying tokens, in the same way you can participate in a mining pool if you lack the hashrate to mine independently.
There will be independent PoS validators who can afford upfront costs, but there are independent miners too who purchase lots of hardware. In PoS the next block is randomly distributed, so those with better hardware dont outperform. So you can validate off a solar powered raspberry pi or nuc if you'd like and not underperform someone with a highend gpu, so the hardware cost is much lower, added to this in long run it will be cheaper to participate in staking than having to replace gpus/asics to mine with.
I don't see how this leads you to think it is unfair in comparison to mining? Upfront costs pretty similar, running costs cheaper, long term hardware replacement costs much less.
They both require large financial investments don't they? And both PoW and PoS have pooling options if you want to invest less.
I'm not seeing much difference in terms of accessibility. In theory PoS is easier because PoW requires actual hardware and/or more technical knowledge.
PoW lacks fairness, most of the rewards go to folks who can allocate capital to very expensive mining operations. I would actually argue that PoS might be more fair/accessible than PoW is now.
What is fairness? In voting, we usually consider a system which permits those with more money to vote more times to be unfair. PoW is fair only if wealth is distributed fairly.
Once you understand Bitcoin, there's no way why you'd go back to the legacy system. It's not Bitcoiners getting freaking rich; it's them adopting a superior store of value that is being selected as the winner in a free market.
Most people are perfectly happy entrusting their (fiat) money with the banks, and asking permission for accessing their funds. Bitcoiners, on the other hand, have tasted the freedom of self-custody and a permissionless payment system.
Whether it has value or not depends on how important it is to have a monetary good that is not issued by a nation state, and cannot be controlled/stopped/inflated/modified.
> there's no way why you'd go back to the legacy system
I can think of lots of reasons.
* Deflationary currencies are dangerous. Inflation is a feature, not a bug.
* If I screw up a bank transfer or have my credit card details stolen, I can have those transactions reversed. No such luck with Bitcoin. The idea of losing my life’s savings to a zero day or sophisticated hacker doesn’t sounds great to me.
* I can’t remember the last time my bank got DoSed.
* Bitcoin’s value fluctuates wildly, making it a poor medium of exchange.
* I like that my country can adjust monetary policy in response to world events like pandemics. That’s a feature, not a bug.
Fortunately, no one is forcing anyone to adopt Bitcoin, if the features are undesirable.
> Deflationary currencies are dangerous. Inflation is a feature, not a bug.
You may be right, but we can't stop a community from choosing something deflationary as their preferred currency.
> I can have those transactions reversed. No such luck with Bitcoin
I'd argue this is a feature in Bitcoin for many people.
> I can’t remember the last time my bank got DoSed.
You're fortunate. Last time I went to a bank (right after COVID hit), I was denied cash withdrawals due to liquidity issues. That's what happens when your money is in custody of someone else. Once you look outside first world countries, you'll see the demerits of centralised systems handling critical resources like money.
> Bitcoin’s value fluctuates wildly, making it a poor medium of exchange.
I'll agree with this point. Perhaps it's because of the nature of the market itself. Bitcoin trades globally, 24x7 and 365 days a year, without circuit breakers when there's extreme volatility. It's not appropriate for buying candies from a store, but maybe a good option for a Tesla?
> I like that my country can adjust monetary policy in response to world events like pandemics.
On the contrary, people holding Bitcoin during the pandemic were relatively well off in 2020. The stimulus package had negative impacts too, like asset inflation. But more concretely, Bitcoin is the first true alternative to central banking, and many people are happy to adopt it because it solves important problems for them.
These kinds of posts are so frustrating. "Blub currencies". They insist that everybody skeptical of BTC's utility must simply be ignorant. This is a deeply uncharitable way of discussing almost any topic.
Understanding Bitcoin really can also convince you that it might not be a superior store of value. Think of the consequences of someone breaking SHA256 which, given, at the moment looks absolutely unfeasible, or of some entity or coordinated entities to actually control the main branch, or the cost of energy to mine (and the fees) exceeding the value of bitcoin at a point in time, or more mundane things like loosing the private key of an address.
Microstrategy's $425M buy order was brokered by Coinbase, and it didn't shoot up the price. Anyway, exchanges will usually deny placing such large orders. Institutions use OTC desks instead, and there are plenty of them these days.
All they care about is opening new accounts, and selling financial products to people who don't need them. They custody your money, but it's impossible to reach them when you need their help. The banking industry continues to exist with websites that were designed in the 2000s. The tipping point for me was when my bank denied cash withdrawals during the initial weeks of the first COVID lockdown.
You may not have been through the same experience, but remember that most of the world's population is either legacy-banked, or unbanked.
Bitcoin hitting $1T is not just speculation - there's a deeper story behind it. All the hype aside, let's not forget what Bitcoin really fixes.
Chase is pretty good about giving me debit cards, credit cards, FDIC protection, e-checks, safe/reversible transactions, and fraud protection. They also do actually answer the phone when I call.
Maybe you just need a new bank? Bitcoin provides none of these solutions.
These are mostly financial apps. Compound for example provides the ability to earn decent interest rates (currently ~2-6%) in a time of 0.1% at banks. That's definitely important for people taking it seriously and using it to grow real savings. It's not a joke or a toy, it's used for real investments.
Lightning is helping Bitcoin become more usable. dYdX, uniswap, and dai are important infrastructure for the crypto economy. Cryptokitties is a game that is not important but is popular. Augur gives insight about the future.
Right now best examples are mostly NFT games like Axie Infinity and NBA Top Shot. DeFi arguably qualifies... Decentralized replacements for many siren server offerings will likely be developed over the next decade, no harm in getting started now.
Bitcoin provided the world a way to transfer value over the internet, that's censorship resistant and completely trustless. If that's not disruptive, I don't know what is. GPT-3 is smart enough to understand that.
At my previous job, in a legal-tech company, we used Woleet to build a copyright protection product for intellectual property. However, I believe IPFS [1] is a superior solution for proof-of-existence, compared to timestamping on Bitcoin.
With Woleet, you must keep the original payload (file + personal identification) that was timestamped, for eternity. In the event of a copyright violation, you must be able to prove in front of a judge that hash of the file in your possession is indeed what exists on the Bitcoin blockchain.
With IPFS, you only need to save the hash of the payload (or a human-readable name, with IPNS [2]), to convince the judge that you authored the original file at a certain point in time. Additionally, IPFS has version control. This means that if you want to prove to a court that some revision to the T&Cs of your product were made before a certain date, it makes more sense to use IPFS.
Yes, if I understand IPFS correctly, you can. Since IPFS works as a content addressed system, if you embed the date, send the document to the judge (the hash which is based on the content), don't show it until a later point, you can prove the document is the same as you sent, even without revealing the content until later.
IPFS doesn't seem to have anything about "version control" as onyb mentioned.
Nothing. Including the date doesn't do anything other than commit yourself to stating that date, the important part is the date at which you commit to the hash.
I'm assuming to you add the document (with date) to IPFS without being connected to the network (no actual data gets shared, only hash), gets the hash and send it over to the person you need to prove the document's date to. They won't be able to get it (since content itself is offline) and once you want to prove it, you add it again or make it otherwise online. Then they can fetch the same hash and confirm they received the hash at the date.
It's also useful to point out that Kashmir was neither a part of India nor Pakistan after independence from the British in 1947.
It was only after Pakistan launched an operation to capture Kashmir, that the then ruler of Kashmir signed an "Instrument of Accession" with India, in exchange for military assistance.
To participate in PoS, you need an existing stash of coins, which is inaccessible for many individuals from countries where cryptocurrencies are outlawed. Not forgetting to mention that participation in consensus would indirectly require going through KYC.
PoW, on the other hand, is akin to buying Bitcoin with electricity - a borderless natural resource.