Small quibble but broadly agree. In PoW you convert capital into electricity which then gets converted into coins. In PoS you convert capital into coins which then gets converted into more coins. Same starting material, same ending material, different intermediate steps. That's why my argument is that they're basically the same at the limit.
Not really. In PoW you convert money into electricity, then use that electricity to claim mining rewards. In PoS you lock down your money, then use it to claim minting rewards. The two are not fundamentally different, PoS just skips the "convert into electricity" part.
With PoW you had capital expenditure, but also operational expenditure (e.g. electricity costs). Your capital also depreciates over time.
With PoS, you don't have any operational expenditure, and the sticker price of your capital expenditure stays the same, and you can get it back when you unstake.
With PoW you use your money to buy mining equipment and you will get more money, and voting power. With PoS you buy more of the currency with that money instead.
In PoW miners buy physical capital and electricity, in PoS miners buy digital tokens. It's exactly the same, except PoS is less detrimental to the environment.
Taken to its conclusion, PoW and PoS are exactly the same.
In a PoW environment you can take some of your coins, 'stake' them by buying a share in a mining pool, and then 'un-stake' them by selling your share in the mining pool.
The only difference is how much coal is burned and e-waste is generated along the way.
In both cases control and reward go to those with the most resources to deploy within said system.
PoW requires brute force. PoS requires tied up capital. Do you really think the energy usage is the same...physically? Sounds like nonsense with no backing.
If you have significant fiat capital you can easily purchase mining power in PoW. Similar with purchasing validator power in PoS. The two are equal in that regard. Where they differ is that PoS is more resilient to 51% attacks of this nature than PoW is.
With PoW, you'd need to pay for enough hardware and electricity to rival half of the hash rate of the entire network. With PoS, you'd need to pay enough to own half of the coins. Both are prohibitively expensive. PoS also discourages you from such an attack as you'd be destroying the value of the coins you own.
The difference is that with PoW you constantly have to do "stuff" (ie. buying equipment, running datacenters) or get left behind. PoS on the other hand you can just sit on your ass and wait for the $$$ to roll in.
OP's argument is that PoS is a problem because the supply of tokens is finite, and that PoW doesn't have the same problem because it relies on physical capital instead.
I'm still not convinced by PoS, but at first glance, since money = work then PoS might be viable, because what's the difference? Energy goes into creating proof of stake coins, just like it goes into producing proof of work coins, so they should be equally viable... that's what I thought the first time I seriously looked at PoS.
I want to believe that PoS is not simply an attempt to get something for nothing, but I think that maybe it's attempt to get money to work twice. In PoW, the work is done to get coins. In PoS, the work is done to get fiat or whatever, then exchanged for PoS, and then put to work mining, but the value was created outside the PoS system and now it's not clear where additional work is taking place to fuel block validation. I haven't decided 100% that it's a scam, but it is definitely complex and confusing.
The mental model that I'm still stuck with is that PoW is like normal combustion engine... ASICs being high-displacement V8s, while PoS is like some kind of complex perpetual motion machine.
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.
I don't think I follow you. As far as I can tell, PoS is as much of a lottery as PoW. In PoW a player increases their chances of winning the lottery by spending real money on electricity. In PoS a player increases their chances of winning the lottery by spending real money on virtual tokens. The outcome should be the same, except that no electricity is wasted in the case of PoS.
Pos is controlled by those with the most money, and they continuously gain more money through staking rewards (i.e. the rich control the system and automatically get richer).
With PoW, you have to sell/spend some of the coins you earn in order to pay for operation expenditures.
The difference is that PoW is permissionless and PoS is permissioned system. Another difference is that in PoS you pay once and get benefits forever, in PoW you must actively choose to spend energy mining. One more difference is that once you become a staker, your power in the system only grows, in PoW anybody can start mining and dilute your power.
PoS is simply worse from every angle and it’s also not cheaper because MR=MC.
Leaving behind the technical details and the energy consumption aspect, it seems to me that the main economic difference between PoW and PoS is that in the former miners are forced to sell their earned tokens due to a high cost of keeping their equipment up and running. This sounds like a healthier approach.
Whereas PoS validators don't have the same burden, therefore they'd naturally tend to simply increase their shares.
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