Dumb out-of-the-loop question: then what's this talk of Ethereum moving to proof of stake? Whenever someone brings up that PoW is bad, people say Ethereum; whenever someone says why PoW, someone says because PoS isn't safe.
I didn't read Ethereum whitepaper because I consider it to be a copy of Bitcoin but what was the purpose of POW then? Just to initially mine a distribute coins?
Looking at Ethereum whitepaper[1] I only found one mention of proof of stake:
"an alternative approach has been proposed called proof of stake, calculating the weight of a node as being proportional to its currency holdings and not computational resources; the discussion of the relative merits of the two approaches is beyond the scope of this paper but it should be noted that both approaches can be used to serve as the backbone of a cryptocurrency."
And why Satoshi didn't consider switching Bitcoin to POS if it is so good.
I didn't read Ethereum whitepaper because I consider it to be a copy of Bitcoin but what was the purpose of POW then? Just to initially mine a distribute coins?
Looking at Ethereum whitepaper[1] I only found one mention of proof of stake:
"an alternative approach has been proposed called proof of stake, calculating the weight of a node as being proportional to its currency holdings and not computational resources; the discussion of the relative merits of the two approaches is beyond the scope of this paper but it should be noted that both approaches can be used to serve as the backbone of a cryptocurrency."
And why Satoshi didn't consider switching Bitcoin to POS if it is so good.
Proof of stake chains are virtually immune to collusion and majority attacks. A single actor would need to own huge amount of resources and then essentially burn the coins. To purchase such a dominant stake the price would rise very quickly... making it very unlikely to be feasible. In comparison, attacking the larger Proof of work chains only requires a few $100M in hardware (the harder ones) and a MW-scale power source used sparingly. I don't see why PoW is still used...
Bitcoin is never quitting PoW. The Bitcoin core maintainers and consensus are adamant about PoW.
The ETH2 work is important but the app layer on Ethereum is where the action is at today. Decentralized Finance is growing at 30x rate per year: https://defipulse.com/ . I fully expect this development to eventually eat most of the financial markets. They are going after derivatives, lending, options, etc. It's an extremely fast moving and innovative field and Bitcoin is frankly getting left in the dust. They will not implement Turing completeness. A lot of Bitcoin will end up wrapped and deployed on Ethereum. There's already $7.7B worth on there today: https://defipulse.com/btc
The only way PoW crypto is superceded is if someone finally implements PoS. There is a lot of hope in ethereum "moving to" proof of stake, but I think a move will never happen. Miners will not allow it. It'll be a fork.
Then, if it has to be forked why not start from scratch with something better? I imagine/hope many people are working on better crypto protocols at the moment.
Ethereum has been "about to switch away from PoW" for years and years. They get zero points for this up until the day it actually happens. For now, they are massively harmful, and judging by their history, will continue to be so.
I see PoW more as a stepping stone to bootstrap a crypto currency, and I think it might just go away over time.
Ethereum has done it this way:
First you build a stable blockchain, secured through tremendous amounts of power.
Then, once your system has been widely adopted and people have "skin in the game", you switch to Proof of Stake to minimize power consumption while still maintaining security.
PoS is the better solution, environmentally speaking, but it necessarily depends on there already being value in the system that people can be held accountable with and thus kept honest. But to reach that state, people have to trust your system first, and if you're not an already trusted entity, PoW is one way of achieving that initial phase of trust building.
I cannot fathom Bitcoin ever adopting Proof of Stake (PoS) like Ethereum. Bitcoin's community is far too dogmatic.
I see PoW as a liability for the whole cryptocurrency system. For this reason I think the transition to PoS will be like the Whigs vs. the Republicans. One simply does not survive.
As an engineer with twenty years experience in this space and nearly as long studying the economics of it, I have yet to see a replacement for PoW that solves the problem that PoW solves.
Proof of Work is trustless decentralization.
Proof of stake is trusting the dudes who premined the coin and sold you a “fix for bitcoins inherent problem” to hype their ICO.
If you were right, after 10 years one of those PoS currencies would be winning. Can you even remember the proof of stake currencies from 2011?
Why did they fail? After all they had a huge economic advantage over bitcoin mining as they cost effectively zero electricity.
https://www.technologyreview.com/2023/02/28/1069190/ethereum...
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