The benefit of PoW is that it is tied to real world physics and markets. The price of bitcoin is derived from the price of electricity, computing power and the supply. PoS is tied to the price of what the owners of the coins will sell them for and who wants them, in ethereums case there’s an unlimited money printer that could crash the price at any moment - like the usd, but the usd has a huge ass army behind it
Physics in a sense of the current limits of computing and energy generation are based on physics. If I come up with a faster computer I get paid more and I also further secure the network. It’s a way to insure against technology advancing enough to break the network. If I come up with free electricity I only have to worry about the cost of compute. And bitcoin miners can and do ask for more money if the price of electricity goes up. They do this by holding onto mined coins for longer creating a supply shortage. The big exchanges often get their liquidity pools from miners so if the miners don’t sell they have to pay a higher price set by the market. And finally if PoW is so bad why do you admit that the price of PoS is tied to it? If bitcoin went PoS its fundamentals would collapse and most of the crypto market along with it.
Bitcoins price is derived from the cost of compute, energy and a finite supply. These are the fundamentals of bitcoin. Just like the price of gold is set mostly by the cost of machinery, energy and labour to pull it out of the ground and then the extra cost of maintaining or protecting the gold reserves, there’s also a finite supply. Bitcoin going PoS would be a bit like the current gold system saying we’re not going to take it out of the ground any more but instead we’re going to say who ever owns the current stockpile gets an imaginary credit for more gold. Any new gold entering into circulation will only be in the form of gold contracts.
Proof of Stake at the end of the day is just saying “instead of joining a mining pool and paying my electricity and hardware to do a lot of wasteful work, I’ll instead pick another entity to do the mining for me and give me a share of the profits”. Proof of Stake is still Proof of Work,
It’s literally not this. Proof-of-stake is basically saying “I’m allowed to author the next block because some math formula says a coin I hold is eligible to do this, and here’s a signature proving I own the coin”. It’s not proof-of-work, it’s proof-of-ownership.
Ethereum does not have an unlimited money printer. It has a specific inflation rate and network protocol controlling it. Its fiscal policy has changed over time, PoW is better, but you don’t have to make stuff up to make that point.
Somebody more knowledgeable than me about Eth can detail that, it’s gotten a lot more complicated in the past few years. But suffice to say a clear economic policy does exist, but it burns coins and/or mints them according to several changing variables within the eth ecosystem, for example, gas fees. But the rules are all out there, written in protocol, for anybody to follow and build around, otherwise the whole system would fail to even operate as a blockchain.
I was just answering your post to basically that Vitalik or whoever doesn’t just have a money printer they can unilaterally turn on.
The benefit of PoW is that it is tied to real world physics and markets. The price of bitcoin is derived from the price of electricity, computing power and the supply. PoS is tied to the price of what the owners of the coins will sell them for and who wants them, in ethereums case there’s an unlimited money printer that could crash the price at any moment - like the usd, but the usd has a huge ass army behind it
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Physics in a sense of the current limits of computing and energy generation are based on physics. If I come up with a faster computer I get paid more and I also further secure the network. It’s a way to insure against technology advancing enough to break the network. If I come up with free electricity I only have to worry about the cost of compute. And bitcoin miners can and do ask for more money if the price of electricity goes up. They do this by holding onto mined coins for longer creating a supply shortage. The big exchanges often get their liquidity pools from miners so if the miners don’t sell they have to pay a higher price set by the market. And finally if PoW is so bad why do you admit that the price of PoS is tied to it? If bitcoin went PoS its fundamentals would collapse and most of the crypto market along with it.
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Bitcoins price is derived from the cost of compute, energy and a finite supply. These are the fundamentals of bitcoin. Just like the price of gold is set mostly by the cost of machinery, energy and labour to pull it out of the ground and then the extra cost of maintaining or protecting the gold reserves, there’s also a finite supply. Bitcoin going PoS would be a bit like the current gold system saying we’re not going to take it out of the ground any more but instead we’re going to say who ever owns the current stockpile gets an imaginary credit for more gold. Any new gold entering into circulation will only be in the form of gold contracts.
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I know. It’s one of the fundamentals of bitcoin though and that’s what we were talking about
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It’s literally not this. Proof-of-stake is basically saying “I’m allowed to author the next block because some math formula says a coin I hold is eligible to do this, and here’s a signature proving I own the coin”. It’s not proof-of-work, it’s proof-of-ownership.
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Ethereum does not have an unlimited money printer. It has a specific inflation rate and network protocol controlling it. Its fiscal policy has changed over time, PoW is better, but you don’t have to make stuff up to make that point.
I didn’t know that. What is the protocol? I know last bull run they dumped huge amounts of ether on the market at the two peaks
Somebody more knowledgeable than me about Eth can detail that, it’s gotten a lot more complicated in the past few years. But suffice to say a clear economic policy does exist, but it burns coins and/or mints them according to several changing variables within the eth ecosystem, for example, gas fees. But the rules are all out there, written in protocol, for anybody to follow and build around, otherwise the whole system would fail to even operate as a blockchain.
I was just answering your post to basically that Vitalik or whoever doesn’t just have a money printer they can unilaterally turn on.