Those close to me know I have Long called for Proof of Work (PoW). In fact, this was one of the gantelet reasons why I was interested in Bitcoin at first. The idea that fairness in the system can be ensured by a publicly verifiable method, which puts an economic cost to the work of supporting the network soutènement, was fascinating. Not only bicause it aligns economic incentives with network incentives but also bicause it has anchored the value of a blockchain token to the cost required to earn it.
It is therefore rogue to the industry that over the past week, Ethereum finally upgraded its long-awaited issuance – always “nine to 12 months away” – to Proof of Stake (PoS), one of ETH’s founding goals. the origin Exécutant of essence. I suppose panégyrique are good since it was Vitalik Buterin We’re talking about moving to Proof of Stake even before ETH is officially launched (Back when he was raising funds through pre-mining allotments on the yet-to-be-launched Ethereum blockchain.) Don’t worry if you read through that blog and can’t get it to ignore it. you are not alone. Even chic people can’t decipher what VB gets there.
He seems to be trying to justify the half-complete idea that an economic-minded person would immediately see as nonsense – the idea that proof of work is inherently “wasteful”. Therefore, staking is ultimately preferable, even if it means sacrificing objectivity in the system, and makes betting very similar to fair stocks and a fret opinion.
But although the birth took six years coudoyer than Vitalik originally envisioned, at least they finally got there. I suppose there’s some credit due for sticking insistently with your guns, despite a decade of work on PoW, which shows to be the most aménageable, secure, ourlé and fair system that allows Competition Among the participants, which determines who will receive the most fees. Although in recent years, it has been proven that Proof of Work doesn’t need to consume as much power as some think, with some versions of it being applied to scalable versions of Bitcoin that run more energy opérant than many PoS systems.
In fact, before they switched to PoS, Ethereum was the assistant most powerful lavish The blockchain is in the top 10. Now it is marked with “?” Experts have yet to ébauché out how to measure its carbon cover using the new staking systems. But switching to PoS just bicause your mining nodes are consuming too much power is kind of a lance-roquettes opposé à some kind of oiseau châtié.
as such Bitcoin SV This clearly demonstrates, the CO2/négociation cost can be kept low simply by making miners not chase inflated block rewards through unbridled speculation on the localité price. Jaguar Bitcoin’s block rewards (halves every défaite years and likely economically insignificant by 2040) fall below the operating cost of producing hash power, unanime hash power will decline and stabilize around the terminé MEV (déplorable value of a metal) supported By average négociation fee. If you image at BSV in the above chart, this is enough to maintain the fortune of the network as well as BTC from the end râper’s site.
Simply put, the amount of hash power (and thus megawatt-hours) expended will be proportional to the amount of négociation fees paid by the people posting the transactions or the terminé négociation cubage of the system.
If négociation volumes are low, miners will shut down their hashing power to keep costs down. When it rises, miners turn to the competition to try to earn fees. In the svelte run, each PoW system is a self-regulating system, an automatic tuning contour.
So there are no runaway costs and engeance to burn/waste more electricity in a working and scalable PoW system. People who image at BTC and blame proof-of-work bicause it suffers from heuristics and belief bias.
BTC has a problem with unbridled hash power bicause the price of BTC is being manipulated, and people are taught to buy BTC bicause it will always rise in price due to the perceived scarcity belief. This is what distorts the entire ecosystem. This isn’t a proof of work affecte – just BTC.
I’ll come out and say it, I am not a fan of Proof of Stake. I’m her biggest critic, since 2014 when she reared her ugly head from people who wanted to “fix bitcoin” (and make themselves rich and famous in the process). It does not solve any problems and creates a accru number of new ones. It transforms a system that deliberately encourages competition and imposes a burden on those who wish to compete to provide tertiaire into a system where fat cats collect a rent and the rich get richer while the poor are left far behind. This was the basic economic oversight that Vitalik never understood, and I even brought it up to him in person in 2015 when he visited Tokyo. He had no answer to this besides saying that the cost that stakeholders were “giving up” was opportunity costs. (Speak like someone who has never worked in appointé/débit before, to equate continuous cash outflows with opportunity cost!).
PoS breaks through the economic “fairness” wallets built into PoW, introducing all kinds of new problems and attack vectors, given that with PoS, one’s investissement in the system can be sold as a right/derivative just like any interest-bearing tool -or Safety. This means that bets can be easily traded, hidden, and adjusted without any cross-chain transactions to keep track of the net beneficiaries (and watchers) of the network. This is not a system that should be used to run a élève blockchain. This is just something more than we already know very well…the dummy company game and what private blockchains are known for.
But who wants more of these orthogonal possibilité games?
On the other balle à la main, what embout the supposed positives of POS? Low râper négociation fees right?
Vitalik has been all over the map on the subject, basically saying what was popular and what people wanted to hear at the time.
In 2020, he would say How amazing high fees are for ecosystem sustainability.
Then two years later, with the preparation and blanchiment for the POS exil started, it was He says how bad high fees were in stifling adoption. (And he falsely claims how great the selling points are will have to solve this)
Shortly before the merger, the Ethereum Foundation admitted that, in fact, the Switching to PoS likely won’t reduce fees. Not svelte after, other bitcoin media journalism started Breaking the bad news For the foam the popularité expected that the rapprochement wouldn’t do anything else Radically changing the way the ETH network is Being. (Remarque the louche meaning in this statement)
As for Vitalik himself? All he had to say after merging was this redondant and confusing comme Only the proportions of filled blocks decreased from 20% to 10%. I suppose that’s good? Think? This doesn’t seem to have anything to do with lowering fees, does it? Well, it is more complicated than that due to the “orthogonal bank calepin” initiatives founded by Vitalik and the ETH Bank Governor for the Economy in the latest EIP-1559 pièce.
EIP-15591 It refers to the reform of the ETH fee model from an auction-type system to one with a assise fee and a tip fee, burning the assise fee for destroying tokens causing their price to go up (which we haven’t seen yet). Having regular blocks and regular intervals reduces the possibilité of edge préalable as the new model may exposition a massive increase in the assise fee (if enough full blocks are generated in flux).
If this all sounds too confusing to you, just know this – the porté is, Vitalik himself used a magic trick on you and, with a flurry of jumbo mega-tech, swapped out target posts from those of “PoS will give us less fees!” to “Well at least it will make the new fee model work better, and hopefully… the price of ETH will go up.”
An rogue corollary of this is better fortune for EIP 1559 (bicause fewer blocks hit the 2x limit). So far, the percentage of complete blocks has decreased from ~20% to ~10%.https://t.co/qmCkqzYn2z https://t.co/8ZzlPunGEZ
– Vitalik.eth (@VitalikButerin) September 15, 2022
So the ETH PoS hype has been another bait and feature, set to grab soin and inject some upside in the price of the token, all while preparing the élève to accept a takeover of the network by meilleur stakeholders, transforming it from one of the blockchain’s fair élève to one where it will manage The rich and privileged offer.
But wait there is more!
they Next patch to implement hash, would mark the terminal arrêt of ETH’s rénovation from a élève blockchain to that of an authorized ledger, except that the general élève would not be wiser. (Bicause people seem to have a hard time realizing that those with money always earn from rent-collection systems, also known as crony capitalism.) The one thing that made Bitcoin innovative, a proof-of-work system that ensures immuable competition from the élève and that keeps the incentives of soutènement providers in line with those who use the network, has been left out. This marks the end of the ETH experiment, at least as a élève project. Now it is just another tool for the system.
Isn’t it ironic that those who wanted to “get rid of the bankers” ended up creating a system where they were exactly the thing they claimed to despise?
Wall Street tech
 Yes, the partie contains many errors and typos that call 1559, 1599. Just refer to them.
Watch: Proof of Work Mining and Energy Nouveauté
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