Don’t forget that opaque blockchains can have invisible inflation. Transparent blockchains will always be worth more, as the user can verify that inflation has not occurred.
This applies to grin as much as xmr.
Indeed that is one downside of hiding amounts, as shown in row "Fully auditable supply" in [1]. Finding out just one discrete log (log_G(H)) can collapse the whole system with undetectable inflation.
In opaque blockchains, the mechanism that prevents inflation is the same mechanism that prevents double-spending. The user can verify that inflation has not occurred by running a monero node.
Everything considered, I don't think that the risk of a monero inflation bug is greater than a bitcoin inflation bug when you consider the complexity associated with scripting.
And just to think of the energy that you wasted arguing this tired point! It’s about trust.
You don’t see it has value because you trust in authority. For those that don’t trust in authority, they need a proof of work to prove that someone else… did the work. Dont trust, verify.
That no-trust, verify model is valuable to me. It’s a one way valve. Super useful when you can’t trust anyone around you.
Bitcoin is money for enemies. If my enemy and I can transact in an adversarial environment without relying on some subjective truth, this is valuable.
> Bitcoin is money for enemies. If my enemy and I can transact in an adversarial environment without relying on some subjective truth, this is valuable.
What are you transacting? Ultimately, you're going to be transacting in a real world "thing", rather than just something on the chain. So you haven't actually solved anything, there is still a layer of trust involved. You still rely on your enemy to either make the transaction after you deliver the "thing", or you rely on your enemy to deliver the "thing" after you make the transaction.
Sure, you can stand there with guns to heads, but then you could just do it in cash, no need for bitcoin.
You should appreciate that the trust assumptions in your example have been minimized to a point not before possible for digital transactions; in principle removing all possible third-party interference in remote transactions.
If you're going to argue about failures in practice, I'm not interested, because I agree (likely in a way more open-minded to moving forward than your mindset of giving up).
Yes, I agree, bitcoin (I'm using bitcoin as a proxy for others here) does that. But it turns out that most of the world doesn't value that property all that highly when combined with all the downsides of bitcoin.
The vast majority of transactions are from people buying and selling crypto, not for real world cases, just trying to make a profit in fiat.
We've had 15 years now, and we can still ignore crypto. Most people do. I chose not to, in case it made me rich, and it seems to be working ok towards that goal.
I don't see what you mean by "giving up", because that is still presupposing that there is a real problem that the technology is solving, that people are ignoring out of laziness or spite or something.
I'm not going to argue you or anyone should find the value aforementioned.
But I think the "it's been 15 years" argument is hollow. Clearly Bitcoin has an every-growing community of dedicated holders, and Bitcoin has surely increased the general skepticism of the monetary system.
I think you are conflating a speculative vehicle with an inflation hedge. Bitcoin is surely great for both depending on your timeline, but you strawman it a bit by appealing to the lowest common denominator who doesn't get and doesn't hold it.
It's provably scarce, it's highly locally securable (big job, but possible for most) and as a scarce asset, it's relatively cheap and easy to transfer. Yes, it failed as money (on the base layer), and that was its stated goal, but I'll readily give credit where it is due.
Thousands of cryptocurrencies are scarce. I can create a new one tomorrow which will also be scarce. That is necessary but not sufficient to create value.
It isn't cheap and easy to transfer. Tech nerds find it so, but get out the bubble and almost no-one else does.
The things I like about bitcoin is that it is indeed a trust free transaction mechanism, and provided you evade the law, there is no inbuilt mechanism to sanction anyone from using it. And yes, in theory it presents an alternative to traditional finance. I like that we have this now, as a threat so to speak.
Fantastic.
But now what? In reality, almost no-one cares. That is just the raw reality. It is too complicated, too insecure, too risky for most of society. I personally do not see any of this being overcome, and I never expect it to become anything other than a speculative vehicle in which most chain transactions are just people buying and selling it from each other for fiat money.
Nah you just enrich the founders who did nothing except print all the tokens out of nothing. PoS is worthless, it came from nothing, it is worth nothing.
You don’t really get how mining pools work. It’s not a monolithic thing. well OK MARA is a proprietary pool, but the rest are made up of people contributing hash. If a state actor took over a pool, we could spin up another quick smart. Hash is fluid. Try that with slashing and stake lockups and others nonsense PoS invents to do a worse job.
Bitcoin is not currently mined by "people", it is mined by large specialized companies with razor-thin margins in warehouses with access to bulk ASIC purchase agreements and incredibly cheap electricity.
The last time a "person" was able to mine Bitcoin at breakeven was around 2017 or so. Maybe 2020 or 2022, if you threw the dice on buying ASICs from shady companies, hired an electrician to install a new circuit, then filled your home office with 10,000W of equipment.
In contrast to stake as an individual, you don't need special access to electricity or agreements or anything. Just buy tokens and run them on a mini-PC that costs less than a grand. The minimums are low due to DVT.
> Try that with slashing and stake lockups
I don't see how slashing is relevant to the conversation.
As for lockups, it's much easier to wait a few days for stake to unlock than to try to sell a bitcoin mining ASIC. It's also less counterparty risk and a much more liquid market.
https://bitaxe.org/
I guess all those plebs are just imagining mining sats at the edge. Mining isn’t just farms. And farms are not pools.
You are regurgitating ETH propaganda that doesn’t match reality.
what you are missing is that PoS coins are printed from nothing. The original sin. From nothing. Worth nothing. PoS is a Ponzi to dump worthless tokens on you. You can’t escape that.
PoS trends to zero. I can’t believe we are still arguing this with >2T market cap for BTC and ETH has actually shrunk since it moved to PoS. It’s going in the wrong direction…
One bitaxe costs $145 and runs at about 400GH/s. That's $0.02 per day in gross revenue, before electricity expenditure. It breaks even at $0.05 per kWh, which is an electricity rate so cheap it's impossible to get most places in the world. Mining 20 sats per day - which are worth a tenth of a cent each - is completely meaningless.
Even if you could somehow get completely free electricity, you need to buy 1700 bitaxes at a cost of $240,000 to earn a modest $1k per month, or 5% annual return initially, which dwindles quickly as ASIC technology improves year-over-year. You never reach breakeven.
So the bitaxe is a novelty item. Economically viable mining is indeed just farms now.
> what you are missing is that PoS coins are printed from nothing.
Satoshi's coins were printed from running some lines of C he wrote on a desktop computer. That's just as "nothing".
> The original sin. From nothing. Worth nothing.
That's not how economics works. See my other reply about how software also comes "from nothing" but is obviously not worth nothing. All intellectual property comes "from nothing", but intellectual property powers the modern economy.
> PoS trends to zero.
Opinion.
> I can’t believe we are still arguing this with >2T market cap for BTC and ETH has actually shrunk since it moved to PoS. It’s going in the wrong direction…
Cherry-picked timeline… It’s reality dude! It’s the timeline that reflects reality in 2025.
Of course if you imagine a reality where ETH PoS was the best and the coin was worth $100k/ETH post merge you could say that. But that’s fantasy.
It’s worth less per unit than when it was POW.
Satoshi spent real resources to mine, yes they were negligible at the time, but it was real resources. I recall genesis block took 6 days of hashing at difficulty 1. Vitalik just hit print.
BitAxe is a toy, yes. But my point was that people are mining sats. You just don’t see the value in the hardware and energy outlay for integrity. That’s the disconnect. PoS has no real world binding, and so must rely on humans for integrity. Bitcoin… offers an alternative. ETH PoS is more of the same. I don’t trust humans, you trust them too much.
> I recall genesis block took 6 days of hashing at difficulty 1.
The genesis block (0) was hard-coded. Block 1 was mined 6 days later, but Satoshi wasn't hashing that whole time, he was just waiting.
Every block after the genesis block itself was subject to the difficulty adjustment process, including Block 1. So technically we know that Bitcoin is actually pre-mined by at least one block, since if anybody else knew about Bitcoin back then, it's certain they wouldn't have waited 6 days to mine Block 1 like Satoshi did.
> You just don’t see the value in the hardware and energy outlay for integrity.
To equal 10% of the current Bitcoin network hashrate (a good ballpark figure for having "enough to matter" when it comes to defending PoW consensus), you would need 2.5 million of these units, plus 2.5 million people willing to pay $145 and $52/yr in electricity to run them 24/7 next to their wifi routers, to earn $0.02 per day. Plus, of course, fiddle with the units every few months/years when they stop mining for whatever reason, like your partner changed the wifi password or a fan goes out.
How many people do you know who would want to take up that deal? It's not just me - nobody sees that value. Nobody wants to donate $200 to create an insignificant, marginal contribution to Bitcoin's theoretical security properties and earn $0.02 per day.
It's a lot more alluring to earn a real return on whatever ETH you're already holding by doing the exact same thing on Ethereum without needing to buy specialized mining hardware.
> PoS has no real world binding, and so must rely on humans for integrity.
Can you be more specific? Ethereum doesn't rely on humans for integrity any more than Bitcoin does. Conversely, Bitcoin doesn't rely on humans any less. Both protocols are nothing more than a set of rules that everyone agrees on, and everyone can collectively agree to change at any time.
> I don’t trust humans, you trust them too much.
You trust the CEOs of large mining farms that grow more and more concentrated year after year through economies of scale. You also trust that governments won't execute a single warrant to take over their country's largest centralized mining operation whenever it's convenient for them.
I trust a large set of of geographically distributed stakers. They can't grow any larger than they currently are, because staking has no economy of scale, and they can't be seized by governments, because it would require them to execute tens of thousands of warrants on tens of thousands of physical locations.
We don’t know exactly what happened between 0 and 1, but it’s not really that important, other than it’s “externally verifiable hash”, eg PoW.
Real Return”. I think the real return is -40% since PoS? And falling? The illusion of yield. It’s the same nonsense they use to get people to buy treasuries with yields under inflation.
It’s Wall Street tricks dressed up as yield. That’s all that’s been reinvented here. It’s not some grand hack to bypass “waste”.
I agree going after the stakers won’t shut it down. But going after the central devs? Remember liberty reserve? Ethereum is just LR, and Solana is LR2 and Sui is LR3?
> We don’t know exactly what happened between 0 and 1, but it’s not really that important, other than it’s “externally verifiable hash”, eg PoW.
Whether or not someone ran a particular piece of software on their computer for ten minutes in 2009, or even six days for that matter, is not important.
> Real Return”. I think the real return is -40% since PoS? And falling? The illusion of yield. It’s the same nonsense they use to get people to buy treasuries with yields under inflation. It’s Wall Street tricks dressed up as yield. That’s all that’s been reinvented here. It’s not some grand hack to bypass “waste”.
When you hold ETH (and stake it, which is easy), your percentage share of all outstanding ETH goes slowly up over time. When you hold BTC, your percentage share only goes down as more BTC are mined.
The "return" is that you accumulate more of the asset's market cap over time. If you don't value ETH, just don't buy it. If you like ETH, staking gets you more of it. The return is real in the sense that it's paid partially by transaction fee revenue, not by simply inflating the network by the same amount as the reward payouts.
> I agree going after the stakers won’t shut it down. But going after the central devs? Remember liberty reserve? Ethereum is just LR, and Solana is LR2 and Sui is LR3?
Alright so Ethereum has ten central dev teams working on ten clients across international borders. Bitcoin has one central dev team working on one central client. Which is more decentralized?
Of course if you want to buy something useful you have to pay someone who created it or someone who is reselling it.
It sounds like you're basically describing the software market, and more broadly, intellectual property in general. When you write software, it creates something using near-zero physical resources and physical effort, but it isn't a Ponzi scheme.
Your description could also apply to all fiat money, too. You're born with zero of it, and you have to buy it from someone who ultimately got it from someone who printed it out of thin air. That doesn't mean all money everywhere is a Ponzi scheme.
Expenditure of real resources isn't an indicator of a product's worth. If it was, Microsoft would be burning coal to power Microsoft Word.
In summary: PoW is a mechanism for fair coin distribution (of course, fairness still depends on the emission curve), while PoS is not (its creators start with 100% of all coins).
I am a random nobody, I was there at the time the Ethereum presale happened, and they were accepting purchases from people just like me.
In fact the presale was so open that it was drawing substantial criticism at the time. People were worried about the legal ramifications of them selling to literally any member of the public, without any KYC or vetting process. It was the polar opposite of selling to insiders.
That's aside from your metrics for the sale being wrong as well.
I was also there. Seemed like a scam, like all those other premined coins that were popular when ETH launched.
I stand by that assessment in 2025.
I guess technically if you had traded Bitcoin for ETH at launch and then back to Bitcoin before merge you could have made more sats than holding the sats alone. It’s true of many low cap tokens. But for anyone touching ETH since the merge, they have been burned.
We can marvel at the innovations introduced by the tech, yeah, contracts are interesting (yet still don’t seem to have a use case beyond accounting and tokens.. [primarily fiat stables]).
Because it’s not external referencing. It’s all on chain, and any external price of tokens is all in humans minds. Of course, true of Bitcoin too.
However, energy is the external thing that links time and computation to the chain data.
Really, Bitcoin PoW is an amazing discovery. Proof of Stake is self serving self referencial database.
Bitcoin through Proof of Work is a global computational one-way valve for a ledger, which enables a fuzzy decentralized time, by which we can enforce digital scarcity! The ledger record becomes the digital commodity. What an age!
Proof of stake ends up as chain where 26 dudes in discord can freeze accounts, lock the chain, etc, etc.
it’s not really different than 26 banks doing the same. And really you have to ask yourself about the purpose of any of this if you are trading 26 banks for 26 dudes in a discord.
Bitcoin proof of work is both the sine qua non and the ne plus ultra of the entire sphere… and i say this as an enjoyer of all the fancy math et al. in the space. it is genuinely a monumental achievement… one whose value… is indeterminate (at best; and worst). and i wouldn’t dare opine on that point, because i’m “from Switzerland” on this. but that it opened a mathemeatical pandora’s box is undeniable. when i read the original Bitcoin paper (about a year after publication) i was suffused with the feeling that something fundamental was “discovered” in a way i’ve only felt a handful of times in my entire life… (and then i spent all my BTC on drugs)
+1 blockchains and cryptocurrencies are super interesting and valuable IMO outside of the present speculative lotteries people are playing.
But I suspect even more interesting things than the current applications will come out of the opening of a bridge between pure computation and the material world over the next decades/centuries/millenia.
> Proof of Stake is self serving self referencial database.
Proof of Work is much more self-serving than Proof of Stake, as it demands external expenditures to keep itself running. PoS can perform the same job (running a blockchain) without demanding that the world drop what it's doing to contribute electricity to one massive global tragedy of the commons.
Being self-referential is a beneficial feature, not a bug.
> Proof of stake ends up as chain where 26 dudes in discord can freeze accounts, lock the chain, etc, etc.
That's where Proof of Work ends up, not Proof of Stake. PoW's economies of scale always eventually result in a network controlled by a handful of massive mining operations running at razor-thin margins. The "26 dudes in discord" that people talk about are the CEOs of large mining warehouses with custom chips that make it impossible for home miners to break even.
In contrast, with a well-designed Proof of Stake system, people can contribute by staking at home and running mini-PCs in closets at edge locations. It has the potential to remain a much more grassroots network with less concentration of wealth, if the initial distribution is relatively fair. There is no economy of scale and ideally no concentration of wealth over time - as everyone earns the same percent returns in staking.
Haha, no.
Like in sui where the validators halted and froze?
Or Solana where dishonest stalkers rigged the delegated staking auction and stole from other stakers?
What you are repeating is the same PoS nonsense.
Get out of here. Eth drove off a cliff when it went PoS. It’s going to zero vs Bitcoin, like every other PoS (or alt) coin. It’s all just PoS cartels.
Meanwhile, many people have their “edge” BitAxe earning Bitcoin.
nb: PoS can never really be fairly distributed. It’s printed out of nothing to enrich the founders. The billionaires were dumping Sol on retail last cycle. It can never escape this. Eth was “premined”.
Ethereum is doing just fine after going PoS, in fact, it’s much more secure than when it was PoW from a security budget standpoint while achieving less inflation compared to Bitcoin, and will continue to remain secure compared to Bitcoin’s critical security budget issue as block rewards go down. It’s also special compared to other chains in that it started out as PoW for at least 7 years.
Bitcoin has ASIC monopoly and conflicts of interest with core devs connected to companies dipping into mining.
Solana and other chains are VC fueled crap though, I agree.
And yet, every ETH is worth much less sats today then when it was PoW. Remember the flipping, lol.
All the yields in the world don’t mean nothin’ if the value of the capital is not preserved. To say nothing about “security”. I would argue the complexity introduced by the beacon chain mechanism reduces security… but it’s debatable.
You can keep beating the failing PoS drum or you can actually preserve your capital where other grubby humans can’t mess with it. I know what I’m doing.
ETH price has been performing poorly lately, therefore PoS is "failing"?
That seems like quite the leap in logic to me.
I'd like to mention by the way that Bitcoin has had two egregious bugs that caused network downtime - once in 2010 and again in 2013. Ethereum has had 100% uptime since inception.
Part of this is due to Bitcoin having one reference implementation and Ethereum having five, so it's impossible for the entire network to run into the exact same software bug.
I don't believe he did, and I'm familiar with a lot of his writings. Do you have a source?
> Single Client = Good. multiple client = menace.
Two major bugs took 100% of the Bitcoin network down on two occasions.
In contrast, several major bugs temporarily took out small subsets of Ethereum validators several times, but the network remained operational throughout. Due to EIP-1559, the network was not even degraded at all in terms of performance or throughput.
Apparently you're right that I can't convince you otherwise. One network's major bugs have caused major outages, and another network's major bugs resulted in 100.0% uptime still being maintained, and you still think the one with the major outages has a better strategy to defend against bugs.
It’s not an apples to apples comparison — I was there in 2013 with the 0.4/0.5 bdb issue happened, it was a split (not downtime), and the community went with 0.4 until 0.5 was patched. The community was much smaller. There was no downtime. There could have been loses on the centralized exchange side for the few hours of ambiguity. maybe there was 1 public report of loss at the time.
This is the lesson that ETH people were not around for. More moving parts; more failure cases. More client, more moving parts.
There were several significant double-spends. People were able to create fake transactions and scam each other.
Preventing people from sending fake transactions is Bitcoin's one reason for existence. People made out with a bunch of stolen money.
If everyone being able to send fake Bitcoins around and scam people doesn't count as downtime, I don't know what counts as downtime.
Showing fake bitcoins is actively worse than if the network refused to process transactions at all.
As a side note, due to its slashing system, Ethereum "fails closed" like this and refuses to confirm transactions if the network were majorly disrupted.
> There could have been loses on the centralized exchange side for the few hours of ambiguity. maybe there was 1 public report of loss at the time.
At the time, I remember several reports of relatively large losses (and gains, by the scammers). But the private losses are probably larger and they're just as important. When people (and exchanges) get scammed, they're generally incentivized to stay quiet about it.
> This is the lesson that ETH people were not around for.
The "ETH people" that matter - the protocol researchers and client developers and exchange CEOs - were for the most part all around during the early Bitcoin days.
> More moving parts; more failure cases. More client, more moving parts.
Ten cars have "more moving parts" than one car, and the fleet is much more prone to a failure of one of the parts in one of its cars.
When two parts break at once, it's better to have a fleet of eight working cars than one broken car in need of two repairs.
Thanks for the source, by the way. I think Satoshi was just as wrong there as he was when he thought Bitcoin would become a "peer to peer electronic cash system".
The fleet analogy doesn’t hold. I used the term “lockstep” for a reason.
Fleets of cars are not in lockstep. A degraded fleet is worse than no fleet here, there is no 2 are down, 8 are up here.
A better yet strained analogy is 10 cars with different parts that are not interchangeable, work differently and need different drivers. Maintenance nightmare. Contrast with say, an Airline fleet all of the same type of plane, interchangeable parts and pilots qualified in that model.
Anyway, we should leave it here. This debate will be referenced in n years as other debates of in previous cycles on here. I am getting more concerned about physical threats after the recent incidents. I’m going to burn this identity now.
> A degraded fleet is worse than no fleet here, there is no 2 are down, 8 are up here.
Ethereum runs at 100% throughput with 100% of its security guarantees, all the way up to a 33% outage of its validator set. So it stays running at 100% capacity even in a 3 down, 7 up scenario. This has been the case since EIP-1559 was implemented in 2021, and it has been empirically tested.
That's more favorable than Bitcoin, which degrades in capacity (though not security) during partial outages. A 30% miner outage means a 30% reduction in transaction throughput.
The entire point of blockchains is that they are able to thrive and run robustly in a "2 down, 8 up" scenario. That's the sole property they sacrifice so much to achieve compared to centralized database software.
> A better yet strained analogy is 10 cars with different parts that are not interchangeable, work differently and need different drivers. Maintenance nightmare.
Every client is drop-in interchangeable. You don't need different skills to run each one, any more than you need different driving skills to drive a Honda than to drive a Toyota. The only difference is their internals.
To continue with your analogy, you start reaping the rewards of diversity when one car is revealed to have a manufacturing defect and the whole world needs a specific replacement part all at once. This isn't that uncommon. What happens is that the part goes out of stock.
Car diversity causes no maintenance nightmare, because good mechanics are everywhere and they can fix the 500 most popular car models very cheaply despite their varying internals. With Ethereum client diversity, if one of the ten clients breaks down, the fix arrives within hours, for free over the internet - no mechanic trip needed.
> Contrast with say, an Airline fleet all of the same type of plane, interchangeable parts and pilots qualified in that model.
If an airline bought all Boeing 737 Max, which didn't seem like a bad choice at the time, their entire fleet would have been grounded from March 2019 to November 2020.
Southwest suffered a $435 million loss. Everyone who bet on a single aircraft, lost. Everyone who diversified their fleet pulled ahead.
> I am getting more concerned about physical threats after the recent incidents. I’m going to burn this identity now.
It's never a bad idea to burn an identity. But after these conversations, I'm not convinced of the reason.
Sui didn't halt because of PoS, it halted because of poor coding practices. Solana isn't rigged because it's PoS, it's rigged because its token is distributed mostly to insiders.
> What you are repeating is the same PoS nonsense. Get out of here.
That's rude and unhelpful.
> Eth drove off a cliff when it went PoS.
ETH is the only PoS token that's been performing relatively poorly lately, and it's still in the #2 spot by market cap. (And #1, surpassing Bitcoin, by most other network metrics).
> The billionaires were dumping Sol on retail last cycle.
Because they gave themselves a bunch of Sol. Fairly distributed PoS coins are not like this.
> Eth was “premined”.
103 million of the current 120 million ETH (89%), you or I or anyone could have bought at the public token presale or mined since then. No one person owns more than 0.25% of the supply. That's hardly "premined".
Compare that to Bitcoin, where Satoshi mined 5% of the supply while the network was little more than a whitepaper and a repo. That's 20x the largest holder of ETH, and it's a real risk that those keys come alive again some time in the future and cause a panic in the markets.
It’s more that waste energy allows one way process, which is valuable. Valves. Diodes.
One doesn’t complain about waste heat from computation in general, if that computation has value.
And the second part - you won’t understand because you prefer authority to set monetary policy. The history of fiat currencies is full of breaches of that trust.
It's a waste because the energy is not spent creating real value. If energy spend's goal is
to make energy spend valuable and nothing else, it's a waste and evolutionary deadend. Your example is wrong because in diodes and valves waste heat is a byproduct of getting real value not the goal (when heating is the goal and provides actual value of people not dying from cold that is again real value).
> And the second part - you won’t understand because you prefer authority to set monetary policy
You will discover that monetary policy is always set by someone one way or another. Choose if you want it to be democratically elected to serve you government or randos who happen to have a bunch of BTC from selling drugs to kids on black market or scamming and ransomwaring people (this is it's biggest use case).
Only the one big pow coin matters tho. Turns out, PoS coins are worthless!
I also dislike energy frugality arguments. They come from a Luddite place. A civilization is defined by its energy usage. Let’s be advanced civilization.
what do you mean worthless? I'd say the opposite - Bitcoin does nothing... it just sits there looking pretty, this vs all newer blockchains that can actually run programs... we even have smart contracts running MIPS emulators for production use!
... get Bitcoin to do 3% of what ANY PoS blockchain could do.
