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From: Lloyd Fournier <lloyd.fourn@gmail.com>
Date: Thu, 17 Jun 2021 11:48:39 +1000
Message-ID: <CAH5Bsr2LWEk3__xhUo5wnbAf4DrvJxzR9f3AHxvdfMxHk4eG4A@mail.gmail.com>
To: James MacWhyte <macwhyte@gmail.com>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Opinion on proof of stake in future
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@James wrote:

On Tue, 15 Jun 2021 at 21:13, James MacWhyte <macwhyte@gmail.com> wrote:

>
> @Lloyd wrote:
>
> Of course in reality no one wants to keep their coin holding keys online
>> so in Alogorand you can authorize a set of "participation keys"[1] that
>> will be used to create blocks on your coin holding key's behalf.
>> Hopefully you've spotted the problem.
>> You can send your participation keys to any malicious party with a nice
>> website (see random example [2]) offering you a good return.
>> Damn it's still Proof-of-SquareSpace!
>>
>
> I believe we are talking about a comparison to PoW, correct? If you want
> to mine PoW, you need to buy expensive hardware and configure it to work,
> and wait a long time to get any return by solo mining. Or you can join a
> mining pool, which might use your hashing power for nefarious purposes.
>

A mining pool using your hashrate for nefarious purposes can easily be
observed since they send you the contents of the block you are mining
before your hardware starts working on it. This difference is crucial.
Mining pools exist just to reduce income variance.


> Or you might skip the hardware all together and fall for some "cloud
> mining" scheme with a pretty website and a high rate of advertised return.
> So as you can see, Proof-of-SquareSpace exists in PoW as well!
>

I'd agree that "cloud mining" pretty much is Proof-of-SquareSpace for PoW.
Fortunately these services make up a tiny fraction of hashrate.


> The PoS equivalent of buying mining hardware is setting up your own
> validator and not outsourcing that to anyone else. So both PoW and PoS have
> the professional/expert way of participating, and the fraud-prone, amateur
> way of participating. The only difference is, with PoS the
> professional/expert way is accessible to anyone with a raspberry Pi and a
> web connection, which is a much lower barrier to entry than PoW.
>

And yet despite this, the fraud-prone amteur way of participating accounts
for the majority of stake in PoS systems while the professional/expert way
of participating accounts for the overwhelming majority of hashpower in
Bitcoin. It looks like you have elegantly proved my point!

LL

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<div dir=3D"ltr"><div>@James wrote: <br></div><div><br></div><div class=3D"=
gmail_quote"><div dir=3D"ltr" class=3D"gmail_attr">On Tue, 15 Jun 2021 at 2=
1:13, James MacWhyte &lt;<a href=3D"mailto:macwhyte@gmail.com">macwhyte@gma=
il.com</a>&gt; wrote:<br></div><blockquote class=3D"gmail_quote" style=3D"m=
argin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left=
:1ex"><div dir=3D"ltr"><div dir=3D"ltr"><br clear=3D"all"><div><div dir=3D"=
ltr"><div dir=3D"ltr"><div>@Lloyd wrote:</div><div><br></div></div></div></=
div></div><div class=3D"gmail_quote"><blockquote class=3D"gmail_quote" styl=
e=3D"margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);paddin=
g-left:1ex"><div dir=3D"ltr">Of course in reality no one wants to keep thei=
r coin holding keys online so in Alogorand you can authorize a set of &quot=
;participation keys&quot;[1] that will be used to create blocks on your coi=
n holding key&#39;s behalf.<br>Hopefully you&#39;ve spotted the problem.<br=
>You can send your participation keys to any malicious party with a nice we=
bsite (see random example [2]) offering you a good return.<br>Damn it&#39;s=
 still Proof-of-SquareSpace!<br></div></blockquote><div><br></div><div>I be=
lieve we are talking about a comparison to PoW, correct? If you want to min=
e PoW, you need to buy expensive hardware and configure it to work, and wai=
t a long time to get any return by solo mining. Or you can join a mining po=
ol, which might use your hashing power for nefarious purposes.</div></div><=
/div></blockquote><div>=C2=A0</div><div>A mining pool using your hashrate f=
or nefarious purposes can easily be observed since they send you the conten=
ts of the block you are mining before your hardware starts working on it. T=
his difference is crucial. Mining pools exist just to reduce income varianc=
e. <br></div><div>=C2=A0</div><blockquote class=3D"gmail_quote" style=3D"ma=
rgin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:=
1ex"><div dir=3D"ltr"><div class=3D"gmail_quote"><div> Or you might skip th=
e hardware all together and fall for some &quot;cloud mining&quot; scheme w=
ith a pretty website and a high rate of advertised return. So as you can se=
e, Proof-of-SquareSpace exists in PoW as well!</div></div></div></blockquot=
e><div><br></div><div>I&#39;d agree that &quot;cloud mining&quot; pretty mu=
ch is Proof-of-SquareSpace for PoW. Fortunately these services make up a ti=
ny fraction of hashrate.</div><div><br></div><blockquote class=3D"gmail_quo=
te" style=3D"margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204=
);padding-left:1ex"><div dir=3D"ltr"><div class=3D"gmail_quote"><div><br></=
div><div>The PoS equivalent of buying mining hardware is setting up your ow=
n validator and not outsourcing that to anyone else. So both PoW and PoS ha=
ve the professional/expert way of participating, and the fraud-prone, amate=
ur way of participating. The only difference is, with PoS the professional/=
expert way is accessible to anyone with a raspberry Pi and a web connection=
, which is a much lower barrier to entry than PoW.</div></div></div></block=
quote><div><br></div><div>And yet despite this, the fraud-prone amteur way =
of participating accounts for the majority of stake in PoS systems while th=
e professional/expert way of participating accounts for the overwhelming ma=
jority of hashpower in Bitcoin. It looks like you have elegantly proved my =
point!</div><div><br></div><div>LL<br></div></div></div>

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