Zooko talking about PoS. PoS vs PoW Discussion

Mining
41

Hi,

This post may come across as me trying to paint zooko in a bad light, and in bad faith. It is not. It is also not an “I told you so”. I am not coming from a place of bad faith. I am not trying to disrespect anyone. Im a bit upset though so sorry for the tone of this message

There needs to be an alternative to PoS.

It really worries me that zcash co has now realised they are trapped and need a way out, and that way out give zcash co more control. Why not move to an algo that is just about to be retired, like ethash, or at least an algo that can absorb the vast amount of AMD gpus that are flying about. There is hardware out there that will soon be doing a lot less if ethereum pos happens.

There are alternatives to getting your coin ruined in the change over period.
You can freeze (disable all but coinbase transactions) the blockchain prior to announcement, or at least checkpoint. Those miners will be holding zec, would they really want to burn it to the ground? The potential was there with monero. I admit this is basic stuff that wouldn’t work in reality, but there are other solutions. Is it in zcash co’s interest to find them?

(Your only problem with ASIC manufacturers is greed?)

How does announcing a switch to PoS stop an attack before the switch happens? isnt it the same problem? This has to be talked about, you cannot pull a surprise fork that invalidates hardware that may or may not have even been delivered. people are making financial decisions based of zcash co’s statements.

China is not a hive mind, but I see what you are implying. - a few large companies (not the pools themselves) control the majority of hashpower on those pools (which they probably own).

51% BTG was nothing. I feel sorry for the people that got burnt. But 51% attacks are not the responsibility of the dev team it is more risk management for the company that accepts/exchanges the coin. They are for your risk model, but I can see why zooko is so scared of them.

How can zcash co in good faith take 20% of all zec to be ever printed, but get it in the first 4 years then suggest, hurm, you know, it would be better to reward people who have the most zec, rather than the people who are paying to support the coin with their electricity bills. I am 100% not a lawyer but that can’t be legal. Wouldnt it unduly enrich zcash co?

To me, this is how it seems things have gone so far:

ASIC resistance - “well, yes we implied we would fork but, nah it is better to have hardware that can only mine zec”

PoW - “Well, yes we implied that the network would be supported by PoW twice. People who first bought consumer based hardware, then by people who bought specialist hardware that only really works on our project in its current state. This was to make the network more secure. After thinking about this specialist hardware probably isn’t right for us either, now no mining at all anymore, ultra secure!. Proof of stake! who has the most coins controls the coin. yay! founders rewards forever, we will only switch to proof of stake after the first halving though.”

Privacy - “Well, yes we implied that the whole point of this project was to keep prying eyes, like oppressive governments from being able to oppress their citizens. [what excuse or back peddling will come here? my guess it will be a combination/involve kyc, pos and tax]”

This whole situation just makes me sad. There are a number of solutions that dont involve PoS that I would like to discuss but it is like shouting into the wind. Everyone thinks everyone else is tilting at windmills.

Ive still yet to see how I can stake from a z address. link anyone?

Does the zcash foundation have an official stance on this?

42

There are alternatives, cheer up : )

43

Correcting factual inaccuracies:

  • The Founders Reward is 10% of all ZEC created by the emission curve, not 20%.
  • Per this blog post:
    • ZcashCo only gets about 1.2% of all ZEC created by the emission curve, not the whole 10%.
    • Most of the FR is spread amongst individuals, none of whom get more than 0.5% of all ZEC.
    • The Zcash Foundation gets about 1.4% of all ZEC.
10 Likes
44

Hi,

Thanks for the corrections, it is important to make sure that inaccuracies are addressed.
I had written a much longer response, although now I think I am wandering into territory that I don’t belong, so I have cut a lot it from the post. and removed all questions.

I 100% agree with the founders reward and was happy to be contributing to it when I able to mine zcash. To me it was a selling point. It allows them to get and retain people like you.

my mistake, what I meant was
The founders reward is 20% (2.5 zec from every block that is 12.5 zec - all blocks upto the first halving) for all zec mined for the first 4 years, which is 10% of the total supply. but in the first 4 years (some in year 1)

I appreciate the two other corrections. I am sure I saw a post from zooko where he said he donates lots to the foundation, but I am not up on your company finances and I don’t pretend to be. PoS tho is starting from an uneven ground. The company initially seemed to want to distribute a wide as possible (this was the reason for the slow start, right?) this seems antithetical to PoS with a FR

I just want the people who are advocating PoS to understand they are starting from a losing position. I do not want to be giving people wrong information.

45

I get your idea, but the interesting part with POS is that POS isn’t just and only staking. There is a wide range of options and the design for it.

Be it the minimum staking amount, the maximum staking amoount, penalties, frozen stakes, limited stakes, more reward for active wallets, fixed % rewards, amount of rewards, bonus rewards, rewards as a fixed interest and whatever not.

When there are given valid problems, like the ones you mention, than the team should work on a design which fixes exactly these beyond all others. It’s not something that is not doable and i doubt Zcash, if they get into POS someday, they are good to go with the simplest of all POS designs, this wouldn’t fit Zcash anyway.

Just some ideas how a fix of exactly this could be and i guess you mean that the FR is possible to get staking rewards as well, right?

  • Option 1: FR wallets are unable to stake at all.
  • Option 2: FR wallets are frozen for a given period
  • Option 3: FR staking rewards get forwarded directly to the Foundation
  • Option 4: FR staking rewards must be used weekly/monthly for donations.
  • Option 5: FR staking rewards get automaticlly fairly distributed to POS wallets.
  • Option 6: FR staking rewards on FR wallet get not accepted by the POS design.
  • Option 7: FR staking rewards are put into a special Fund.
  • Option 8: FR staking rewards are automaticlly burned.
  • Option 9: FR staking rewards are only 1% (enter given number here) of normal staking rewards.
  • Option 10: Wait until there is no more FR anyway.
  • Option 11: Mix of some of the above.

10+ options without even thinking more about the possibilities. I’am pretty sure there are way more and better options how it eliminate a given problem like the one you have in mind. It’s all about the brain and design behind a POS system.

1 Like
46

mate this is why I read your posts.

Thanks. I will read this and digest further. You are a lot more clued up on this than me. do you mind me PMing you questions? I don’t want to derail this further, but I really want to ask you some more questions :slight_smile: thanks mate.

btw option 10 is the one that scares me. anyway I will PM you.

I like your other suggestions, looking at them more, they all kinda seem to take something away from someone without their explicit consent. It is a bit hard to explain, for example option 5 takes somebodys contractually and earnt money away from them, and saying they cant play the game. Im not sure the community has the right to decide what happens. I do need to read up more on this though. Oh and anyone, please, how do I stake a z address?

thanks again.

edit: wait a minute, you haven’t said ASIC’s rule the world and Bitmain is the one true emperor of crypto. how can I call you shill now? come on man, up your game, you want those discount coupons. :smiley: (this edit is meant as joke, just in case it got lost in translation)

47

:thinking: Work is Timeless, Stake is Not. Much has been written about… | by Hugo Nguyen | Medium

2 Likes
48

PIVX works pretty good.

49
50

Shawn thank you for that link. Has zooko read that yet?

51

No idea if Zooko has seen it

52

Interesting read but some major points are missing. While it handles pretty good the “time” issue it totally fails to include the FIAT issue as well as the security issue. Hardware and Electricity are paid with FIAT. Each time we buy hardware for minign we use money that could be invested in crypto. Each time we pay our electricity bill we actually lower the value of the coin we mine, the strange it sounds. I will try to find some papers that describe that problem better…

53

Interesting read, here some of the “highlights”:

  • In a distributed consensus-based on the proof of Work, miners need a lot of energy. One Bitcoin transaction required the same amount of electricity as powering [1.57 American households] for one day [(data from 2015]. And these energy costs are paid with fiat currencies, leading to a constant downward pressure on the digital currency value.

  • Also, rewards for the creation of a new block are different: with Proof-of-Work, the miner may potentially own none of the digital currency he/she is mining. In Proof-of-Stake, forgers are always those who own the coins minted.

  • So this possible future switch from PoW to PoS may provide the following benefits:

  1. Energy savings;
  2. A safer network as attacks become more expensive: if a hacker would like to buy 51% of the total number of coins, the market reacts by fast price appreciation.
54

Another very interesting article to read. Maybe even PoA is the better solution?!

Again some highlights:

  • The computational power required for this algorithm is far lower than both PoW and PoS, and it requires significantly less power consumption.

  • PoA can process thousands of transactions per second. Their target is to reach 1 M/tps, which will vastly increase its scalability and enable it to process more transactions than Visa.

  • Perhaps most importantly of all, the PoA protocol can be deployed on IoT devices, with no risk of either power loss or memory loss – something that will become increasingly vital in the future as the IoT industry continues to expand.

  • The Future of Crypto Mining, we’ve already seen some significant changes in the development of mining protocols over the past couple of years – primarily, with more cryptocurrencies moving away from PoW and towards PoS. However, it is likely that, given the ever-increasing expansion of the IoT industry, we could begin to see yet another shift away from PoS, and towards PoA over the next couple of years.

55
56

Well I gotta admit, this is the first time i hear of Proof of Assignment, but 1 M transactions/second sounds too good to be true.

57

From what little I know PoA requires ‘trusted nodes’… not keen on that. Maybe PoA with PoS on the hosting node would address that.

58

I admit as well i wasn’t aware of the transaction/seconds amount until now the PoA promises. I’am posting mostly the different Po* variants to show that there are way more possible ways than just black and white.

Some features are unique. If this 1M transactions/second can hold true than it’s a huge advantage over every other algo/system/consensus we have currently? In case it’s possible why not aiming for that?

Why the hell sticking with POW, something that is by now unefficient, unsecure (for 99% of the coins), slow, day by day getting more centralized (as difficulty raises more and more miners must give up) and so on? Just doesn’t make sense.

Why not aiming for a Po* that is new, better, faster, secure, fairer and so on? Why not research something that is unique versus everything that excists and that can implent and solve most (if not all) of current problems with POW/ZEC?

59

One of the best POS explainations i could find:

https://en.bitcoin.it/wiki/Proof_of_Stake

60

Doing some research on it as it’s quiet new for me as well, but i found some interesting facts about it:

Most interesting things about PoA:

  • PoA offers many benefits. Firstly, household devices can be utilized to contribute to mining, offering a realistic solution to issues of scalability and delayed transaction processing that are faced by present-day popular cryptocurrency networks.

  • In 2017 there were 8.4 billion IoT devices recorded globally and this number is expected to rise to 30 billion in 2020

  • The technology seems rather impressive already. Capable of processing thousands of transactions per second, the target of companies developing it is to reach 1 M/tps and leave even the centralized competitors like Visa in the dust.

  • At the moment, PoA is being tried and tested on such projects like POA.Network, Ethereum Kovan testnet and IOTW.

  • So while PoA algorithms remain in their infancy, there is a lot of promise about them. For sure there is a lot of work ahead of the developers of this algorithm, but it’s almost certain that many product manufacturers, agents, distributors and service providers will be looking to become strategic partners with IOTW and similar PoA blockchains in the future.

  • On the VeChain Foundation web site i read that they tested PoA and have been tested 10.000 transactions per second.

  • As per the CSIRO report, Red Belly Blockchain was reportedly able to operate 30,000 transactions per second from different locations, showing an average transaction delay of three seconds. According to a report released by CSIRO back in July, Red Belly Blockchain uses byzantine consensus — an algorithm that completes transactions without [proof-of-work] (PoW) and thus without an increase in energy consumption. According to the CSIRO release, this is not the first time that Red Belly Blockchain has been tested on Amazon Cloud. During experiments between July 2017 and May 2018, one test showed 660,000 transactions per second on 300 machines. However, all of them were in a single Availability Zone.

https://captainaltcoin.com/proof-of-assignment-poa/

1 Like