This is a bad take and won't convince anyone who understands it, even though it has a grain of truth.
The reason bitcoin required proof of work is not a vulnerability of proof of stake (although I agree it's less secure), but because the stake would have no value. PoS needs something scarce and valuable. Bitcoin was scarce at the beginning, but it did not have much of a value.
Increasing money supply - nope, stakers cannot increase money supply, pos/pow is consensus on the history, not the rules of the system. The mechanism that would lead to increased the money supply would be exactly the same in both pow (like bitcoin) and pos - change of culture, or social consensus (as opposed to automatic bft consensus).
So no, don't talk to PoS people like this, it just shows you don't understand the mechanics of consensus and it will certainly not make them change their minds.
The good part is that the stake which is internal is a chicken and egg problem - using something that you are trying to secure (from the past) to secure the future creates long range attacks. PoS chains would just fall back to social consensus in this case, but it still sucks.
Replies (3)
I think you're elaborating on the details but as far as I can tell we're both saying the same thing.
The fundamental problem is external capital cannot be deployed against the adversary.
As external capital cannot be deployed against the adversary, you must comply with the adversary's demands or risk collapsing the status quo. This means you end up following rulers not rules. It's simplification but I'm writing a post not a book.
PoW at least gives the market a fighting chance at overpowering a central bank or large government, PoS does not, there's no basis for the market to fight back against the adversary's demands to allow seigniorage, do KYC at a protocol, or whatever else they want.
This is why I think Ethereum is on a direct path to being a defacto CBDC.
I don't agree with the second part. That is up to social consensus. If you have a privacy network, people won't follow rules like kyc or compliance, no matter the stake.
The social consensus is above block rules.
You have that in bitcoin - if all miners wanted seniorage and increase the money supply, it would not work, because hard money property is the core value of bitcoiners and they would not allow such a fork, or it would have no value.
Let's consider DarkFi - a PoS chain. It will never allow privacy intrusion or kyc, no matter the stake. People would rather slash the stake and fork out than allow compromise on their core value.
You are confusing network consensus and social consensus. The social consensus is what determines the rules and core values of the network. The BFT consensus is about censorship and preventing double spends. I think PoW is a bit better, but not against large scale attackers.
To compromise on the basic values, you can't do an economic attack, you need to attack the minds of the users. In both cases - pow and pos.
Bookmarked so I can give this a proper response, but let me see if we agree about some basic principles and terminology:
The set of participants who hold hard power over the protocol are the actors who receive coins in exchange for something else. They decide if a transaction is legitimate or not in the same way that the clerk in a shop decides if your banknote is real or not. In your terminology this set of participants is the social layer.
Block producers provide immutability as a service. This is what you term the consensus layer.
What emerges from the interplay between the two is a market where immutability is traded.
The adversary is an actor motivated to attack the market itself and prevent immutability from being traded, except perhaps under certain conditions (e.g. seigniorage, KYC, etc).
