Hacker News new | ask | show | jobs
by vasilipupkin 3125 days ago
ok, I skimmed through it. I admit, I didn't get it. However, I don't think it addresses my fundamental point: there is no reason beyond speculation to own a POW coin. There is a reason, independent of speculation, to own a POS coin.
1 comments
Frogolocalypse 3125 days ago
> there is no reason beyond speculation to own a POW coin.

The incentives of a pow coin align with the users, not the owners, so there's no reason any user would prefer to use another incentive structure.

> There is a reason, independent of speculation, to own a POS coin.

It is not trustless. You are reliant upon the owners not re-writing the consensus rules to your detriment.

link
ericb 3124 days ago
POW relies on self-interest, though.

For example, if you own the most of a particular POW coin, it is not in your interest to corrupt the ledger because you will suffer the loss of faith in the currency worse than anyone.

link
vasilipupkin 3125 days ago
but if you are one of the owners, how can owners rewrite the rules to your detriment? or, why would they? whether you own $10k worth of coins, or $10 million, in the case of POS, the incentives are aligned and the coin owners earn transaction fees. In the POW case, what underpins the value of the coin?
link
Frogolocalypse 3125 days ago
> In the case of POS, the incentives are aligned and the coin owners

Biggest owner wins. That's why it is not trustless. The only long-term game-theory outcome for the system is a monopoly. Owners own the miners, and dictate the rules to the users. Otherwise known as our world financial system.

> In the POW case, what underpins the value of the coin?

The network effect of the decentralization, i.e. the nodes. It is the nodes that are peers in the peer-to-peer cash of bitcoin. It is they who hold the blockchain, validate transactions, and validate blocks. Because there are so many of them (185,000 and counting) unless you can effectively convince all of those nodes to adopt consensus changes, the existing consensus rules apply.

PoW alone doesn't make something valuable. Its successful implementation does.

link
vasilipupkin 3125 days ago
Not sure I follow. Biggest owner has the same incentives as the smallest owner - to keep the dollar price of the coin as high as possible. So, what I am asking is, in the case of a POW coin like bitcoin, what is the force, beyond pure speculation that keeps the coin worth X and not 0.5 X?
link
Frogolocalypse 3125 days ago
> Biggest owner has the same incentives as the smallest owner

Biggest owner can steal smallest owners money because biggest owner controls the consensus rules. So no, the incentives aren't aligned.

> what is the force

The only one that matters : Supply and demand, and no ability to cheat the system. The only thing that is happening is more and more people are recognizing it.

link
vasilipupkin 3125 days ago
Biggest owner can steal smaller owners money, maybe, depending on the POS design. But that would make no sense. I mean the biggest owners have the biggest stake in the integrity of the network, no? supply and demand can clear at X and at 0.5X, so that doesn't answer the question for me.
link