[meri_dian]

The ability of a cryptocurrency to overcome attack is based on the amount of computational power expended on hashing.

As more and more standalone cryptocurrencies are launched, the total amount of computational power expended on each will decrease and therefore make each more vulnerable to a 51% attack.

This problem is especially pertinent to niche currencies like Telegram's which are tied to a specific company service rather than those trying to act as a general unit of storage or exchange like Bitcoin or even an industry or economy wide tool like Ripple's XRP which. The more specific a currency's use case, the less processing power that will be dedicated to processing that currency's blockchain. And the more vulnerable it will be.

This seems like a real problem for the ecosystem as a whole.

[pera]

This "cryptocurrency" will probably be centralized (although they claim some level of decentralization). Most of these ICOs for niche currencies are created just to try to take money from the current market frenzy, and most of them don't need decentralization at all, they just want to say that their company is investing in "blockchain technology" to get a piece of the cake.

[Xophmeister]

Computational power is not a constant.

[oh_sigh]

That only holds true for PoW systems

[meri_dian]

How is PoS safe from this?

[googlryas]

With PoW, assuming you can use the same hardware to mine different coins, then you just point your BTC mining rig onto MinorCoin, you get 51% of the hashing power and then you can double spend and let's say crash the value of the coin.

Once that is done, you can move your mining rigs onto the next MinorCoin, or you can put them back to mining BTC without you having lost any value except for the opportunity cost when you weren't mining BTC.

With PoS, you need to buy up 51% of the coins in order to make the attack. As you buy more and more coins, the price will rise, so you will spend more money than you expect to get to 51%. Then, once you're there, you do some double spend attacks and destroy the value of the network. Now, all that money you pumped into it is gone. That is the key difference between PoS and PoW in this scenario.

[0wing]

BTC PoW hashing power is supplied by ASICs so it's impossible for BTC miners to do anything with their hardware other than mine BTC/BCash.

PoS mining is just rewarding the rich simply for being rich. What could be wrong with that?

[googlryas]

BTC ASICs could be re-purposed for any coin that uses the same hashing algorithm of BTC.

PoS doesn't reward the rich for being rich any more than a savings account rewards the rich for being rich by letting them make more money off of a given interest rate.

[0wing]

The algorithm BTC uses has been depreciated in favor of ASIC resistant mining protocols which prevent what we see with Bitmain and allow normal users to access mining rewards.

BTC ASICs are a case of failure to prevent centralization. Nearly every successor to Bitcoin has developed ASIC resistant algorithms to allow normal users to contribute to securing the network activity and be rewarded with newly minted supply for doing so.

Block rewards are nothing like savings interest because it works like an all or nothing lottery.

If the developer or an exchange controls 40% or even 10% of the supply, they have a significantly higher likelihood of taking newly minted coins which compounds further increases to their probability of increasing their control of the supply. All the while those who have less of the supply or are too poor to qualify for staking will not be exponentially increasing their wealth.

[seanwilson]

With PoW, you'd need to pay for enough hardware and electricity to rival half of the hash rate of the entire network. With PoS, you'd need to pay enough to own half of the coins. Both are prohibitively expensive. PoS also discourages you from such an attack as you'd be destroying the value of the coins you own.