[barbegal]

And the same applies to proof of stake. You need some form of external randomness to give you security. Of course many people have tried to come up with schemes where randomness can be created fairly by a group of people who don't necessarily trust each other [1]. Unfortunately all these schemes require at least half the participants to be honest so are vulnerable to trivial Sybil attacks. And the only way we know how to prevent Sybil attacks is to use proof of work or some sort of centralised system: leaving us back where we started.

I am convinced it can be mathematically proven that Proof of Stake/Burn algorithms don't work (without some sort of external randomness) but I don't have the mathematical skill to produce the proof.

[1] https://eprint.iacr.org/2017/216.pdf

[timjver]

Doesn't the Proof of Stake algorithm protect against Sybil attacks by trusting participants based on how much they are staking?

[ufo]

The issue is in a lower level than that. A proof of stake system will want to randomly choose who gets to mine the next block, weighted by how much everyone is staking. But making this choice depends on everyone agreeing on a source of randomness, which is what the previous posts were talking about.

[barbegal]

That might actually work but there is a lot to analyse to make sure that something is actually at stake. Firstly can dishonesty be detected and traced back to a stake holder? I'm not sure about that within specific randomness generating schemes. Secondly even if participants can be detected cheating it may still be economically advantageous for them to be dishonest if there is only a small probability that they lose their stake.

[wildbunny]

I found that proof of burn actually was exactly equivalent to proof of stake in terms of overall security. I.e. not good enough.