[anonytrary]

Proof of stake is an oligarchy. The only proof-of-X that works is if X guarantees one person has the same voting power as another person. Finding X is currently an unsolved problem in mathematics and computer science. No cryptocurrency does this.

[DennisP]

It's only oligarchy if stakers have governance rights over the protocol. That's true of some PoS chains but not all.

Otherwise, it's just people with more money getting the same percentage returns as anyone else, which is actually a better situation than legacy banking (where bigger accounts get better rates) or proof of work (where there are physical economies of scale).

[wmf]

There's an argument that a 51% attack (or threat thereof) is a form of governance so all miners/stakers ultimately have governance rights.

[DennisP]

Ethereum just had a brief encounter with that threat. It's switching to a system that burns most transaction fees instead of giving them to miners. The miners took exception to that, and made a lot of noise about a "demonstration of force" in which at least 51% of them would move to the same mining pool, showing they could attack if they wanted to.

The rest of the community called their bluff. The miners backed down and the change is scheduled for July.

Miners don't have that much power because if users, apps, exchanges, data feeds, and tokenized real-world assets are all referencing the new hard-forked chain, then miners have a choice between running that fork or going out of business. A chain with just miners has little economic value and can't support all those GPUs.

Under proof-of-stake, a 51% attack is even less of a threat. A double-spend attempt results in destruction of all your stake. A long-term censorship attack could be maintained, but if it's egregious then users could remove your stake with a hard fork, and if there's support for that from all the above entities, it'll work.

Miners and stakers are not governors. They're service providers.

[anonytrary]

Exactly what I was going to say. Governance is social weight, which is exactly what you have if you buy your way to 51%. Proof of person also suffers from this because decentralized collectives can conspire and/or collectively make decisions (as we saw with $GME), but it always guarantees that any person ultimately has exactly the same fundamental weight as any other person.

It is an extremely hard problem and I think it is impossible to achieve true decentralization because many other things are centralized, like human relationships. Mom, dad, sister, brother, girlfriend, boyfriend, best friend, business partner, etc. will always share increased affinity with you when making certain decisions. Unfortunately, I believe the human flaw is that we are more likely to agree with people based on relationship rather than on merit. Humans are corruptible and can be convinced to sway in a certain way, and therefore create gravity wells of centralization.

It sounds crazy, but a classic example is "cliques" in high school. There's the jocks, the goths, the nerds, etc. They are like little planets of centralized thinking, dancing together in the uncertain space of adolescence.

[thrill]

Everything is equivalent to proof-of-stake plus overhead. If you have the stake, you can show it in proof-of-stake, or you can buy mining hardware and burn electricity in POW, or you can buy storage and prove it via "plotting" (in Chia) in proof-of-capacity. Two of these require you to exchange stake for something else that you then dedicate to the system. Unless there's something in the protocol unique to non-proof-of-stake then it's comparatively wasteful.

[creshal]

But any variant of proof-of-you-can-afford-to-buy-tons-of-expensive-hardware is just oligarchy with additional, economy and environment damaging, steps. PoS at least takes out the middlemen and lets you run your "crypto" "currency" without collateral damage while you figure out something better.

[ChainOfFools]

this is actually impossible because all cryptocurrencies necessarily start out maximally centralized, and "decentralize" gradually through the distribution model.

the problem is that this creates at best a concentric circular pattern of ownership (and thus leverage over liquidity), even if everyone involved is completely honest and ownership is 100% transparent. in reality it's far worse than that because pseudo anonymous address ownership means claims of "fair distribution" cannot be trusted let alone proven.

decentralization is a mirage.

[DonHopkins]

How about Proof-Of-Poverty?