[dcposch]

Congratulations to the cryptographers and engineers at Mina for shipping this. We are getting palpably close to efficiently provable general computation. (For others interested in the evolution, see TinyRAM and the various zkEVM efforts especially zkSync2. This is a fascinating development in CS with wide implications.)

My issue with Mina as a platform is the token distribution. It's over 50% allocated to insiders: https://minaprotocol.com/blog/mina-token-distribution-and-su...

(Note that of the 1m initial tokens, slightly over half is "backers", "core contributors", and the two foundations. Since Mina is proof-of-stake, all ongoing issurance goes to existing tokenholders, so we can expect that Mina will always be over 50% insider owned unless they sell.)

[tromp]

> all ongoing issurance goes to existing tokenholders

David Rosenthal also raised this issue in his recent blog entry [1]:

"It isn't just that the Gini coefficients of cryptocurrencies are extremely high[4], but that Proof-of-Stake makes this a self-reinforcing problem. Because the rewards for mining new blocks, and the fees for including transactions in blocks, flow to the HODL-ers in proportion to their HODL-ings, whatever Gini coefficient the systems starts out with will always increase. Proof-of-Stake isn't effective at decentralization."

[1] https://news.ycombinator.com/item?id=30310317

[dcposch]

David's post seems pretty confused.

> Because the rewards for mining new blocks, and the fees for including transactions in blocks, [...] whatever Gini coefficient the systems starts out with will always increase

That doesn't follow at all. If everyone staked their coins and nobody ever bought or sold, the distribution would remain constant over time. In reality, coins do trade, and this causes diffusion. Coin ownership can decentralize over time.

In practice, proof-of-stake is better for distributing ownership than proof-of-work, because the block rewards (new issuance) go to a wider set of participants. Staking can be done by anyone, while mining profitably requires a specialized operation with large upfront capital costs.

--

Finally, be wary of anyone quoting Gini coefficients for blockchains. Gini only makes sense if calculated per person. If you calculate Gini from on-chain address balances, you get numbers that are wildly off. See https://vitalik.ca/general/2021/07/29/gini.html

[anchpop]

I haven't read the blog entry, but the logic here doesn't make sense to me. If everyone gets a 5% return on their stake, the gini coefficient doesn't change at all. Probably small holders never stak and so never get any return, but these people were never going to run nodes anyway so I don't know if it matters.

Furthermore, let's say it costs $1000 to set up a PoW mining rig, compared to $1000 to buying a stake big enough to let you validate. I'm not sure it makes such a big difference in either case.

[tromp]

> If everyone gets a 5% return on their stake,

Transaction fees slightly tip the balance from transactors to hodlers.

> let's say it costs $1000 to set up a PoW mining rig

Setting it up does nothing. You have to pay the ongoing electricity bill, which most miners do by selling a substantial fraction of their mined coins.

[klysm]

Is the Gini coefficient a valid measure here?