[game-of-throws]

In PoW, mining has real-world ongoing costs (electricity, hardware) and so miners need to continually liquidate their earnings to stay afloat. This counterbalances the effect of wealth centralization. If you try to remove real-world costs from that equation, you lose the counterbalancing effect.

[yokem55]

At least in Ethereum - - Stakers earn far less then miners since they aren't burning capital to validate. They only need to be paid for their opportunity cost over putting that capital to use elsewhere. - Their stake does not automatically compound. Each validator maxes out at a weight of 32 eth, and it takes 32 to get a new validator going. - Earnings have to be skimmed back to the execution layer in order to be manually re-staked (if there is 32 eth worth). Those earnings then enter the 'dominion and control' of the staker, so at that point taxes have to be paid on that income.

In contrast, mining can drastically improve the return on capital by operating at larger and larger scales so as to get better and better deals on equipment and electricity. That kind scaling doesn't happen with proof of stake.

[doomroot]

> In contrast, mining can drastically improve the return on capital by operating at larger and larger scales so as to get better and better deals on equipment and electricity. That kind scaling doesn't happen with proof of stake.

Yes and No. We saw what happened to very large mining farms that got wiped out in a matter of weeks as mining was cracked down on in china. Large ETH stakers wont be forced to liquidate their stake in the event they get kicked out of their current jurisdiction. In short, uncertainty about the future of crypto regulation makes it easier to be a staker than it does a miner.

[eterps]

> This counterbalances the effect of wealth centralization

Yes, this ensures a limited supply with PoW, right?

> If you try to remove real-world costs from that equation, you lose the counterbalancing effect.

I assume you can't remove real-world costs in the case of PoS, but yes I can see how the real-world costs will be much, much lower.

Are you saying that there is a good reason to keep those real-world costs higher? (pardon my ignorance, I haven't looked into the principle you describe here before).