First one is Lido and second one is Coinbase both of them are pools. Lido is more decentralized than Coinbase as the stake is spread across many different staking providers. In any case the situation is not ideal and a bigger uptake of solo staking and truly decentralized staking solutions like RocketPool would be beneficial.
Coinbase is the only entity that knows the private keys which could be used to move the funds in this wallet. So if "owns" means actual technical control of the coins, Coinbase owns them.
Now, many people (pretty much all) follow the laws and contractual obligations of the region in which they live. Under the framework of that system, the funds at still belong to the customer that deposited them. Whether that means the customer "owns" them or is simply "owed" them by Coinbase is debatable...probably a pointless debate.
> Under the framework of that system, the funds at still belong to the customer that deposited them.
Careful. In the case of bankruptcy, you probably won't get your money back. Bloomberg Law[0]:
> An exchange going bankrupt would likely have to face Chapter 11 debtors’ rules on creditor recovery. Generally, secured creditors would be paid back first before others.
> A crypto exchange is not likely to have investor protection measures in place for cryptocurrency, though it could carry insurance policies for certain covered incidents, such as cybersecurity incident. And unless user terms specified otherwise, an investor would likely be an unsecured creditor who may not be able to recover what they’re owed.
Those are staking pools, which represent thousands of individual users, and the largest one (LIDO) also has has additional decentralization that is not well captured by looking at just reward address. The reward address is a contract that individual users will be able to tap into.
Worth adding it's also not substantially less decentralized than PoW mining was, the status quo was 41% of hash power controlled by 2 pools. At least now it's using significantly less power and is largely more non-custodial.
I'm still flummoxed why people use blockchains for any kind of data or computation. Fundamentally isn't blockchain a tech stack built on a linked list with mandatory network calls in every operation? It seems purposefully inefficient. At least in theory it had a point (decentralized control). In practice, however...
The only purpose of a blockchain is to decentralize the storage and validation of data. It only makes sense if the decentralization is worth the loss in efficiency. Using a blockchain just to store data and perform computations when you have no reason to decentralize will only result in a crappy, slow database.
I agree completely, and I am disappointed that so many projects start which have no benefit from the computation redundancy (yet will have to pay for it).
People won't use it for traditional number crunching.
Way I see it, the idea is to get your data, code, and capital into the big global ball of state by consensus where it can coexist with other code. The point is being able to co-operate with others by writing arbitrary programmable incentive mechanisms.
The tech isn't there yet though. It still needs higher throughput (sharding, layer 2s), better visibility into the mechanics, and probably some kind of privacy layer.
I thought the transactions within a block are stored in a Merkle tree, but the blocks themselves are stored as a linked list. So if you wanted to find a particular transaction you'd still have to traverse all the blocks (O(length)) and then inspect each block (O(log(depth))). I have no idea what dominates in verifying a Bitcoin transaction, so maybe in practice the cost of finding a particular block is amortized because you're spending most of your time within a block.
But from the original bitcoin paper[1] I got the impression that to verify any particular transaction you need to traverse the whole list of blocks.
Wasn't a public blockchain supposed to solve this? I always see this speculation and I thought the blockchain was supposed to show the public who was doing what... instead I always see these comments about big holders and speculation who it is. Shouldn't exchange addresses be known?
You may be right that the majority is probably an exchange. But is there something in the protocol specification that prohibits such majority?
Then it raises a question, can an actor such as a government (which may have unlimited resources) to hold large numbers of ether (> 51%) to add blocks to their advantage?
Perhaps, it's my ignorance about this technology that makes me question and prevent me from adopting this technology.
There's a common misconception that once you have >51% you can do anything. This isn't true. There's plenty of mischief you might get away with (censoring, double spending), but you can't transfer other peoples money without their private key, and you can't change the rules of the protocol. You can probably tank the value of the currency by doing large enough double spends and causing problems, but in PoS importantly you're hurting yourself more than anyone else, while in PoW, you still have a bunch of useful hardware left over after the attack, and with hash power marketplaces you can attack a PoW chain while having more or less no investment in the chain itself.
I keep hearing "you can't do X without getting slashed". What happens if there is a network partition that lasts for longer than 6 minutes? Which two of the diverging blockchains get to slash the other one and take all their stake?
> What happens if there is a network partition that lasts for longer than 6 minutes?
With less than 2/3 of the total stake active on a single partition, that partition stops finalizing transactions, meaning that the chain explicitly stops guaranteeing that it's canonical.
Notably, slashing cannot result from a partition, only from malicious validator behavior.
> Which two of the diverging blockchains get to slash the other one and take all their stake?
For a partition, which is not a slashable offense, there is no slashing. The minority partition stakers suffer inactivity leak on the majority chain, meaning that they very slowly (at first) start losing their stake until the majority partition has 2/3 stake again. It's not a big penalty like slashing, unless the chain remains in a degenerate state for many hours or days.
On the other hand, a slashing rules offender (attacker) gets slashed on all chain forks. The conflicting signed block from one gets included on all others for a bounty. This means that every staker must vote for only one fork at a time, which means the network can eventually determine which fork is canonical because it was voted for the most.
The short answers is yes, there are various safeguards and countermeasures in place, some on the protocol and some on the social/incentive layer. But it would take dozens of pages to explain all of these in detail, so if you are truly interested in this you can search for "proof of stake security" or "proof of stake centralization risk" and you will find a huge number of resources.
Not really the same. Mining pools simply point their capital at an api while those staking with exchanges literally give them their capital. With stratum V2 on the horizon (allows miners to construct their own blocks while in a pool) the similarities will be even less.
But either way, it's a central entity ordering transactions and putting transactions in blocks.
The real question is, how much capital do you need to be a block producer. For Ethereum that's 32 ETH; with 400K validators and 12-second blocks you'll produce one every 55 days on average.
So on Bitcoin, the largest remaining PoW network, how much capital do you need to produce a block that often?
Let's see....actually 14M ETH staked now so about 430K validators. Blocks are 12 seconds, so blocks per day is 24 * 60 * 5 = 7200. Taking 430,000/7200 gives 60 days.
But they're saying returns are more like 6%. Where are you getting return per block? (Also I think some of the return comes from doing block attestations, on every block.)
This article was the first I read that describes the new system. It appears designed to benefit Etherium banks. The more you hold, the more you get.
> Miners are replaced by validators – people who “stake” at least 32 ETH by sending them to an address on the Ethereum network where they cannot be bought or sold.
These staked ETH tokens act like lottery tickets: The more ETH a validator stakes, the more likely one of its tickets will be drawn, granting it the ability to write a “block” of transactions to Ethereum's digital ledger.
https://etherscan.io/address/0x388c818ca8b9251b393131c08a736...
https://etherscan.io/address/0x4675c7e5baafbffbca748158becba...