[rfoo]

Yeah, PoW is bad too. But I'm happy to pay a tax to those who burnt energy to keep the networking running and converted USD to the native token, proportioned to their effort.

I'm less happy to pay someone a tax just because they are rich and they did barely anything.

[Tricky_Troll]

>I'm less happy to pay someone a tax just because they are rich and they did barely anything.

As the operator of a single validator node you can get out of here with that take. I'm using up very significant bandwidth, having to keep a computer running 24/7, updating node and OS software, troubleshoot it after a power or internet outage and at some point I will have to replace the SSD since it is constantly reading and writing and will need replacing after a few years.

Is it a full time job? Absolutely not, but is it free from responsibility? Definitely not. If anything, I could be making more than 3%pa elsewhere if I weren't also in it for ideological reasons.

[domothy]

>But I'm happy to pay a tax to those who burnt energy to keep the networking running and converted USD to the native token, proportioned to their effort.

Why? That's doubly bad for non-mining holders: not only does your share of supply get diluted with newly printed coins, but it also get devalued relative to USD when these coins inevitably get sold to pay expenses

In Ethereum's post-merge world, non-staking holders can keep their share of supply the same (or even have it passively increase) when total supply shrinks. And if the supply does increase by ~0.5-1% and you as a holder aren't okay with that amount of dilution, the barrier of entry to stake profitably and protect your share of supply is much, much lower than the barrier of entry of profitable bitcoin mining.

And the total newly issued coins (which are nominally much lower than pre-merge) have a much lower need to be sold off. If you view issuance as a tax on holders, Ethereum's model wins on all counts

>just because they are rich and they did barely anything

But stakers also "keep the networking running", just like miners under PoW. In both cases, it's gonna be the amount of capital involved that decides how the rewards are proportioned, there's no way around it - these permissionless systems ultimately use the inherent scarcity of economic capital as the anti-sybil mechanism with economic incentives to keep everyone honest. PoS just bypasses the need for burning a huge amount of energy and the embarrassing quantity of single-purpose e-waste to indirectly calculate who has how much at stake. It goes straight to the point: the capital at stake is simply measured in the value of the coin itself instead of external energy/hardware.

On the outside it does kinda look like stakers get rewarded passivly for doing nothing, but there are definitely costs involved, they're just mostly economic instead of physical - think of all the usual risk involved in crypto's volatility, now compound that with slashing risks, illiquidity, opportunity costs – staking yield is like 4-5% atm (and has been down only for quite some time), if you're a billionaire whale you definitely have other investment opportunities available that yield way more than that. I mean just the fact that the net supply growth can go negative shows that even internally in the blockchain itself there can be better things to do with your ETH than stake it; these people aren't burning their ETH on transactions fees for fun, they're actively using their ETH to do stuff that gets them some economic utility.

[rfoo]

> but it also get devalued relative to USD when these coins inevitably get sold to pay expenses

Good point. It invalidates the "good" part but does not make it doubly bad IMO.

And for ETH, well, I don't think it's about protecting value, it's more about:

> In both cases, it's gonna be the amount of capital involved that decides how the rewards are proportioned, there's no way around it

Yes. The difference is, PoW requires you to BURN resource proportioned to your rewards, while PoS just requires you to HAVE (but not burn) it. This makes a huge difference IMO.

For example, I would consider it more "ethical" (whatever that means) to add a light PoW part (with constant or slowly increasing difficulty, that is chosen to reduce environmental impact) to the ETH PoS protocol as-is: the random-chosen validators have to solve a PoW in addition to make their efforts proportioned to how much they stake, instead of being mostly constant.

[hanniabu]

Okay so startup capital aside, you like PoW because there's an ongoing cost to participating in consensus and don't like how PoS is more or less free.

I'm not sure how you arrived at this when your initial complaint was the rich get richer with PoS. PoW has much higher costs to participate and after a few years you have more costs when you need to upgrade your mining rigs because they're either burnt out or outcompeted by newer hardware.