I think there is a lot of misinformation and bias against Proof of Stake. Yes there have been lots of shady coins that use insecure PoS mechanisms. Yes there have been massive issues with distribution of PoS coins (of course there have also been massive issues with PoW coins as well). However, I want to remind everyone that there is a difference between "proved to be impossible" and "have not achieved recognized success yet". Most of the arguments levied against PoS are out of date or rely on unproven assumptions or extrapolation from the analysis of a particular PoS system. I certainly don't think we should experiment with bitcoin by switching to PoS, but from my research, it seems very likely that there is a proof of stake consensus protocol we could build that has substantially higher security (cost / capital required to execute an attack) while at the same time costing far less resources (which do translate to fees on the network) *without* compromising any of the critical security properties bitcoin relies on. I think the critical piece of this is the disagreements around hardcoded checkpoints, which is a critical piece solving attacks that could be levied on a PoS chain, and how that does (or doesn't) affect the security model.
@Eric Your proof of stake fallacy seems to be saying that PoS is worse when a 51% attack happens. While I agree, I think that line of thinking omits important facts:
* The capital required to 51% attack a PoS chain can be made substantially greater than on a PoS chain.
* The capital the attacker stands to lose can be substantially greater as well if the attack is successful.
* The effectiveness of paying miners to raise the honest fraction of miners above 50% may be quite bad.
* Allowing a 51% attack is already unacceptable. It should be considered whether what happens in the case of a 51% may not be significantly different. The currency would likely be critically damaged in a 51% attack regardless of consensus mechanism.
> Proof-of-stake tends towards oligopolistic control
People repeat this often, but the facts support this. There is no centralization pressure in any proof of stake mechanism that I'm aware of. IE if you have 10 times as much coin that you use to mint blocks, you should expect to earn 10x as much minting revenue - not more than 10x. By contrast, proof of work does in fact have clear centralization pressure - this is not disputed. Our goal in relation to that is to ensure that the centralization pressure remains insignifiant. Proof of work also clearly has a lot more barriers to entry than any proof of stake system does. Both of these mean the tendency towards oligopolistic control is worse for PoW.
> Energy usage, in-and-of-itself, is nothing to be ashamed of!!
I certainly agree. Bitcoin's energy usage at the moment is I think quite warranted. However, the question is: can we do substantially better. I think if we can, we probably should... eventually.
> Proof of Stake is only resilient to ⅓ of the network demonstrating a Byzantine Fault, whilst Proof of Work is resilient up to the ½ threshold
I see no mention of this in the
pos.pdf you linked to. I'm not aware of any proof that
all PoS systems have a failure threshold of 1/3. I know that staking systems like Casper do in fact have that 1/3 requirement. However there are PoS designs that should exceed that up to nearly 50% as far as I'm aware. Proof of work is not in fact resilient up to the 1/2 threshold in the way you would think. IE, if 100% of miners are currently honest and have a collective 100 exahashes/s hashpower, an attacker does not need to obtain 100 exahashes/s, but actually only needs to accumulate 50 exahashes/s. This is because as the attacker accumulates hashpower, it drives honest miners out of the market as the difficulty increases to beyond what is economically sustainable. Also, its been shown that the best proof of work can do is require an attacker to obtain 33% of the hashpower because of the
selfish mining attack discussed in depth in this paper:
https://arxiv.org/abs/1311.0243. Together, both of these things reduce PoW's security by a factor of about 83% (1 - 50%*33%).
> Proof of Stake requires other trade-offs which are incompatible with Bitcoin's objective (to be a trustless digital cash) — specifically the famous "security vs. liveness" guarantee
Do you have a good source that talks about why you think proof of stake cannot be used for a trustless digital cash?
> You cannot gain tokens without someone choosing to give up those coins - a form of permission.
This is not a practical constraint. Just like in mining, some nodes may reject you, but there will likely be more that will accept you, some sellers may reject you, but most would accept your money as payment for bitcoins. I don't think requiring the "permission" of one of millions of people in the market can be reasonably considered a "permissioned currency".
> 2. Proof of stake must have a trusted means of timestamping to regulate overproduction of blocks
Both PoW and PoS could mine/mint blocks twice as fast if everyone agreed to double their clock speeds. Both systems rely on an honest majority sticking to standard time.