Nostr Web Client

I think you're elaborating on the details but as far as I can tell we're both saying the same thing.

The fundamental problem is external capital cannot be deployed against the adversary.

As external capital cannot be deployed against the adversary, you must comply with the adversary's demands or risk collapsing the status quo. This means you end up following rulers not rules. It's simplification but I'm writing a post not a book.

PoW at least gives the market a fighting chance at overpowering a central bank or large government, PoS does not, there's no basis for the market to fight back against the adversary's demands to allow seigniorage, do KYC at a protocol, or whatever else they want.

This is why I think Ethereum is on a direct path to being a defacto CBDC.

Juraj 2y ago

I don't agree with the second part. That is up to social consensus. If you have a privacy network, people won't follow rules like kyc or compliance, no matter the stake.

The social consensus is above block rules.

You have that in bitcoin - if all miners wanted seniorage and increase the money supply, it would not work, because hard money property is the core value of bitcoiners and they would not allow such a fork, or it would have no value.

Let's consider DarkFi - a PoS chain. It will never allow privacy intrusion or kyc, no matter the stake. People would rather slash the stake and fork out than allow compromise on their core value.

You are confusing network consensus and social consensus. The social consensus is what determines the rules and core values of the network. The BFT consensus is about censorship and preventing double spends. I think PoW is a bit better, but not against large scale attackers.

To compromise on the basic values, you can't do an economic attack, you need to attack the minds of the users. In both cases - pow and pos.

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gsovereignty 2y ago

Bookmarked so I can give this a proper response, but let me see if we agree about some basic principles and terminology:

The set of participants who hold hard power over the protocol are the actors who receive coins in exchange for something else. They decide if a transaction is legitimate or not in the same way that the clerk in a shop decides if your banknote is real or not. In your terminology this set of participants is the social layer.

Block producers provide immutability as a service. This is what you term the consensus layer.

What emerges from the interplay between the two is a market where immutability is traded.

The adversary is an actor motivated to attack the market itself and prevent immutability from being traded, except perhaps under certain conditions (e.g. seigniorage, KYC, etc).

mark tyler 2y ago

Small note, miners do not decide whether a transaction is legitimate, they can only decide whether a transaction is illegitimate. They do this by not including it. This is a somewhat weak mechanism, limited by the degree of decentralization of mining.

Conversely, if they try to decide that a transaction is legitimate (that doesn’t follow historical rules) then everyone’s nodes will ignore it. This ultimately falls back to a social layer, but there is a strong bias toward not changing anything since everyone needs to physically update their nodes to work with the now-forked chain.

gsovereignty 2y ago

Social layer and consensus layer are oversimplifications, but my point is that the "social layer" cannot include a transaction that has been censored by the "consensus layer".

Thus, the attack vector that will be used is mining empty blocks.

It's not possible to use external capital to overpower the adversary if your consensus mechanism relies on stake. This is why Satoshi used PoW and not stake based consensus.