Can someone explain to me in simple terms why BTC requires proof of work and can’t do exclusively proof of stake?
I’m a big proponent that Bitcoin != Crypto, and I’m not an ETH gal, but just learned about ETH’s shift to proof of stake and I want to understand why that doesn’t work for BTC.
Apologies in advance if this is a dumb question. #plebchain
Proof of work is a real world constraint (by energy and computers) that anchors Bitcoin to the real, physical world.
Proof of stake is anchored to nothing and creates yet another "rich get richer" where validators control the network by diluting all the holders.
This might be helpful in explaining in more detail:
https://bitcoinmagazine.com/technical/proof-of-work-vs-proof-of-stake-why-bitcoin-wont-change
This is not a bad listen. Not sure if this is what you are looking for exactly.
Bitcoin Audible: Read_654 - A Bitcoiner's Guide to Proof of Stake [Scott Sullivan]
Media file: https://traffic.megaphone.fm/CSN2266921976.mp3?updated=1663299393
Thank you! I’ll give it a listen. Late to the PoW vs. PoS convo but ready to learn about it more fully. Appreciate the reference!
you're welcome! I could try to bumble along with an explanation but I feel like there are people out there who have said it more eloquently than I ever will 😅
Not a dumb question at all.
Proof of Work requires real expenditure of energy as the proof that you’ve done the required job to secure transactions history. Energy expenditure can’t be faked because nobody can mess with the laws of thermodynamics.
Proof of Stake requires the deployment of large sums of capital as collateral to allow participants to secure transactions history. There’s no anchor in the real world and as a pure software consensus mechanism it is prone to manipulation.
Hope this helps.
Difficulty-adjusted PoW links Bitcoin issuance to time itself, the universes most scarce resource.
Bitcoin is time.
Proof or work promotes fairness in distribution and allows for decentralization. Because work must be performed the amount required can be algorithmically adjusted to target a pace of block production. It also promotes greater efficiencies as those less efficient won't be able to compete and maintain profit. Improved efficiencies reduce both the effective cost for consumers, and harmful impacts to the world
Proof of stake is a pay to play model that replicates much of the negatives of the fiat system where a relative few "stakers" are centralized and act as gatekeepers. Over time, the stakers passively acquire all wealth of the users.
Bitcoin and its users are focused on being decentralized anyone anywhere can participate in the bitcoin network under proof of work , in a proof of stake system already the only way to participate is by buying coins from someone else so the holders of the coin can choose who is and isnt allowed to participate
It also removes the costlyness of money
The list on why pow versus pos is a very long one above just examples
Proof of Work is able to be way more secure because in order to attack it you need to expend energy, which has real physical cost. If you fail, you lose your attack investment. This disincentives attacks.
Proof of Stake is not as secure because in order to attack it you must stake tokens, which also has a cost. But if you fail, you just unstake and you don’t lose your attack investment. This incentives attacks.
Proof of stake is what we have had in legacy financial institutions for hundreds of years and what has brought us to where we are now, and this place is not good.
Proof of work is required to build actual, long lasting structures such as the pyramids, bridges, and houses. The very existence of these structures is the proof that work was done and this is no different when it comes to a money who’s value you don’t have to trust a third party to describe or dictate.
Gold standard vs fiat standard
That’s the rabbit hole that turned me into a bitcoin maxi. Enjoy the ride.
I had to read this 3 times to get it, but it helped a lot.
https://dergigi.com/2021/01/14/bitcoin-is-time/
Also this podcast with Jason Lowery was mind blowing and helped me.
In short: PoS is a political system. And the whole point of a decentralised network is to eliminate politics (the possibility of human manipulation). The only way to achieve this is with PoW because you need a tie into physical reality that can’t be faked. The work to produce a block is energy that anchors the digital ledger into the physical realm. It has a weight now. You cannot just change it.
Do you understand what I mean?
Did you understand yet why POW is absolute essential for a decentralised monetary system?? #[1]
I’m getting there! Started reading the money is time article you shared, working my way through it slowly. Now have a good understanding of tokens, ledgers, etc. This is a good reminder to keep reading!!
Cool! I was watching this video yesterday. Even if I don’t agree with Jason Lowery on everything I think the lens through which he views PoW is fascinating and underpins its absolute necessity. It’s worth to watch and shorter than the podcast which I shared with you.
