Bitcoin mining is, in a way, Proof-Of-Stake.
If two person were to enter a competition to become the best miner, the biggest factor will be who had the biggest starting capital.
Take painting on the other hand. Assuming one of them isn't dead broke, money will have little to no influence over which one can be the best painter. Therefore painting is Proof-Of-Work.
I feel strongly about this. Waiting for someone to argue I'm wrong.
The first miner took more risk than the second miner. If the bitcoin price went down (or stagnates) and the first bitcoin miner’s PPA is or becomes uncompetitive then the second miner actually has the advantage.
Here we're assuming both started at the same time. But even if not the case the point I'm making still stand and I don't think what you're saying here really disproves it. Sure there's other small factors, but someone who started with 10 000$ capital will never compete with someone who started with 1 000 000$. Even if the smaller miner has some advantages like cheaper electricity.
That’s not true — scale can kill you in bitcoin mining. There are not many “pockets” of free energy that are 1 GW … someone who heats their home in Alaska might outcompete Riot on a profitability standpoint.
Capital grows. So starting with capital is better than not starting with capital. But that’s just a fact of private property, there will never be a “fair” allocation of capital that doesn’t benefit incumbents.
But bitcoin mining is as ruthlessly competitive of a business as there is. Negative returns on capital compound, too.
Mining is probably the most competitive market. I would never say otherwise. But that dosen't change the fact that, when compared with other capitalist ventures, Mining is one of those that benefits the most from starting with a bigger capital.
This is probably what make it so competitive. There's not really many innovations you can do to out compete others. It dosen't matter much if your marketing team is better. The only things that matters is how cheap your electricity is and how much capital you out in.
(Sure there's other factors. In the long run a mining company that takes better care of their machines will see benefits for exemple. But this is why I mentioned earlier that the *biggest* factor is capital.)
I'm going to link a note so you can see better where I'm coming from.
