A lot of people want to save the planet from POW by using POS. If this is you, I very much respect your right to feel that way and choose a POS system. As long as POS fans are not pressuring the rest of us to convert to POS, its cool if... you guys make blockchains with POS systems. But please keep a few thoughts in mind:
Mining for physical gold is more demanding on energy resources than mining for cryptocurrencies, knowing that, are you going to push the gold and other physical mining industries to stop? Do you wear gold or diamonds and yet feel its wrong for people to spend energy in the areas of life they deem worthwhile?
Your POS blockchain will be much easier for a wealthy government such as US or China to hijack, which also means poorer countries will struggle under their thumb.
Immutability is hardest to break with a POW system.
Let’s talk about XRP, the XRP “trusted validator” system is dangerous, because the current trusted validators can choose to ignore other validators or refuse to allow in new validators. Of course Ripple cleaned up their act and put out effort to not “own” the network, they were under fire and made adjustments. Nevertheless, the design of this trusted validator system is easily corruptible.
I’m not saying POW can’t be corrupted, but its a lot harder to do. Ripple does not require complete consensus, only majority consensus and this makes it even easier for a “trusted validator” system to become hijacked (with Ripple in the best position to do it). Once a majority is achieved it is possible to change anything like rewinding the chain or adding coins. This is true with hashpower too, but its a lot harder to do. Craig Wright is trying to force is protocol with a hashpower battle, and that’s scary. But to do this is very expensive and if he wanted to keep control over the network he would have to do it indefinitely, this is not true with Ripple and XRP. Once you have the majority of trusted validators you can reject newcomers forever. Craig Wright on the other hand would have to fight for superior hashpower all day every day and never lose the advantage. This is why POW is ideal.
To Be Fair… POW Can Be Hijacked Too!
POW can be hijacked as well. A perfect example is what is going on with Bitcoin Cash. Craig Wright plans on doing a hashpower war with ABC/Bitmain and if they win the SV protocol goes in. So corporations or governments could force changes on a POW blockchain if they want to do it. But its easier to do it with POS, and its harder to maintain that control with POW. Here’s how it works. Let’s say Craig Wright wins by having the most hashpower, well, he only wins that one time. ABC/Bitmain and other miners could make more miners and try to beat Craig Wright in another hashpower battle and reverse his changes.
This means that while Craig Wright can get control, its only momentary control and he can lose it the very next day. However, with POS its much more difficult to compete with the wealthy. For example, in the US an estimate stated that 1% of the US population control the majority of the wealth, which means that in a POS system even 99% of the US population has no chance of competing with that 1% of the population in staking. Additionally, if a government wanted to take over the network it would be easy, because they can just inflate the US dollar, reducing the wealth of the community and increasing the government’s percentage of the national and global wealth instantaneously. Also, POS provides no negatives for rich people, because there is no risk or financial loss in the effort to take over. POW requires financial costs, energy costs, human labor costs in order to try and hijack the network, and if they fail to take it over it was one expensive land-grab. On the other hand, POS is zero cost for them, they get their money back and make some extra money. I’m not opposed to an alternative to POW, I just think its the best thing available at this time.
Afraid of POS
POS might look beautiful and seem like its going to be good for your life but one of these days you’ll find POS messed you over and took all of your stuff! What were we talking about? Oh, yeah, blockchain….
I’m afraid of POS because I fear it will undue everything Bitcoin started out doing for people. If POS had a randomizing lottery effect I might be able to get behind it…. Here is the other thing, the miners are becoming more energy-sparing every year. Although it will always cost energy and the energy costs are not likely to lower too much, there are limits to how much a business is willing to pay for equipment, so I expect the energy costs will go down while the costs of equipment will go up. POW also creates more jobs: technical engineers, manufacturing personnel, drafters, electrical engineers, computer scientists, sales reps, affiliate marketers and so on. Care about the people! Support POW.