Comment on Over 2 percent of the US’s electricity generation now goes to bitcoin
TypicalHog@lemm.ee 7 months ago“So weird how proof-of-work currencies like Bitcoin were able to do that without making a centralized governance structure which promised to hand over the keys later.”
Huh?? What do you mean? Bitcoin doesn’t have on-chain governance. It’s controlled by miners and developers, BTC holders have no say. Bitcoin was never even trying to do what Cardano is.
Mining pools have been getting more distributed the last few years thanks to some network upgrades. Pools relay the results of mining, they don’t do the actual mining, they have no hashpower. In the past, pools have tried to censor transactions, and seen their pool get abandoned by the entire network. They couldn’t censor them of course, they could only temporarily delay them. Pools have no power. They can’t double-spend or 51% attack because nearly all of the BTC they acquire flows right back to miners. They can’t afford the cost of a 51% attack more than any other entity or nation-state. They can’t spend money which isn’t theirs, even if they could do a 51% attack. If you look at hashpower instead of pools, you will see it’s much more decentralized.
Correct me if I’m wrong, but don’t the pools send the block that needs to get mined to it’s participants? If that’s the case, imagine if those 2 top pools decide to do sus stuff or if they get compromized by malware. This could create some trouble until miners migrate. Again, correct me if I’m wrong. Having 2 such large mining pools is not cool and there is no hiding from that fact.
“The rewards proportion isn’t why the “rich get richer”. The rich get richer because coins in transit can’t stake. This means the only coins that can stake are existing coins, sitting in wallets, doing nothing but staking. You are printing an inflationary currency supply, making new coins, and giving those coins to those who are already sitting on the most coins. The more coins you have, the greater portion of your coins will be sitting instead of moving, because why not, it’s free money right? For doing nothing. It’s why supply inflation/currency devaluation hurts the middle class more than anybody else. They have an emergency fund, they have a savings account, they are saving up for a down payment. They have more cash on hand than rich people or poor people. Rich people have assets. Poor people don’t have enough money to be effected. The proportionality doesn’t matter here. What matters is the direction of the new coin flow: towards those who are already sitting on coins.”
What do you mean, coins in transit can’t stake? I have 10 coins (wallet staked), you have 0 coins (wallet staked), I send you 5 coins (atomic operation). Still 10 coins are staked, just I have 5 staked coins and you have 5 staked coins. Coins in Cardano are NEVER locked when staked. You don’t really stake coins, you stake a wallet, again, no locking, it’s almost as a flag staked/unstaked that doesn’t change how you can move or send your coins. Cardano is printing new coins and they go to stakers (which are essentially all holders (so noone gets diluted) big and small since staking in Cardano is a no-brainer thing to do). Bitcoin is also printing new coins, but it’s not giving them to holders (not not diluting them) they go to already mega rich mining farms who get richer and expand. And you said Cardano stakers are doing nothing. This is not true, they are either validating TXs and creating blocks themselves or delegating their stake to someone they trust to do it for them, thus those coins are still doing something (securing the network).
“In a fixed supply, your coins may gain value over time due to deflationary pressure. Every coin is effected the same way. In cardano and other inflationary currencies, you’ve added an additional layer where you are printing coins and handing them to those with the most coins already. Not only does this give them more coins, it reduces the value of the coins held by people whose coins recently transited.”
Lil fun fact. Cardano is also limited supply like Bitcoin. In Bitcoin, newly created coins go to miners who then sell them and existing holders get diluted. In Cardano, existing holders don’t get diluted because they get the coins. They have more coins but same percentage of total coins. In Bitcoin you have same amount of coins, but less percentage of total coins over time. And as I said, there is no such thing as “reduces the value of the coins held by people whose coins recently transited”, coins don’t get unstaked in Cardano when they get transfered (unless if you send them to an unstaked wallet). But as I said - pretty much everyone in Cardano stakes their balance since it’s risk free and everyone wants to help Cardano by putting their coins to securing the network. Most of those 35% of unstaked coins are actually either lost coins or coins in huge whale wallets. (Which is actually kinda ironic cuz you keep saying how only whales are staking lol).
makeasnek@lemmy.ml 7 months ago
I’ve love to see more pools, but I just don’t think its as big of an issue as it’s often made out to be, since they don’t actually control the hashpower. The blocks they send to participants are immediately verifiable as real or not, miners don’t have to take a pool’s word for it and will often have full nodes monitoring the blockchain to make sure any given pool doesn’t go over 51% hashpower.
Pools really can’t do sus stuff. There are a few things pools could do or try to do:
Censor transactions by refusing to include them in blocks. They are financially incentivized not to do this, since not including a tx in the block means selecting the next least valuable tx in terms of fees. The immediate damage from this is basically nil, the next block will probably be made by a different pool and the tx will go through. So transactions can’t get censored, only delayed. But people will notice, and that pool will lose all its hashpower and its means of making money, which is exactly what happened when this scenario happened before. Bitcoin has faced, and beaten back, this exact attack before.
Conspire to perform a 51% attack. They don’t just need 51% between each other, they need enough hashpower to roll back previous blocks, which means maintaining 51% for several blocks in a row. One of the primary reasons 51% attacks are not viable is that you need to give that Bitcoin to somebody, get something of value in return, and then un-spend it. They need to transfer you that equivalent amount of value before it gets unspent. Nobody transferring hundreds of millions or billions of dollars worth of value is going to be happy with a one block confirmation. Or even a three block confirmation. Even if they were, what items can you actually transfer that quickly? It’s just not viable as an attack method, there is no money to be gained. Pool operators are fallible at the rest of us, if there was a viable way to do a 51% attack, somebody would have done it by now. But it’s not.
If a block moves a coin from a to b, that coin can’t also the coin that stakes that block. Granted, I am showing some ignorance of Cardano here, but that’s how other PoS systems work. And there is usually a “cooldown” of a couple blocks to prevent that coin from staking for a while for security reasons.
I didn’t know about cardano’s capped supply, you’ve taught me a few things in this thread. Until the system is actually decentralized and the cardano devs give away the master keys and let the network truly run on its own, I have little interest in it. And based on some cursory reading, centralization of relays and growing chain size are much more of a concern than with Bitcoin. Best of luck to you.
TypicalHog@lemm.ee 7 months ago
Just wrote a big ass reply and I clicked “Next” instead of “Reply” and it’s all gone… But in short: