By 2014, one miner had 51% of all bitcoin mining - when 51% had previously been the apocalypse scenario for bitcoin. Proof-of-work has efficiencies of scale - so it naturally recentralises.
The word “decentralised” is an attempt to abrogate legal culpability for what happens on your network, by claiming that your network doesn’t have any central points of control. īut none of the technical details matter - because all of this is handwaving to pretend that a system full of central points of control is “decentralised.” Decentralisation was always fake The Ethereum blockchain will then be continued by the Beacon Chain validators. There are a fixed number of blocks to go on Ethereum, with the last being expected around 15 September. For now, if you stake ether, it’s unavailable to you, and you just get block rewards back from your stake. Staked ether cannot be withdrawn as yet - that’s coming in a future version of Ethereum. To run a validator, you have to stake 32 ETH. If a validator goes offline or attests to invalid transactions, it can lose its stake (“slashing”). Once there are enough attestations, the new block becomes part of the Ethereum blockchain, and participants get a block reward of some ether. Other validators then confirm and attest that the block is valid. Ethereum’s new mechanism is the Beacon Chain.Ī participant validates a block of transactions. There are many ways to do a proof-of-stake system. Most remained functionally centralised in practice. But many minor altcoins seized upon POS - just on the basis that they needed something to let them pretend to be decentralised that wasn’t POW, and this was something. There was zero chance that bitcoin would adopt POS. POS is a bit too obviously “thems what has, gets” - so you have to convince the users to go along with it. What I mean by proof of stake is that instead of your “vote” on the accepted transaction history being weighted by the share of computing resources you bring to the network, it’s weighted by the number of bitcoins you can prove you own, using your private keys. I’m wondering if as bitcoins become more widely distributed, whether a transition from a proof of work based system to a proof of stake one might happen. Your chance to validate the next block and get the coins is proportional to your current holding: You show your commitment by holding coins. Proof-of-stake (POS) was first proposed by BitcoinTalk user QuantumMechanic on 11 July 2011. Bitcoin is the most inefficient payment system in human history.Įthereum copied bitcoin’s stupid system, because they didn’t have anything better that they could claim was decentralised. Your chance of winning the bitcoin lottery is in direct proportion to how much you waste.īitcoin mining now uses over 0.5% of all the electricity in the world - for the same seven transactions per second it managed to do in 2009. You throw away computing power as fast as possible to show you deserve the bitcoins. So Satoshi required an unforgeable commitment for everyone who wanted the bitcoin reward: competitive waste of resources. If you just give coins to anyone who asks, you don’t know if it’s a thousand people asking … or one person with a thousand sockpuppets. So he paid the transaction processors with a bitcoin reward. And he also wanted to distribute fresh bitcoins. Satoshi Nakamoto needed a way to add transactions to a ledger, making sure nobody spent a coin twice - but without any central authority. Proof-of-work (POW) cryptocurrency mining was invented for bitcoin. In all other senses, none of this matters. And will cause much-needed political problems for bitcoin’s proof-of-work. Proof-of-stake will still be a vast improvement over proof-of-work. Proof-of-stake pretends to change that - and it just doesn’t.Īnd that’s before we get to the community angst over whether US-jurisdiction validators will follow OFAC sanctions because they have to. Proof-of-stake still doesn’t fix all the other problems with Ethereum, or cryptocurrency more broadly.ĭecentralisation is always fake.
Using a country’s worth of electricity, and thus pumping huge amounts of carbon dioxide into the air, is unconscionable.īut that won’t suddenly make cryptocurrency good. If it happens this time, then hooray! Proof-of-work mining is a crime against humanity. After eight years of promises that Ethereum would definitely get off the blithering idiocy of proof-of-work cryptocurrency mining … the merge of the ETH blockchain into the new Beacon Chain system, formerly ETH2, is scheduled for some time between 15 and 20 September 2022.
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