Proof of stake, some doubts and concerns


#1

Hi guys, first of all, I’m still trying to grasp the whole concept of proof of stake. Some friends and me were planning to set up a rig to mine Ethereum and then I found out about the Metropolis upgrade. I’ve been reading some articles and watching some videos like this one from @ivan

So yeah, I can understand the benefits (quickness, scalability, a more “green” approach, penalties for abusing the system, etc…). However, I have some concerns and doubts:

  • Ivan mentions in the video that you’d need a minimum amount of 1000 ETH, is this accurate or did I get it wrong? Should I spend and lock over 250k € in order to be a validator? Seems a huge amount to me, only available to few people that will make even more money from mining, or validating, in this case. Sure they won’t “mess around” against the blockchain, but why would they? They’d be already in a heavily privileged position over everyone else.

  • How is a system based on wealth “more democratic” in any way?

  • How does the betting system work, actually? How do you know you’re vouching for a good transaction and not a malicious one? Can anyone share a link or something with more detailed info about the process?

  • Generally, what would be the advantages for those who are not big investors, just normal people with modest amounts of ETH?

I’m still trying to wrap around my head about this whole issue, these concerns are pretty visceral and probably I could be plain wrong about some of them. Well, that’s the point of this thread, to learn about this issue. :sweat_smile:


#2

Simon, interesting topic, my understanding is that the minimum stake for POS under Casper has not be agreed. The 1,000 was quote by Vitalik a while back. Numbers closer to 10 would become possible in the future. There would also be shared pools that Ether holders could join.

The reason behind the POS 3 years ago, was to make it less expensive (energy costs) for miners, it is also more environmentally friendly. Not sure if it is more democratic at 1,000 ethers, it would be at 10.

There are 2 proposed methods:
Casper FFG (Friendly Finality Gadget - Vitalik) Ethereum blockchain pauses after every 50 blocks to let stakers validate and establish consensus on the chain.
Casper CBC (Correct By Construction, Zamfir); it works so that a “safety oracle” constantly fine-tunes a partially built PoS protocol until the safety oracle completes the system.

The overall advantages are for a more sustainable system, it can continue to grow more efficiently with lower costs to the stake holders and ultimately all participants.


#3

Great info Jon, thanks for sharing.

I’m totally for reducing the environmental impact, in that regard I think this is a brilliant idea. The possibility of shared pools would also be great because it would remove all the costs of maintaining the mining farms, leaving more margin for profit and growth. At least that’s what it seems to me.

About the minimum stake, I guess we’ll have to wait and see. 10 ETH would seem a reasonable minimum stake for anyone who’s invested in Ethereum, and has an average salary.


#4

really interesting to read. I guess if you want to stake coins there might be better ones like neblio… its really interesting how the crypto space is trying to stay decentralized and i think in the future the community will simply avoid centralized currencies.