I guess most people on this forum would agree with me that Bitcoin potentially has some “economic bugs” built into it (if not there are good articles out there that people can read, let me know if you want the links).
So, I have written to Jeffrey Tucker about this and wrote back to me and said that it was false. When I wrote back to him that Proof-of-Work creates an economic incentive for the network to centralize (which is by now a proven fact, just look at the mushrooming cloud hashing companies), which is contradictory to its purpose, I got no reply back from him.
I’ve asked other prominent figures in the Bitcoin community about this as well, but got no response. They just ignore me.
The other day I listen to an interview with Gavin over at econtalk (http://www.econtalk.org/) and emailed them some hard questions that they never asked him about these things, but have received no response yet. Perhaps they need a little more time though
Why is it that this supposedly smart peoples and experts don’t get it? I understand that software developers don’t get the economic issues, because they are not trained in that field, but these other people… why can’t they see it?
Gavin even said (in the interview: http://www.econtalk.org/archives/2014/05/gavin_andresen.html) that perhaps we might “just have to live with a little bit more centralization” (or something down that line). It’s crazy.
(yea they pearcoin has nothing to do with it, but I could not help myself, its hilarious)
Please share the links, I am pretty sure the community wants to learn more. :pearcoin:
bitcoin economics is such an unknown for many that the economists when first look at bitcoin they compare it to fiat money and their models from them. Usually takes a while for the understandings to become uniform across the board.
There is an element that the bitcoin network is an organic growing and changing thing. So it may appear to become centralised in some ways at the moment but time has shown that there always new developments and unfolding of scenarios that cause such events to come and go. I remember the first time slush’s pool had more than 51% of the bitcoin networks hashing power. This is centralised and was in the early days when one attack on the pool server and enough hashing power the bitcoin network could have been distroyed… or just the fact that slush had the power in his hands to 51% attack the network. I think that some btc fans are die hard btc fans and they will never see a flaw in it until they are burnt by it. Others will read around more and the more people come to the same conclusions the more inovations like POS come to be further examined.
There is a level where people can blow things out of proportion as well… the idea of one single entity having 51% of the hashrate of btc network is not going to happen with some spare garage btc miner… agreed these data centres are the hot spots for such centralisation, but the idea that the more these companies make money in what they are doing the more competitor companies will be set up to tap the market, thus aiding in the decentralisation of the network… so I can see where they are coming from in some regards, the setting up of data centers and the mining scene is completely out of the control of these core developers or investors… I think there is an element of “don’t show a sign of weakness in btc if you dont want to see the price drop off, and thus these peoples investments / retirement funds dwindle” I am very aware the power some people have with regards to their tweets opinions etc… i remember there was a prominant person on btctalk who used to give spot estimates for btc value and ascminer shares… when he warned that ascminer shares would be crashing in 3 days… it did not crash in 3 days time… it crashed about 30 mins after he posted his tweet.
If i was to turn round and claim i have found a flaw in POS or that I was going to be investing $1 million into PPC I think there would be strong movement on the market price without me actually investing or pulling out. The community is full of long term adopters, and new people, it only takes you to get burnt once to stop listening to what one persons predictions are, but if someone keeps giving sound advice then many new people will find this kind of characters words as gospal and will act on them.
ramble ramble tl;dr maybe they don’t want to cause uncertainty on something they feel is a temporary situation as a lot of people are watching what these guys say and do with their investments
I’ll see if I can find some extra good ones this weekend.
In the mean time, have a look at what David Irvine has to say: https://www.youtube.com/watch?v=k-BGhj8HGnY&feature=youtu.be&t=33m04s
He says something like: I don’t believe in proof-of-stake… it reminds me of… the landlord telling me how to vote.
So why do I get upset when I hear this? Well I do agree with him, those with the most money have the most power on proof-of-stake but the same is true for proof-of-work where the guys with the most money to spend on hardware controls the most cpu power, or his own proof-or-resources which also boils down to owning stuff and that those that have more money, get more control.
A key difference is that in Peercoin, which is 100% proof-of-stake, the entity that have the most money also have the most coins and thus will loose the most if the exchange rate goes down. In proof-of-work, you can simply just switch to mine something different and so forth and so on.
Why doesn’t he get something that is clearly very easy to understand? Or am I just super intelligent? Or am I wrong? :not speak:
edit 1: added a blueberry. :pearcoin:
edit 2: it’s even in the name… you have something at stake. It isn’t a proof-of-power, it’s proof-of-i-really-do-not-want-this-to-fail something at stake. could it be more obvious?
You are just super intelligent.
Plus you are biased.
But you are biased because of good reasons. Your edit 2 makes that quite clear
sent by Tapatalk
I’m smarter then I look, that’s for sure :pearcoin:
There is a purpose to me whining about these things. I’m trying to remember why I didn’t like Peercoin when I first heard about it. I was very much into Litecoin and the whole thing about PoS seemed… untrust worthy to me.
Now, since I’m obviously not super smart (or I would have got it) and there are many more people as stupid as me where did the Peercoin propaganda go wrong? Why I not get it sooner? How do we make sure that people that are as ignorant as I was and as stupid as I was, understands Peercoin?
I’m thinking here that if I can understand why smart people don’t get it and why stupid people as me don’t get it, then perhaps we can also find out how to put across a message that makes everyone get it. Do you follow what I’m saying? I want to strike at the core of the ignorance here.
One thing that I (erronously) thought was a joke, was the idea that PoS would work. In my opinion back then, I thought that big coin hoarders would be able to control the network. It wasn’t enough for me that they have no real economic incentive to do so (if it was enough, I would be semi-fine with PoW too). What turned me around, was that I realized that Bitcoin has built into it a path towards centralization. As the ASIC technology gets more expensive, it will crowd out the everyday person from direct investing in ASIC.
Peercoin on the other hand, will get more decentralized over time because old coin hoarders will loose their coins, sell their coins and not use (all) their coins for minting. Over time new coin holders will therefor increase their proportional hoard compared to old coin holders. Even though some will always have more control then others, at least the trajectory is that of towards more decentralization. This is the opposite to Bitcoin that will become more decentralized and where the infrastructure is crowd sourced (cloudhasing) gets old quickly and there is nothing at stake (they could switch coin and short bitcoins while they are at it, making even more on the next coin they are going to mine) really.
Hmm… how do you put those things into a slogan…
Thanks Pillow for bringing this up.
It is hard to find a good slogan. I think of it in this way:
Bitcoiners and Litecoiners (and other PoW coins) can be rebellious, try things for their own benefit , make profits at cost of the network etc. because they have nothing at stake. Many people like that (mostly greedy types). It is about realising short term profits, quick instant rewards.
With PoS coins you almost have to be a good citizen as you have your coins at stake if something goes wrong. It also pays off to buy and hoard coins as you get higher absolute rewards (relatively it is still 1%). Encourages saving and behaviour focussed on the long term.
So I think any slogan in this context would have to reflect the behaviour between spenders and savers. Short term and long term gains. Centralisation and distributed networks. But I do not pretend to have all the answers here. Just my contribution.