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Comment by zeroclip | Hacker News Reader

Not the case with proof of stake.

Ah yes, let's make currency decentralized by having it controlled by the richest people. That makes much more sense than wasting energy.

That’s not how PoS works.

So tell me again, how much money do you need in order to stake?

0.01 ETH or less, through decentralized staking pools.

But your main argument is wrong: validators do not control the network. Users running node software do. Running a node is free. If a single validator began to exert unwanted control, the honest majority of non-rich users could slash or evict them.

What prevents the rich validators from slashing non-rich users so they don't lose their majority?

It’s not the majority of stake that controls the chain, it’s the majority of honest users. Rich validators can collude to have 51% staking power and start to exert unwanted force, like censoring blocks for their own profit or doing something else unwanted, but the majority of honest users can decide to coordinate a soft fork and point their clients at a new chain. The controlling validators will only be rich on the old chain.

Proof of stake is a pyramid scheme.

um, no? How is it one?

Validators are paid mostly from protocol reward by placing their capital at risk and performing the necessary work to validate the network.

So the richest get even richer, at the expense of everyone else. How is that not a pyramid scheme?

“Richest get richer” could describe any form of capital investment in a risk-on asset that appreciates over time: buying gold, stocks, real estate, art, VC. If you have capital to place at risk in an investment that gives you a return*, you are “rich and getting richer.”

Unlike stocks and other investments, you don’t need a large amount of capital to receive a PoS reward, and there are less significant economy of scale. All validators receive an equal % return no matter how much Eth they deposit. Those without 32ETH capital can use pools and decentralized staking platforms to receive the same % return minus a small fee to the service who has the capital at risk and is doing the work to validate.

Opposite to a pyramid scheme: if more people join Eth deposit pool, everybody including early investors earns collectively less % reward on their stake, and the equation for this is explicit and known! And the staking deposit of each new entrant does not funnel back up to early entrants.

* Note: a lot of these investors are down since last year, not just Eth but stocks and other investments have crashed.

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