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Comment by noman-land | Hacker News Reader

This is essentially how bitcoin's proof of work algorithm works. They maintain the difficulty by adding 0s as computers get faster.

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Yep. So much compute and energy thrown away because proof of stake wasn't figured out sooner.

You need some proof of work to prime the pump for proof of stake. Otherwise, you have no security because there's nothing at stake.

Now that we have plenty of proof of work completed, we don't really need any more. You can bootstrap your new coin by burning Bitcoins as a provable value sink to get it started on the path to POS.

You could stake fiat in a bank account I guess?

That's pretty much Tether. You could probably bootstrap a POS coin by staking Tether. There would be a lot of details in getting it to eventually grow independent of Tether. I don't claim to know how that could happen. Especially since Tether is not a highly-regarded/trusted token in the community.

lol what this nonsense. tether's regarded as the safest bc their biz model is providing entities usdt for usd without offering interest on the cash.

now why would any entities want to deposit usd into a private bank and receive usdt without any yield on their cash? you think you understand tether so well maybe think about it for a few minutes

Did Ethereum end up moving to PoS? How did that work out?

Yes ... And it's spawned even more innovation. Right now the L2s are building momentum!

Huh, very nice! I'll see if the price of gas changed, thanks!

They should really be using renewables by now /s

You should also check out current L1s. Most stablecoin transactions aren’t happening on an Eth L2 - see “Total Transaction Size by Blockchain, Last 30 Days”

https://visaonchainanalytics.com/transactions

PoS is a superior mechanism design than PoW from the fact that miners acting in bad faith in PoS have their stake burned so they can't keep on acting bad. While to mess with PoW miners only need to guarantee temporarily excess hash power - look up "Bitcoin Cash: 51% Attack" for examples.

Like everything in tech, the devil is in the details, algorithm details in this case, so far it seems to be working out just fine.

PoS at best makes a different tradeoff, it's certainly not strictly superior.

See criticism here: https://news.ycombinator.com/item?id=25007874

Bitcoin still refuses to move to proof of stake. It's obscene https://digiconomist.net/bitcoin-energy-consumption

Ah yes, because explicitly admitting who controls the financial system is more efficient than using proof of waste to measure it indirectly.

I wish cryptocurrency folks would stop pretending it is about decentralization or distributed systems, and that anything that allows them to bypass financial regulation is good enough.

Isn't the reason more about limiting currency. Most of the crypto bros all hate the money printers.

The fact that faster hashers will come about just adds some natural competition, but it's still about limiting money supplies.

The hashing is about consensus. It's related how a low hash stands as proof of computational power, you can't just fake it.

The "adding more zeros" is done automatically, according to an algorithm, so that the time between blocks is more or less the same.

There's this incredible MIT course about all of this, it's where I got the idea for the site from: https://youtube.com/playlist?list=PLUl4u3cNGP61KHzhg3JIJdK08...

Thanks for the playlist! I've already been going through the later videos.

Its about preventing double spending of the same bitcoin.

That's incorrect. The money supply is fixed irrespective of the hash rate.

But it halves every so often.

Yes, the block reward halves every 210K block or roughly every ~4 years, but that's independent of the hash rate. Bitcoin adapts to the hash rate so that blocks are produced approximately every 10 minutes. Eventually the total supply of 21M BTC will be reached after which new bitcoin issuance will cease.

But "it's still about limiting money supplies" is correct, no?

One's investment in mining equipment becomes half as profitable every so often.

No, mining profitability and money supply are distinct concepts. In fact, mining profitability constantly fluctuates depending on many factors aside from the block reward (e.g. electricity cost, total hash rate, equipment depreciation, BTC price, etc.).

Bitcoin could have been designed with a different money supply mechanism (e.g. no halvings) but it would still have required mining. The hash rate has basically no impact on the money supply. That's because mining doesn't solve the problem of limiting the money supply, it solves the problem of decentralized consensus, aka the double spending problem.

I understand the purpose of mining and how the hash rate adjusts but I'm trying to understand about the profitability.

Imagine you are a miner and a halving is next week. One week you earn 1btc. None of those other factors you mentioned have changed.

Then the halving happens so the next week you make 0.5btc. However yours and everyone else's held bitcoins are still worth the same as they were before.

Hasn't your mining profitability halved?

Given the scenario you proposed, yes it has.

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