Speaker(s): Ryan Sean Adams, David Hoffman, Lyn Alden, Justin Drake
Held on: 28-03-2022
Written on: 30-03-2022
URL1:
I would encourage viewing the Zettelkastan webpage here. My notes were originally written for the Zettelkasten, and then copied over here, so there might be formatting issues below.
Introduction of Guests
Helping Ethereum
transit to Proof of Stake
Macro expert
Proponent of Proof of Work
Critical of Proof of Stake
Which Consensus Mechanism has better Accrual of Monetary Premium
Proof of Work have to be constantly online, while Proof of Stake as
Proof of Work harder to attack - needs the physical hardware
Money should be the simplest, leanest, no bloat. something that’s tries to be everything is not good money
Equities vs Commodities
Should also apply the same (equity) analogy to Proof of Work
Proof of Stake has a social layer, stakers are beholden to community members
Argues that we should make an apples to apples comparison. ie compare Bitcoin Proof of Work vs Proof of Stake/ Ethereum Proof of Work vs Proof of Stake Proof of Stake
can simply remove a malicious validator from the validator set in the case of any attack (forced exit)
Proof of Stake similar to shareholders of a company (bound by law)
Agrees there’s granularity to it - but stresses it’s easier to become equity, harder to become commodities (because immutable)
Proof of Stake situation can become centralized when a majority capital holder can lockdown/censor the network
If Proof of Work gets banned, they can just migrate the hash power somewhere else. But for Proof of Stake, whales, custodians can determine the fate of the network
argues that it is fundamentally still a function of capital - ie if u have enough capital, u can take control of the network ( 51% attack). Genesis Mining are also custodians of the hash rate, they rent hash rate out.
Lyn Alden argues that smaller entities actually have the advantage
Federal Reserve is an example of Proof of Stake system not on a blockchain. Proof of Work brought back digital commodities
Complexity and bugs
Humanity is great at abstracting away complexity
Client diversity to mitigate the risks of bugs and complexity of Ethereum
Lyn Alden agrees, but reiterates that having the leanest code is still the best way to prevent bugs
Argues that Bitcoin Core relies on the security of many external factors - operating system, supply chain to provide the correct code/data
Being a last mover in Bitcoin
Last mover/miner in Bitcoin
is a lot more advantaged Justin Drake
Argues its actually a huge disadvantage
Hardware for mining would be extremely expensive
Moore’s Law also makes it easier for would be attackers. Cost of making the attack is the hardware, not the actual operating costs
Centralization and Participation
After a decade in the space, does not know any individual who operates Proof of Work, it’s all industrial.
Proof of Stake has contributions from everyone and much more accessible to everyone
Jack of all trades, master of none
The more a system tries to do many things, the worse it performs at these things
When Ethereum tried to harden its monetary policy, it started losing market share in Decentralized Finance to other ecosystems
Subjective vs Objective reasons for Bitcoin
The question posed: How much do people of the world like the Proof of Work system more because it feels more fair (subjective) and how much like the technical workings of Proof of Work(objective).
Lyn Alden
Depends who u talk to
personally approaches it more from a technical risk perspective
The closer an entity is to the money printer, the easier it is to get financed
Aspects of Governance?
Being able to have a say in which transaction passes/which doesn’t
Counter question by David Hoffman: Aren’t the mining rigs/hardware the governance model for Bitcoin, just like how $ETH is the governance asset for Ethereum?
Lyn Alden: Proof of Stake system can lead to wealth concentration, early holders effectively have a permanent stake in the system. Whereas for Proof of Work it depends on the miners having to continuously ensure their hardware is competitive
Also being to influence the protocol itself
Proof of Work comparison to gold producers - gold producers have no control over the price of gold
Closing Argument: What is the best way to create crypto money?
Asset needs a Schelling point for it to have monetary premium
There is much more money to maintain economic security for Ethereum compared to Bitcoin
Proof of Stake stands out in both quantitative and qualitative standpoint
We want things that are the hardest, most immutable to be money
We want things that are held for monetary premium (like gold), not for utility (compared to oil which is used for utility)
We want things that are the simplest, so it minimizes bugs
us nuclear code in floppy disks
security systems are usually slow to update to the latest tech
we want it to work when we want it to work, not work when we dont want it to work