There have been a number of voices in the blockchain and cryptocurrency community seeking a solution different than Bitcoin’s Proof of Work (PoW) consensus mechanism for block validation.
Many of these voices suggest that a Proof of Stake (PoS) model would maintain the elegant parts of Bitcoin while being far more efficient.
Each block on a PoW blockchain is validated by miners who use powerful computers to solve complex mathematical equations. When the equation is solved, the block is validated — and the miner earns a reward.
However, many see this PoW protocol as an inefficient way for a platform to function — based on the cost of electricity needed to run the computers needed to solve the block validation problems. As such, some have sought other solutions for validating blocks.
One such solution is proof of stake (PoS), which utilizes a miner’s ‘stake’ in the platform. This is based on the ownership of coins/tokens or the length of time as a miner — which is then randomized. Upon block validation, miners are then rewarded in a similar way as with PoW.
Proponents have argued that this type of validation system would eliminate many of the problems associated with PoW. For example, the cost of energy to create a block would drop drastically. Furthermore, the risk of a 51-percent attack, like the recent ETC attack, would end completely.
While it may seem to be functionally similar, this model does not have the same level of research as the original Bitcoin PoW protocol does. For this reason, many within the crypto community are beginning to reject the concept as faulty.
Replacing PoW with PoS is like thinking a tank has the attributes of a tank because of its shape, then replacing the armor with paper, and rolling off to war.
— Samson Mow (@Excellion) January 23, 2019
Simply understanding the PoW protocol and seeking to replace the key component of the equation is not a solution for the best management of validation. Instead, this leaves the blockchain open to a number of major weaknesses which are just now being explored.
Problems on the rise
The weaknesses in a PoS system have not had the time to be fully considered.
Almost immediately, detractors have pointed out that a PoS protocol would allow miners to follow any number of chain histories — because nothing is risked. Called the ‘nothing at stake’ problem, this failure would ultimately make consensus on the chain impossible. However, PoS devotees have argued that this problem could be easily solved with some protocol adjustments.
Still, there are more problems surfacing.
I've been pointing out for awhile that while PoS proponents often claim without explanation that PoS is a scalability improvement, it's obviously much easier to scale PoW because checking PoW is cheap.
This attack is a perfect example of that problem.
— Peter Todd (@peterktodd) January 23, 2019
There are at least three different new vulnerabilities that are possible.
- The first is a vulnerability on an individual node that requires no stake whatsoever.
- The second is a variation of the first, which allows an attacker to create ‘apparent stake’ — while not actually having any stake.
- The third allows an attacker to falsely amplify their stake with self-spends in order to arbitrarily save falsified numbers onto individual victim nodes.
Taken together, these vulnerabilities represent massive shortcomings in the PoS protocol. The Jan 15 delay of the Constantinople fork on the Ethereum chain may be the result of these types of vulnerabilities.Without further research, jumping into the PoS protocol could easily cause massive disruption of the blockchain and the projects that rely on it. Click To Tweet
While there may be shortcomings, it seems clear that Satoshi’s original vision of a PoW protocol is best. As further research continues, the brilliance that went into the creation of the Bitcoin blockchain continues to reveal itself.
Think Proof of Stake is destined to fail? Or will the bugs get worked out? Let us know in the comments below!
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