Translator’s Foreword: After the official release of the Ethereum 2.0 deposit contract, Ethereum has taken a big step towards the transformation of the PoS system, and Ethereum co-founder Vitalik Buterin has summarized in his new article that Ethereum will The reason for switching from the current PoW system to the PoS system, in his opinion, under the same cost conditions, PoS provides better security, which can resist potential attacks. In addition, the PoS system can be faster after being attacked. Recovery, and the last advantage is that PoS is more decentralized than ASIC mining (Note: GPU mining is not included). Despite this, Vitalik also mentioned two possible advantages of PoW systems, but these advantages are still insufficient Let Ethereum stay in the PoW system.
Compared with the Proof of Work (PoW) consensus mechanism, the Proof of Stake (PoS) is a superior blockchain security mechanism. There are three main reasons:
1. PoS provides better security under the same cost conditions
The total cost of the GPU-based proof-of-work attack: assuming a 6-hour attack, it is about $0.26. When the attacker gets a block reward, it may be reduced to zero.
Based on the ASIC workload proof , the total cost of the attack is: US$486.67 (ASIC hardware cost) + US$0.08 (power + maintenance cost) = US$486.75.
As the threshold for joining becomes higher and higher, ASIC provides a higher level of security at a higher centralized cost.
Proof of Stake (PoS) assumes that a 15% rate of return is sufficient to motivate people to invest (this is the expected return rate of Ethereum 2.0), then a reward of $1 per day will attract 6.667 years of deposits, or approximately $2,433. The hardware and electricity costs of a node are very small. A $1,000 computer can pledge hundreds of thousands of dollars in deposits, and about $100 a month is enough to pay for electricity and Internet costs. We can conservatively say that these ongoing costs account for about 10% of the total investment cost, that is, we only have a daily return of $0.9 that ultimately corresponds to the cost of capital, so we need to cut the above figure by about 10%.
The total cost of the attack is: US$0.90/day * 2433.455 days (6.667 years) = US$2189
In the long run, this cost is expected to be higher because staking will become more effective and people will be satisfied with a lower rate of return. I personally predict that this number will eventually rise to about $10,000.
Please note that the only “cost” for obtaining this high level of security is the inconvenience caused by not being able to move coins at will when you are staking. It may even be because the public knows that these coins are locked, causing the value of the coins to rise, so the total amount of money flowing in the community and preparing for productive investment remains unchanged! In PoW, the “price” of maintaining consensus is that real power is consumed wildly.
Higher security or lower cost? Both methods are ok. I personally prefer the latter one, because as we will see below, even a successful attack in Proof of Stake (PoS) is more harmful than Proof of Work (PoW). ) Attack is much smaller and recovery is easier.
2. The proof of stake (PoS) system is easier to recover after being attacked
In a PoW system, if your blockchain suffers a 51% attack, what would you do? So far, the only response in practice is to “wait for the attacker to get bored”. But this ignores the possibility of a more dangerous attack. This attack is called a “spawn camping attack”, which means that the attacker attacks the blockchain again and again, and the goal is to make the blockchain Becomes useless.
In a system based on GPU mining, there is no way to defend it. A continuous attacker can easily make a blockchain useless forever (or more realistically, switch to a proof of stake or proof of authority consensus mechanism). In fact, after the first few days, the attacker’s cost may become very low, because honest miners will withdraw (because they cannot get rewards during the attack).
In an ASIC-based mining system, the community can respond to the first attack, but this is actually an attack. The community needs to change the PoW algorithm through a hard fork to deal with the first attack. “Block” all ASICs (attackers and honest miners!). However, if the attacker is willing to bear the initial cost, then after that, the situation returns to the GPU situation (because there is not enough time to build and distribute ASICs for the new algorithm), so in this case, the attacker can still cheaply Continue to execute the nest attack.
However, in the case of PoS, the situation is much better. For certain types of 51% attacks (especially restoring the finalized block), there is a built-in “penalty” mechanism in the PoS consensus proof system, through which mechanism , Most of the pledged rights and interests of the attacker (and no other people’s pledged rights and interests) will be automatically destroyed. For other attacks that are more difficult to detect (especially the 51% alliance censorship attack), the community can coordinate a small number of users to activate the soft fork (UASF). In this case, the attacker’s funds are once again destroyed (in the ether). Fang, this is done through the “idle leakage mechanism”). This does not require a “hard fork of burning coins”, except for the need to coordinate on the UASF to select a few blocks, everything else is automated, just simply follow the protocol rules.
Therefore, the first attack on the blockchain will cost the attacker millions of dollars, and the community will recover within a few days. The second attack on the blockchain will still cost the attacker millions of dollars, because they need to buy new coins to replace the old coins that have been destroyed. Similarly, the third time, the fourth time… both cost the attacker millions of dollars. This game is very asymmetrical and it is not good for the attacker.
3. Proof of Stake (PoS) is more decentralized than ASIC mining
GPU-based workload proof is considered to be reasonably decentralized (it is not difficult to obtain GPUs), but GPU-based mining largely does not meet the security standards we mentioned earlier to prevent attacks. On the other hand, ASIC-based mining requires millions of dollars in capital to enter.
This is also the correct response to the common argument that “PoS makes the rich get richer”: ASIC mining also means that the rich get richer, and this game is more inclined to the rich. At least in the PoS system, the required minimum deposit amount is quite low, and many ordinary people can achieve it.
In addition, the PoS consensus proves to be more censorship-resistant. Both GPU mining and ASIC mining are very easy to detect: they require a lot of power consumption, expensive hardware purchases, and large venues. In contrast, PoS staking can be easily detected. It’s even done through VPN on the eye-catching laptop.
Possible advantages of PoW
I think PoW has two main real advantages, although in my opinion, these advantages are quite limited.
1. The PoS system is more like a “closed” system, which leads to a higher concentration of wealth in the system in the long run. To this, the main response I see is that in PoS, the overall reward (that is, the verifier’s income) It will be quite low. In Ethereum 2.0, we expect the total annualized revenue of validators to be equivalent to 0.5-2% of the total supply of ETH. And the more validators participating in staking, the less profit they will get. Therefore, it may take more than a century to double the concentration of coins. In this time frame, other pressures (want to spend money, allocate money to charities or other methods, etc.) may take up leading position.
2. PoS needs “weak subjectivity”, while PoW does not. However, this can be said to be a very weak requirement. In fact, users already need to trust the client developer or community to this degree. At the very least, users need to trust someone (usually the client developer) to tell them what the protocol is and any updates to the protocol.
In any software application, this is inevitable. Therefore, the marginal additional trust required by PoS is still very low.
However, even though these risks are indeed great, in my opinion, they are secondary to the huge benefits that the PoS system gains from its higher efficiency and the ability to better handle and recover from attacks. of.
Please also refer to my previous article on the PoS consensus mechanism.
