Google's fully homomorphic encryption package

Posted Jun 15, 2021 19:43 UTC (Tue) by job (guest, #670)
In reply to: Google's fully homomorphic encryption package by jamesh
Parent article: Google's fully homomorphic encryption package

Rich-get-richer is a more descriptive name than proof-of-stake, since it is more obvious that such systems can not be bootstrapped. Who would get the first reward, if the system was fair? The second?

It is probably also not a coincidence that all blockchains that migrate to the rich-get-richer model started out with "let's all agree that I have all the money and then I can sell it to you", also known as a pre-mine or initial-coin-offering.

Google's fully homomorphic encryption package

Posted Jun 20, 2021 7:52 UTC (Sun) by teknohog (guest, #70891) [Link] (2 responses)

> Rich-get-richer is a more descriptive name than proof-of-stake, since it is more obvious that such systems can not be bootstrapped. Who would get the first reward, if the system was fair? The second?

Proof of Stake was introduced by Peercoin in 2012, and it also used Proof of Work on the side for a fairer bootstrap. The PoW rewards declined quite rapidly over time to favour the more energy-efficient PoS. Some other coins such as Zano use a similar scheme.

A lot of cryptocurrencies have a bastardized version of PoS where you need a minimum deposit to earn PoS rewards. These obviously have a "rich get richer" issue, but they also have other problems such as centralizing the entire network logic into fewer select nodes.

Google's fully homomorphic encryption package

Posted Jun 20, 2021 12:38 UTC (Sun) by smurf (subscriber, #17840) [Link] (1 responses)

PoS is not just staking, it's also proofing. You need to supply the resources to validate blocks and/or to verify that others who say they're validating are doing their job. This processing cost is independent of your actual stake. Staking 0.1ETH would cost you more CPU power = electricity than the stake would yield. You want a return on small amounts? fine, create a mining pool. Since costs are fixed, the pool's take should be minimal given a sufficient number of participants.

Peercoin's algorithm is a good start but is kindof simplistic compared to Ether's admittedly more elaborate scheme. Not surprising, as we have a decade more experience WRT the [more-or-less nonexistent] ability of crypto currencies to scale up sufficiently.

Google's fully homomorphic encryption package

Posted Jun 20, 2021 14:34 UTC (Sun) by teknohog (guest, #70891) [Link]

> Staking 0.1ETH would cost you more CPU power = electricity than the stake would yield. You want a return on small amounts? fine, create a mining pool.

Good point, I hadn't considered that one. However, as I already mentioned in passing, staking thresholds will centralize the validation process into fewer nodes, away from the decentralized aims of original cryptocurrencies. Mining pools are a part of this problem, even for existing PoW coins.

It shouldn't be a problem for anyone if I want to help maintain the distributed nature of the network at my own expense. Perhaps in Ethereum's case, the threshold is a part of the greenwashing as they transform from PoW to PoS. However, it should be seen as a problem whenever a cryptocurrency is promoting increased centralization.

Bitcoin doesn't have any staking rewards, but its community also recognizes the importance of publicly accessible nodes for the health of the network. There used to be the Bitnodes project that would reward nodes with high uptime, but it never really materialized due to low participation numbers.