Leap is correct. The energy required for Bitcoin (or anything using PoW) is significantly higher than the energy requirement for Ethereum (or anything PoS). I am led to believe, however, that there is greater security in the PoW formula. In other words, a PoW Blockchain is harder to falsify than a PoS Blockchain would be. But I’m not positive of that.
Blockchain’s CAN be modified. Its just really, really hard and very expensive to do so. It claims to be an immutable data base, but in reality it is just very difficult to mutate it.
I believe the buy in or stake is 32 eth. Roughly $42k. If you wanted to open a restaurant it would cost more.
The PoW model allows anyone with a computer is it “mint”? That is the nft term.
The problem though is in how many machines make sure the blockchain accounting is verified. PoW is a larger number than PoS where the winner of solving the puzzle does the accounting instead of a larger number of machines in PoW.
The way I understand it the more you stake the better the chances you will become a validator. Let’s say you stake 10,000 eth and another stakes 32 eth, Well the guy with 10,000 will win out because the theory is the more you are in the less chance you will try to degrade the network. Yes it could happen but it would take alot of stakers to do it.
This is actually where it shows up in your linked artcle
“Annualized interest rates and an inverse square root function are used to calculate rewards in ETH 2.0. In layman’s terms, this means that the lower the overall amount of ETH staked, the lower the incentives for each validator will be.”
Right Peter but if you get enough stakers together to take over the network, The Theory is that you will lose more than the network. They are thinking it doesn’t pay to spend a dollar to make 80 cents.
Collude with the other big stake holders in the network to basically steal from the smaller guys. For example, transactions of less than 0.00001 coins will be dropped. Any account balances less than 0.00001 coins are too small to manage, so they will be forfeited. Things like that.
The risks to small stake holders are real and significant if only large stake holders can make all of the decisions about how the network operates.
Not in detail, no. But at a high level. The management of various crypto networks varies by the specific currency. This particular risk is probably not a risk to all currencies.
It’s more of a suggestion based on watching history. In an unregulated market, those with the biggest stakes tend to make the rules - and make them in their own favor. There isn’t a whole lot of regulation in the crypto market - certainly not when compared to the stock and bond markets.
Getting back to your original comment to which I was replying: the more you stake the bigger your chances to become a validator. I’m translating that to mean the more you have invested in the specific currency, the better your chances of gaining some control over the policies and procedures of the currency.
Given the relatively small circulation of most cryptos, and the ability of things like hedge funds or sovereign wealth funds to raise tremendous amounts of capital, it is not at all inconceivable that a large entity could corner the market on some particular crypto. And they’d only do that for their own benefit, not for the benefit of anyone else. That is the nature of these entities. Pretty much sociopathy unchained.
Ok Thanks Peter, what I understand is that the stakers (validators) haven’t any control over the policies and procedures. What they get is interest on their stakes. Many of these validators are made up with many investors and the validator pays them an interest, after deducting a fee for their management, for the use of their Ethereum.