Shrimp
(A lil big Shrimp in the rough crypto ocean )
1
Yesterday I explained a friend of mine PoW vs PoS
And I realized through explaining I didn’t grasp this concept yet completely.
Here are my questions:
Are all PoS networks PoS is Delegated Proof of Stake (DPoS)? I am assuming yes at least it always sound like this to me or I cannot pinpoint the difference.
And obviously you still always need the physical computing power in form of a node right?
So this means Pos will have obviously less physical decentralization? Since there a potentially less nodes but more miner participants in the form of stakers
And the main positive effect of Pos is more environmentally friendly?
Really sorry for these potentially dumb questions…just want to grasp it and also to verify somethings I explained yesterday
It’s not dumb at all, anyone would have the same question if they first learned about PoW or PoS:
Not all PoS are DPoS. PoS mean anyone can run a node, that provide more decentralization, but at the same time decrease security and liveness since not every node meet the network requirement, also that would make non-tech people cannot participate in securing the network if they don’t have the required technical knowledge to run a node.
DPoS mean only the people who meet the network and technical knowledge requirement can run a node, and other people delegate their stake into those people, this approach can provide “might be a bit lower” decentralization but highly more security.
Yes, you still need physical computing power to run a node in PoS, but it much more lower since people coming into consensus only need to “stake their token”, not “solve a hard mathematic problem by computing power” like PoW.
The opposite, in the early day, PoS might require to rely on DPoS to secure the network more efficently, lead to lower node runners (in Radix now is 100 node). But in the long term, there will be unlimited node, and all of the people hosting a node only need a low required computing power, clearly much lower entry for people than PoW.
As all the thing I have said until this point, maybe you can answer for your question what is the advantages of PoS
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Shrimp
(A lil big Shrimp in the rough crypto ocean )
3
Thx a lot for taking the time to write this and answering dumb questions I appreciate it!
To rephrase: PoS everyone has to run a node to be able to stake
DPoS people matching the requirements of network run notes where other users delegate their stake towards to get validating fee but due to DPoS than also have to pay commission to node operator
I still have some questions where I would struggle when I would explain it to someone:
Why is is more secure? Cause you have more reliable validators / people who meet network requirement consistently?
Cause more Decentralization should = more security right? So why is it that less Decentralization is better security in the case of DPoS
This might be a very technical question but why is only the stake=votes needed in the case of PoS to find consensus? Isn’t there still an element of chance so that different nodes get the chance to validate a block
It feels like I am still missing a piece of the puzzle so that I fully grasp PoS and PoW
Must keep in mind that “everybody don’t want do run a node themselves but still want to participate providing security for the network and get staking reward”, so DPoS work in favor for these people, DPoS can get more “security” through that mindset of people (since more people “securing network” through staking). “More reliable validators / people who meet network requirement consistently” also a good contributor for DPoS network.
In PoS, people’s reward highly depend on their technical entry, this lead to inequality, and “in the end more insecurity”.
On the opposite, there are ofc lower node numbers in DPoS than PoS (since not everyone can become node provider) lead to lower decentralization (evaluated by Nakamoto Coefficient)
To validate a block PoS first randomly choose a leader to post a result (this is Cerberus Consensus, other might work different), and later all nodes voting on the result. If the result got >= 66% staking power, the block is validated.
You can also take a look at my NeuRacle which are using DPoS.
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Shrimp
(A lil big Shrimp in the rough crypto ocean )
5
Ok so the statement more decentralization = better security is in itself not wrong but security has more variables than just decentralization like for exemple reliability of nodes
So DPoS makes it more accessible for a broader audience to participate in the network via staking while potentially also being more secure.
This still doesn’t make to much sense to me:
So we have the staked tokens which equals votes these are delegated to a node which validates blocks.
But is not the amount of nodes increasing security and not the token delegated.
So stupid exemple of two networks:
First network has 100 Nodes but only 50% the tokens in circulation are delegated to the nodes
Second network has 50 nodes but 100% of the tokens in circulation are delegated to the nodes
Network number 1 should be more secure or cause it is harder to reach the Nakamoto Coefficient?
Wait I think I have a thinking mistake here: in a DPoS system there are two ways of 51% attacks or?
First one is get physical control of 51% of the Nodes and second is get a 51% stake of the tokens in circulation
But just by having 51% of nodes in your control it doesn’t mean you have the power to alter the network because the votes/stakes delegated to the network decide the nodes weighting in the network? Or
Uh that was really helpfull Thx. So unlike with PoW it is not a “race” of who has to best hardware to decide who gets to validate the next block but it is truly by chance who posts a result (in Cerberus Consensus).
A successful validation of a block will be rewarded with tokens right but there is also potential punishment how does this work?
This s really helpful right now! Thx for sharing the article on Nakamoto Coefficient
What is your project Neu Racle about? And what exactly is actually an oracle?
You can dive more into the DPoS attacking question here
In my NeuRacle and also Cerberus, the malicious node which vote the wrong result (maximum 44%) is punished.
IMO this is not related, I will be happy if you open another thread to ask this specific question
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Shrimp
(A lil big Shrimp in the rough crypto ocean )
7
Thx for the link to read more about DPoS attacking!
So if a malicious node gets punished what does this exactly mean? What is the punishement?
Cause in PoW the punishement of being malicious validator is that you don’t get your mining fee but there is no further disincentivize
Their previous staking got slashed (mean all the participant on the malicious node got their staking slashed) check the Cerberus infographic link I shared in the previous reply.
Who missed out on voting to validate a block got no reward or punishment.
This mechanism incentivize people to choose the best behaviour node for their staking.
So it’s harder to compromise, or attack the network.
@Shrimp Perhaps nowadays Consensus is an important part of the blockchain system. The cryptocurrency which is considered to be the most successful implementation of blockchain technology in the world, has various types of consensus models. Two of them are proof-of-work (PoW) and proof-of-stake (PoS).
PoW is very popular along with the growing popularity of bitcoin, while PoS emerged after various criticisms and criticisms were directed at bitcoin miners who were hungry for electricity.
PoW controversy arises because of the excessive consumption of electrical energy. Mining equipment is indeed a type of heavyweight electronic equipment, because each machine will “suck” hundreds to thousands of Watts every hour. Combined with the issue of “dirty electricity” generated from fossil energy-based power plants, miners can be branded as “enemies of the environment”.
Delegated proof-of-stake (DPoS), as described earlier in this article, seeks to simplify the PoS process, while speeding up the consensus process. Replacing PoW with PoS does not mean that the consensus process will run faster, because many parties are involved in the consensus. Then be DPoS. The delegation (representative) system reduces the number of parties involved in the consensus, while at the same time accelerating the consensus system like representative democracy, instead of holding elections every time a decision regarding the state is made.
But DPoS in fact is not the best solution. The case of EOS for example. A “representative” who neglected to carry out his duties resulted in the EOS system “conceding” 2.09 million coins. Thus, the DPoS system actually reflects how limited decentralization has security loopholes like centralization, which the blockchain system wants to eliminate.