Proof-of-work is absolute truth, proof-of-stake is relative truth. Both have their role. But for the most important transactions it's better to produce more clean energy than to give up on the undeletable history that accumulated work provides.
It's hard to express this compactly to a non-technical person, but basically: it's harder to fake the results of a massive calculation done over ten years with datacenters full of hardware than it is to convince a fixed set of humans to change their minds and rewrite history.
This is what we get when there is no absolute truth.
Using Merkle trees, we can prove the existence of arbitrary amounts of data using just one tx on the Bitcoin blockchain.
Data availability is nontrivial (IPFS?) but proof that the original photo existed would be feasible.
A scenario: so long as the heaviest proof-of-work chain exists, every other chain can hash its state to it as a sort of backup every ~10 mins, then use whatever local mechanisms it wants.
They'd all be paying "tribute" in fees to Bitcoin, king of coins.
A scenario where chains buy BTC to pay fees to hash state to Bitcoin — then do their own thing — isn't the favored outcome of any partisan, but it's not that expensive.
It's hard to attack someone as anti-Bitcoin if they are provably buying $200k-$2M of BTC per year to pay fees to run their operation.
I'm sure some will still try it. But said critic probably wouldn't be buying as much BTC themselves.
To argue the other side of it, proof-of-stake does have the advantage of being N globally distributed, possibly pseudonymous individuals rather than M geographically fixed mining farms.
This kind of thing has always been the concern with proof-of-work:
On the other hand, Bitcoin mining is no longer in the exponential growth phase. Hashrate isn't increasing 100X in a year, hardware now lasts longer, opex/capex is more predictable, and tools for bounding risk now exist. So it's easier to mine anywhere. blockchain.com/charts/hash-ra…
Good post making the case that PoS has greater robustness to several different kinds of attacks than PoW. I agree, and would add in one he didn't, which is ASIC supply disruption.
But I prefer having both as they're each strong against different attacks.
Google didn't *initially* compete with other companies *primarily* on its stock price but on its product.
Assets should likewise have unique features. Good example: Zcash's privacy sets & shielded transactions. electriccoin.co/zcash-metrics/
> Google didn't *initially* compete with other companies *primarily* on its stock price but on its product
Note: yes, when raising capital you're competing with other companies based on your stock. But the customer for your stock isn't identical to the customer for your product.
Now, it's true that customers of product (users) are increasingly becoming customers of stock (shareholders). Robinhood makes it possible to buy stock in products you use. Crypto makes this default.
That's powerful, but also turns many off. More product culture will be helpful.
An important question when thinking about the El Salvador bill is what counts as receiving BTC.
On-chain? Sure.
Lightning? Ok.
Off-chain? Probably, or else popular wallets from exchanges wouldn’t count.
But if off-chain counts, then the $8B of wrapped BTC will count... 🤔
If off-chain BTC transactions count, such as Coinbase-to-Coinbase or Binance-to-Binance, then wrapped BTC transactions will count.
If wrapped BTC counts, then you can wrap BTC on Ethereum — or any of the new chains. Just like USDC is now present on four chains, including Solana.
If wrapped BTC counts, which it likely will, then every wallet for every chain which wraps BTC is a candidate for satisfying the law — so long as it also has L1 (and perhaps L2) interoperability.
So Polygon & Solana could be handling millions of wrapped BTC transactions.
As the rising third power in the world, India has the potential to be the center of a new Aligned Movement — an upgrade to the Non-Aligned Movement that aligns every neutral country behind Bitcoin and decentralized crypto protocols. balajis.com/add-crypto-to-…
Crucially, Crypto Capital isn't anti-American or anti-Chinese for that matter.
There are Woke Americans & Crypto Americans, Crypto Chinese & Communist Chinese.
The Crypto American is much closer to the average Chinese hodler than to Warren, Trump, or Xi Jinping.
N custodial wallets are hubs and the M citizens are spokes.
If a user of wallet 1 sends a transaction to a user of wallet 2, then the transfer looks instant on their screens.
Bulk settlement happens later on-chain between wallet 1 and 2.
Let’s say there are N=10 popular custodial wallets & they all do bulk settlement with each other every 24 hours. That’s N*(N-1)/2 = 45 pairwise on-chain Bitcoin L1 transactions per day, which is feasible.
Also, add in N daily on-chain transactions with the state’s Bitcoin fund.