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Jimmy Song @jimmysong
, 8 tweets, 1 min read Read on Twitter
Why POS doesn't make sense in a nutshell:

1/
Blocks produce X coins for some random staker.
Economically, someone will pay up to X to become that staker.
2/
What would people be willing to do? If there's any grinding they can do (manipulate previous transactions so they get stake reward), they will do it.
3/
They can also take out loans in the currency with the interest rate that still makes them profit for staking. They may even be willing to do evil things so they get to be a staker. For instance, DDoS other stakers.
4/
Ultimately, staking cost can be spent as creatively as people can think up and it will approach X. The economic cost (which may or may not include electricity), is still going to be similar to PoW.
5/
What you lose with PoS is transparency (you know how people mined PoW, you don't with PoS) and security (there's no asymmetric problem that's hard to solve but easy to verify).
6/
So why do people like PoS so much? Much like electric cars, it makes them feel good. Electric cars still need electricity, but the electricity source may be more polluting than gas! But at least the consumer "feels" like it's less polluting.
7/
You replace the known costs with unknown costs and that gives people plausible deniability and makes them feel good. That's not virtue, that's intellectual laziness at best and cowardice at worst.
8/
That's not to say Staking has no place. Certainly, it can be utilized judiciously for other things. But to make it the lynchpin of a blockchain simply does not make sense. /fin
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