Is the whole idea of proof of work or proof of stake quite unnecessary and superfluous for cyptocurrencies?

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I only have a vague idea of proof of stake, but I think I reasonably understand proof of work. In the case of bitcoin, the whole hash thing business has to be combined with a mechanism to increase the difficulty according a certain time calculation. Now this difficulty/time calculation is merely a matter of good faith, and hope that a majority abides by it. If you look a bit deeper, the whole hash function itself relies on good faith, also called the 51% risk/attack whatever.

And hence you have currencies like ripple, which are just faith (maybe one degree higher compared to bitcoin and ethereum) as far as I can see, without any hash or other garnishing. This does seem to be equally functional. So did Satoshi over-design bitcoin? Does this suggest that a whole new generation of minimalistic cryptos will completely sweep away bitcoin, ethereum and the likes?

user2277550

Posted 2018-04-11T06:36:05.823

Reputation: 691

Can you explain what you mean by "time calculation is merely a matter of good faith"? What makes you think that it is a matter of good faith? – Andrew Chow – 2018-04-24T20:42:29.547

@AndrewChow Well, it is a matter of faith, in that it relies on the gaurd against the 51% attack to safeguard it. If people say, well, let us increase the difficulty a lot slower, then it assumes that more than 50% of the network will say no. Please contrast what I say with Ripple. Bitcoin is just fine. I am just curious whether it is over-designed. – user2277550 – 2018-04-25T12:02:19.763

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Can you elaborate some of your statements a bit?

Now this time calculation is merely a matter of good faith, and hope that a majority abides by it.

When you have a look here you will see that the average block times is 9m 4s. Not too far away from the ten minutes the protocol tries to enforce.

If you look a bit deeper, the whole hash function itself relies on good faith, also called the 51% risk/attack whatever.

Why does the hash function rely on good faith?

You're example ripple is in no means a replacement for bitcoin or ethereum. It is a completely centralised currency / system. We could use SWIFT banking instead.

JohnyDoe

Posted 2018-04-11T06:36:05.823

Reputation: 37

My understanding is that Ripple is presently centralized, largely for business reasons, but that its protocol works equally well in a decentralized setting. On the time calculation, yes I agree the majority has acted in good faith and kept to the original intentions. But one could reason 'if you are gonna have faith anway, why not have it all the way'. That seems to be the basic philosophy behind ripple and the likes. In the case of bitcoin, the protocol assumes that the majority of the participants will be honest in judging the first successful hash solution – user2277550 – 2018-04-23T16:01:01.340

In the bitcoin protocol it is not only necessary that the majority of the nodes are dishonest but they must also work together. Otherwise the honest network will still be larger. There's no reason to act dishonestly if you're not part of a group capable of controlling 51 % of the network. You will just burn electricity. IMHO it is safe to say that the majority would rather act honestly and eventually get a reward than act dishonestly just to try to disrupt the network. – JohnyDoe – 2018-04-24T06:58:22.623

Asked: 2018-04-11T06:36:05.823

Viewed: 94 times

Active: 2018-04-23T15:41:45.213