Vitalik tells you why Ethereum is moving from PoW to PoS
Original title: Vitalik: Three key reasons why Ethereum shifted from PoW to PoS
Original source: Free and Easy
Translator Foreword: After the official release of the Ethereum 2.0 deposit contract, Ethereum has taken a big step towards the transformation of the PoS system, and Vitalik Buterin, the co-founder of Ethereum, summarized in his new article that Ethereum will change from the current The reason for switching from the PoW system to the PoS system. In his opinion, under the same cost conditions, PoS provides better security, which can resist potential attacks. In addition, the PoS system can recover faster after being attacked. The last advantage is that PoS is more decentralized than ASIC mining (note: GPU mining is not included). However, Vitalik also mentioned two possible advantages of the PoW system, but these advantages are still not enough to make Ethereum stays in the PoW system.
Same as Proof of Work (PoW) consensus mechanism Proof of Stake (PoS) is a superior blockchain security mechanism for three main reasons:
1. Under the same cost conditions , PoS provides better security
The easiest way is to put PoW and PoS together to see The reward is the cost of conducting an attack in the network at $1 per day.
GPU based proof of work
You can rent GPUs cheaply, so the cost of attacking the network is simply renting enough GPU power to exceed existing miner costs. For every $1 in block rewards, existing miners should spend close to $1 in cost (if they spend more, miners will quit as unprofitable, if they spend less, new miners can join and get high profits). Therefore, attacking a network is not very expensive and only takes a few hours.
Total attack cost: Assuming a 6-hour attack, it is about $0.26, when the attacker gets the block reward , possibly reduced to zero.
ASIC-Based Proof-of-Work
ASICs are a capital cost: when you buy an ASIC miner, you can expect it to last for 2 years, until it wears out or becomes obsolete with newer, better hardware. If a blockchain is 51% attacked, the community may respond by changing the PoW algorithm, and your ASIC miners lose their value. On average, ongoing costs account for about 1/3 of mining costs and capital costs about 2/3 (see this article). So for a block reward of $1 per day, miners would spend about $0.33/day in electricity + maintenance and about $0.67/day in ASIC miners. Assuming an ASIC mining rig has a lifespan of 2 years, a miner would need to spend $486.67 for such ASIC hardware.
Then the total attack cost is: $486.67 (ASIC hardware cost) + $0.08 (electricity + maintenance cost) = 486.75 Dollar.
As the entry threshold becomes higher and higher, ASICs provide higher centralization costs level of security.
Proof of Stake (PoS)
PoS Almost entirely capital cost (deposited coins), the only operational cost is the cost of running a node. Now, how much capital are people willing to lock up to get a reward of $1 per day? Unlike ASIC miners, deposited coins are not depreciated and you can get them back with a short delay when you are done staking. Therefore, participants should be willing to pay a higher cost of capital for the same amount of rewards.
Assuming a 15% rate of return is enough to motivate people to invest (which is the expected rate of return for Ethereum 2.0), then every day A $1 reward would attract 6.667 years of deposits, or roughly $2433. While the hardware and electricity costs of a node are minimal, a $1,000 computer can stake hundreds of thousands of dollars in deposits, and about $100 per month is enough to cover electricity and internet costs. We can conservatively say that these ongoing costs represent approximately 10% of the total investment cost, i.e. our return of only $0.90 per day ends up corresponding to the cost of capital, so we need to cut the above figure by approximately 10%.
Then the total attack cost is: $0.90/day * 2433.455 days (6.667 years) = $2189
In the long run, this cost is expected to be higher as staking becomes more efficient and people appreciate the lower The rate of return will also be satisfactory. I personally expect that number to eventually rise to around $10,000.
Note that the only "price" for this high level of security is not being able to move around while you are staking The inconvenience caused by currency. It may even be that the total amount of currency circulating in the community, ready for productive investment, etc. remains the same because the public knows that the coins are locked, causing the value of the coins to rise! In PoW, the "cost" of maintaining consensus is that real electricity is consumed crazily.
More security or lower cost?
Please note that there are two ways to improve the security-to-cost ratio of the system by 5-20 times, one is to keep the block reward change, but with added security. An alternative would be to drastically reduce the block reward (thus leading to a "waste" of the consensus mechanism) and keep the level of security the same.
Both methods are ok, I personally prefer the latter because as we will see below Yes, in Proof-of-Stake (PoS), even a successful attack is much less harmful than an attack in Proof-of-Work (PoW), and recovery is easier.
2. It is easier to recover after the proof-of-stake (PoS) system is attacked
In a PoW system, if your blockchain suffers a 51% attack, what would you do? As of now, the only response in practice is to "wait for the attacker to get bored". But this ignores the possibility of a more dangerous attack, which is called a "spawn camping attack" (spawn camping attack), which means that the attacker attacks the blockchain again and again, and the goal is to make the blockchain become useless.
In a system based on GPU mining, there is no way to defend against it, and a persistent attacker could easily render a blockchain permanently useless ( Or more realistically, switch to proof-of-stake or proof-of-authority consensus mechanisms). In fact, after the first few days, the cost to the attacker may become very low, as honest miners will drop out (due to the fact that they cannot receive rewards during the attack).
In an ASIC-based mining system, the community can respond to the first attack, but this is actually an attack, and the community needs to Respond to the first attack by changing the PoW algorithm through a hard fork, thereby "blocking" all ASICs (attackers and honest miners!). However, if the attacker is willing to bear the initial cost, after that, the situation is back to the GPU situation (because there is not enough time to build and distribute ASICs for new algorithms), so in this case, the attacker can still cheaply Continue to execute the nest attack.
However, in the case of PoS, the situation is much better, for certain types of 51% attacks (notably reverting finalized blocks), in There is a built-in "slashing" mechanism in the PoS consensus proof system, through which most of the attacker's stake (and no one else's stake) is automatically destroyed. For other attacks that are harder to detect (notably the 51% coalition censorship attack), the community can coordinate a minority user-activated soft fork (UASF), in which case the attacker's funds are again massively destroyed (in ethereum Fang, this is done through the "idle leak mechanism"). This does not require a "hard fork that burns coins", everything else is automated except for coordination on the UASF to select a few blocks, simply following the protocol rules.
Hence, the first attack on the blockchain will cost the attacker millions of dollars, while the community will recover within days. Attacking the blockchain a second time would still cost the attacker millions of dollars as they would need to buy new coins to replace old ones that had been destroyed. Likewise, the third time, the fourth time... all cost the attacker millions of dollars, the game is very asymmetrical and it doesn't favor the attacker.
3. Proof of Stake (PoS) is more decentralized than ASIC mining
Based on GPU proof-of-work is considered to be reasonably decentralized (obtaining GPUs is not difficult), but GPU-based mining largely does not meet the security standards we mentioned earlier to prevent attacks. On the other hand, ASIC-based mining requires millions of dollars in capital to enter.
This is also the correct response to the common "PoS makes the rich get richer" argument: ASIC mining also means the rich get richer, and this game It is more inclined to the rich. At least in PoS systems, the minimum stake required is fairly low and within reach of many ordinary people.
In addition, the PoS consensus proof is more censorship resistant, GPU mining and ASIC mining are both Very easy to detect: they require massive power consumption, expensive hardware purchases, and large venues, compared to PoS staking that can be done on humble laptops, or even via VPN.
Possible advantages of PoW
I think there are two main real advantages of PoW, Although these advantages are also rather limited in my opinion.
1. The PoS system is more like a "closed" system, which leads to a higher concentration of wealth in the system in the long run. In the PoS system, if You have some coins, you can choose to stake them and get more coins. Whereas in a PoW system, you can always earn more coins, but you need some external resources to do that. Therefore, one could argue that in the long run, the distribution of tokens in PoS systems may become more and more centralized.
The main response I see to this is that in PoS the overall reward (i.e. validator income) will be Low, in Ethereum 2.0, we expect total annualized validator revenue to be equivalent to 0.5-2% of total ETH supply. And the more validators involved in staking, the less rewards they get. So it may take more than a century for the concentration of the coin to double, and in this time frame, other pressures (wanting to spend money, distribute money to charities or other means, etc.) may account for leading position.
2. PoS requires "weak subjectivity", while PoW does not.
Related For an initial introduction to the concept of "weak subjectivity", see here. Essentially, when a node first comes online and any subsequent time after it has been offline for an extended period of time (i.e. months), the node has to find some third-party resource to determine the correct blockchain. This could be their friends, it could be an exchange or blockchain explorer website, a client developer, or another participant, while PoW doesn't have this requirement.
However, this is arguably a very weak requirement. In fact, users already need to trust the client developer or the community to this extent. At the very least, users need to trust someone (usually a client developer) to tell them what the protocol is, and any updates to it.
This is unavoidable in any software application. Therefore, the marginal additional trust requirements required by PoS remain low.
However, even if these risks are indeed significant, in my opinion, relative to the PoS system from its higher efficiency, as well as better handling and from The huge gains in ability to recover from attacks are secondary.
See also my previous article on PoS consensus mechanisms.
A Proof of Stake Design Philosophy
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