# "Proof-of-Stake Wears No Clothes" https://github.com/stickfigure/blog/wiki/Proof-Of-Stake-Wears-No-Clothes ## tl;dr: Boiled down to its bare essence, a cryptocurrency is a **list of transactions**, and a **protocol for deciding which transactions are allowed to be added to that list**. 1. The list of valid transactions determines who has coin. 2. `<complexity>` 3. People with coin decide which transactions are valid. This is circular logic. ## Good paragraphs + my summaries ### Proof-of-Stake can work for a while. But the meta-consensus of choosing between chains will eventually be exposed **"Can proof-of-stake work?"** Sure, for a while. Possibly a long while. It is easy to reach consensus when everyone agrees. But on a sufficiently long time scale, difficult conflicts will occur. The wise and respected leader will be dead and gone in some decades, sooner if he/she is careless or unlucky. Proof-of-stake is inherently self-referential. It is possible to have two perfectly consistent, equally valid chains - perhaps with different stakers. Since “stake” is defined within a blockchain, it cannot be used to pick between two blockchains. Under the right kind of stress, the real, unwritten meta-consensus protocol that determines "which blockchain do we pay attention to?" will be revealed. Exactly what that is will depend on the nature of the fork. One risk is a relatively balanced fork, following a long and contentious fight in the community. Perhaps it will be about adjusting stake rewards. Perhaps it will be about “fixing” a broken/hacked contract. Perhaps it will be about staked stolen currency. ### [[Proof-of-Work]] incentivizes losing forks to switch to the main one I don't have an opinion on the ETH/ETC split. But the rift “healed” because miners picked one over the other; ETC is now significantly less secure than ETH and has suffered multiple 51% hacks. Concentration of hashpower (a finite resource) creates a positive feedback loop which encourages the remaining hashpower to abandon smaller forks. Forking a proof-of-stake chain can create two chains, each of which is endorsed by a majority of stakers in that chain. This split can repeat ad infinitum. Which will be the “real” one? ### "But my proof-of-stake solution addresses this!" Describe it in terms that don't reduce to “You have influence over the blockchain… because the blockchain says so”.