Proof-of-Stake is a Rebranded Version of the Old Financial System
Over the last few years, there’s been a lot of projects, both public and private, that are attempting to create a next-generation blockchain or something better than Satoshi’s Bitcoin. A great majority of these projects have condemned proof-of-work (PoW) cryptocurrencies because they think they waste resources, and many of these new blockchains have chosen to use a proof-of-stake (PoS) system. However, PoS has many flaws and introduces a distribution process that advocates an ugly planned economy that’s propagated by ancient thinking and basically the old banking system.
Proof-of-stake’s biggest issue is the “nothing at stake” problem. Unlike the economics involved with proof-of-stake (PoS) coins, Bitcoin’s proof-of-work (PoW) makes it a superior form of money and extremely harder to attack. In contrast to PoW, a proof-of-stake (PoS) system is a protocol that forges blocks by the amount of ‘stake’ each participant in the network holds.
Basically, proponents believe the consensus model can offer a better form of distribution and because there are no mining rigs ‘wasting resources,’ it may be friendlier to the environment. However, unlike reading Satoshi’s white paper, immediately after studying each type of PoS coin one can notice these projects are riddled with red flags. For instance, while some of these networks use a hybrid PoW algorithm prior to adding a staking functionality, a great majority of PoS currencies are created in private prior to launch, and some don’t have a fixed supply.
How is this any different than the fiat system and central banking?