Failing to Understand Proof of Stake: Why Evan Faggart might be a closet Bitcoin Maximalist

A response to 'Proof of Stake: Why It’s Not a Valid Option for Cryptocurrency' by Evan Faggart https://bitsonline.com/proof-stake-not-valid

Proof of Stake: Why People Love it

Not only do people favour PoS for energy efficiency, they also value being able to participate in the coin creation and, of course, block reward process without the need for expensive, unreliable, difficult to maintain and quickly obsoleted mining equipment. PoS places block creation and general network participation back in the hands of the many. Where voting on contentious (or otherwise) network decisions is concerned, this greater level of participation even makes the process of reaching consensus meaningful again.

Typically, staking also requires running a full-node wallet which, given adequate participation, is beneficial for currency networks.

Unlimited Inflation (try not to slap your forehead...)

Neither PoW nor PoS determine the coin creation schedule, that is determined by the protocol of each specific coin. Don't believe me? Take the notoriously inflationary Dogecoin as an example. Is it PoW or PoS? It's PoW. Oh, but Evan - how can this be? Because whether or not a currency is inflationary, deflationary or otherwise is determined by the protocol it implements. Repeat this until you understand: Protocol is unrelated to choice of coin creation method.

The 'growth in supply of PoW coins' is not dynamic. The difficulty adjustment of, for eg: Bitcoin, is dynamic. This is a single attribute of the protocol implemented in that particular coin.

Again, coin creation method (ie: PoW, PoS, fill-in-the-blank) has nothing to do with a particular coin being inflationary or deflationary. Except for the curious currencies that created all their coins in their genesis blocks (or in a limited and already mined number of blocks following), the vast majority of currencies are still in an inflationary stage of coin creation.

Perhaps you're confused, Evan, by rising coin supply occurring at the same time as rising value and, lacking a better way to describe this phenomenon, lazily apply the label of 'deflationary'? The rising valuation of popular crypto currencies is entirely due to increased demand from new adopters. Is that really so difficult to understand?

Why PoS Creates Bad Money (just tie your hands behind your back - but also refrain from whacking your forehead against anything else...)

Growth in supply of PoS coins is determined by the protocol. Some, such as Pivx, actually anticipate having a slightly declining coin supply as transaction volume increases. This is due its protocol decision for transaction fee amounts to be destroyed.

' ... even with a total supply cap, supply shocks will plague a PoS-based monetary system, leaving no room for stability and making it hard to have reliable economic growth.'

Evan, how do you imagine a PoW coin, such as Bitcoin, will fare at some point in the future when its block reward nears zero? Transaction fees! Right? What prevents a PoS from behaving the same way?

Nothing, Evan. Nothing. All such behaviours are determined by - you guessed it! The protocol implemented by each specific coin. It's almost as if this isn't so difficult to understand...

The Worst Kind of Centralisation (or how participation by PoW miners with the most resources is somehow magically better than participation by PoS users with the most resources...)

Again... Choice of PoW or PoS has nothing to do with other aspects of a currency's protocol - such as how consensus is reached.

re: PoS, 'So whoever has the most money has the most influence over a vote.'
re: Pow, whoever has the most mining power has the most influence over a vote.

What's the difference? Either way, people with more resources have more influence.

'For example, controlling interests in a PoS network could vote to remove the supply cap.' And destroy the value of what they already hold? That'd be pretty dumb. And they'd still need the coin developers to implement it - or did you already forget that Bitcoin Core developers have already demonstrated that, when you really get down to it, consensus doesn't matter? See: SegWit2x New York Agreement

'Consequently, economic cycles, politics, and corruption will enter the equation, throwing the PoS-based economy into chaos.'

An equally pertinent Simpsons quote from Kent Brockman comes to mind...

'Professor, without knowing precisely what the danger is, would you say it's time for our viewers to crack each other's heads open and feast on the goo inside?'

My own conclusion...

The most important thing Bitcoin gave the world was currency competition. There isn't going to be only one - there's going to be many. Of everything - including coin creation methods. So, Evan, for the love of God, quit this Chicken-Little the-sky-is-falling bullshit. ok?