Delegated PoS systems like EOS have a collusion problem
News & Commentary
When EOS was first introduced as an "Ethereum-killer", supporters lauded its delegated Proof-of-Stake consensus mechanism. It works like this: large stakeholders to compete to become a delegate, or "supernode", fulfilling roles similar to miners and full nodes in a Proof of Work system. Users can trust these supernodes because any "cheating" on their behalf could, in theory, be transparent to (and punishable by) the other supernodes
In this Chinese-language article, one blockchain researcher explains how lucrative the role of supernode can be. Described as "a bidding war of cloud-service providers" due to the requirement on bandwidth, the competition leads to concentrations of supernodes in China, Korea, parts of Europe, and the US. Rampant collusion and bribery increases the chances of success for incumbents, but the system appears fair from the outside.
A few weeks ago, Vitalik Buterin published an article entitled Governance, Part 2: plutocracy is still bad, in which he doubles down on the argument that collusion is inevitable in DPoS systems, to which EOS team responded with this post.
someone finally uses the c-word to talk about crypto networks.— Meltem Demirors (@Melt_Dem) April 11, 2018
COLLUSION. massively problematic in PoS systems that replicate today's power structures predicated on economic power & wealth. not sure i agree 100% with author but this was good data... https://t.co/0HXB4WUBbF pic.twitter.com/8GCrbTu2Fi
"The bank started treating the purchases as cash advances late in January and charged Tucker a total of $143 in fees and $20.61 in interest in January and February alone, according to the complaint. When he called the bank’s customer service line to complain, Chase blamed the costs on Coinbase, Tucker said."
"Hydro-Québec touted its hydroelectric power as the ideal solution: a clean, renewable source of energy that can be supplied in massive quantities. It contends that the energy it provides to cryptocurrency mining operations is “surplus”—an extra 100 terawatts of low-impact energy the utility has the capacity to generates over the next decade."
Technical & Updates
"Although we think the current relatively conservative proposal could work, the nothing at stake problem could be a significant challenge. Therefore despite the plan to use this proposal as a stepping stone, as part of a gradual shift towards a full PoS system, this will be significantly more difficult to achieve than some in the Ethereum community think."
"The report also points out that in February 2018, over 4,000 websites worldwide, including many government ones, were affected by the cryptojacking script. The problem was eventually traced to a website plug-in called Browsealoud, used to help blind and partially sighted people access the web."
"There are so many examples like that of statistics getting misused in public discourse. I wonder whether you spend time thinking about how to improve the use of statistics by nonexperts."