Cardano has 3000 small business stake pool validators to process transactions. They are so cheap and easy to setup you can use a Raspberry Pi as the stake pool.
Cardano (ADA) that is staked to a stake pool increases its chances of validating a block and getting a payout. If a block is processed, stakers get a cut of transaction fees and newly minted crypto based on % they staked compared to the entire stake pool supply.
On Cardano, staked crypto is not held by the stake pools, it is delegated. It's basically voting with your tokens which stake pool processes transactions. This is Non-Custodial which is great because Ethereum doesn't work this way.
If too much Cardano (ADA) is staked in a stake pool, it doesn't become more likely to be picked to process transactions and it flattens out. This encourages more decentralization.
Because the cost of stake pool rig (raspberry pi) is so cheap and the amount you need to start staking (10 ADA) is so low, you see more stake pools instead of decreasing.
The minimum attack vector in Cardano is usually in the high 20s. That means it would take the 20+ biggest stake pool groups to come together to take over the network
Compare this with Mining pools on Bitcoin, if 3 of the biggest mining pools (or the people running the mining pool software) decide to join hands, they can take over the network in a 51% attack. Much worse imo.
I am not wrong. It has zero to do with how many small authenticators you do or do not have. ANY proof of stake coin is insecure, because it uses the SAME resource to decide who can authenticate as well as who can establish the coins value.
If I hold 99% of the tokens (through many shell companies), I can continue forever holding 99% of the tokens and I NEVER have to spend real money to be an authenticator. And I never have to give up my holdings. It is a fundamental flaw in the entire Proof of Stake industry. I can control everything and there is nothing anyone can ever do to wrest control away from me. If I don't want to sell my stake, you can only buy the tiny float I allow you to have. You can never dethrone me.
If I were to hold 99% of Bitcoin though, it gets me nothing. To control who can transact the other 1%, I have to spend actual money OUTSIDE OF THE BITCOIN ECOSYSTEM in order to control the authentication. And if enough people decide I'm an evil dictator, they can always ban together and eventually overwhelm me. This is because they don't need to buy my stake in BTC to authenticate. They only need energy, and I don't control that.
Proof of Stake is an inherently bad idea. It is exactly analogous to a corporate structure, where the people who control the stock control the coins. The fact that a coin may have many stakeholders does nothing to minimize the fact that a determined bad actor could set up many nominee stakeholders.
All Proof of Stake coins are inherently vulnerable to this. Only Proof of Work guarantees that nobody can control both sides.
To control who can transact the other 1%, I have to spend actual money OUTSIDE OF THE BITCOIN ECOSYSTEM in order to control the authentication
I agree with this, it's true for now unless Bitcoin becomes the World Reserve Currency. Then the amount of Bitcoin you have also greatly controls how much energy you can acquire to mine Bitcoin and your % of ownership stays stagnant if you mine as well.
Not only that but in Bitcoin as the difficulty increases, the hardware must get more specialized, more expensive, and price out more people. Eventually you do get to a point where 1-2 mining pools control over 50% of transactions which is what we're seeing in Bitcoin. Regular people don't even have the option to mine for bitcoin because the costs (and electricty) are so high and take so long that it's not worth it unless your in a bunghole shithole 3rd world nation. Corporations will vastly control the bitcoin mining operation, eventually acquiring the wealth to buy out/create the best mining rigs to maintain control forever. And even if they initially had a lower % supply, they will increase that supply if they have a market control on the computing power and the hardware.
This is what we have been seeing in Bitcoin since it started.
So eventually with a rising ledger and an exponentially rising mining difficulty, regular users of Bitcoin and even miners get priced out by those same corporations who already own millions of Bitcoin and already own a vast % of the computation to bitcoin mining. Then you're fucked.
So then the major question proof of stake is how decentralized is the crypto?
Now sure they can hide their crypto in wallets and that can be tracked. There is a way to find this out considering we know some of the big addresses like Coinbase or Binance or the Dapps for example. If someone owns the majority then you will see a predictability in the Project Catalyst voting, in the staking, in how the system is running and you do not see that. If the majority ownership is not there initially, it becomes harder over time as more and more people acquire ADA and hodl it themselves.
Stake pool operators will remain low cost for small businesses to create so this isn't a problem. It won't be priced out with better hardware and higher energy output. At the end of the day it all comes down to decentralization and Cardano has Bitcoin soundly beat in pretty much everything.
You're wrong about Proof of Stake.
Cardano has 3000 small business stake pool validators to process transactions. They are so cheap and easy to setup you can use a Raspberry Pi as the stake pool.
Cardano (ADA) that is staked to a stake pool increases its chances of validating a block and getting a payout. If a block is processed, stakers get a cut of transaction fees and newly minted crypto based on % they staked compared to the entire stake pool supply.
On Cardano, staked crypto is not held by the stake pools, it is delegated. It's basically voting with your tokens which stake pool processes transactions. This is Non-Custodial which is great because Ethereum doesn't work this way.
If too much Cardano (ADA) is staked in a stake pool, it doesn't become more likely to be picked to process transactions and it flattens out. This encourages more decentralization.
Because the cost of stake pool rig (raspberry pi) is so cheap and the amount you need to start staking (10 ADA) is so low, you see more stake pools instead of decreasing.
The minimum attack vector in Cardano is usually in the high 20s. That means it would take the 20+ biggest stake pool groups to come together to take over the network
Compare this with Mining pools on Bitcoin, if 3 of the biggest mining pools (or the people running the mining pool software) decide to join hands, they can take over the network in a 51% attack. Much worse imo.
I am not wrong. It has zero to do with how many small authenticators you do or do not have. ANY proof of stake coin is insecure, because it uses the SAME resource to decide who can authenticate as well as who can establish the coins value.
If I hold 99% of the tokens (through many shell companies), I can continue forever holding 99% of the tokens and I NEVER have to spend real money to be an authenticator. And I never have to give up my holdings. It is a fundamental flaw in the entire Proof of Stake industry. I can control everything and there is nothing anyone can ever do to wrest control away from me. If I don't want to sell my stake, you can only buy the tiny float I allow you to have. You can never dethrone me.
If I were to hold 99% of Bitcoin though, it gets me nothing. To control who can transact the other 1%, I have to spend actual money OUTSIDE OF THE BITCOIN ECOSYSTEM in order to control the authentication. And if enough people decide I'm an evil dictator, they can always ban together and eventually overwhelm me. This is because they don't need to buy my stake in BTC to authenticate. They only need energy, and I don't control that.
Proof of Stake is an inherently bad idea. It is exactly analogous to a corporate structure, where the people who control the stock control the coins. The fact that a coin may have many stakeholders does nothing to minimize the fact that a determined bad actor could set up many nominee stakeholders.
All Proof of Stake coins are inherently vulnerable to this. Only Proof of Work guarantees that nobody can control both sides.
I agree with this, it's true for now unless Bitcoin becomes the World Reserve Currency. Then the amount of Bitcoin you have also greatly controls how much energy you can acquire to mine Bitcoin and your % of ownership stays stagnant if you mine as well.
Not only that but in Bitcoin as the difficulty increases, the hardware must get more specialized, more expensive, and price out more people. Eventually you do get to a point where 1-2 mining pools control over 50% of transactions which is what we're seeing in Bitcoin. Regular people don't even have the option to mine for bitcoin because the costs (and electricty) are so high and take so long that it's not worth it unless your in a bunghole shithole 3rd world nation. Corporations will vastly control the bitcoin mining operation, eventually acquiring the wealth to buy out/create the best mining rigs to maintain control forever. And even if they initially had a lower % supply, they will increase that supply if they have a market control on the computing power and the hardware.
This is what we have been seeing in Bitcoin since it started.
So eventually with a rising ledger and an exponentially rising mining difficulty, regular users of Bitcoin and even miners get priced out by those same corporations who already own millions of Bitcoin and already own a vast % of the computation to bitcoin mining. Then you're fucked.
So then the major question proof of stake is how decentralized is the crypto?
Here is data on Cardano wallet distribution
https://lookerstudio.google.com/reporting/3136c55b-635e-4f46-8e4b-b8ab54f2d460/page/r2LQC
https://lookerstudio.google.com/reporting/3136c55b-635e-4f46-8e4b-b8ab54f2d460/page/p_ogr3ndx6qc
Now sure they can hide their crypto in wallets and that can be tracked. There is a way to find this out considering we know some of the big addresses like Coinbase or Binance or the Dapps for example. If someone owns the majority then you will see a predictability in the Project Catalyst voting, in the staking, in how the system is running and you do not see that. If the majority ownership is not there initially, it becomes harder over time as more and more people acquire ADA and hodl it themselves.
Stake pool operators will remain low cost for small businesses to create so this isn't a problem. It won't be priced out with better hardware and higher energy output. At the end of the day it all comes down to decentralization and Cardano has Bitcoin soundly beat in pretty much everything.