I've seen some recent discussion about Proof of Stake beeing more centralized (because of the recent ETH upgrade) and would like to have a small debate about that.
In any system people with more money have more power, since people that have power in the new system are always willing to sell out.
People with more BTC/BCH could buy more ASICs/manufacture those and mine more BTC/BCH, rinse and repeat.
Thus I would argue that if you want to improve decentralization, you should either:
- lower the barrier to entry, such that more people can participate in consensus (e.g. by using CPU/GPU based PoW)
- let people directly vote with their money (instead of requiring them to buy extra hardware, have cheap electricity, etc.)
One counterargument I've seen is that the advantage of ASICs is that they are only useful for mining and thus miners have a vested interest in the future of BTC/BCH.
I would argue that the incentives of users and validators are even better aligned in PoS, since:
- the block producers are the actual users of the cryptocurrency and not a distinct group
- they have a vested interest aswell, which is even stronger since it's in the form of the token of the network itself
- they get slashed/penalized for attacking the network, if someone attacks BCH you can't magically destroy their ASIC, and if the attack would be successfull they could still use their ASIC on some other network with the same PoW algo such as BTC
Another counterargument I've seen is that the centralization of miners doesn't matter, I probably disagree with this the most because:
- if you don't care about the centralization of miners and think only the number of nodes in the network matter (when meassuring decentralization), you might as well just use PoA and let a select few produce blocks (I hope you see why this wouldn't be a good idea)
- I want to be able to produce blocks and participate in the consensus as well
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source https://www.reddit.com/r/btc/comments/oyt83o/why_stay_with_asicbased_pow/
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