There are many who think that Proof of Stake can act as a real replacement for Proof of Work. While this is wrong, explaining why in a simple way can be tricky.
Most arguments start by going into various broken incentives and specific attack vectors but this can get complicated for most people. I think there is a much simpler way to put it:
- Proof of Work is superior because its data is provably connected to a cost; and because of that, it's also provably connected to human choices. A proof of "human choice" is the best defense against forgery because subverting the truth always involves lying about choices, being it your own or of others.
Once we have a system that both requires and proves "human choices" we can have deterministic rules and incentive games based on those proofs for determining which pieces of data are valid and which are not. What we get, is a system that is transparent, accountable and that can be relied on even without knowing all the internal information (SPV proofs). Security in a proven history of choices; that is Proof of Work.
In contrast, with systems like Proof of Stake, the data has no connection to cost or human choices. Since everything is controlled by the tokens, it is actually the private keys that control everything; so the only "proof" that the data has in the end, is the signature of a private key, that's it! This is true for every Proof of Stake system that exists today, regardless of how sophisticated it claims to be.
The problem with such a "proof", is that it essentially proves nothing:
No Choice -
Validators can sign multiple versions of a block on multiple forks. Due to there being no cost and no limited resources, the validator doesn't have to make a choice; he can sign everything at the same time.
No Time -
PoS has no concept of the passage of time. Work = Progress over time; PoS has non of that since it's just signatures that appear the same regardless of when they are signed. Entire chain histories can be recomputed costlessly.
No Scope of Access or Identification -
This is the most important. PoS has no proof that the private keys are actually distributed amongst many people or what the distribution even is. All the keys could in fact be controlled by a single person! You never truly know who controls the system.
PoW has and proves a "scope of access" by being accessible only through the choice to work and consume energy. This ensures a 'distribution' through economic and competitive forces and 'identification' by means of the economic footprint the validators leave behind.
With the data in PoS not being bound by Choice, Time, or Scope. There is nothing fundamentally preventing the data from being forged. In other words, every PoS system can have its data fabricated by manipulating the three unproven variables in its system which we can define as CTS (Choice, Time, and Scope).
CTS, essentially gives us the three W's of a system (What When Who) and With CTS not proven in PoS, it amounts to nothing more than a subjective "story" that is replicated amongst every validator. The question then becomes, who's in the best position to manipulate the CTS "story" in this Proof of Nothing system?
As the master storytellers and originators, the main developers of a PoS project are in a powerful position to manipulate CTS because they are its only provable point. The creation of a PoS system is the only point where Choice, Time, and Scope is actually proven. The 'Choice' is the project's creation, the 'Time' is its launch date, and the 'Scope' is the developers themselves. Put differently you could say the only 'proof of work' in Proof of Stake is its creation. From the perspective of PoW, Proof of Stake is a single miner producing a single block with the miner being the PoS developer. Thus, they will always hold the most sway when it comes to convincing others about CTS since they will forever be at its center by having created the first and only proof of work in the entire system.
In addition, the developers distribute all the tokens at the start and therefore choose which private keys control the chain! With "Scope" having no proof beyond the fact that it was formulated by the developers, there is no way to prove this has been done fairly. All the tokens could be controlled by the developers themselves! You can't know for sure their "story" of a fair initial coin distribution isn't fabricated.
The truly insidious thing about PoS, is since "Time" is not proven ether, any control over the system in its early stage will forever remain so for the lifetime of the system. This is because you can easily recompute entire chain histories in PoS. Even if the developers give away their tokens at a later stage, they can recompute a history where they didn't! This means that if even at one point in the history of a PoS system someone controlled a majority of tokens, they will potentially forever control the system from that point on; and there is no way to prove it never happened!
And lastly, since "Choice" is not proven in the system, the developers or an attacker can lie to everyone about the fabricated chain and claim it is the "real one" that they and everyone else chose to validate from the very beginning. There is no way to prove that they are lying. Signatures say nothing about choices, history, or identity. Showing that the developers or some validator signed blocks in two separate chains doesn't completely prove fraud either. The excuse could be made that keys were stolen or that validation software malfunctioned or was wrongly sourced. What's more, you can't identify who is behind a validator/attacker. The developers could claim the attack is someone else when in fact it's themselves.
All this subjectivity on which is the "real chain" is made worse from the perspective of normal users who cannot and do not hold the historical blockchain data. Having no idea which chain was there first, it comes down to choosing one "story" over another. Users can even be manipulated into supporting a fork that had its rules changed without their knowledge. This can even go further by creating the appearance of widespread consensus and support by many validators for a specific chain when in fact they are all controlled by a single entity. This can all happen in any system where CTS is malleable.
A counterclaim could be made that any attempt by developers to manipulate the chain in their system would be noticed by at least some validators who would then spread FUD and warn others of what is happening.
To this, it should first be pointed out that just having the ability to create such a huge disruption and confusion in the system, completely rules out PoS as a viable alternative to PoW if the goal is to have a global ledger that has significant economic activity. The world's financial data could never be trusted to such a fragile, subjective and unverifiable system that boils down to letting a small group of developers act as the final source of truth regarding the economy's financial history. That said, the "FUD" claim against a developer attack can also in itself be an attack vector on PoS.
A minority of validators could formulate a "social FUD attack" on a PoS project by spreading false rumors and hysteria that a massive attack has occurred and that the developers have maliciously recomputed the entire history. They can then spam the network with hundreds of fake chains, provide fake API information or hack existing sources and create a bot army on Reddit of fake users who complain about their coins being inaccessible. This is simply not possible to perform on PoW which is objective; but with the inherent subjectivity of PoS, the data's validity boils down to a few trusted sources, and when those sources' integrity comes into question, massive confusion can ensue.
To put it another way, in a subjective PoS system, the more you lie, the more it becomes the truth. In PoW, the more you lie the more you are seen as a proven fraud, and the more others want nothing to do with you.
In conclusion, when it comes to PoW vs PoS, it's really 'Proof of Human Choices' vs 'Proof of Story'. The lack of any proof connected to the data in PoS means such projects will forever remain centralized around their developer's word as the final source of truth. Proof of Stake is a completely centralized subjective system, period.
"proof-of-stake systems are ultimately permanent nobilities where the members of the genesis block allocation always have the ultimate say. No matter what happens ten million blocks down the road, the genesis block members can always come together and launch an alternate fork with an alternate transaction history and have that fork take over" - Vitalik Buterin
Put simply, Proof of Work is superior because the data is connected to proven a history of human choices; and you cannot cheat in a system that proves your every move.
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source https://www.reddit.com/r/btc/comments/ppl5th/simple_explanation_for_why_proof_of_work_is/
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