Is Proof of Stake fair to all parties?

ouroboros

#1

Im totaly new in cryptocurencies. I heard for Bitcoin a long time ago,and ofcourse Im regreting like most of us who didnt saw oportunity :slight_smile:
Now something brought me in Cardano among hundreds of other coins. I dont have any doubt it will change everything,cause I read almost everything about it. So my conclusion about PoS is that only investors and big buys will have chance to win a reward for “mining”. I feel like Im wrong about this,but it says clearly that bigger stake will have bigger chance for wining reward for validating transaction.


#2

My suggestion is to wait till more facts surface about staking. That’s the only way to see if you will make money staking.

That said, staking isn’t the only way to make money. If you believe in ADA, It will go up in price significantly once the project is complete.

if I had money I would buy the shit out of ADA at this price as this is perhaps the only time you can pocket the same amount of ADA that others spent thousands of $ to buy earlier.

No sane investor will sell ADA till project is realized. And when it’s realized they still won’t exit all their positions. It is insane to sell ADA for fiat.


#3

Tnx for fast response ADA_Fan. Somehow all this Cardano thing made me more interested in overall future of the world itself. Today I want to buy 600ADA for 100dollars. And slowly invest more in time. And Im not too much interested in becoming millionaire or gaining any huge amount of money. Im just happy that a lot of people believe in this project, and it will be great if it succeeds. Only thing is wierd. They mention total randomness, but still they say bigger stake-bigger chance.


#4

In a sense think about it like earning interest. The more you have in the bank the more interest you get. In the beginning they will be increasing supply to pay staking rewards so there will be inflation although hopefully the rise in value vs fiat more than compensates. As the network gets used more, staking rewards will be paid by transaction fees.


#5

Randomness is needed to be able to choose between stakeholders in the beginning of each epoch without predictability…
if this randomness is not applied would be predictable whom would be chooosen to sign the block and therefore the system would be not secure …

You are not wrong about Cardano and ADA, they will rule the crypto space yet some patience is needed :wink:


#6

Go into a pool, rewards are shared so smaller but more frequent and more likely to track close to the average. On average, randomness falls out of the picture and return is proportional to stake.


#7

BTW in my opinion it’s as fair or more fair than BTC mining.


#8

Correct, ADA_Fan,

selling is just a matter of distrust in the crypto hype. Anyway …

I graduated from university myself (as a computer scientist), but never
felt as a part of the “academic community”, as Cardano proposes itself!
Therefore, I am quite sceptical about them and their project. (Yes, I am
actually invested into ADA, anyway.)

If Cardano can convince the community and the rest of the world to be
THE upcoming cryptocurrency, they might prosper soon and persistantly.

As far as I am concerned, none of the three companies Cardano consists
of seem to be able to do a convincing marketing. Competitors as Tron
might be technically underlaying, but they are able to catch attention. Sad,
but true, that is all that counts!

You can send me to hell for my comment, but I am giving my two cents to
give birth to Cardano/ADA. It just needs criticism to grow stronger and become adult.

Best regards,
Markus


#9

That was truly honest answer markus. And unfortunetly describing a true state that world is in now. Everything is about presentation and marketing, quality and work realy doesnt matter to anyone, even those who believe in it.
For this Cardano project to succeeds, people need big changes in their minds, cause people are weak in their core and need leader or hero to feel safe and secure…in this manner they need centres of power and someone to tell them what to do with their life. So it doesnt matter if anyone will make a few bucks on this Cardano or any other coin, for me it is honest idea and goes to the right direction where world should be.


#10

Good to see the skeptics who actually believe in Cardano tech among us. When I looked at this space in the beginning, I laughed my pants off seeing blatant lies and scams, but after carefully studying coins I became absolutely convinced about the future of Cardano. At this point I think only a handful people with tech background get it. It will be a huge platform! I am just blown away by its potential and that’s what matters.

You have a point about marketing, but I’d rather see a steady rise in awareness than a full blown marketing campaign without Shelley in place. In Q4 everything will change.

We are running a marathon not a sprint. I absolutely couldn’t care less what the price does till at least Mid-2019.

If I had money I’d buy more Ada.


#11

I don’t think Charles wants to do a full blown marketing push until after the tech is a little more mature. I think he wants to avoid comparison with the more dubious projects at this point. Time will tell if this is a good idea or not. Also Cardano has a higher market cap than Tron despite the lackluster marketing.


#12

just came across this question “is-proof-of-stake-fair-to-all-parties” and asked myself:

can blockchain users ever be fair to all anonymous participants?


#13

Hey don’t forget that 80% of ADA will be locked up & all the transaction fees that were collected since sept 2017 from mainnet going live since then IOhK has been getting those fees ADA, ( correct me if I’m wrong ) they will burn those ADA once Shelley goes live.

80% being locked up is pretty big. That alone should drive higher.


#14

What do you mean by that?


#15

Well think about it. Most ppl are buying ADA to hold and receive transactions fees.

So 80% of ADA could be locked to POS. I know that I am. And the whales will also lock up their ADA to pos.
That PoS will drive the price up.


#16

Any amount “could be” staked but you said “80% will be”.

Also, staked ADA can be spent or exchanged at any time, it merely ceases to be staked in the next epoch – unless restaked by the new holder. So “locked up” isn’t quite right either.

Staking could cause the price to rise but we just don’t know. Speculation can be fun but it’s very often useless.

Edit: I think it’s quite likely that the effect of staking starting on market sentiment will outweigh any effect from reduced supply.


#17

Only seen now by polling this thread as you didn’t reply to my question.

As @RobJF already pointed out any staked amount can be spend at any time.
The stake remains valid for the ongoing epoch (currently drafted at a 5day duration)
Whoever received any fee durring epoch n can stake this amount only from n+1 on.

Beside this I believe that not PoS or any other consensus mechanism is favourishing lockings. There are different other main reasons:

  1. HODLing: as long as people believe they can get rich by just waiting a couple of months and contribute absolutely nothing to our humanity, this IMHO is by far the biggest main reason for locked funds. And this kills every ecosystem, also FIAT and ancian good based ones.

  2. lack of consumable goods and services: no comments here, everyone know that adoption is still a long long way to go.

  3. price roller coasters


#18

I’m locking mine up also and I consider myself the Joe 6 pack of crypto.


#19

Technically, you are right. A staked ADA isn’t locked. BUT this is where game theory comes in. Some people won’t touch their ADA when Shelley comes in hopes of getting those ADA staking returns.

This will dry up the supply and push the price up in the marketplace. At some point, when the price is high enough, some stalkers will choose to sell their ADA as it will be more profitable for them than staking. This will play out continuously till the Nash equilibrium is reached. For every ADA price there will be an ADA amount that will make it profitable to stake it rather than sell.

Your decision to stake/sell will depend, collectively, on ADA price, your stake level(i.e. probability of earning ADA), ADA staking rewards, electricity price, StakePool fees and your personal ADA growth expectations. That’s the genius of #Cardano staking system.

I wouldn’t be so quick to dismiss HODLers. They play an important role in the whole ecosystem. Their motivation doesn’t matter. What matters is that they make decisions based on the price of ADA. It will affect the markets thereby setting the whole game-theoretic part of Shelly into action. So #DontHate. Everyone is welcome to participate :slight_smile: #PlaceYourBetsLadiesAndGentlemen


#20

I would think that is pretty straightforward. Imagine every ADA in a hat. Every 20 seconds, one coin (and its holder) is selected to be the slot leader and reap the benefit. If you own 1 ADA, you have a 1 in 31 billion chance to get selected. If you own 15 billion ADA, you have a 1 in 2 chance of getting selected.