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RE: How Vote Incentivization Monopolizes Delegated Proof of Stake

in #dpos5 years ago

I think that is one of the great weaknesses of PoS and one of the big points for PoW.

Not really, the difference between POS and POW is that in the later the block producers are elected by those that can contribute more hashing power as opposed to having more stake. The fact that only a handful of mining pools are effectively able to produce blocks should be enough evidence that POW also leads to a monopoly (technically an oligopoly).

In POW each individual miner has to decide to which mining pool they should direct their hashing power. The rational thing to do is to choose the one that gives them a better chance of getting a higher portion of the block rewards. It turns out that the best choice is to join a pool that already has a high percentage of the block production.

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Oh, I definitely agree, I didn't mean to say that PoW doesn't have any problems of centralization, but it has no problem of monopolization like PoS has. We got mining pools which can be a short term threat for the chain, but if people leave the mining pools again it loses the power. While in PoS that's more difficult. Some PoS chains solve this by reducing the stake of the consensus node on "bad behaviour".