Ethereum is moving to proof of stake. A financial advisor I work with who is deeply involved in crypto assets called proof-of-stake a "Ponzi scheme". Let's debate this.
When I evaluate crypto as an asset class, I compare it to modern money. A USD($) can be printed from thin air, is backed by faith, and currently yields effectively 0% interest, penalizing savers. A modern or primitive economy relies on savings (work stored up) and deferral of consumption (spending) to generate growth.
Crypto (generically) seems to offer solutions to the following modern money problems -
- Cannot be printed from thin air
- Backed by an algorithm, and requires hard capital or resources to mine or generate it
- Transparent (usually)
- Offers interest to its holder (not all, but moving to proof of stake is encouraging)
I generally see crypto assets as the evolution of money. And when I value one, I look at the stream of income it could produce. Ethereum moving to P-o-S seems like a step toward re-thinking money in a more sound manner if (big if) assets start producing tangible rewards to savers, which can be lent to generate economic growth.
Now for the Ponzi scheme - large holders can control the pie (not all of it), and be rewarded as such. Some coins could incentivize this - however I have seen coins like Harmony ONE create models for balance, by moving the staking pool to the median.
Overall, I encourage the move to proof of stake. It will make crypto assets easier to value if the income generated (the interest or dividends if you will) can reward the savers and be used toward productive economic activity.
I want to hear your thoughts - is PoS a game-changer? A ponzi scheme? Are you more or less likely to hold PoS coins?
My sense, when I first heard of it, was that it was "one dollar one vote", or a system where the biggest whales will control the chain. That said, that's how the existing system capitalist system works, with a hierarchy of banks, so it would probably work.
BTW, the interest rate on USD$ is close to zero not because it's fiat, as you imply, but because they target a low rate of inflation. That's because the wealthy are controlling the system right now, and high inflation harms people with assets. Low inflation harms people who labor and are in debt.
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