Vitalik Speaks! Why Proof of Stake?

Transcript

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so vitalik the conversation about proof of work first proof of stake was really really big from what i can remember in in 2017 in 2018 or should probably even bigger before that but i came into the world of crypto in 2017. uh and i actually think it's really valuable that people understand this debate and why and and understand the merits of proof of work and also understand the merits of proof-of-stake in order to understand like why is ethereum so committed to proof of sake like why do we want this and so you wrote this article on your blog vitalik.ca everyone should check it out called why proof of stake and we kind of want to go through some of these points so we can help help the bankless nation like kind of come to understand the the terms that you use here and the the arguments of

why proof of stake is inherently uh the right i'm not going to say superior but the right uh consensus mechanism for ethereum right because many bitcoiners will still say to the state that proof of work is the one true consensus mechanism um so this let's go through some of the some of the points that you that you wrote here proof of stake offers more security for the same cost like what does that mean and how does staking offer that so the basic uh idea here is that if you try to quantify security so the easiest way to quantify security is just how many dollars you need to spend to break the thing um then if you look at the ratio of security to cost where cost just means like how many rewards you

have to put um you have to push out to the participants then the ratio of the security level to the two of the ecab amount you pay for the security just is much more favorable on the private stake side than it is for any version of proof of work uh and i think the way that you can look at this right is that if you look at just first of all start off with a comparison between gpu based proof of work and asic-based proof of work uh so this is a comparison that and even bitcoin people make all the time right when they defend why the their asic baseball of work is better than the asic resistance algorithms is basically that in the gpu case the cost of mining is only operating costs and there's basically no capital cost

right because like you can rent gpus um if you buy a gpu you can always sell it after even if the blockchain disappears gpus continue to be useful and so if he wants to attack a gpu based chain all you have to do is just rent some gpus for six hours or what however long he wants to do an attack and so the cost of an attack is basically going to be just exactly the same as the cost of the rewards during the time period that you're attacking and and if you as an attacker receive block rewards then the cost of the attack even drops to zero or it becomes profitable all by itself right so for gpus like while gpu proof of work mining has a big advantage in terms of being decentralized from a security perspective it actually

is quite weak and we've seen this right as i mentioned in an ethereum classic has been getting a lot of 51 attacks recently now if we look at asic-based proof-of-work asic-based proof-of-work is considerably more secure because asic-based birth of work has not only ongoing costs but also capital costs right and an analysis i did a few years ago suggests that it's about one-third ongoing cost and about two-thirds capital costs um maybe that ratio changes over time i actually have no idea which direction it's going to change into but like that's roughly what it is approximately right and if you us then if you uh kind of make some assumptions about how long an asic lasts you can actually kind of reverse engineer what the capital costs are and

kind of from the amount of money that you're paying for rewards right so the idea basically is that if your your chain is paying one dollar a day in rewards uh then out of that one dollar one third will be operating costs two-thirds of the capital costs and you can think of the two-thirds that's capital costs as being kind of amortized over the entire period of time uh during which that miner is mining right and so if you assume that an asic lasted about two years i think now it's a little bit more it's a little bit more than two years um but you know moore's law increasing efficiency wear and tear all these things so at the two year level right all you have to do is you basically take the

amount per day that they're spending on the asic and then multiply that by the number of days in two years and that's the cost of the asic right and so if your model of an attack is that an attacker just has to buy up as many a successful legitimate network then you can use this to kind of get an estimate for the cost of the a6 needed to attack the network and so here you know you get about fortune 86 dollars and so that's the cost of breaking proof of work if you have asics right so already much better than gpus but asics have a cost of centralization so now if we go to proof of stakes before we say can i get you to comment on ethereum one would you if ethereum won if that was the chain that would just carry on

into the into the future forever would you have been in favor of it being gpu based or would you have been uh interested in making an asic version of ethereum so at the beginning i was definitely much more pro gpus but i think more recently uh i've well i it's not so much that i've become more pro asic it's that i've become less pro gpu and and so it's just like it just feels like a kind of a tragic choice between two differently bad options to be honest okay but gpus did have this nice property in the early days that it was a much more um egalitarian decentralized way to distribute the tokens which

arguably that's kind of what ethereum was looking for in like the first part of its life yeah i agree and i think that's very important and i think ethereum is definitely better as a result of having that gpu mining for the first few years of its existence as somebody who came into ethereum because it was able to be gpu mined i have to say thank you for making that choice but not as secure compared to asics is the point at least from an economic security perspective and the thing to keep in mind is that the longer we like i i think the chain even like ha manages to be um a gpu mind up until this day only because people realize that proof of stake is coming right

like if you just like basically the reason why there isn't much more work on building a6 is that people realize that any asics that get built will only survive like uh i mean either a year or potentially even a few months like potentially in response to the chain getting taken over by asics we could even just rush the entire transition um and uh just like do the merge and uh in a couple of weeks right like it like doing that sort of thing would totally uh be extremely disruptive to the ethereum ecosystem but you know doing something extremely disruptive in response to an already extremely disruptive attack is the sort of thing that would happen right and so like people i think realize that it's just too risky to build asics

because like there's just no guarantee that you're actually going to have enough of a period of time during which you're go you're going to be profitable and that's why the chain continues to be gpu friendly right and so the facts that like this gpu friendliness has been possible to this day should not at all be taken as evidence that gpu friendliness is a stable equilibrium going into the long term right makes sense um shall we get into previously yeah so proof of stake um so basically the way that i view proof of stake is i view proof of stake as combining the efficiencies of uh or this capital cost property of asics but really cranking that property up to the extreme um and at the same time having the kind of open accessibility of

gpus right so basically proof of stake is almost entirely capital cost right the cost of like operating a node is fairly small and and the difference is though is that in the case of asics the capital cost is only kind of amortized over the course of um you know about two years so it's about like 50 percent a year but unlike asics deposited coins do not depreciate deposited coins so you can deposit them you can stake for a bit and you can get them back and so you actually don't even need that high of a rate of return to motivate people to stake um so here i was actually i think understating the case right because like here is saying oh you know imagine a percent rate of its turn is enough to motivate people to be willing

to lock up their money and stake but and i think fifteen percent is roughly the rate of return that we're going to see in this initial phase of youth two like i think with the current level of deposits it's about 18 um but you know we're gonna see more deposits but i think in the long run especially when it's possible to just deposit um steak for a bit and then withdraw and get your money back within a day like i fully expect that the rate of hurts the the rate of return will just drop to something closer to 10 or even 5 percent and so but even with 15 percent a 15 rate of return on capital that basically means that you know one dollar per day of rewards is gonna attract six point six six seven worth of worth of uh

deposits right or basically like if you have uh to if you um stick uh twenty four hundred dollars in as a deposit then your annual return would be twenty four hundred dollars multiplied by fifteen percent um which would be around um you know close to 365 and so 365 dollars a year is equal to one dollar a day right so if we assume 15 rate of return per year then every one dollar of day in rewards is going to correspond to 2 43 of deposits that's at current um rates if the rates drop to 5 percent and this on broadway so it goes up to 7 500.

right now if we assume that um only 90 of the costs are capital costs and there's still 10 that are operating costs then the 243 goes down to about 21.89 but basically even still right we have five times more deposits that are paid for by the same rewards improve at stake as compared to asic-driven proof-of-work uh so and this is now in the long-term like i expect it to go up to something like 10 000 so it'll be 25 times stronger than the proof of work so does the security is so is that summarized as the security of proof of stake comes from the fact that ether the asset doesn't deprecate in the same way that asic a machine does and so ether gives you a year on year return

where an asic gives you a year-on-year deprecation devaluation of the unit right and so that's the fundamental component of where proof-of-stake gets its security from yes that's definitely an excellent way of standing the point cool all right so where we've come so far is we have gpu uh based proof of work work which ethereum is on now that means you can use the gpu card and like your yeah nvidia like gaming machine to mine a little bit um and that total cost of attack is um like fairly cheap like it you can attack that fairly easily lower economic security and then bitcoin has asic-based

proof-of-work which is a bit more expensive to attack so higher economic security and that's why economic security comes from the fact that the asic is only doing one job that's only possible to do one job which is mine bitcoin it's dedicated so it's all sunk capital costs basically you are locked in so and now proof of stake because it's like ultra sunk cost that's the only thing you can really like kind of you know do with do with it it's almost like a tokenized asic on on steroids if if you will that's even more efficient and how would you quantify this is this like a a 5x more efficient like bank for the bank for the security for the dollar or is it uh a 10x

uh like according to the kind of back on my back of the envelope numbers here it's 5x in the short term and up to 20x in the long term wow so i i think of this you know dave and i have you know often sort of analogized these sort of chains to nation states and almost this is like the security force this is the the defense right and so it's almost like you're upgrading your military calvary and horses to like panzer tanks here right like like trying to think like what what what's a good a good analogy like okay so here's a really fun and dumb analogy so um gpu based proof of work is you have to like basically hire soldiers out every

ev every day to patrol your borders to make sure the enemy army doesn't get in and you have to keep on paying them basic base proof of work is um the great the great wall of china um then uh proof of stake is imagine a gra um a great wall of china that has the property that the way that this wall is constructed is that when people are not staying in their own houses they just teleport the walls the walls of their houses and they make it part of the they make it part of the great wall so whenever you're not in your house whenever you're like going off on vacation you just click a button and your house teleports to being part of the wall and you know the government pays you some small amount of money to do this and you're happy to collect the

reward uh and then as soon as you want to move back into your house you just click a button again and the walls teleport back at their part of your house again right so basically it just like you don't even need to kind of create these separate resources you're just kind of taking advantage of existing resources and you're moving over moving them over to a different purpose when people know that they don't need them for a long time so much more capital efficient so so the idea is that the great wall this version of the great wall of china would theoretically be a lot higher because of the incentive for everyone to allocate the walls of their house into the walls of the great wall of china in the moments that they are not inside their house using their house as a house exactly

yeah the interesting thing so is i think here um you talked about this in the article right so we're talking about a 5 to 20 x gain in proof of stake potentially and the question is what do we do with this efficiency gain as a social contract for ethereum can you talk about that because it seems like there are like you know maybe two options here of what to do with this drastically improved military drastically improved great wall yes so one of them is to keep the military budget the same but have much higher security and the other one is to have the same security but cut the military budget

down and i guess the reason why i think we're taking the second approach is actually best to kind of even describe to the next section right like i think we like ethereum has enough security today especially if attacks become much easier to recover from and we actually don't even need to have like too much spending going into i keep going going into keeping the wall up um because um you know if it it turns out that basically if even if someone successfully invades so like you can do this clever move clever move where you just like hard fork and you and you delete their army uh so so is that so that i want to get into

that just to to to to link folks into what you're talking about like so um the way ethereum right now the way bitcoin right now pays for their military is generally through block reward through issuance through supply right so and bitcoin's approach is to cut that military budget at least military budget denominated in bitcoin every four years cut it in half every four years so we're where the bitcoin protocol government every four years you know what it's forced on you we're gonna slash your military like like by by four right um at least denominated in bitcoin by two right two excuse me um ethereum's approach

is basically to do something that's maybe more what the social contract is kind of called minimum necessary issuance or minimum viable issuance where it's like hey like maybe we can drop this a whole lot more because we have a a stronger defense system and so that that issuance essentially is what goes to pay for the military and maybe that could be slashed maybe that could be cut right now it's a four four and a half percent or so and we could go to something less than one percent absolutely and yeah one of the theories i've had about uh one of the reasons why proof of stake is is more more secure in the long term is

that with that reduced issuance that reduction of issuance actually compounds as a benefit over time and i want to get your take on this because i don't know if this is real or not and this is the same uh same dynamic is present in eip-1559 the more ether that's burned in eip-1559 the more ether is unable to be leveraged in an attack against stakers right the the less ether we can make available to the secondary market the less ether there's available for attackers to be able to grab and use that to attack the ethereum network is that is that a real thing so like the less ether that we issue is that over time adding to security that's definitely an

interesting and a kind of novel way to think about it and i guess and generally yes like the less ether there is and um and even like the the higher the price goes so the the harder it is for an attacker to buy enough to successfully make an attack and that's definitely one of the factors that contributes to security and if you have miners that are just constantly selling millions of coins every year then you know some of those coins are going to end up in the in the hands of people that might be interested in attacking it at some point if you want to live a bankless life you need to get a hardware wallet there is no alternative for storing your crypto in a self-sovereign fashion

that's why i have four ledgers that i use to manage my different crypto assets using the ledger live account as well ledger live is like your home base for managing your ethereum defy and crypto accounts it does a really good job of aggregating all of your different ethereum wallets if you are the type of person that uses more than one but you can also add other cryptocurrencies like bitcoin or cosmos or whatever your preferred blockchain is and then it will display an aggregate portfolio of all your accounts at the main page one thing that ledger is doing a really good job of is enabling all the money verbs that me and ryan talk about with the bankless skill cube enabled in the ledger live app so right now in the ledger live app you can buy sell lend swap and stake

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and so uh one of one of the sections in this pieces is titled um attacks are much easier to recover from in proof of stake uh maybe we can talk about like the aft after an attack happens what paths to maintaining or you know restoring security does ethereum have yeah so i think in the gpu case the only defense is basically just waiting and hoping the attacker goes away which has worked so far right but like as soon as an attacker comes that's persistent you're basically screwed and you have to try to figure out something else in an asic based system you do have one form of defense which is you uh just change the proof of work algorithm and what that does is it basically kind of

bricks like all the asics it renders them useless but it bricks both the attackers a6 and the honest miners a6 right but if the attacker is willing to suffer that initial expense then at that point it just turns into a gpu mind coin up up until um you know after a couple of years where people build asics for the new algorithm again and so it just turns into the kind of the into the first paragraph and the attacker can just continue the attack really cheaply for as long as they want and in fact i would even argue that it's worse than this because if an attacker starts doing this and if the attacker commits to continuing to attack then it actually takes away from the incentive to build asics for the new

algorithm because anyone building the a6 knows that if the attacker is going to continue then potentially those a6 could get bricked the second time um so like basically the fact that breaking hurts both the attacker and honest miners actually and it really uh makes the game theory behind all of this even worse so in the brutal state case um basically it's uh it gets much better right because like we have this concept of slashing right so if you contribute to breaking the chain uh you get slashed and even if you contribute to breaking the chain as part of a 51 attack you get swatched now there are attacks that are hard to detect and hard to slash for so

a big one is like a 51 coalition censoring everyone else but you can get around this by using um this wonderful trick that the bitcoin people invented in 2017 called the uasf the user activated soft fork right basically just users coordinate on um participating in a minority chain and they just abandon the majority chain that's censoring them and actually because of the way that the casper ffg rules work the attacker cannot legally uh kind of move over to the minority chain without um contradicting themselves and getting slashed and so the attacker just gets weak and they lose about half their points right so basically no matter how you attack the chain it's going to be very expensive

for the attacker not very expensive for everyone who's not an attacker and so the game is very asymmetric right like every time the attacker attacks they lose a huge amount of money um and potentially like the the amount of coins that are burned as a result of an attack would even could even mean that an attack would cause the price of east to go up so like one of my favorite features about proof-of-stake is that if an attacker attacks ethereum it makes all of the stakers rich by by default well not by default look but it's highly likely that the price of ether goes up because of somebody's buying up all this ether um one question i had when i had about this like using this as a defensive mechanism in

proof-of-stake this is relying on the social layer right this is in this moment security has migrated away from the actual code and moved into the social layer which maybe it perhaps is one day if this ever does happen it would be coordinated via something like twitter or reddit can you talk about that dynamic uh yeah so there's definitely a lot of kind of discomfort in relying on the social layer for consensus but actually i i i wrote about this quite a bit in my original 2014 article the one where i'd say it called like how i learned to love weak subjectivity uh if you actually even just go in and i could google for that now you can probably find it um basically uh

here i'll just wait for you to um there you go down down it's there oh you visited it oh you i've read this one twice yeah so if you just like scroll down like 10 paragraphs um just keep scrolling until i tell you to stop right right this is keep going keep going uh keep consequences um okay uh um go down to the paragraph that says this ignores um i think it's the third one however this logic ignores there we go um so basically the arguments that i make is that relying on social consensus like is actually reasonable occasionally it's just that consensus is a social

consensus is not something that you want to kind of keep on keep leaning on forever right so the idea is basically that like i mean even bitcoin relies on social consensus to some extent right like even you know the uasf that was proposed in uh 2016 was ultimately a form of social consensus overriding mining uh so basically um you know hard forks are done with uh social consensus um even the idea that if miners push a blockchain that would increase the the supply to beyond 21 million then people would reject that blockchain as is ultimately secured by social consensus the difference between um a uh

a malicious protocol change and a bug fix is social consensus so relying on social consensus on in these kind of extreme matters where and especially on matters where there's clearly one side which is an attack and one side which is just trying to push the chain forward is i think actually reasonable thing to do the thing that you don't want to do is you don't want to rely on social consensus too often right and the thing to keep in mind is that if you even think about like how a an attack on proof of work would be responded to right like even like defenders of uh 86 base proof of work will say oh if our 51 attack happens we can just break the asic and we can change the algorithm right like if you

press them on it they will say that this is what this is a defense um but that depends as well it's also a social consensus like changing the work algorithm is also a form of social consensus overriding the uh uh overriding the code uh so it's also straight it's also striking that the price of bitcoin the price in itself is one layer of social consensus too it is indeed yeah um and we've seen we've seen this uh the idea of breaking asics that's played out a number of times i believe in the monero community so this is not hypothetical conversations this is this is strategy that blockchains have blockchain ecosystems have leveraged exactly

so let's move on to uh one of my favorite subjects which is how proof of stake is more decentralized than asics some people would call this a bold claim vitalik why can you make such a claim so and i think we do need to uh right like break up proof of work into two categories at gpus and asics so you know like there is a very decent case and gpu-based temperature work is quite decentralized and i'm happy to admit this like my my qualm against the gpu mining is not about the decentralization it's about the security right now the problem with asics on the other hand is that in order to make an asic you need millions of dollars of capital right now you could say oh

you know you don't have to make your own asic you could buy an asic but the reality is that if you're buying an asic though the side that's making the most profit is not going to be you it's going to be the easy manufacturer right people selling the shovels exactly like in the long run it's like the the game is very much one that's kind of skewed to benefit uh whoever can sell the best [ __ ] level and um you know whoever can sell the best shovel has a lot of like they can potentially even like sneak in code that could allow that asic to be bricked remotely like they could do all sorts of real evil things that are harder to do with if you're running the thing on general purpose hardware uh so basically like asic based mining really

does uh rely very heavily on this very small number of these uh very uh uh wealthy and uh kind of powerful manufacturers and so like basically if proof of stake means the rich gets richer well guess what asic mining also means the rich get richer except the bar that you need to pass in order to get richer in in the case of asic mining is something like 10 million dollars but in the case of proof of stake it's 20 thousand dollars today and much less than 20 000 in the future once taking portals become possible so one of the i've been chewing around the ideas of staking pools and there's a bunch of different design parameters um but i think the staking pool that

retains as much ethos of ethereum as possible which i think there is a spectrum of how much does a uh a protocol or company on ethereum retain the original ethos of the of the system there there's something to be said for that uh uh and that that's kind of where i turn my attention to rocket pool where rocket pool's trying to become a staking pool for people to decentralize the number uh the amount of uh people that can participate in staking by being a pool and then also decentralizing the nodes by making more uh total nodes available to be part of the ethereum proof-of-stake consensus mechanism when you think of rocketple is that what you think of uh yeah no i think rocketpool's

definitely one of the good examples of someone trying to do a good job um the ether protocol is really explicitly designed to make a stake decentralized staking with things like multi-party computation as easy as possible so that's definitely the sort of direction that we're looking into there's also this sub argument that you made here vitalik that proof of stake is more censorship resistant and that's basically because it's not on the electric electricity grid right for instance like a in the way that a gpu mining or asic mining footprint might be is that the is that the main argument here yes exactly like if you imagine um you know you're you want you're living in

say venezuela and you wants to participate in the ethereum network then if you're a proof of work miner then you know realistically you're consuming huge amounts of electricity you have to get huge amounts of hardware if the government wants to find you they can find it right like it's it's not hard to see someone can see like consuming that much electricity like these are techniques that they have already perfected for years to figuring out finding people who are growing the wrong kind of plants in their backyard or so um you know this is fearless it does make you wonder how long it would take a motivated government body like the united states or some other government body maybe let's not name

different governments here to go seek out all of the major mining bitcoin mining or even ethereum mining facilities in the world and just confiscate them take them over by for by physical force these are alive now yes it's just um it i think it's kind of a little bit of a game maybe that that um some in crypto play uh as if we've already faced off against these nation states that are actually actually trying to censor its realities they're just not even trying yet so um yeah that is that is an advantage that may come into play but there are also some advantages that you talked about here vitalik of proof of work and

i think we'd be remiss if we didn't mention the the ways proof of work actually is superior because there are some tradeoffs can you talk about these yeah so and these are like what i think are the two best arguments in favor of proof of work like one is this critique that proof of stake feels more like a closed system like there isn't this kind of new source of issues that kind of brings fresh economic blood in the into the ecosystem and so um and uh like it feels like the system has this kind of natural kind of introvert pressure to just be more of the same people by default um and this is definitely something that does

kind of concern me to some extent and the best rebuttal that i have is that in proof of stake the rewards in general are going to be fairly low right like i think if proof of stake rewards were say 10 of like annually then like i could see that very quickly lead to a few stakers very quickly i'm having uh i fear a very large portion of uh the entire supply and demand meeting everything but here we're talking about validator rewards equal to like up to 0.5 to 2 probably closer to 0.5 percent of the total supply and the more validators are staking the lower the interest rates get right and so the amount of time needed for this factor to like

cause a large amount of concentration is huge right it's potentially over a century and on on such time scales like doesn't really matter much but like people want to spend money they want to distribute their money among their children they would want to give their money to charity and so like aren't the like basically if there are any natural economic pressures toward deconcentration at all then like they're going to have an effect that's larger than 0.5 every year is basically the argument whereas if that rate was instead of 0.5 percent something like 4.5 then and i think this argument would actually have a much stronger case so this is one of the reasons why i'm pushing for lower rewards and the reason

people make this argument is of course is as we stated earlier um stake death is is almost like a an everlasting asic there's no depreciation there's no capital depreciation unlike a real world and it doesn't suffocate exactly exactly and no notably the the people that see that crypto has like accidentally inadvertently made really wealthy are largely people that i'm guessing this is my gut take that weren't wealthy beforehand right and so like what's the point of hanging on to you every single last denomination of ether if you like you can't sell it and like have like kind of a nice more comfortable lifestyle like the people that have large supplies of ether are going to have to sell if they ever want

that material impact to do something real in their lives and so that's kind of what i think what you are alluding to vitalik is that the rewards the passive income rewards to ether accrue slower than people's uh people find ways to sell their ether to buy a new house or new car or something and so there's like this natural sort of incentive to let go of your ether well what about the second point metallic uh we talked about weak subjectivity earlier does does anything bear repeating here now weak subjectivity is this uh extremely fascinating topic and i think it's been really the center of the debate almost like ever since the beginning and up until this day like

basically and weak subjectivity is this really subtle thing where like the idea is that in proof of work um you know you have this property that you have your client and uh you can just start it at any time and even if you've been offline for 10 years you could just start it up and you can stick to the value chain and you have all or the canonical chain and you have all of these economic guarantees in proof of stake like you can kind of still do that but it depends on what guarantees you want right so like if you're gearing if the guarantees that you care about or are in an honest majority model unless so you just assume that the majority of people are nice then you can still do that but if you want to have a hard economic guarantee

so you want to have a guarantee that says um you know tricking you requires the attacker to burn a huge amount of money the way that proof of stake i kind of promises a strong economic guarantees then you lose this property to some extent right and the reason why you lose this property to some extent is basically because um like if an attacker just create like who has say 51 of the stake uh creates a fake chain and they can get and they convince you that this fake shane is the real chain then like normally the uh the the way that they would get punished for this is it would be slashed right like if you create a fake chain that conflicts with the real chain that you already

contributed to making then you know some large portion of you of the validators intersect you can make proofs and uh you can publish those proofs into both chains and you can burn the attacker's money uh so right we've this is just like standard you know prostate periods like how swashing works but the problem is what if the attacker has already withdrawn their deposits that they use to make the attack um by the time that uh they actually need to do the attack right so what if someone has been offline for a year and you feed them a chain that looks like a vowel chain from the perspective of their client that was uh um off um

offline on or online for the last time a year ago but back in present-day reality you've already taken out all your coins and so whatever slashing happens can't actually hit you right so you could still trick them and you would not get swatched for it and so if you want to be resistant against this attack basically you just have to log on and kind of be online often enough that um basically the time difference between uh any two times during which you come online is less than uh the time that it takes for like something like one third of of uh the validator set to be replaced right which is and that number depends on the size of the validator set it's like somewhere

between a couple of days and a couple of months depending on how many people are participating uh so like that that like that requirement the requirement that in order to have a really kind of economically guaranteed level of security on which chain you're getting uh you need to log on um with your client at least once every few months like that is the the this week's objectivity requirement and the reason why like a lot of people feel uncomfortable about this is because it basically means that like if you're like if you're just joining the system for the first time then uh you know you for the first time that you log on uh you need to basically find some third-party source that basically

tells you like which chain is the canonical one that you should be following now most of the time this actually isn't a big deal because most of the time there aren't going to be 51 attackers trying to use their old keys to screw people over and so there is really going to be like one chain that has enough signatures right but in the extreme case where there are attackers that can like buy up people's old keys then basically in order to disambiguate you do need to find someone to trust to give you that information and fans of proof-of-work say that you know oh my god this is trust this is fatal what what are you doing you've completely destroyed the point of cryptocurrency but my argument uh is basically that like

this level of trust is a level of trust that we already have so like for example you already trust developers to tell you the most recent hard fork version um you know you already trust them to fix bugs you already get software updates from them once every um you know half a year or so and so why not just like leverage that existing level of trust and uh i use it for uh proof of stake checkpointing as well um so that's basically so with with proof of work and nakamoto consensus we have the ability to actually legitimately and concretely verify the amount of work that is done on a particular chain we don't have that with proof of stake because we're not doing

work we are and so they're we're verifying signatures that are signed by validators and in order to recognize that those validators actually are real you have to look at the state of the blockchain itself like at the time uh you know a couple of months ago to a year ago right so this is like the security of a proof of stake chain is definitely more kind of it's not like it's not circular it's more like a spiral right it's like the security of the system today depends on the validity of the chain six months ago and the security of the chain six months ago it depends on the validity of what happened 12 months ago and so like if you skip one of those steps then uh like and if you're on offline for longer than that period of time then you do you do

need some uh way to kind of help you disambiguate and come back online but if you're there more often than like basically staying in sync with the chain is more of this like necessarily dynamic process right right so here's kind of i guess my takeaway to just sort of summarize uh this article and uh you guys jump in if you have some other things if you are willing to get past this edge case weak subjectivity requirement and you made some compelling arguments why that that makes sense or it's less important than others think and if you're willing to get past this issue that stake never depreciates and so there is the the capability for people in the system to continue recruit accruing wealth and you

sort of mitigate again that against that with lower rewards overall then what you end up with is a chain that is much more economically secure uh and also more efficient in that economic security so you can do things like reduce issuance reduce the cost to actually secure that network essentially security per dollar exactly that's that's what proof-of-stake uh that's what proof-of-stake provides at least under ethereum right because there are other flavors of proof-of-stake but um yes would you add anything to that metallic no no i don't think in general that's a great summary