Why Proof of Stake is Flawed with Lane Rettig - WBD440

Location: New York
Date: Sunday 5th December
Project: Ethereum
Role: Core Developer


The Proof of Work (PoW) consensus protocol is under relentless
attack. 


Earlier this month The House of Representatives held a hearing on
digital assets. Rashida Tlaib dismissively questioned Proof of
Work PoW, quoting erroneous Bitcoin transaction energy cost data.
In response Stellar’s CEO Denelle Dixon implicitly agreed PoW was
energy intensive, and that “we all need to focus on minimizing
the energy consumption as much as possible”.


The next day Ripple’s co-founder Chairman Chris Larsen published
a medium article that stated “Bitcoin’s code needs to be changed
to a low energy consensus algorithm like those used by nearly all
other major crypto protocols.” 


Last week CNBC interviewed the CEOs of 2 wealth management firms.
One stated the following:


“Bitcoin operates on PoW: that’s the older technology, it’s
slower, it’s really a drain on energy. Proof of Stake (PoS) is
the newer system, it’s where I’d want my money going. It’s less
energy intensive. It’s faster. It’s more secure."


In potentially the biggest change to any blockchain ever
implemented, Ethereum is planning to move from PoW to PoS. PoS
has been argued by its proponents (most notably Vitalik Buterin)
to not only be less energy intensive than PoW, but to also
provide significantly much cheaper security, and greater
decentralization.


But, the arguments dismissing PoW and recommending PoS are
fundamentally flawed.


In this interview, I talk to the former Ethereum Core Developer
Lane Rettig, who now works as a core developer for Spacemesh. We
discuss the history and logic behind PoW, the drivers for
developing new consensus protocols, how PoS is set to work within
Ethereum, and the significant flaws and risks this proposed
change entails.