The energy usage in proof of work is to create a cost for participating in the network. Costs disincentivize malicious behavior, because now you have something to lose (the money you spent on electricity/computation). But if you play nicely and support the network, you might even get paid for it. That's the block reward and mining fees, an incentive for participating in the network. This incentive/disincentive helps align self-interested actors with network goals; full blocks with valid transactions.
Proof of stake posits that rather than having to put up electricity/computation resources to participate, a user must lock up and risk coins. And like you mentioned, money can be thought of as stores of energy. Thus there is the same punishment disincentive of losing money for bad behaviour, and the same reward incentive of gaining money for good behaviour.
So the question is: are digital coins disconnected from the physical world worth anything?
Awesome Article! Thanks for sharing.
Hi. I am going to share this article as much as possible. Shoutout to your Tinder match also, what an awesome fun fact.
The energy usage in proof of work is to create a cost for participating in the network. Costs disincentivize malicious behavior, because now you have something to lose (the money you spent on electricity/computation). But if you play nicely and support the network, you might even get paid for it. That's the block reward and mining fees, an incentive for participating in the network. This incentive/disincentive helps align self-interested actors with network goals; full blocks with valid transactions.
Proof of stake posits that rather than having to put up electricity/computation resources to participate, a user must lock up and risk coins. And like you mentioned, money can be thought of as stores of energy. Thus there is the same punishment disincentive of losing money for bad behaviour, and the same reward incentive of gaining money for good behaviour.
So the question is: are digital coins disconnected from the physical world worth anything?