ESSAY OF THE CRYPTO-PHILOSOPHER

At the beginning of its heyday, POS seemed to be a real panacea for POW’s problems with its energy consumption, relative centralization and negative impact on the environment. And during the years of mass application and the emergence of new blockchains on POS, many obvious shortcomings of this type of consensus were exposed…

The main problem as in the beloved other type of blockchain is centralization. After all, the main validators of different networks are all familiar teams that have their own big communitis. These validators always recruit the largest stacks, which in turn makes a small group of them the main monopolists in a large number of networks. And on the one hand, they are a great find for new blockchains with their communes and developed infrastructure, and on the other hand, their decisions or inactions may simply lose this blockchain in the future…

To understand what I mean, you need to understand how POS works, I make decisions that affect the network… In 2013, Daniel Larimer, an American programmer and crypto entrepreneur, used this concept to create the Delegated Proof-of-Stake mechanism (DPoS). It was first implemented in the BitShares blockchain platform, and then in various versions embodied in the most famous cryptoprojects EOS, Cardano, Tezos and more. Today, the delegation function has become an industry standard and is used in almost all PoS implementations. To compensate for the costs of computing nodes for transaction verification and generation of new blocks, most PoS-blockets provide a reward that is paid in native coins of this network. Typically, its size for each block is fixed, but may vary depending on current network settings. At PoS, cryptocurrency owners may not participate in the network themselves, but transfer their coins to — validators to professional participants who control the blockchain’s nodes. Instead, they undertake to accrue to the coin holders of the award, often — less a small commission. At the same time, validators have other responsibilities — is to support blockchain updates, vote participation and decision making. Here there are problems…

Some validators ( are mostly CEX validators ) unwilling to vote and update and thus cause problems obtaining the necessary consensus (ie the required number of votes for making one or another decision) and the number of these votes depends on the number of certified coins per validator… It turns out that the whole blockchain cannot vote or run updates on the network just because 4–5 validators each have about 5–15% of all fixed coins, just ignore it… Another situation is when these few validators decide to vote for a certain grant, it is unclear which developer for unclear purposes, or some ambassadore for some obscure advertising company… Theoretically, a small group of validators can simply turn off the blockchain for a while, can also do many other things that could harm one of the networks in favor of another (similar in its design ) network by prior arrangement…

What is currently being proposed to address this issue? The so-called « distributed validators » appear. That is, the validator gives certain rights in the decision-making of the validator to its delegates, and it turns out that the decision is made by not several people but by many people who steak coins from this validator and also receive part of the validator’s remuneration. The idea is interesting, but is it a panacea for the project itself? After all, at the heart of such a validator is his own token. Liquidity to this token is provided from the rewards of the validator, and therefore the validator is interested in the constant sale of all received awards from the project, which constantly reduces the price of tokenes of the project.

The projects themselves are struggling with centralization on a different basis… This is also a delegation from the project for validators with a small stack, but with great activity for the project, or delegations from the project, which are graduated in this way, that the smaller the stack of the validator, the larger the delegation he receives…

But obviously these measures do not work as everyone would like… And what can the author of the article offer to solve this problem?

The idea is that POS blockchains should enter the maximum amount of the allowed stack for one validator. For example, 3% of all reserved tokens. When the validator reaches this limit, the delegate can no longer delegate to him, and then delegates to another validator with a smaller stack… Then in one hand the whole power of voice in decision making will not be concentrated, and this force will be more distributed! This system will also force more informed choices to be made by delegates, who most delegate to the first on the list of validators.

Of course, it may not work, there may be a better way or ways we don’t know about… I think in time we will find the answer to all these questions and be able to get closer to the dream — is actually a free and decentralized blockchain for people!..

P.S. I do not call anyone to anything and do not give financial advice … The only advice for you is DO NOT LET YOURSELF SHAVED!

ESSAY OF THE CRYPTO-PHILOSOPHER

At the beginning of its heyday, POS seemed to be a real panacea for POW’s problems with its energy consumption, relative centralization and negative impact on the environment. And during the years of mass application and the emergence of new blockchains on POS, many obvious shortcomings of this type of consensus were exposed…

The main problem as in the beloved other type of blockchain is centralization. After all, the main validators of different networks are all familiar teams that have their own big communitis. These validators always recruit the largest stacks, which in turn makes a small group of them the main monopolists in a large number of networks. And on the one hand, they are a great find for new blockchains with their communes and developed infrastructure, and on the other hand, their decisions or inactions may simply lose this blockchain in the future…

To understand what I mean, you need to understand how POS works, I make decisions that affect the network… In 2013, Daniel Larimer, an American programmer and crypto entrepreneur, used this concept to create the Delegated Proof-of-Stake mechanism (DPoS). It was first implemented in the BitShares blockchain platform, and then in various versions embodied in the most famous cryptoprojects EOS, Cardano, Tezos and more. Today, the delegation function has become an industry standard and is used in almost all PoS implementations. To compensate for the costs of computing nodes for transaction verification and generation of new blocks, most PoS-blockets provide a reward that is paid in native coins of this network. Typically, its size for each block is fixed, but may vary depending on current network settings. At PoS, cryptocurrency owners may not participate in the network themselves, but transfer their coins to — validators to professional participants who control the blockchain’s nodes. Instead, they undertake to accrue to the coin holders of the award, often — less a small commission. At the same time, validators have other responsibilities — is to support blockchain updates, vote participation and decision making. Here there are problems…

Some validators ( are mostly CEX validators ) unwilling to vote and update and thus cause problems obtaining the necessary consensus (ie the required number of votes for making one or another decision) and the number of these votes depends on the number of certified coins per validator… It turns out that the whole blockchain cannot vote or run updates on the network just because 4–5 validators each have about 5–15% of all fixed coins, just ignore it… Another situation is when these few validators decide to vote for a certain grant, it is unclear which developer for unclear purposes, or some ambassadore for some obscure advertising company… Theoretically, a small group of validators can simply turn off the blockchain for a while, can also do many other things that could harm one of the networks in favor of another (similar in its design ) network by prior arrangement…

What is currently being proposed to address this issue? The so-called « distributed validators » appear. That is, the validator gives certain rights in the decision-making of the validator to its delegates, and it turns out that the decision is made by not several people but by many people who steak coins from this validator and also receive part of the validator’s remuneration. The idea is interesting, but is it a panacea for the project itself? After all, at the heart of such a validator is his own token. Liquidity to this token is provided from the rewards of the validator, and therefore the validator is interested in the constant sale of all received awards from the project, which constantly reduces the price of tokenes of the project.

The projects themselves are struggling with centralization on a different basis… This is also a delegation from the project for validators with a small stack, but with great activity for the project, or delegations from the project, which are graduated in this way, that the smaller the stack of the validator, the larger the delegation he receives…

But obviously these measures do not work as everyone would like… And what can the author of the article offer to solve this problem?

The idea is that POS blockchains should enter the maximum amount of the allowed stack for one validator. For example, 3% of all reserved tokens. When the validator reaches this limit, the delegate can no longer delegate to him, and then delegates to another validator with a smaller stack… Then in one hand the whole power of voice in decision making will not be concentrated, and this force will be more distributed! This system will also force more informed choices to be made by delegates, who most delegate to the first on the list of validators.

Of course, it may not work, there may be a better way or ways we don’t know about… I think in time we will find the answer to all these questions and be able to get closer to the dream — is actually a free and decentralized blockchain for people!..

P.S. I do not call anyone to anything and do not give financial advice … The only advice for you is DO NOT LET YOURSELF SHAVED!