Having enjoyed your other comments in this thread, I'm curious how Bitcoin fixes this issue. Because it can't be created out of thin air? Or is there something else I'm missing?
Crypto currencies are an experiment in the "denationalization of money" which was a book written by Hayek - of course he wrote this before cyrpto currencies were even a thing.
I would avoid just picking out BTC (which being stable in supply is prone to hoarding as digital gold and not really used as a means of commerce) and look at what other crypto has to offer as well, such as Ethereum which has a dynamic supply limit that is tied to its usage - in times of high usage such as today, it actually becomes deflationary. As usage slows, it becomes inflationary again which in theory should promote network usage.
We are essentially in an ongoing experiment of the denationalization of money and I personally think it will be fascinating how it will play out in the next couple decades.
Proof of work was the first of the consensus algorithms to be used with blockchains because Satoshi (imo, probably Hal Finney) likely didn't know about Proof of Stake at the time. By the time it was being discussed, Satoshi was already becoming less active in the community.
The claim PoS is not the best store of value is asinine. PoW in BTC has consolidated around a cabal of a handful of miners and the power usage is of course a well-known sounding bell for PoW apologists everywhere.
The truth is PoW was the best they had at the dawn of blockchain, then technology improved. It's really this simple and I'm baffled when people get religious about consensus algorithms. It's as if people would say we need to keep using bubblesort instead of quicksort because bubblesort was discovered first.
Proof of stake is not really any different to the fiat system it's trying to replace.
If a money isn't proof-of-work then it implies that some people can create it without doing work.
Gold's proof-of-work stood it in good stead for thousands of years. It was only some of it's physical limitations that led to fiat beating it. In fact fiat would be worthless if it wasn't boot-strapped into having value by originally representing gold's proof-of-work. Now we have digital proof of work in bitcoin. It doesn't have the physical limitations of gold, and fiat is going to hyperinflate to 0 once again - but this time it will stay there.
"Proof of stake is not really any different to the fiat system it's trying to replace." Please elaborate.
"If a money isn't proof-of-work then it implies that some people can create it without doing work" Have you seen how much work goes into being a validator? There is definitely work being done - just much more sophisticated that guessing a random value...
Agreed on crypto not having the physical limitations and on the trend of fiat to inflate. I just can't agree on the other points.
