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it seems to me that the mining model has it "flaws" too since it tends to concentrate mining power with very few (which might be a risk). I understand the incentive of it but .... somehow we end up with centralization. Maybe the future of crypto currencies lies somewhere else unless I have not understood the present situation.

Renzo Carioca
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The PoW mining is the best mining scheme. It makes the blockchain more secure than PoS. Bitcoin is not worth 17k because it is scarce, but because it is the safest blockchain ever, a blockchain that can't be hacked. PoS has not yet proven its security model. Wait a couple of years more, when there will be high valued PoS currencies and their security will be tested. Also, something that has not been difficult to create isn't worth much. That's why PoS currencies do not appreciate quickly.

Miners concentrate in a single large pool because this is a new concept and few people know how to configure them. Wait for the first mining pool to be hacked, and everybody will quickly learn how to download and install mining pool software.

You can create your own pool, if you don't like the available pools. The source code is free and available for everyone.

The future of cryptocurrencies is the PoW

Nulik
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  • thank you for your answer. The difference between PoW and PoS is relevant and as you point out , PoS might be tested. – Renzo Carioca Dec 13 '17 at 08:03
  • Firstly, see: Why does Ethereum plan to move to Proof of Stake? for an overview. – Richard Horrocks Dec 13 '17 at 10:13
  • Secondly, the PoS implementation that Ethereum will use is arguably more secure than PoW. See Vitalik's A Proof-of-Stake Design Philosophy. (It mitigates 51% attacks, as well as 33% selfish mining - see Majority is not Enough: Bitcoin Mining is Vulnerable. – Richard Horrocks Dec 13 '17 at 10:14
  • Thirdly, there are many existing blockchain that's use PoS. For example, EOS/Bitshares uses dPoS (currently #11 by way of market cap). Neither Ripple nor IOTA use PoW (#4 and #6 market cap respectively). Value is arguably derived from speculation, not the consensus mechanism used. – Richard Horrocks Dec 13 '17 at 10:15
  • Lastly, people join pools because solo mining is no longer profitable. If you don't join a pool, and take a share of their earnings, you won't make any money. Running your own pool software, on your own, with no one else in your pool, is no different from solo mining: you won't make any money. – Richard Horrocks Dec 13 '17 at 10:16
  • For me the perfect crypto currency does not require exchange. such system should not be account based but value based so real ownership is clear. One possible design is that on one side we could have some kind of issuer of hackproof "mathematical encrypted" units which could evolve in complexity and the other side some kind of independant timestamp providers so with the users, we would always have a minimum of four parties involved in any transaction (2 users, issuer & timestamp). The economics? several options are available – Renzo Carioca Dec 13 '17 at 10:50
  • @RichardHorrocks, you can't be sure that new Ethereum's PoS design will be more secure than PoW until it is tested, and it is not yet released. So, how many years would be needed to fully trust new Ethereum algorithms like to hold millions on the blockchain? Or should I remember you about the DAO hack? – Nulik Dec 13 '17 at 19:48
  • @RichardHorrocks I have another read for you: https://en.wikipedia.org/wiki/Proof-of-stake , check the section "Criticism" , the main advantage of PoS is that it is cheaper. But cheapness is not very well appreciated by the market. – Nulik Dec 13 '17 at 19:50
  • @RichardHorrocks, when I suggested the OP to run his own pool, I didn't mean to install the pool software and sit there waiting. Of course he will have to do his marketing and invite other people to join. But that's a much profitable thing to do, than investing in hardware and mining. Even if his pool manages to mine 10k worth of Ethers, at 1% pool's fee, that's going to be 100 bucks per day. Much better than mining with your own hardware. (from the point of view of ROI) – Nulik Dec 13 '17 at 19:55