<blockquote>
  <p>but if we think the other way around if you have more money and buy more Ether tokens you are again have the competitive advantage at the Proof of Stake consensus mechanism. OR am I missing something?</p>
</blockquote>

<p>You're not missing anything.</p>

<p>Instead of people investing money in hardware, it becomes people hoarding coins and investing money into buying more coins. All that serves to do is make the rich richer and is really no better than PoW in that regard. This sort of behavior can lead to stagnation of the coin's economy as people use it less and less for transacting and keep holding more for staking.</p>

<p>Furthermore, Proof of Stake has problems, specifically the Nothing At Stake problem. If someone wanted to fork the blockchain, they can do so without risking their money. They can then stake on both the fork and the original at no extra cost. This is not good for the coin. But with Proof of Work, if a miner forked the blockchain, they do have something at stake: they hashrate can only be used to mine the fork or the original, so they risk losing their money if they mine on the wrong fork. Thus there is an incentive to not fork.</p>

CC BY-SA 3.0
2018-02-13T05:20:58.443Z
2018-02-13T05:20:58.443Z
Ava Chow
<p>It is said that Proof of Stake will be the mainstream consensus mechanism in the long run. Regarding the nature perspective I totally agree. But it has been rumoured that Proof of stake is more democratic way of having consensus since at proof of work mechanism; people who have more money can invest more to hardware so they have the competitive advantage. Again correct but if we think the other way around if you have more money and buy more Ether tokens you are again have the competitive advantage at the Proof of Stake consensus mechanism. OR am I missing something?</p>

<proof-of-work><consensus><proof-of-stake>
Proof of Work and Proof of Stake - Competitive advantage
Firat Akcoray
# Proof of Work and Proof of Stake - Competitive advantage

(Asked by: username_0 on 2018-02-12)

It is said that Proof of Stake will be the mainstream consensus mechanism in the long run. Regarding the nature perspective I totally agree. But it has been rumoured that Proof of stake is more democratic way of having consensus since at proof of work mechanism; people who have more money can invest more to hardware so they have the competitive advantage. Again correct but if we think the other way around if you have more money and buy more Ether tokens you are again have the competitive advantage at the Proof of Stake consensus mechanism. OR am I missing something?

**Tags:** proof-of-work, consensus, proof-of-stake


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## 1 answers

### Answer by username_1 on 2018-02-13. Score: 1 | Accepted answer

> but if we think the other way around if you have more money and buy more Ether tokens you are again have the competitive advantage at the Proof of Stake consensus mechanism. OR am I missing something?

You're not missing anything.

Instead of people investing money in hardware, it becomes people hoarding coins and investing money into buying more coins. All that serves to do is make the rich richer and is really no better than PoW in that regard. This sort of behavior can lead to stagnation of the coin's economy as people use it less and less for transacting and keep holding more for staking.

Furthermore, Proof of Stake has problems, specifically the Nothing At Stake problem. If someone wanted to fork the blockchain, they can do so without risking their money. They can then stake on both the fork and the original at no extra cost. This is not good for the coin. But with Proof of Work, if a miner forked the blockchain, they do have something at stake: they hashrate can only be used to mine the fork or the original, so they risk losing their money if they mine on the wrong fork. Thus there is an incentive to not fork.


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