Paul Sztorc

>https://www.truthcoin.info/blog/pow-cheapest/

By the logic of that article asymmetric cryptography doesn't, because the value equal to what's protected by the key is magically wasted somewhere. Of course, that isn't true, because it's not possible to break asymmetric cryptography by brute force with expenditure equal to whatever is protected. Same applies to PoS.

It's maliciously created nonsense, which is most visible when he slyly equates locked tokens to wasted glucose. Wasted glucose is _real_ energy, while locked tokens are inherently worthless patterns of bits. Locking them is just a _trick_ to convince people to cooperate with each other - a game theory setting where everyone finds it most beneficial to cooperate.
The whole point of the economy is to manipulate real resources - various forms of matter and energy [1] and locking tokens is just a different way of social organization. "Liquidity" (of digital tokens) isn't a real resource. "Money" isn't a real resource. If there's less _real_ energy wasted, the new social organization system is more efficient. That's the objective metric underneath it all, and clearly PoS is a more efficient way of organizing massive human cooperation than PoW.

[1] theoretically matter is a different form of energy, but at the current technological level they are separate inputs to the human economy, except for nuclear power

For an alternative point of view, I highly recommend that people read http://www.truthcoin.info/blog/pow-cheapest/.

One issue that proof of stake proponents often ignore is that proof of stake has its own costs that are roughly equivalent to the dollar cost of PoW. The issue is that you need to lock up money for PoS in order to mine it. That has a cost as you are forgoing interest on lending that money to an actually productive enterprise that is creating value. The net result is that funding and investment becomes more scarce because private investment is "crowded out" by people simply staking their Ethereum. This is the same harm caused by too much government debt "crowding out" private investment.

Also, if the PoS staking rewards are too low, you are vulnerable to the exact same 51% attacks as PoW. So it's very unsure how this would significantly reduce fees unless you are also significantly increasing your vulnerability to attack. (Now, there are caveats about the fungibility and the ease of renting PoW miners vs renting PoS tokens, but many of the same principles apply).

"Nothing is Cheaper than proof of work"[1]. The best that can be said about Proof of Stake is that you get marginally better security while sacrificing liveliness / allowing the consensus layer to be captured by regulators [2]. PoW forces the machine to advance, if you refuse (or are forced to ignore) a block, the business dies but the network moves forward. If PoS was new and research was underfunded, you might have a plausible claim that it might turn into a workable solution.
The fact of the matter is, it's been 6 years since PoS' proposal and millions of dollars in R&D funds have been pumped into trying to unsuccessfully obviate PoW.

[1] http://www.truthcoin.info/blog/pow-cheapest/
[2] https://twitter.com/NickSzabo4/status/956461360161935361 "Conjectured governance under proof-of-stake seems to involve programmers & other amateurs making legal & accounting decisions. Bitcoin governance does not. Even when lawyers & accountants properly take over PoS governance, PoW governance will likely be far more socially scalable."

I don't care much if the waste is in energy or hardware or in any other resource. And the level of waste depends only on the block reward and the price of ETH, not the algorithm used, because as long as it is profitable people will burn resources to get the rewards. In free competition people will do that until it gets unprofitable and it gets unprofitable when they burn as much value as they get from the reward. This is MC=MR argument - first presented in: http://www.truthcoin.info/blog/pow-cheapest/ . I believe it is possible that PoS is still more efficient than PoW - by being more secure with the same block reward: https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-proof-of-work-da14223a965 , but still the main point holds: the waste depends on the reward not the algo.

Proof of stake doesn't work in practice unless we can find a source of randomness that is globally available, non-influencable and everyone can agree on [1]. At the moment, that source of randomness is completely elusive. It might be possible to create a random source from some form of binary astronomical event which can be widely verified but it would have an incredibly low bit rate of new randomness. One possible candidate is randomly nulling pulsars [2]. Unfortunately, the equipment required to observe this phenomenon is probably not widely available outside of large observatories. Having said that the costs would still be lower than the energy costs of the Bitcoin network.

[1] http://www.truthcoin.info/blog/pos-still-pointless/

[2] https://arxiv.org/abs/1706.05407

This blog post does a great job explaining some of the economics behind mining and why it is not wasteful, in the context of showing proof-of-stake is nonsensical:

"Long Live Proof-of-Work, Long Live Mining"
http://www.truthcoin.info/blog/pow-and-mining/

And the follow-up post:

"Nothing is Cheaper than Proof of Work"
http://www.truthcoin.info/blog/pow-cheapest/

Both are highly recommended read, but a quick TL;DR: if you're going to incentivize the security to of your network with $X of rewards, then up to (and probably very near to) $X would be necessarily "wasted" to obtain that reward. And these incentives and security model are not "waste" in any way - they're the entire premise behind blockchain systems!

edit: removed quotes from truthcoin.info, added tl;dr