46% of ETH POS post merge is just two addresses

46% of ETH POS post merge is just two addresses(twitter.com)

75 points by greenail 3 years ago | 44 comments

This will probably get lower over the next few days but it still doesn't look very distributed compared with the existing Banking system.

It's hard to tell the difference between ETH running on infrastructure maintained by Binance, Binance, and FTX etc and USD going between JPMorgan, Citi, and Goldman.

I read a statistic that over 50% of the Ethereum Mainnet is on AWS (but can't find it now) - hopefully that isn't all in the same Virginia data centre.

PaywallBuster 3 years ago | |

https://twitter.com/solanobahn/status/1547604262527463424

encryptluks2 3 years ago | |

I agree but there people are likely overpaying. Heck, it should be Hetzner or OVH.

syrgian 3 years ago | | |

Considering that you can get penalized if your validator is offline, I think any gain in reliability from using the most reliable provider you can is going to pay off.

yabones 3 years ago |

We've successfully subverted and revolutionized the global centralization of financial control by... concentrating wealth and power... Wait...

lawn 3 years ago |

I tend towards the theory that POS is more centralizing than POW, and the question is will it stay decentralized or end up with one address (or rather one entity) controlling 50%?

With POW a miner needs to continually provide new investments to be competitive, with new and more effective hardware and electricity.

But with POS you can just keep your coins in one place, and it will keep building up with no new investments at all (except running a node, a relatively small cost).

And in POS if someone ever reaches 50%, then it can forever hold that position, and it's essentially game over (baring a drastic hard fork).

It doesn't seem that unlikely that one big exchange will accomplish it.

pphysch 3 years ago | |

More likely, a) a cartel will opaquely control >50% of the network and b) probably already does

Fraudsters have a strong incentive to maintain a patina of integrity (for their given industry)

godelski 3 years ago | |

From a POS point of view it is easier to get people to leave custodial wallets (the biggest holders you see here, like coinbase). BUT people don't for a lot of pretty valid reasons. First is that you won't be staking on ETH2 if you don't have 32 tokens (roughly $50k). (I see this as a pretty centralizing barrier and similar to why people joined mining pools instead of being on their own) The second is that people invest in many coins, so it makes sense to keep everything in a singular location than 20 different wallets. So, convenience.

I honestly have yet to see a system that provides a strong decentralizing force. To be fair, I think this is a really difficult task that people don't really give it it's credit. I mean there's resource momentum and resources make it easier to obtain more resources. The problem with that is that it seem to be outside the control of any cryptocurrency and this makes the issue infinitely more difficult.

mrits 3 years ago | |

From a centralization perspective there isn't much difference between POS and POW. Miners are becoming corporations that can be bought and sold.

admax88qqq 3 years ago | | |

Sure there is.

The continued investment required for PoW is the difference.

If a PoW coin ever becomes centralized, it can become decentralized by new parties investing in more hashing power.

If a PoS coin ever becomes centralized, then it stays centralized. You can't just "buy" more stake unless the 51% player agrees to sell you some.

It really seems like PoS is the rich get richer without having to expend any effort. They stake their coins (costing nothing) and get rewards. If you have more coins to stake than others on average, you'll win the block rewards more often than others, increasing your ownership share.

In PoW, because computers are constantly getting faster/more efficient, your existing mining hardware depreciates with time and you have to continue to invest to maintain your dominance.

charcircuit 3 years ago | |

>But with POS you can just keep your coins in one place, and it will keep building up with no new investments at all (except running a node, a relatively small cost).

But everyone else will also be building up which means that your relative size will be the same.

Fatnino 3 years ago | |

Little nitpick: it's 2/3 needed now, not 50%.

If a bad actor misbehaves before controlling 2/3 then their stake gets eroded or even erased as punishment. Even merely being offline can result in stake erosion.

lawn 3 years ago | | |

No I mean 50% as in nobody can ever remove you from the 50%.

But to your point, who should decide who the misbehaving actor is? In what situation can you punish the network with only 1/3, as compared to 1/2 as with Bitcoin?

bongobingo1 3 years ago |

Wealth transfer complete?

I assume that isn't the take away, right? Right?

dboreham 3 years ago |

What is this showing us? When I look here : https://beaconscan.com/slots I don't see these addresses in the proposer column.

ChrisRR 3 years ago |

Can someone explain what this means to us not in the loop?

BitwiseFool 3 years ago | |

When it comes to blockchains, it is considered good to have the "work" be spread across a wide number of parties. The goal is to have decentralized consensus. If any one entity, or a small number of entities, gain a significant share of either the mining hash-rate, or the staking pools, then there is a possibility of something called a 51% attack. While the two institutions from the tweet are unlikely to perform such an attack, their significant share of ETH raises questions about how decentralized the platform truly is. One such question that arises is, can the US Government impose restrictions on these pools so that transactions involving sanctioned addresses are not included?

RunSet 3 years ago | |

Rich get richer.

charcircuit 3 years ago | | |

The people staking get richer at the same rate on average as everyone else staking.

casualrandomcom 3 years ago |

What do you make of this

https://twitter.com/thwjanssen89/status/1570426961411067904?...

comment?

croes 3 years ago | |

https://twitter.com/TralfamadorianH/status/15704446762721280...

brotchie 3 years ago |

Lido and Coinbase

taolegal 3 years ago |

funny how they just ceded true decentralization to Bitcoin & the usual detractors will miss out due to deep-seated prejudices

you may as well just use a central bank or traditional database, POW is unlike the rest and for good reason

encryptluks2 3 years ago | |

Bitcoin ceded true decentralization to mining farms a long time ago.

taolegal 3 years ago | | |

nah, as long as it's still easy for an individual to run a node and store the entire blockchain on their own it's miles ahead of anyone else

m4jor 3 years ago |

These are just bots

croes 3 years ago | |

Doesn't change the underlying problem.

mesozoic 3 years ago |

Web 3 is going well

polygamous_bat 3 years ago |

Reminds me of my favorite crypto joke: "cryptocurrency is an alternate banking system for people whose primary complaint about the 2008 financial crisis was that they weren't _in_ on it."

njarboe 3 years ago | |

It is very hard to get approval to be a bank and they are highly regulated. Many in crypto liked the idea of being able to run a bank out of their bedroom similar to any other SaaS business. Like many jokes, a truth told sideways can be quite funny.

seer-zig 3 years ago | |

The primary complaint about the 2008 (and the entire move to fiat) is (1) the government gets to print money at its own whim, deflating everyone's hard work. (2) fiat is inherently based on usury, which billions of people find appalling and abhorrent. What happened in 2008 was the natural outcome of such a system, and it will continue to happen if things are not fixed.

porknaut 3 years ago | |

And those that exaggerate all its deficiencies are upset they weren’t in on the cryptocurrencies. Wonder what comes next…

pessimizer 3 years ago | | |

It's hard to find a successful pyramid scheme or bubble that I'm not upset I wasn't on the ground floor of. I'm also upset that I didn't win the lottery. It doesn't mean that I secretly think pyramid schemes, lotteries, and beanie babies are good, and that I'm naysaying them because I didn't get a piece. I would naysay them 10x as much if they had made me rich. I'd be rich and an authoritative source, who's going to stop me from talking shit about the things I dislike?