Hey everyone,
Interested to hear opinions on this.
With the current drama surrounding the ETC 51% attack and the negativity towards pure POW coins that has been present since, Is pure POW safe going into the future for small market cap coins (relative to bitcoin) and is it worthwhile for Electroneum to move to another algorithm such as POS to future-proof itself?
IMO moving away from from POW should be a priority. As 51% attacks become more of a common occurrence, its being proven that POW is an indication of poor risk management.
It may not be an important detail right now however, as regulation becomes more relavent, it may at some time be required that crypto currencies offer the same protections to consumers as other regulated financial instruments.
This may mean that in order for a crypto to be compliant, it will need to demonstrate that an adequate level of risk management has been carried out in addition to contingency plans put into place to mitigate collateral damage. It’s common knowledge that POW does not take any of this into account.
ETN may or may not be mass adopted, but if a 51% attack occurs before it is, how will ETN explain this to business partners? What will be the initial and ongoing costs? How will the publicity effect consumer confidence? Will the product be able to recover its status in the market place?
Risk management involves planning so that those questions don’t have to be answered. POW presents every possibility that those questions will have to be answered at some point.
I agreed. The team needs to revalue this possibility.
I thought F2 Pool controlled the majority of hash power for the kryptonight algorythm. On that topic, I was reading that the Chinese government recently passed regulation, giving itself total oversight and control over all block chain facilities within its borders. That implies an entirely new dimension of risk IMO, but I’ll leave that one right there.
I did happen to read the previous post where you also mention that the purpose of ETN is to be spent and I’ll tell you why it’s impossible to impose that purpose as a constant.
Statistically, The coins that capture the least interest as a store of value are stable coins that are non minable and backed by cash assets on a 1:1 ratio. Their value is fixed so consumers spend them quickly as a transitional medium and have little interest in holding them as a store of value.
Despite intentions, the majority holders of ETN are speculative buyers, meaning those who are expecting a maturation of value to be cashed in at some future date. Accumulation continues for that purpose more so than any other. But you guys know this, as the longest running thread on this forum is all about that.
Last, ETN is seeking to be block chain/ Fintech hybrid. When it comes to Fintechs, there is no principle more important to business continuity than risk management. Ask anyone who is a Risk Manager for financial instruments and they’ll explain this.
In conclusion, POW introduces far too many variables, the first paragraph being an example. The run off effects of such variables are far more expensive to correct than they are to remove altogether. ETN has done a good job of responding to the market and should continue to do so. Perhaps POS should not be considered a last resort.
What was that you said about etn controlling the hashing power? Did I read that wrong?
You mean etn is the coin using most of the hashing power of the original cryptonote algorithm?
What @BegaMutex means is that out of all the coins that can be mined on the Cryptonight Algorithm… Electroneum has one of if not the largest amount of hash power. Meaning that there isn’t a great deal of hash power available on other Coins where they could all switch to ETN to control the majority Hash Power.
To take majority of the hashpower on ETN it would require a lot of ASIC mining power. Since only other ASIC hardware would be powerful enough to take control, it seems unlikely since most of the ASIC Cryptonight Equipment is already on ETN.
This is true for now however this can change very quickly, and does need monitoring. I have been following all the news in regards to potential crackdowns regarding POW, but i dont think there is anything to immediately worry about.
But agree with Latroy that plan B needs to be understood so that it could be implimented in an emergency. But as a last resort.
Thanks for putting that into context. Just in time for this subject of risk management is the Cryptopia incident as an example.
Zero business continuity plan in place. Not even a prescripted statement for the public in the event of current circumstances.
The best risk managed product in all of crypto is probably XRP. If they were not, banks would not be allowed to touch them at all.
