Democracies are complicated to implement, the nuances are plenty. And through their analysis and criticism, we have the chance to improve on them. To design processes that better guarantee their purity and withstand corruption.
Proof-of-Stake systems behave in a very similar way. Voting, or the degree of influence, is based on ownership of stake instead of citizenship, but otherwise, the process is prone to similar nuances and must be designed to withstand manipulation. We must also continuously criticize PoS implementations so we have the chance to improve them.
And surely — there is plenty of criticism of PoS in the crypto world. The spectrum ranges from belief that the problems of PoS are solvable, debating the pros and cons of various implementations, to outright skepticism whether PoS can work at all.
Take for example the views of Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, from the recent Deconomy: “How about EOS? As has been debated endlessly, a platform controlled by 21 crypto bros is just not all that decentralized. They can collude and censor if they wish. Governments and other well resourced actor can bribe them or force them to act against their will and against the well being and the security of the people using the platform”.
Let’s try to analyze Lubin’s argument why EOS, the dominant PoS implementation to date, is flawed. The 21 elected nodes of EOS “can collude and censor if they wish.” But what would happen if these nodes indeed collude against the interests of the entire network? If the effects aren’t minor, like a decline in token price, stakeholders will spring to action and just replace the colluding nodes. Elections on EOS rely on stake of the entirety of the network, and the majority of stake is assumed to be honest. So where’s the risk?
The risk is only if the colluding nodes could prevent their own replacement. The core of the matter, in my opinion, is that they are the ones running the elections. They are the ones counting the votes.
This isn’t all that different from Cersei counting the Westeros votes by herself.
The majority of PoS implementations are closed systems. The voting process is part of the protocol and the protocol is executed by nodes running the network, that are chosen according to the protocol. There is an essence of circular trust here.