Hi all, I've got a few questions that I'm hoping to find answers for:
From my understanding of the scalability problem:
as a blockchain scales, the number of transactions per second a node needs to process increases which translates into increasing costs of running a node. Higher and higher costs lead to less and less participants who can afford to run a node, incentivizing them to pool together, raising the risk of centralization to unacceptable levels.
The understood way to avoid this is to:
Keep the costs of running a node trivially small compared to a participant’s profit/income
What I don't understand is:
Is sharding just a temporary solution? Splitting a blockchain into multiple smaller blockchains, thereby reducing the costs of running a node, will only be a temporary solution as shards will inevitable scale...?
How does the shift to PoS help at all? The real world already shows us that when people can compound their wealth without risk (e.g. land ownership), the rich gets richer, poor gets poorer, and it tends to a pareto distribution (i.e. centralization)??
PoS + DeFi has been highlighted by researchers to create a chaotic feedback loop which makes the decentralization/security model very unclear... based on profit maximization, whether the rational participant stakes his coins, or loans it out via some DeFi app is purely dependent on price. This means that the amount of staked coins can fluctuate.. leading to high risk of centralization. This does not happen with PoW because it is decoupled from the price
Is PoS not very suspectible to state actors covertly taking over? It seems to me that governments like the US will not conceed the domainance of the USD that lightly..
Why are we witnessing a wide-spread abandoning PoW? It seems to me that PoW is by far the best for decentralization?? You need to actually risk your investment (mining costs) in order to stand a chance of gaining rewards...