makeasnek on Nostr: This is a well thought out post. A few things: - While most PoS currencies have an ...

This is a well thought out post.

A few things:

- While most PoS currencies have an inflationary supply, I don't believe, and I could be wrong here, that they are /required to/ have one. There's no reason your reward for staking can't just be tx fees. Proof-of-stake is just a system for assigning who has the authority to make the next block. Instead of using hashpower, they use proof of ownership of a randomly (but predictably) selected set of coins.
- You are assuming that mining has to be profitable to work. I'm not sure that's a safe assumption. I think that most miners are not making much money, or at least, aren't able to make money unless they are "speculatively mining" ie mining at break-even or loss and then saving some BTC to sell at an expected higher price. Which, to be fair, for a deflationary currency is not an unviable strategy. This is because of the way Bitcoin's difficulty function works. If mining is profitable, people flock to mining, which increases competition, which makes mining less profitable. When mining is unprofitable enough, people turn off their rigs and do something else instead. Until enough do that for mining to become "profitable" again. This means that /on average/ mining is at a breakeven point for your average miner. The network will buy hashpower at the cheapest price it can. And when you consider that miners are often deriving secondary benefits from mining (such as waste heat) or treating it as an energy storage solution, that cheapest price may be well below what the formula of BTC reward - cost to mine would give you.
- Large power competition is also worth considering. Large powers have some incentive to have some "stake" in or "control" of the global currency network. If BTC is the dominant global currency and China ends up with all the hashpower, that is a problem for the US. Big powers regularly throw billions of dollars into holes in order to maintain their competitive edge and make sure things like global trade routes/rules tilt in their favor. The space race or the race to make the most undersea cables is another example. Mining is going to become one of those areas of great power competition. If the US wants to continue to be able to, for example, issue sanctions against its enemies, in a Bitcoin standard world, that means they need to control significant hashpower. While they will never be able to fully /censor/ transactions without 51% of hashpower, they can /delay/ them. Likewise, if you want your economy to be efficient and competitive, you want to be able to guarantee that your transactions make it onto the chain. If your country has delayed transactions, that will have a real economic impact. So Bitcoin may very well be the next frontier of great power competition. Great powers don't care about profitability since that's not the goal of their mining.