Profitability Switching: PoST vs. PoW

It just occurred to me that there is a very big difference between PoST and PoW and I haven’t yet seen a discussion about it.

When mining PoW coins like ETH or BTC, you can switch between different algorithms/coins on the fly. You just shut down one miner and start up a different one. In fact, many miner management systems have automatic profit switching built in as a feature - it will continually look for the most profitable coin to mine and switch mining clients as appropriate based on your rules.

But we won’t be able to do this easily with PoST will we? Because of the large effort up front in plotting, it will be very difficult and time consuming to switch to a competing PoST coin that happens to be more profitable. This is a form of lock-in BUT greatly benefits the first PoST coin to market.

Is this a good thing for Chia or bad? Thoughts?

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I’m not sure I get the nuance, so allow me to challenge.

Chia claims to be Proof o SpaceTime.
This devolves on the one hand into a Proof of Stake in case of 0 netspace growth,
This devolves asymptotically into Proof of Work as netspace growth is very high
So we are somewhere inbetween {cue Twilight Zone theme :smiley:)

While the investment is as you say lopsided in theory {large one time plotting cost followed by a low upkeep cost), everyone that paid their dues in IT will know that upkeep isn’t so negligible at all. Keeping any system alive for many years is not trivial at all and requires many resources other than just keep the lights on.

Besides that we also have opportunity cost. As new opportunities arise, you are missing out on them by continuing to commit your resources to Chia.

Now fem a psychological perspective you are more right than from the technological point of view. People have an innate tendency towards loss aversion. Even if you would be convinced nixing plots and repurposing the drives would be a net benefit, giving u n perceived investment would push that decision far beyond the reasonable threshold.

Also, the ‘lottery’ of the pre-pool environment plays on the proven addictive attraction of the variable reward reinforcement scheme.(was launching without pool support a mistake? Or did he do it on purpose? (yes, I’m a sucker for movie quotes))

So, is the lockin real, or just a figment of your psychological makeup being gamed?


Agreed on all points but I think we are talking about different things.

For pure PoW coins right now, if you have a GPU mining rig, you can choose between ETH and lots of others. Your mining software can switch between coins every hour or even every minute if you like because PoW is just an executable running in memory, not dependent on any state data. This means that the mining difficulty of different coins constantly fluctuates, forming a market from which you can extract arbitrage. I don’t think this same market will exist with PoST coins like Chia, because switching between coins that rely on huge state data like these plot files will necessarily involve re-plotting. At first glance, this seems like a huge win for Chia because there is lock-in built in (farmers don’t want to move to competing coins without huge incentive) and there is less market fluctuation (farmers aren’t constantly switching around to the most profitable coins). But what are the downsides, except for other PoST coins? Does this inhibit competition? Do we care? :stuck_out_tongue_winking_eye:

Some more remarks:

  • Arbitrage is possible in PoW. It is the NetHash business model. However, it is hard to pull of from an individual mining PoV.
  • Is pool operation in itself a form of arbitrage in a PoST {and PoW) environment? Be it not between currencies.
  • While in theory {and in my beieve practice) PoW is far more switching friendly due to the absence of an extra asymmetry introduced by Farming vs Mining, there are still switching inhibitors (e.g. minimum withdrawal conditions from pools etc.), that admittedly are not unique to the model
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I suppose it would be smart to diversify your PoST farming in such a future, just like you might diversify your stock or crypto portfolio. Maybe devote a percentage of your storage to each serious PoST blockchain that comes along rather than constantly switching back and forth? I’ve been keeping my eye on Spacemesh as an up-and-coming example of a competing PoST blockchain. And of course it would probably be smart to set up a Storj node and even FileCoin (if you have the power for it). Those last two aren’t technically PoST but they do need lots of storage!

Think of it this way. You can still instantly switch your ‘plotting’ or whatever will be the name for it. It’s just you farming that will migrate over time. As the market moves, you point the needle in one direction or the other. If there’s pools on either side, it is not that different from switching to a different PoW coin.

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Ah, that’s a good way to think of it. It does assume continual plotting which assumes continuous storage growth though. I’m thinking more of the small to medium home farmer that probably has a set amount of extra space and doesn’t continuously add to it. The same home farmer might have an 8 GPU PoW rig that can constantly switch to the most profitable coin without any further investment. In your example, we assume that the home farmer would constantly add new storage and fill that new storage based on the currently profitable coin. But in my example, the home farmer is stuck with the same amount of extra storage and doesn’t necessarily want to keep adding more - they want to make the most of what they already have. In this case, PoST is at a disadvantage (from the miner/farmer point of view) to PoW.

Actually, the more I think about it, the less concerned I am. You are right in that plotting can be instantly switched, so over time there will be intelligent farming management software built to manage multiple PoST farming just like there is today with PoW. Let’s say there are 3 main PoST coins - your smart farming manager could fill your space with 33% of each one. As the market fluctuates, it could delete and replot a few here and there to keep your portfolio balanced and profitable according to the market. It wouldn’t be as fast as instant profit switching in the PoW world, but it would still work on a slower timescale (or as fast as your plotters can keep everything balanced).

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Not really. You just in time delete a plot to make room for the new one. No net growth of storage is necessary.

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Yes I just realized that sorry - see above! :slight_smile:

I think it’s good for Chia or, more generally, PoST if you ignore the monetary side of things and only consider the technology.

I think identity and reputation are two markets that are in need of disruption and PoST is a possible system that could provide better anti-bot, bad actor detection than anything we currently have.

I wrote a longer thread here.

PoST using idle capacity favors the proverbial “little guy” if the incremental cost of proving idle capacity is near $0. It creates a unique scenario where small participants have an economic advantage over large participants because small participants are using capacity that’s normally wasted, so their incremental cost is $0. Running at scale requires buying dedicated resources and there’s a real cost involved with that (as many Chia farming hopefuls have learned).

So, IMO, not being able to easily switch between blockchains could be a valuable feature.

In terms of only XCH value, if the price of Chia shoots to the moon, there won’t be 100 million flavor of the month miners jumping on board at the drop of a hat. The price of XCH would need to be astronomical (IMO) to justify it and the netspace would grow so fast at that point that it would create a disincentive in terms of hopping on the bandwagon. It’s the same thing we’re seeing now, but on a larger scale.

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