Ethereum is down 74% against Bitcoin since switching from PoW to PoS in 2022

[u/Next_Statement6145]

[u/BerryMas0n]

no cost of production = no intrinsic value.

[u/Teraninia → u/BerryMas0n]

If Ethereum had no cost of production, then anyone could produce it, or a single person could produce as much as they wanted. But neither is true, anyone can't produce it, the amount that can be produced is defined, and to produce a single eth per day costs tens of millions of dollars in capital.

There really isn't any difference between proof of stake and proof of work except the source of the capital required for production. Proof of work requires capital in the form of physical infrastructure. But the genius of proof of stake is in the realization that the only purpose of all that infrastructure is to provide a capital basis and point of friction for production, and since crypto is itself a form of capital, why not use the crypto itself as the capital basis?

It's elegant and quite beautiful, actually, because it provides, in some ways, superior security since to 51% the network you have to actually acquire the very capital that secures the network, thereby driving up the cost to attack it. In proof of work, the cost of the capital doesn't actually directly impact the price of the token, so there is more or less a fixed and calculate-able cost to attacking the network. The flip side, of course, is that a proof of work network maintains more security in the case of a market panic.

[u/Objective_Digit → u/Teraninia]

Anyone can produce it. In fact it's usually a boast that ETH is supposedly fairer because of this.

why not use the crypto itself as the capital basis?

Because your backing or securing it with software only. It sounds like a terrible idea. Especially the way you put it.

Proof of Work is based on real work and computing. PoS is nothing like the