Staking Is The New Mining - And Why It's All About Trust, At The End Of The Day

in LeoFinance3 years ago

I'm not going to sugarcoat it for you, so here we go: money is tokenized trust. That's all there is to it, really.

Money is not a piece of paper issued by a government, it's not a kilogram of a yellow metal, it's not even a cryptographic signature recorded in a digital peer to peer ledger. Money is none of that, although we use all of these representations of it in our daily activities.

Money is a function of trust, distributed over a population of actors, in a time-space bound context. Ok, I may have jumped a little with that definition, and probably said more than I had to, so I'll stop here (and I may come back in a future article to detail all this).

So, back to the title: staking is the new mining.

I am fortunate enough to remember a time when I was able to mine Bitcoin on my laptop. Didn't mine a lot, because, at that time, it didn't seem very attractive. The majority of trust was deposited in other venues. I was generating more value by coding for various clients, or, don't laugh, even by teaching tango (yeah, I ran, for a short period of time, a small tango school). But I do remember how was to mine coins on my laptop.

Then ASICS came, a piece of hardware that was better at mining than the software. Then mining farms appeared, most of them in China, or in Northern countries where electricity was cheap. Then mining farms colluded in big mining syndicates and, in just a few years, we reached a tipping point.

That tipping point represents the end of a trust trend. Generating tokens via solving useless mathematical problems suddenly doesn't seem so viable anymore. Why? Because we already have a lot of those tokens floating around. There are literally thousands of them, in hundreds of different peer to peer ledgers (or blockchains, if you want to call them like that). So we have a better place to place our trust now: the tokens themselves. We have poured enough of it so we all agree that vouching with them is relevant.

Minting tokens via proof of work is becoming limited. It may continue to function for a while, but it will be more and more marginal. Its place is slowly, but firmly, taken by a much more subtle process: staking.

Simply put, staking means I'm blocking the value that I already minted, and with that I'm signaling support for a certain process. I'm literally vouching with my wallet. The more I put into, the more rewards should I receive. Just like, with the mining, the more computing power I was deploying, the bigger the chances to discover a block.

But make no mistake, what I'm really vouching with, is my tokenized trust.


There is an ongoing funding proposal for two of my Hive-related projects, which will allow me to support some of the costs involved. If you want to support this proposal, all you have to do is to vote it using any of the two links below:

Sign this proposal with Hivesigner
Peakd: https://peakd.com/me/proposals/92

Already supported by: @toofasteddie, @amico, @bluerobo, @chrisaiki, @erikah, @ervin-lemark, @ew-and-patterns, @guruvaj, @mytechtrail, @pharesim, @ryivhnn, @sacrosanct, @captainklaus, @santigs, @inertia, @bro.poker, @distantsignal, @doze, @gadrian-sp, @shmoogleosukami, @valued-customer, @condeas, @justinashby, @likwid, @bucipuci


I'm a geek, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Hive you may stay updated by following me @dragosroua.


Dragos Roua


Wanna know when you're getting paid?

I know the feeling. That's why I created hive.supply, an easy to use and accurate tool for calculating your HIVE rewards

It's free to use, but if you think this is a useful addition, I'd appreciate your witness vote.

Thank you!

Posted Using LeoFinance Beta

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I was only thinking about you the other day and wondered if you were still around. Good to see a post from you. Hope you and your wife are both happy and well. 😍

Posted Using LeoFinance Beta

Yeah, all good here, hope everything is ok with you and yours as well :)

Posted Using LeoFinance Beta

Nice to see you posting again! Have a !BEER for that!

Simply put, staking means I'm blocking the value that I already minted, and with that I'm signaling support for a certain process. I'm literally vouching with my wallet. The more I put into, the more rewards should I receive. Just like, with the mining, the more computing power I was deploying, the bigger the chances to discover a block.

That is true, the more people start to stake, the more valuable it get's by this as it is measured in peoples trust.

Posted Using LeoFinance Beta

You know, I've never actually thought about money like that before o_O Interesting way to put it and I'm probably going to be backburning it for at least the rest of the day now XD

As Andreas once said: Bitcoin should better, has been named - TRUSTNET

Posted Using LeoFinance Beta

It's all about trust and belief :)

O, in other words, a trustless mechanism is full of trust.

Have a great weekend.


Hey @dragosroua, here is a little bit of BEER from @alexvan for you. Enjoy it!

Learn how to earn FREE BEER each day by staking your BEER.