As more cryptocurrency projects move towards proof-of-stake (PoS) consensus models, there are important implications for user privacy and anonymous acquisition of coins.
- Staking Requirements: Staking requires already holding the native coins to earn staking rewards over time. This makes it harder for new users to bootstrap into PoS systems anonymously.
- Centralized Coin Distribution: Many PoS projects have VC involvement who were allocated a large chunk of the initial token supply. This increases centralization risks.
- KYC/AML Hurdles: Regulated exchanges require KYC/AML compliance, making it difficult to acquire coins anonymously through standard fiat on-ramps.
- P2P Limitations: Peer-to-peer options like LocalBitcoins/LocalMonero that used to exist could help some, but it appears that there may be un-official pressure to prevent these centralized, but P2P marketplaces, from existing. In the absence, it effectively blocks the on-ramp to crypto for a PoS coin/asset.
- PoW Privacy Coins: Privacy-focused cryptocurrencies like Monero are still primarily proof-of-work based currently. This to me says a lot, since it ensures it can always be secured though energy/effort and never need to risk exposing your identity to a counterpart to trade from fiat.
The ideals of permission-less, censorship-resistant money are challenged in a PoS paradigm if all avenues to acquire coins require linking to real-world identity one way or another.
Now to be clear, PoS has its place and can be useful for many blockchain use cases, but the factions that support demonizing or just making PoW illegal may be missing the bigger implications here.
I am asking for anyone's thoughts on this be it that I am right or wrong, but why, if so?
