1.5 Inherent Limitations of Traditional Consensus Mechanisms

The security foundation of existing blockchain networks is not limited to complex cryptographic algorithms. It fundamentally relies on a core assumption about participant behavior: that the majority of nodes will remain honest. Honest nodes refer to computers running client software strictly according to the network's predefined consensus rules; their behavior ensures overall network consistency and predictability. Conversely, "attackers" and their controlled nodes refer to individuals or entities intending to subvert the network rules. To achieve their goals, attackers modify the rules in their local software copy, attempting to compromise the network's integrity. Thus, although cryptography and incentive mechanisms increase the difficulty and cost of attacks, the security of networks like Bitcoin ultimately rests on the societal expectation that "the majority of nodes will act honestly." However, to maintain this state, the network must continuously consume vast amounts of computing hardware and electricity, constantly increasing its resource investment to raise the capital expenditure used for system security. This leads to a fundamental inefficiency: precious resources are not used for executing productive tasks, creating direct value (e.g., in the Bitcoin network, theoretically 0% of block rewards are directed to participants performing productive tasks, as all rewards are consumed on verifying essentially non-productive hash computations). Instead, they are used to maintain a computing power "arms race," making security dependent on ever-increasing energy and hardware consumption with diminishing marginal returns. In essence, the fundamental goal the Proof of Work mechanism attempts to achieve is to ensure the honest majority possesses greater voting power (in the form of computing power) in deciding which chain is the "correct" one.

The Proof of Stake (PoS) mechanism has been explored by the blockchain community as a primary alternative to Proof of Work, mainly motivated by the desire to reduce computational costs and mitigate the massive environmental impact associated with PoW. In PoS systems, participants lock (stake) a certain amount of the native cryptocurrency into a specific contract, with voting rights and validation responsibilities typically proportional to the staked amount.

While PoS aims to maintain network security with lower energy consumption, it introduces significant costs related to capital lockup (opportunity cost). In typical PoS systems, economic incentives primarily flow to those who own and are willing to lock up substantial capital, rather than to those who actually contribute computing power to execute useful network tasks. This may lead to network operating costs remaining high and incentive direction potentially deviating from actual value creation. A thought experiment: If Ethereum had been a pure PoS network from the beginning, the vast majority of its over $300 billion market capitalization might have been paid out as capital subsidies, rather than being used to subsidize global hardware and computing infrastructure. This massive capital could have been used to subsidize the construction of substantial practical computing infrastructure, potentially significantly accelerating the development of computationally intensive fields like AI.