I was on the Monero subreddit, which is Proof of Work of course, and after asking about some of their concerns with POS, ArticMine, one of the members of Monero's core team said this:
Proof of stake does not work with derivatives, lending, banking etc unless those who stake borrowed coins are strictly regulated by the state.
Proof of stake is ultimately based upon the premise that the stake will be voted in the best interest of the network because the person who controls the staked coins is long the asset. The fundamental problem here is that the network has no way of knowing if there is a much larger short position than the staked coins. In such a scenario the stake under the control of a net short could be voted to harm the network in order to favor the short. Derivatives and borrowed coins turn proof of stake on its head.
What are your thoughts on this criticism of Proof of Stake?
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