Sorry my ignorance regarding NXT, but someone could just start as many nodes as he wants and have majority of them?
Yes.
Nxt also has the notion of "hallmarking" a node, which means it is associated with an account and therefore a stake. Other nodes tend to trust hallmarked nodes more.
I would still rather have big centralized pools than someone having the power to control the network without owning any hashing power or even 51% of the coins (even if he had them at one point, he can sell them off and then attack the network - attacking it at no cost).
How does your PoS deal with that, fork it to an earlier stage? haha
Nxt deals with it by not allowing block-chain re-organisations past 720 blocks. That means the attacker has a narrow window for making the attack. That is in addition to the usual difficulty of acquiring a large enough stake to make the attack feasible. For comparison, in a PoW currency it would go:
- Buy hashpower.
- Attack PoW.
- Sell hashpower.
for a near-zero cost attack. In Nxt it would go:
- Buy stake.
- Wait 1440 blocks so that stake can forge.
- Sell stake.
- Attack PoS (within 720 blocks).
In both cases, the hard part is step 1. The difference in the ordering of last two steps is just a few hours. The PoW attacker has the advantage that they can sell off their hashpower at a gradual pace, without crashing the market. With Nxt, they'd have to carry out their attack within 12 hours of selling, so they'd have to sell quickly. Basically, buying 51% of Nxt is going to cost a fortune, and dumping 51% of Nxt would itself crash the price never mind the attack; and the attacker would lose a lot of money from the price crashing before they could sell their entire stake. So the notion that this attack has no cost is ludicrous.
