If used as advertised, with anyone selecting their own validator list, it fails to reach consensus under non-pathological cases. It basically only works if you have a common list of validators that everyone uses[1], as has been recently demonstrated on Stellar[2] (a fork of Ripple). That would mean there'd be a handful of known servers around the world which together control the ledger. That may be useful in some contexts, but it is absolutely not a comparable solution to bitcoin.
[1] https://forum.ripple.com/viewtopic.php?f=2&t=7801&sid=b12325e49ace885697ed5448201824f1
[2] https://www.stellar.org/blog/safety\_liveness\_and\_fault\_tolerance\_consensus\_choice/
Thanks for the info, two more questions:
Vitalik says cryptocurrency developers should "reach out to LessWrong more", in order to not be ignorant of advanced computer science and game theory topics.
https://blog.ethereum.org/2014/12/31/silos/
I think Vitalik raises several major important points, namely:
* Bitcoin's $600 million wasted on electricity yearly in order to secure the network is a huge problem. Various Proof of Stake algorithms are attempting to improve upon this. The ideal solution would be one which combines the low cost of the Proof of Stake algorithm, with the high security or Proof of Work. I not enough of an expert to be able to say which solution is best, but both the Ripple consensus algorithm and the Bitshares Delegated Proof of State algorithm look promising. I am interested to see what algorithm Vitalik will choose for Ethereum.
* ASIC miners are a problem due to the resulting centralization. They have also lead to increased centralization in Bitcoin, as the network is now increasingly controlled by a few large mining pools.
* Blockchain technologies have a great potential to change the world, and solve governmental and organizational problems that society is facing. Beyond simply revolutionizing money, blockchain technologies could also be used in the future to support prediction markets, voting/consensus building, exchanges, etc.