This thread reveals the gist of the problem with relying exclusively on PoW.
The problem is that Proof of Work consistently results in concentration of power around whomever can develop the best chip or whomever has the money to buy the best / most chips.
Governments (whether the United States, China, or their friends) and corporations (Apple, Nvidia, Intel, AMD, and their friends) will always have a strategic advantage which is insurmountable. They will always have the technological advantage (they will always be the most technologically sophisticated people at the table), and they'll also always have the most financial might. This is assuming they are fair players and not going to cheat.
Assuming they'll use any advantage to win, then you can see that Bitcoin in itself isn't free from political, state, or corporate influence. Bitcoin disperses the problem from being a centralized problem which governments and corporations can solve into being a decentralized problem with much greater complexity.
So a good strategy would be to decentralize as much as possible and increase complexity as much as possible for Eve (Byzantine adversary) and as expensive as possible for the computationally unbounded adversary.
It should be assumed in the design that perfection is not possible, and that if an adversary is big enough and determined enough that they can break it. Bitcoin can be broken but the ease of which it can be broken is what matters. If it's so hard to break that its not worth it then it is a deterrence against breaking it. If it were a World War scenario then for sure it would be broken by various militant forces who would compete for control of it but it will still be useful even if it were broken because none of them would admit if they could break it.
Proof of Stake makes it democratic and early adopters (not the government or companies) would end up owning the stake.
This is a very good point but Proof of Stake eventually shifts the point of failure onto whichever human beings hold the biggest stakes. For that reason I don't think pure Proof of Stake is good enough.
Assume we took the richest list of Protoshares and froze it in time as the Proof of Stake. It might not happen overnight but over time some of the people with high stakes will change their political views or become corrupted somehow and then with it would go everything beneath them.
Basically the concentration of power into too few people will result in the exact same outcome whether it's Proof of Work, Proof of Stake or the government of a traditional country. I don't have the solution to it but I know anonymity would be necessary, along with randomization so that power isn't predictably in the addresses of the richest list. If it is known where the power is and the protocol is not anonymous then the power will be corruptible, will shift, etc.
Flatten the power structure out as much as possible and if some people do rise in power let it be momentary and not permanent so that the system also attempts to be incorruptible from the bottom up. Anything top down is easily corrupted and that is why governments typically favor top down systems.
Any system will have some weakness. The advantage of POS is that the people with the greatest power to topple the system are usually the people with the most to loose. This will definitely keep out individuals and small groups that want to destroy the system, and the government probably won't bother to mess with it unless they can link it to drugs or tax evasion. So, can we just all form a social contract and all agree not to use any DACshares to purchase drugs or avoid paying taxes?
Did you ever see the movie the Matrix when the agents would literally corrupt whomever they had to in order to stop Neo? They would infiltrate and possess the body of anyone closest to Neo.
You're correct that with Proof of Stake the people who seem like they have the most to lose would have an incentive to protect their investment. Here are some ways it could go wrong.
1. The people with the highest stakes might be rich already and not really have the most to lose.
2. The people with the highest stakes might have the most to lose while they are still poor and now that they are millionaires or billionaires they are ready to cash out so rich that their lifestyle has changed. They no longer have anything to lose.
3. The people who are idealists who truly believe in the concept ideologically have the most to lose, but they might not have the highest stakes and might not end up with any power.
There are some ways around this. Early adopters in something like Protoshares probably are idealists because at this time most people don't have a clue what Protoshares are and why it is so important. The people who donated to reserve a name not only believe in the concept but wanted to be part of the genesis block for Keyhotee. So you do have at least some people who probably truly believe in it.
But those people might not be the people who have a lot of Protoshares. So Proof of Stake does have plenty of weaknesses too which become apparent down the road should people with very high stakes become very rich and cash some of their stake out in order to reduce their risks. The other reason is some of these people will not be anonymous and may even become celebrities and they'll be potentially corrupted because of fame.
I don't have a solution but Proof of Stake in my opinion has the same problem that oligarchy has. The same problem we'd have if we let hollywood celebrities have permanent voting power for the USA. We need a way to have social mobility so that if the people at the current top become corrupt a new group of people can take their place easily and instantly. Proof of Stake does not allow for people to easily take their place while an anonymous jury type system or even voting in a more flat manner would allow every Keyhotee name to be equal.
So how about you choose randomly from the Keyhotee names registered into the genesis block? Random jury pools can form to allow them to anonymously vote to select certain things or to balance off the Proof of Stake. Let them decide how much a vote is worth, or act in a way which can adjust the voting scheme if Proof of Stake ever fails or becomes corrupt. Since these names are associated with the project forever and they paid money on faith alone it might be a good group to choose from.