Why I’m so “against” Ethereum(threadreaderapp.com)
threadreaderapp.com
Why I’m so “against” Ethereum
https://threadreaderapp.com/thread/1078682801954799617.html
253 comments
I find it extremely disturbing that cryptocurrency discussions sound so much like political debate
More like religious debates honestly: “the cryptocurrency I ‘invest’* in is the one true future and all the others are shitcoin scams” — like calm down, IMO they’re all scams ;)
* It's not an investment as it does not convey ownership interest.
* It's not an investment as it does not convey ownership interest.
There's a reply to each of the 50 tweets by Vitalik Buterin on Reddit here https://www.reddit.com/r/ethereum/comments/aac4hr/tuurs_crit...
By the way, not much mentioned in the discussion but I'm for Ethereum and kind of anti Bitcoin because of the awful environmental impact of proof or work which the Ethereum folk are at least trying to find a solution to.
By the way, not much mentioned in the discussion but I'm for Ethereum and kind of anti Bitcoin because of the awful environmental impact of proof or work which the Ethereum folk are at least trying to find a solution to.
> awful environmental impact of proof or work
compared to what? you can't have free cheese and environmental (and social) impact of existing fiat systems is far worse.
> Ethereum folk are at least trying to find a solution to
PoS was known long before PoW. PoS is not and cannot be a solution because it doesn't provide objective measure by which competing chains can be compared. only trust in third parties that can be hacked, coerced, etc. oh and ofc "the rich get richer" - so much for fixing awful impact from fiat systems.
compared to what? you can't have free cheese and environmental (and social) impact of existing fiat systems is far worse.
> Ethereum folk are at least trying to find a solution to
PoS was known long before PoW. PoS is not and cannot be a solution because it doesn't provide objective measure by which competing chains can be compared. only trust in third parties that can be hacked, coerced, etc. oh and ofc "the rich get richer" - so much for fixing awful impact from fiat systems.
There are other projects like Komodoplatform that are make big strides in block chain tech.
TL;DR: A long, insightful, and at least partially correct critique of the "state" of Ethereum as of today.
My humble 0.02 is that what's current is immature and unstable, but there's a decent chance that Ethereum, or Bitcoin, or both, will at some point in the future provide some interesting technical solutions/services.
The fact that Ethereum is not there yet is not a good enough argument for me.
My humble 0.02 is that what's current is immature and unstable, but there's a decent chance that Ethereum, or Bitcoin, or both, will at some point in the future provide some interesting technical solutions/services.
The fact that Ethereum is not there yet is not a good enough argument for me.
I agree. Your position is reasonable and cautiously stated. Unfortunately the crypto hate here on HN is real and pretty disappointing really.
Crypto Currencies are an emerging technology that have value far beyond currencies. IPFS for example, d.tube etc.
Crypto Currencies are an emerging technology that have value far beyond currencies. IPFS for example, d.tube etc.
The crypto hate comes from a combination of fatigue and a reaction to the incredible number of total scams in the crypto ecosystem.
Exactly I would have absolutely no problem with them if these things were obscure little open source projects like most tech experiments are. When I first read the Bitcoin paper I was skeptical but interested to see where they'd take it.
My problem is that these projects are simultaneously treated as humble little experiments and the perfect future of the global financial system, deserving of hundreds of millions of dollars of investment and endless public attention. If they would pick one or the other, I'd be fine with it. But I've dealt with years of a radical, quasi-mystical pro-crypto contingent who believe they deserve all of the upside with none of the accountability. I am 100% over it.
In short, the crypto hate is a reaction to the crypto hype. I have very little sympathy for people who profited from the hype, delivered approximately nothing of use to the rest of the world, and now have a sad that there are consequences.
My problem is that these projects are simultaneously treated as humble little experiments and the perfect future of the global financial system, deserving of hundreds of millions of dollars of investment and endless public attention. If they would pick one or the other, I'd be fine with it. But I've dealt with years of a radical, quasi-mystical pro-crypto contingent who believe they deserve all of the upside with none of the accountability. I am 100% over it.
In short, the crypto hate is a reaction to the crypto hype. I have very little sympathy for people who profited from the hype, delivered approximately nothing of use to the rest of the world, and now have a sad that there are consequences.
> In short, the crypto hate is a reaction to the crypto hype.
Actually, as someone who was very interested in Bitcoin in the early days of 2011-2012, I disagree. If anything, the hate on HN was even greater back then, way before Bitcoin became hyped. So many people were convinced it was a pyramid scheme. It was clear to anyone familiar with the Bitcoin community back then that there were a lot of highly technical, talented people, and very few scammers. But most of HN reflexively despised Bitcoin.
In fact, Bitcoin on HN is actually a lot less hated now, which tells me it has little to do with the hype, and that something else was going on.
Bear in mind that I disassociated myself from Bitcoin once the scammers, con-men, and get-rich-quick types infiltrated the community around 2013 and 2014. But even back in 2011, there was a very high number of HNers who seemed personally affronted by the very idea that money was a social agreement. They seemed to believe that money was some kind of official, government activity, end of story. And that anyone who believed otherwise was an evil heretic, to be ridiculed.
> I have very little sympathy for people who profited from the hype, delivered approximately nothing of use to the rest of the world, and now have a sad that there are consequences.
This I agree with 100%.
Actually, as someone who was very interested in Bitcoin in the early days of 2011-2012, I disagree. If anything, the hate on HN was even greater back then, way before Bitcoin became hyped. So many people were convinced it was a pyramid scheme. It was clear to anyone familiar with the Bitcoin community back then that there were a lot of highly technical, talented people, and very few scammers. But most of HN reflexively despised Bitcoin.
In fact, Bitcoin on HN is actually a lot less hated now, which tells me it has little to do with the hype, and that something else was going on.
Bear in mind that I disassociated myself from Bitcoin once the scammers, con-men, and get-rich-quick types infiltrated the community around 2013 and 2014. But even back in 2011, there was a very high number of HNers who seemed personally affronted by the very idea that money was a social agreement. They seemed to believe that money was some kind of official, government activity, end of story. And that anyone who believed otherwise was an evil heretic, to be ridiculed.
> I have very little sympathy for people who profited from the hype, delivered approximately nothing of use to the rest of the world, and now have a sad that there are consequences.
This I agree with 100%.
We may be talking about different hate. I think gnarbarian is talking about their current experience, and I'm certainly talking about my current feelings.
That said, the 2011-12 critique that Bitcoin was a pyramid scheme turned out to be approximately correct. Much like Herbalife, the actual product was never good for much, and its actual utility was basically irrelevant to its rise. And as with many pyramid schemes, a collapse came when the supply of new entrants became insufficient. There are differences, of course. Pyramid schemes have a central authority, while Bitcoin doesn't.
I definitely agree that this is a perennial HN problem, though: "And that anyone who believed otherwise was an evil heretic, to be ridiculed." The field necessarily attracts idealists; so much of making software is continuing to insist on an idea until the computer eventually agrees. But it's regrettably easy to go overboard.
That said, the 2011-12 critique that Bitcoin was a pyramid scheme turned out to be approximately correct. Much like Herbalife, the actual product was never good for much, and its actual utility was basically irrelevant to its rise. And as with many pyramid schemes, a collapse came when the supply of new entrants became insufficient. There are differences, of course. Pyramid schemes have a central authority, while Bitcoin doesn't.
I definitely agree that this is a perennial HN problem, though: "And that anyone who believed otherwise was an evil heretic, to be ridiculed." The field necessarily attracts idealists; so much of making software is continuing to insist on an idea until the computer eventually agrees. But it's regrettably easy to go overboard.
> But even back in 2011, there was a very high number of HNers who seemed personally affronted by the very idea that money was a social agreement. They seemed to believe that money was some kind of official, government activity, end of story. And that anyone who believed otherwise was an evil heretic, to be ridiculed.
This x10. If I were to anthropomorphise HN it would be a middle aged white collar worker, pretty smart, making fairly keen observations about the evolution of a company's product and social structure, but in the dark about executive-level play. Financially conservative, thinks of money as a necessary evil. Stashes money in the bank and is highly suspicious of financial risk.
To this character Bitcoin is a threat because it mixes that which they care strongly about (open source, distributed systems, impact) with that which they've largely ignored and of which they are suspicious (money).
Edit: grammar.
This x10. If I were to anthropomorphise HN it would be a middle aged white collar worker, pretty smart, making fairly keen observations about the evolution of a company's product and social structure, but in the dark about executive-level play. Financially conservative, thinks of money as a necessary evil. Stashes money in the bank and is highly suspicious of financial risk.
To this character Bitcoin is a threat because it mixes that which they care strongly about (open source, distributed systems, impact) with that which they've largely ignored and of which they are suspicious (money).
Edit: grammar.
Your anthropomorphized HN rings amusingly true and strikes me as a bit sad. I was here in the early days, and back then HN was full of people reading PG and planning their own startups. I was one of them, but (until recently) ended up settling in as a middle-aged white collar worker, with cash in the bank and self-congratulations for my focus on craft over money. I guess I'm not the only one.
I never found Bitcoin threatening though. When I finally read Satoshi's paper, it struck me as beautifully elegant, and a great experiment in practical economics.
I never found Bitcoin threatening though. When I finally read Satoshi's paper, it struck me as beautifully elegant, and a great experiment in practical economics.
I smiled at your characterization. Although, more realistically, our archetype has done modestly well by working for the man, and has 100k-low millions in index funds and company stock, and some comfort with +/- 30% swings y/y.
But let's also remember, that middle-aged character has seen the hype cycles many times before in previous decades, and recognizes the scam. The sky-high and unstable valuations, the co-dependent press coverage, the hand-waving distraction from the absence of realistic uses, the flurry of me-too startups, the enthusiasm of lay investors.
Hype usually indicates pure bullshit, but sometimes something useful emerges out of it. Most often the original projects are decimated.
But let's also remember, that middle-aged character has seen the hype cycles many times before in previous decades, and recognizes the scam. The sky-high and unstable valuations, the co-dependent press coverage, the hand-waving distraction from the absence of realistic uses, the flurry of me-too startups, the enthusiasm of lay investors.
Hype usually indicates pure bullshit, but sometimes something useful emerges out of it. Most often the original projects are decimated.
That's true, but someone less conservative would see the cycle and want to throw in on the next iteration. The HNer sees the iterations go by and mostly calls BS, but then profits tangentially by getting high salary jobs fueled by the cycle. I would also say the HNer has a bit of a doomsday/apocalyptic tendency, entertaining the idea that the next bust is "the end." E.g., crypto is dead.
Even in purely technical discussions people providing information get downvoted.
HN is a crypto “safe space”. Just don’t talk about it here.
HN is a crypto “safe space”. Just don’t talk about it here.
This kind of comment sounds more and more like ‘the year of Linux on the desktop’ as time goes by.
Other than making some people really rich, what problems would it solve that aren’t better solved by existing solutions which don’t burn energy to create secure entropy?
Remittances without high fees.
I think as entropy becomes very inefficient to produce (difficulty multipliers increasing on crypto as the network expands...) it will become more clear that the expensive part about sending money internationally is trusting all parties involved.
You pay VISA/MASTERCARD a 3% fee because you trust them to protect your account in the case of fraud. Moneygram takes 2% of all transcations over $900 because you trust them to move money from your account to the recipients account without losing it.
Even in computer security, you have to put your trust in something. Somebody picked cryptography and high numbers of CPU cycles.
Anyway, you asked what problems crypto could solve, and I guess my answer is, maybe it will cost less to send money around the world. As it turns out, there's not necessarily a way to make it free.
I think as entropy becomes very inefficient to produce (difficulty multipliers increasing on crypto as the network expands...) it will become more clear that the expensive part about sending money internationally is trusting all parties involved.
You pay VISA/MASTERCARD a 3% fee because you trust them to protect your account in the case of fraud. Moneygram takes 2% of all transcations over $900 because you trust them to move money from your account to the recipients account without losing it.
Even in computer security, you have to put your trust in something. Somebody picked cryptography and high numbers of CPU cycles.
Anyway, you asked what problems crypto could solve, and I guess my answer is, maybe it will cost less to send money around the world. As it turns out, there's not necessarily a way to make it free.
I don’t pay a fee on my credit cards, the merchant does, and in case of fraud I can issue a chargeback to boot. As long as I pay my balance each month, my credit card is free, plus generating rewards. That’s almost the opposite of cryptocurrency, where far from being able to tackle fraud, it makes theft or loss nearly impossible to remediate. A credit card is also one of the easiest things to use, and all of the hard work on security is undertaken by merchants and the credit card issuer.
> I don’t pay a fee on my credit cards, the merchant does
While that may be technically correct, it's ignorant of the fact that costs are always passed down the line in any economic relationship like you're describing.
That fraud protection costs the card issuers, which is the basis for that merchant fee, and the merchant passes the cost on in the form of higher prices. (Merchant accounts with higher fraud rates will pay higher fees!)
So from another perspective, you actually are paying the bill for those unknown percentage of frauds, which you wouldn't be as much on the hook for so directly if only everyone was responsible for their own individual security.
While that may be technically correct, it's ignorant of the fact that costs are always passed down the line in any economic relationship like you're describing.
That fraud protection costs the card issuers, which is the basis for that merchant fee, and the merchant passes the cost on in the form of higher prices. (Merchant accounts with higher fraud rates will pay higher fees!)
So from another perspective, you actually are paying the bill for those unknown percentage of frauds, which you wouldn't be as much on the hook for so directly if only everyone was responsible for their own individual security.
If the price of Good N is Value of N+x where x is a markup to cover the costs you’re talking about, that cost is passed on to people who pay with any means. If I buy a TV with cash, or credit card, it costs the same. Except of course that I can get cash back on my card, but not with cash (or bitcoin).
So, credit card or not, the cost is there, even if I pay with bitcoin or ether. Except of course for the benefits of the credit card.
So, credit card or not, the cost is there, even if I pay with bitcoin or ether. Except of course for the benefits of the credit card.
>" that cost is passed on to people who pay with any means. If I buy a TV with cash, or credit card, it costs the same."
If people start charging less when paid via methods that have less chargeback risk will you reassess?
If people start charging less when paid via methods that have less chargeback risk will you reassess?
As a matter of fact, this (merchants giving a discount for cash transactions) used to be illegal in Brazil. It recently became legal, but I haven't seen much evidence of changes.
Cash is also more easily counterfeited than card transactions. I'm not sure how the risk of a fraudulent transaction works out in the end.
It would have to be savings in excess of what I’d get through rewards or cash back, and I’d have to trust the, utmyes id reasses.
[deleted]
> If I buy a TV with cash, or credit card, it costs the same.
Only if the vendor of the TV is abiding by the rules of the credit card provider not to offer discounts for cash transactions.
In effect, the customers buying TV's with cash, paying the same, are paying a "credit card tax" to support the credit card users.
Also, they pay the same, but don't earn any of the incentivizing kickbacks (points, cash back, ...).
Only if the vendor of the TV is abiding by the rules of the credit card provider not to offer discounts for cash transactions.
In effect, the customers buying TV's with cash, paying the same, are paying a "credit card tax" to support the credit card users.
Also, they pay the same, but don't earn any of the incentivizing kickbacks (points, cash back, ...).
If the merchant pays something, you pay something. Where do you think the merchant gets the money from?
> I don’t pay a fee on my credit cards, the merchant does
You're transacting with the merchant, and a third-party, the credit card company, helps itself to a piece of the action.
Whether that is coming from you or the merchant is the wrong view.
The transaction between the two of you pays it.
You're transacting with the merchant, and a third-party, the credit card company, helps itself to a piece of the action.
Whether that is coming from you or the merchant is the wrong view.
The transaction between the two of you pays it.
[deleted]
The seller passes the savings onto you ;)
You kind of asked a loaded question, but to answer your question; whatever thing needs decentralization.
PoW will centralize towards cheap energy access. PoS will centralize to majority stake holders. I would bet that such energy access or stake follows a power law distribution. So long as that is true, neither system will ever provide decentralization.
Okay, but what happens to energy prices when enough miners flock to low-cost centers? Prices go up. In a long enough time horizon, opportunity to take advantage of energy prices basically gets competed away. I haven't read much on energy production, but as far as I know there are many places on the planet that cheaply produce renewable energy.
Energy production is heavily regulated and centralized to a few entities. Very much like financial institutions.
It's highly unlikely that the free market somehow sorts this out in the future, considering that it's the free market that gave rise to these power law distributions to begin with.
It's highly unlikely that the free market somehow sorts this out in the future, considering that it's the free market that gave rise to these power law distributions to begin with.
I get your point, but I'm not really sure what the purpose behind your argument is.
There will always be some limiting factor or theoretical vulnerability. If it's not ISPs/Internet infrastructure, then its the exchanges and fiat on ramps. But yet, its been pretty hard to kill illegal filesharing, VPNs, etc.
It's even harder to stop those things when the population doesn't believe in legislating against it, at least in a democracy.
There will always be some limiting factor or theoretical vulnerability. If it's not ISPs/Internet infrastructure, then its the exchanges and fiat on ramps. But yet, its been pretty hard to kill illegal filesharing, VPNs, etc.
It's even harder to stop those things when the population doesn't believe in legislating against it, at least in a democracy.
My point is that neither PoW nor PoS are decentralized. Which was in response to the original comment.
I’ll let other people prognosticate as to what, if anything, that means for their future.
I’ll let other people prognosticate as to what, if anything, that means for their future.
A simple one already deployed on Ethereum: online gambling, where you don't have to trust the casino to run fair games or hold your money.
As with most things, this can be sort of solved with heavy regulatory structures and enforcement, but I would argue that it's not better solved, especially once proof of stake eliminates the problem of burning energy.
As with most things, this can be sort of solved with heavy regulatory structures and enforcement, but I would argue that it's not better solved, especially once proof of stake eliminates the problem of burning energy.
seems that you like many people are very preoccupied that some people that took a huge risk got back a huge reward. This is totally irrelevant but keeps coming up in arguments stressed like in your sentence.
> "existing solutions which don’t burn energy"
Like what?
Like what?
Most computer programs don't rely on brute-forcing hashes to produce results.
Programs that don't require brute-force commonly use many times less energy than programs that do rely on brute force.
This extra cost is often seen as wasteful.
Programs that don't require brute-force commonly use many times less energy than programs that do rely on brute force.
This extra cost is often seen as wasteful.
>"Programs that don't require brute-force commonly use many times less energy than programs that do rely on brute force."
Can you give an example of a program that gives similar results?
Can you give an example of a program that gives similar results?
Do you think these questions are clever? How about YOU give an example for a crypto use case that can't be achieved with traditional methods?
A digital, decentralized currency. If you want to solve the double-spend problem, you need some kind of economically incentivized block inclusion lottery.
It is a currency that acts like gold over the internet, ie no chargebacks and (is expected to) appreciate over time as more dollars/etc are created.
DNS
He’s criticizing Eth for being a “ science experiment”? The entire crypto ecosystem is just an experiment, including bitcoin. It’s all immature and unstable.
I've always tried to tell people that ask me about crypto currencies that not only do they not have any intrinsic value, but the only positive value that they have is entropy. I explained it like this over Christmas dinner, lets say I wanted to start a new commodity, for arguments sake lets say that this new commodity is based on matches. Matches have a value, you light them and they produce a certain amount of energy. You can use them to light candles, clean out that odor from the previous occupant of the toilet, you could even combine a match with a small sterling engine to create motive power. But my commodity isn't the matches, its the energy used as the match is burnt. In my novelty commodity I only trade in matches that have been used, its proof that the match performed work in that it burned a fractional number of BTUs. This proves that the matches are sound. Furthermore, I, as a processor of used match commodities, can charge a nominal transaction fee when people trade spent matches on my Matchchain(TM) platform. Also, while this is a commodity I will call it a currency regardless of the fact that it has no debt instruments, lacks liquidity and is completely unregulated and prone to theft. Would you care to invest?
Now replace spent matches with spent compute.
Now replace spent matches with spent compute.
Nothing in the _world_ has intrinsic value. Obviously, this an opinion, but I do believe it has strong epistemological backing. An easy overview of the opinion by wired: https://www.wired.com/story/bitcoin-has-no-intrinsic-value-n..., a 1970s era discussion by a historian economist: https://fee.org/articles/the-fallacy-of-intrinsic-value/, and a deep dive the theory itself: https://mises.org/library/introduction-value-theory
Now i'm not expecting nor wanting to get into a debate about the theory of value. I do not expect to be able to win, nor do I want to, but I do hope some doubt is cast into the proposition:
> Matches have a value, you light them and they produce a certain amount of energy
Matches have a _utility_, not necessarily a value. Additionally, compute is _also_ just "burning resources", only its electricity instead of potassium chlorate. Arguably a more fungible form.
> regardless of the fact that it has no debt instruments, lacks liquidity and is completely unregulated and prone to theft.
Only one of the four accusations stands up to any critical thought - which is that it is "completely unregulated". If that is the core of your argument against distributed, trustless currency, then that argument applies equally to all pre Federal Reserve transactions the world over, and I'm not sure what the implied problem is.
The best quote from the first and most approachable of the links above:
> All new mediums of exchange spawn skepticism, and should. For much of the 19th century, paper money was held in ill repute because it seemed so ephemeral and detached from value that could be easily recognized: land, gold, size of armies.
Now i'm not expecting nor wanting to get into a debate about the theory of value. I do not expect to be able to win, nor do I want to, but I do hope some doubt is cast into the proposition:
> Matches have a value, you light them and they produce a certain amount of energy
Matches have a _utility_, not necessarily a value. Additionally, compute is _also_ just "burning resources", only its electricity instead of potassium chlorate. Arguably a more fungible form.
> regardless of the fact that it has no debt instruments, lacks liquidity and is completely unregulated and prone to theft.
Only one of the four accusations stands up to any critical thought - which is that it is "completely unregulated". If that is the core of your argument against distributed, trustless currency, then that argument applies equally to all pre Federal Reserve transactions the world over, and I'm not sure what the implied problem is.
The best quote from the first and most approachable of the links above:
> All new mediums of exchange spawn skepticism, and should. For much of the 19th century, paper money was held in ill repute because it seemed so ephemeral and detached from value that could be easily recognized: land, gold, size of armies.
Labor is the principal value of a currency. I'm guessing you are a libertarian. Maybe you should learn about how commerce, financial instruments, and debt work before saying money has no intrinsic value. Otherwise, if money has no intrinsic value then why work for it? Maybe we should go be communists. As Labor is the principal value of currency, so is debt the obligations of its members. When you get a loan you are not just getting money for interest over time, a group of loans can be packaged into bonds and the bonds can be sold by the lender as a lien against the debt. You get money, the bank gets interest and the bond holders get a percentage. Tell me, where can I get a loan for bitcoin from a FDIC lender? Someone I know who will be honest and not Gox me. Is spent compute the same as labor? Can a thing that computes a thing that stores a thing that hashes a thing that shows that a transaction for a thing happens have a value greater than the things I do for my career? Because to me blockchain is a waste of energy and Energy used for Compute, aka Entropy, has no value.
You are speaking as if your philosophical viewpoints are settled facts. Your opinions on the nature of money are not facts and cannot be proven. We can propose theories about why something has value, such as a currency, but ultimately it comes down to philosophy when you are trying to understand why dollars / gold / bitcoin is worth something.
At the end of the day, something has value because two people agree it does. One painting is worth $100million and another $100 because two people agree that’s what it’s worth. Why two people agree something has value is the matter of endless debate. But I assure everyone reading that the commenter I am responding to is not certain to the answer, and actually no one really knows. This is philosophy, we can all have opinions.
At the end of the day, something has value because two people agree it does. One painting is worth $100million and another $100 because two people agree that’s what it’s worth. Why two people agree something has value is the matter of endless debate. But I assure everyone reading that the commenter I am responding to is not certain to the answer, and actually no one really knows. This is philosophy, we can all have opinions.
I support you point in general, but I am curious, that you say "painting is worth X because two people agree". What if they disagree? I'd be interested to read some thoughts on that. Even better - proper theories.
I think it goes even further than what the previous comment said. The value of the painting is different for everyone and even for the same person it will change in different circumstances (value of a cup of water at home or in the desert).
When a transaction happens the two people very probably don't agree on the value. Rather, the seller values the painting at "less or equal" of the strike price and the buyer values it at "equal or more". The transaction happens if those two regions overlap somewhat.
When a transaction happens the two people very probably don't agree on the value. Rather, the seller values the painting at "less or equal" of the strike price and the buyer values it at "equal or more". The transaction happens if those two regions overlap somewhat.
stillbourne(1)
From your perspective you can compare crypto to gold as a store of value. If you hold a bar of gold in your safe, does it have any "intrinsic value?" Similarly to Bitcoin, gold is expensive to mine.
But moving on, Bitcoin is not just a store of value. It's electronically transmittable without middle men. You can think of it as gold you can teleport across the globe. Lots of people would find this to be "intrinsic value."
But moving on, Bitcoin is not just a store of value. It's electronically transmittable without middle men. You can think of it as gold you can teleport across the globe. Lots of people would find this to be "intrinsic value."
> Otherwise, if money has no intrinsic value then why work for it?
Because it has value to me, and to many other humans who I know and trust, which gives it _extrinsic_ or subjective value. To be snarky: Maybe you should learn to think through others ideas, or read their suggested reading, before accusing them of ignorance.
Because it has value to me, and to many other humans who I know and trust, which gives it _extrinsic_ or subjective value. To be snarky: Maybe you should learn to think through others ideas, or read their suggested reading, before accusing them of ignorance.
I would argue (though this is getting more philosophical) that time is what has intrinsic value (or rather, time saved), since we all have a limited amount of time.
Labour is how time gets saved -- one person spends their time doing something so that another person doesn't need to spend their time on it, and thus the person spending the time gets some money as a token for the time they spent.
(But I agree with your point.)
Labour is how time gets saved -- one person spends their time doing something so that another person doesn't need to spend their time on it, and thus the person spending the time gets some money as a token for the time they spent.
(But I agree with your point.)
I disagree, if time were the intrinsic value then all workers would receive the same disbursement amounts. As Labor also requires Skill and Proficiency those combine to adjust the value of the Labor.
People with more skill and proficiency don't need to sacrifice as much of their time to provide the basic sustenance they need to live. They can sacrifice a bit more of their time to earn a bit more and improve their standard of living though. The most skilled have the leisure to work when they want and for who they want, because those skills are in high demand and people are willing to pay more for them.
Time is the sacrifice. If everybody could have a high standard of living and not work, most would chose not to work and spend that time with their families instead. Obviously, there are some who find meaning or purpose in a lifestyle of work, and chose to do so even if they don't need the compensation which comes out of it. Each to his own.
Time is the sacrifice. If everybody could have a high standard of living and not work, most would chose not to work and spend that time with their families instead. Obviously, there are some who find meaning or purpose in a lifestyle of work, and chose to do so even if they don't need the compensation which comes out of it. Each to his own.
Skill and proficiency took the worker time to attain through training and experience, and more skilled workers can save more time (either now through efficiency, or in the future by doing a better job).
That is not correct. A person who flips burgers and a person who is going to school to learn a trade are both using an equal amount of time. The latter however expended more effort to obtain a skill set and effort and labor are equivalent. A 40 year old who works 12 hour shifts to make ends meet can use more time than an individual who expended effort to train a skill to proficiency and enter a labor market. Additionally, we can have 2 individuals who both spent time training a skill set. One can end up more proficient than the other despite time or effort spent as despite the old adage not everyone is created equal. Some are prodigiously gifted. One person may struggle through his tutelage while the other breezes through. In the end they both put in the same time, 4yrs, do they get paid the same because they put in the same time? On the contrary, I went to school with several people that made it through the program for CS and got the paper, but are working in hospitality, warehouses, or sheet metal. They put in equal time do they all get paid equally?
Labor is a sacrifice of ones time, and one expects to receive compensation for that sacrifice. The medium of compensation could be anything, and is certainly not limited to regional monopoly currencies.
The key distinction between the currency and Bitcoin is the government's use of force to mandate that people accept the currency as a unit of payment for services (and use it to pay taxes). There is no intrinsic value. After all, it is merely paper or digital numbers.
It's amusing that anti-bitcoiners will use the government force argument to try and push people away from bitcoin. "Bitcoin is no good because it is not backed by government force."
When people hear that, they say. "Oh my god, really? How can I get some?"
The key distinction between the currency and Bitcoin is the government's use of force to mandate that people accept the currency as a unit of payment for services (and use it to pay taxes). There is no intrinsic value. After all, it is merely paper or digital numbers.
It's amusing that anti-bitcoiners will use the government force argument to try and push people away from bitcoin. "Bitcoin is no good because it is not backed by government force."
When people hear that, they say. "Oh my god, really? How can I get some?"
If Bitcoin is not backed by government force, then why is it worth anything?
Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).
So given these problems, what is the exchange rate of Bitcoin into anything else supposed to be? Given, again, that eventually, everyone transacting in Bitcoin needs to transact out of Bitcoin in order to meet local obligations like taxes, or just to acquire goods someone actually wants to accept payment in.
Bitcoin is a lot like gold, in that people might find some cosmetic and novelty value in it which gives it more then 0 value. But unlike gold, it consumes a lot of real world resources (electricity, structured silicon) in order to continue existing.
Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).
So given these problems, what is the exchange rate of Bitcoin into anything else supposed to be? Given, again, that eventually, everyone transacting in Bitcoin needs to transact out of Bitcoin in order to meet local obligations like taxes, or just to acquire goods someone actually wants to accept payment in.
Bitcoin is a lot like gold, in that people might find some cosmetic and novelty value in it which gives it more then 0 value. But unlike gold, it consumes a lot of real world resources (electricity, structured silicon) in order to continue existing.
> If Bitcoin is not backed by government force, then why is it worth anything?
> Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).
Imagine that! People are willing to accept my bitcoin as a payment for their services voluntarily, and not because they are forced to?
Turns out that there are quite a large number of people who like the idea of economic freedom and dislike the idea of this big cartel telling them what they can or can't do, who they can or can't trade with. They might dislike it so much that they're willing to make the hurdles, and take risks, in order to exchange between currencies to meet their obligations under such repressive systems and achieve some level of financial sovereignty outside it.
People want the choice. They want the choice because the government who holds a monopoly over many businesses in the geographical region they reside often does a bloody awful job, and their prices are too high (a giant chunk of ones earnings, then another chunk of everything they buy). Private enterprises could offer far better service at lower costs and have them delivered on time. If they under-perform, people could pull out their money and pay someone else for the services.
The main obstacle for this kind of voluntary trade is the men with guns saying "That kind of business can't operate here because this is our turf."
> Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).
Imagine that! People are willing to accept my bitcoin as a payment for their services voluntarily, and not because they are forced to?
Turns out that there are quite a large number of people who like the idea of economic freedom and dislike the idea of this big cartel telling them what they can or can't do, who they can or can't trade with. They might dislike it so much that they're willing to make the hurdles, and take risks, in order to exchange between currencies to meet their obligations under such repressive systems and achieve some level of financial sovereignty outside it.
People want the choice. They want the choice because the government who holds a monopoly over many businesses in the geographical region they reside often does a bloody awful job, and their prices are too high (a giant chunk of ones earnings, then another chunk of everything they buy). Private enterprises could offer far better service at lower costs and have them delivered on time. If they under-perform, people could pull out their money and pay someone else for the services.
The main obstacle for this kind of voluntary trade is the men with guns saying "That kind of business can't operate here because this is our turf."
Unless the electricity company accepts Bitcoin, then you've got a problem. In fact you have a problem even if they did - because the hard-cap on the number of Bitcoins means eventually, every Bitcoin will be held by the electricity company.
In fact it's worse then that - since the value of early Bitcoins is less then the value of later Bitcoins, but all Bitcoins are going up in buying power, the electricity company is eventually the richest entity in Bitcoin without even having to be malevolent.
Of course, this doesn't happen because none of them can pay their taxes (or their suppliers taxes) in Bitcoin. In fact no one using Bitcoin can - everyone eventually has to sell all their Bitcoins to someone to recover the currency they need to do that. But who's buying it then? There's a finite amount - if it stays in use it's worth more then you sold it for when you try to get it back - or, since everyone eventually has to sell it, it's worth less - and less again.
In fact it's worse then that - since the value of early Bitcoins is less then the value of later Bitcoins, but all Bitcoins are going up in buying power, the electricity company is eventually the richest entity in Bitcoin without even having to be malevolent.
Of course, this doesn't happen because none of them can pay their taxes (or their suppliers taxes) in Bitcoin. In fact no one using Bitcoin can - everyone eventually has to sell all their Bitcoins to someone to recover the currency they need to do that. But who's buying it then? There's a finite amount - if it stays in use it's worth more then you sold it for when you try to get it back - or, since everyone eventually has to sell it, it's worth less - and less again.
The electricity company has bills to pay. If some company can find a way to make unlimited energy without expending resources, then yes, they will become the richest entity in the world, regardless of the presence of Bitcoin or not.
Your assumptions are all resting on the idea that Bitcoin can't be used to pay taxes. This is already pretty flawed in a few places where it is possible. It will be flawed in many places fairly soon, because governments don't want to miss the boat either.
But Bitcoin maximalists don't actually care about this government thing. They would rather it collapse in on itself so that they can instead spend their money with businesses which make much better use of it than politicians.
For that reason, there is a demand for Bitcoin, and while the demand exists, people are willing to pay more to acquire it. At this point, they have to pay more because they're buying from a market with reduced liquidity, largely because existing hodlers would rather keep hold of it because they're pretty confident it will continue to appreciate in value over time.
And in the current world, where the government sanctioned financial services (paypal, mastercard etc) are actively unpersoning people for having unorthodox political views, there is clearly a growing market for an alternative financial instrument which this cartel does not control.
Your assumptions are all resting on the idea that Bitcoin can't be used to pay taxes. This is already pretty flawed in a few places where it is possible. It will be flawed in many places fairly soon, because governments don't want to miss the boat either.
But Bitcoin maximalists don't actually care about this government thing. They would rather it collapse in on itself so that they can instead spend their money with businesses which make much better use of it than politicians.
For that reason, there is a demand for Bitcoin, and while the demand exists, people are willing to pay more to acquire it. At this point, they have to pay more because they're buying from a market with reduced liquidity, largely because existing hodlers would rather keep hold of it because they're pretty confident it will continue to appreciate in value over time.
And in the current world, where the government sanctioned financial services (paypal, mastercard etc) are actively unpersoning people for having unorthodox political views, there is clearly a growing market for an alternative financial instrument which this cartel does not control.
> The electricity company has bills to pay. If some company can find a way to make unlimited energy without expending resources, then yes, they will become the richest entity in the world, regardless of the presence of Bitcoin or not.
There is a finite amount of Bitcoin total by nature of the protocol. The electricity company is vital to Bitcoin being usable since it's a digital currency. The miners might be necessary too, but they need huge amounts of electricity - which if they had to pay in Bitcoin, means they are paying some portion of the dwindling number of Bitcoins to the electricity company. As is every Bitcoin user. And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up. You can't even found a new electricity company and try to compete on price, because beyond some point the original buyer can buy your new cheaper electricity without measurably reducing their spending power, and to capture the market they need to somehow not enrich you too much while doing it. And then of course, best case you just have 2 big electricity companies controlling all the wealth forever. Deflationary currencies are bad.
> Your assumptions are all resting on the idea that Bitcoin can't be used to pay taxes. This is already pretty flawed in a few places where it is possible.
"Just in time" Bitcoin -> currency conversions do not count. They don't count because they depend on an exchange rate (and are provided by a private company in all examples). The government's tax office is not accepting Bitcoin - it's letting someone act as a payment provider but the payment provider is still paying them in the local currency (and taxes are being assessed in local currency, not Bitcoin).
If the price of Bitcoin collapses, you'll owe more Bitcoins. If my local currency collapses, I'm still only taxed on the portion of my earnings in that currency.
> But Bitcoin maximalists don't actually care about this government thing.
However governments care a lot if you don't pay your taxes. And the utilities care a lot if you don't pay them.
There is a finite amount of Bitcoin total by nature of the protocol. The electricity company is vital to Bitcoin being usable since it's a digital currency. The miners might be necessary too, but they need huge amounts of electricity - which if they had to pay in Bitcoin, means they are paying some portion of the dwindling number of Bitcoins to the electricity company. As is every Bitcoin user. And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up. You can't even found a new electricity company and try to compete on price, because beyond some point the original buyer can buy your new cheaper electricity without measurably reducing their spending power, and to capture the market they need to somehow not enrich you too much while doing it. And then of course, best case you just have 2 big electricity companies controlling all the wealth forever. Deflationary currencies are bad.
> Your assumptions are all resting on the idea that Bitcoin can't be used to pay taxes. This is already pretty flawed in a few places where it is possible.
"Just in time" Bitcoin -> currency conversions do not count. They don't count because they depend on an exchange rate (and are provided by a private company in all examples). The government's tax office is not accepting Bitcoin - it's letting someone act as a payment provider but the payment provider is still paying them in the local currency (and taxes are being assessed in local currency, not Bitcoin).
If the price of Bitcoin collapses, you'll owe more Bitcoins. If my local currency collapses, I'm still only taxed on the portion of my earnings in that currency.
> But Bitcoin maximalists don't actually care about this government thing.
However governments care a lot if you don't pay your taxes. And the utilities care a lot if you don't pay them.
> And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up.
So you are saying that bitcoin would only ever become more and more valuable?
How can you similtaneously believe this statement, and that bitcoin is worthless?
They can't both be true. Either bitcoin is deflationary, IE, it goes up and up in value, and becomes more and more valuable, or it isn't.
Which is it? Is bitcoin worthless, or it is so extremely valuable and amazing, that it is going to take over the entire world with how deflationary it is?
Personally, I'd want to support something that you apparently believe is so useful that it is going to take over the world.
So you are saying that bitcoin would only ever become more and more valuable?
How can you similtaneously believe this statement, and that bitcoin is worthless?
They can't both be true. Either bitcoin is deflationary, IE, it goes up and up in value, and becomes more and more valuable, or it isn't.
Which is it? Is bitcoin worthless, or it is so extremely valuable and amazing, that it is going to take over the entire world with how deflationary it is?
Personally, I'd want to support something that you apparently believe is so useful that it is going to take over the world.
It's a fact about deflationary currency in general, and why it's a bad idea. It grants that for some reason we suppose Bitcoin is worth holding - i.e. some government or entity accepted Bitcoin (or another deflationary currency) as payment for taxes. Maybe someone builds a seasteading community and decides to try this.
The reality is, with nothing backing it (i.e. no government accepting it for taxes), it's not actually worth anything in the long run because eventually everyone has to cash out.
Which isn't to say it's not worth anything now - but the market is exploitative. The goal is to convince everyone to buy in, so those who are in can get out, hopefully taking a profit (not in Bitcoin) along the way.
My point, is that anyone looking at Bitcoin and wondering if they should enter it should absolutely not. Deflationary crypto is a rigged game in favor of those who got in first, and you can never catch up (barring their irrationality). Bitcoin's highs are not going to be repeated, and anyone asking you to buy in wants you to do so so they can get out.
The reality is, with nothing backing it (i.e. no government accepting it for taxes), it's not actually worth anything in the long run because eventually everyone has to cash out.
Which isn't to say it's not worth anything now - but the market is exploitative. The goal is to convince everyone to buy in, so those who are in can get out, hopefully taking a profit (not in Bitcoin) along the way.
My point, is that anyone looking at Bitcoin and wondering if they should enter it should absolutely not. Deflationary crypto is a rigged game in favor of those who got in first, and you can never catch up (barring their irrationality). Bitcoin's highs are not going to be repeated, and anyone asking you to buy in wants you to do so so they can get out.
You seem to think that utilities are monopolies (which is partly true in some cases, where they are granted such monopoly entitlements by a government), and they they don't have expenses. They're not at the bottom of the economy. They need to buy fuels, for example: so they spend money with the fuel companies. Well, the fuel company needs to buy ships, drills and whatnot, and pay its workers. They money comes back into the economy at some point.
If electricity providing is such a lucrative business, then there will be an extremely competitive market for providing that service, and no one company is going to be able to charge silly fees because they will make themselves obsolete. It is only through a government granted monopoly that such companies are able to exist.
Governments care that you pay your tax, but their ability to enforce their tax collection relies on violence, and ability to prove the taxes need paying. Bitcoin creates an economy where the latter is more difficult, perhaps impractical with more private technologies.
It might turn out that governments have to move to being more voluntary models of trade, else they might not be able to acquire enough taxes to fund their operations.
If electricity providing is such a lucrative business, then there will be an extremely competitive market for providing that service, and no one company is going to be able to charge silly fees because they will make themselves obsolete. It is only through a government granted monopoly that such companies are able to exist.
Governments care that you pay your tax, but their ability to enforce their tax collection relies on violence, and ability to prove the taxes need paying. Bitcoin creates an economy where the latter is more difficult, perhaps impractical with more private technologies.
It might turn out that governments have to move to being more voluntary models of trade, else they might not be able to acquire enough taxes to fund their operations.
Not all commercial transactions involve debt.
As all commercial transactions are literally called either credits or debits and the definition for debit according to Webster's
debit noun Definition of debit (Entry 2 of 2) 1a : a record of an indebtedness specifically : an entry on the left-hand side of an account constituting an addition to an expense or asset account or a deduction from a revenue, net worth, or liability account
I would say yes all transactions involved debt.
debit noun Definition of debit (Entry 2 of 2) 1a : a record of an indebtedness specifically : an entry on the left-hand side of an account constituting an addition to an expense or asset account or a deduction from a revenue, net worth, or liability account
I would say yes all transactions involved debt.
See my response on a sibling comment: https://news.ycombinator.com/item?id=18805017
Care to give any examples which aren't just examples of very short-lived debts? (i.e. when I buy something at the corner store, we immediately resolve the debt).
A fair enough terminological point, but in this case, I'm not sure it is much more than a play on words. The parent was clearly talking about longer-lived debt and debt financial instruments, where the debt changes hands so the debt-closing parties aren't necessarily the same as the parties that formed the debt.
To quote:
> Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).
In the edge cases of (almost) immediately resolved debt, this is a non-problem, given that we can simply agree not to complete a transaction in case one of the parties involved doesn't want to accept Bitcoin. Hence, the fact that you cannot be compelled to accept Bitcoin is irrelevant in this situation.
To quote:
> Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).
In the edge cases of (almost) immediately resolved debt, this is a non-problem, given that we can simply agree not to complete a transaction in case one of the parties involved doesn't want to accept Bitcoin. Hence, the fact that you cannot be compelled to accept Bitcoin is irrelevant in this situation.
stillbourne(1)
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The "valuable" matches would have to do something statistically rare, like make a pattern of Jesus's face or something. And somehow be resistant to counterfeit matches. Then your analogy almost makes sense.
Do crypto coins make patterns of Jesus's face? Man there is something I would never have guessed. Also is counterfeit money really that big of a problem that its debasing the value of the dollar enough that we have to abandon all notions of fiat currency and replace it with an entropic commodity that burns energy to no other end? I mean I get, that the "valuable matches" are the ones that "make a coin" of whatever the jargon is but the problem is to make a "coin" takes 215 kWh to create, lets put that back into match terms, assuming one matchstick has one BTU and we convert BTU to kWh that comes to about 733610 matches at a conversion rate of 0.000293071 kWh per BTU that comes to about 2445 boxes of 300 count matches. Amazon sells a 3 pack of 300 count matches for 6.75 which comes out to about $5501.25 for 733610 count of matches. Now be aware that I'm pulling these number out of my ass, butt every match I burn has a 1 in 733610 chance of being a "Jesus Match" that means that I can burn more than that and still not end up with a match that is a Jesus Match because its a statistical argument much like the lottery. In the end what do I have to show for all of this? A huge fucking pile of used matches, and a real sense that maybe just maybe the Emperor's New Currency has value.
I'm not sure what your argument was? But I'll reply with a few points.
Bitcoin mining depends on finding a hash that starts with a whole bunch of zeros, which is more or less equivalent to being just close enough to a jesus that you can sell it for money.
Joining a mining pool gets you a relatively fixed payout, counteracting the lottery nature. You'd only have to burn one box of matches to get a guaranteed payout of 300/730000 of a jesus match.
Yes it's still a waste of power.
Bitcoin mining depends on finding a hash that starts with a whole bunch of zeros, which is more or less equivalent to being just close enough to a jesus that you can sell it for money.
Joining a mining pool gets you a relatively fixed payout, counteracting the lottery nature. You'd only have to burn one box of matches to get a guaranteed payout of 300/730000 of a jesus match.
Yes it's still a waste of power.
What you have to show at the end of the day is a digital currency that has no central authority and yet still prevents double spending.
The cycles are not wasted - they secure a digital currency.
Banks and governments use immense resources to secure fiat currency.
The cycles are not wasted - they secure a digital currency.
Banks and governments use immense resources to secure fiat currency.
> The cycles are not wasted - they secure a digital currency.
If I use a car that gets 1 mile per gallon to visit my grandma, I'm wasting basically all the gas I buy, despite it getting me to my destination.
Proof of work is waste.
If I use a car that gets 1 mile per gallon to visit my grandma, I'm wasting basically all the gas I buy, despite it getting me to my destination.
Proof of work is waste.
>The cycles are not wasted - they secure a digital currency.
But why though? Is the USD that insecure? Is fraud so prevalent that its debasing the value of currency? Do we literally need to spend 70TWh per year, and that's just in its current state as a semi novelty currency/commodity, to secure the concept of money? Can you imagine how much it would cost to run bitcoin if it was the primary reserve currency of the world?
But why though? Is the USD that insecure? Is fraud so prevalent that its debasing the value of currency? Do we literally need to spend 70TWh per year, and that's just in its current state as a semi novelty currency/commodity, to secure the concept of money? Can you imagine how much it would cost to run bitcoin if it was the primary reserve currency of the world?
Every match head burnt is required to be slightly larger in diameter than the first, so eventually you're burning massive purpose-built “matches”.
Send matches securely to anybody in the world, you say?
Look at how may people and companies lost crypto currency of one form or another. That suggests security is actually a major unsolved issues with crypto.
It's not the fault of crypto currency that people fall for phishing, have insecure infrastructure, or shitty backup strategies.
A technical system which in practice cannot be reliably operated securely, and which is prone to no-recourse losses, is worse than alternatives.
Yes, sir its part of my Matchchain Bullshit Tech. I can't say that you won't get Goxed though.
This is a creative metaphor, but like most metaphors, not all of the novel properties of the original system were preserved in the metaphor.
If you want to improve the metaphor find a way to make it so that as a holder of matches I can have very high confidence that there is an upper limit of N matches that can exist at any given time extending far into the future.
Also add some way for me to transfer my matches to another match holder in ten minutes (or an hour, or whatever reasonable interval) regardless of the physical distance between us.
If you want to improve the metaphor find a way to make it so that as a holder of matches I can have very high confidence that there is an upper limit of N matches that can exist at any given time extending far into the future.
Also add some way for me to transfer my matches to another match holder in ten minutes (or an hour, or whatever reasonable interval) regardless of the physical distance between us.
Yes, lets create a scarcity of all of our burned matches! If my calculations are correct, at 21m bitcoin would be the equivalent of 15,405,810,000,000 used matches. That's a great idea. Sadly, you'll just have to wait 24h for my antique wire transfer.
The key distinction between a burned match and a some bitcoin is that you can't forge the latter. Anyone can forge a match, and it would be extremely difficult to create an "authentic" match, which the receiver of in a transaction could verify to be such.
Anything could technically be used as currency. Historically people have always used something that is difficult to forge, because forgery results in inflation, meaning the currency which they hold loses its purchasing power over short times. It ends up not worth the labor they put in to earn it. If that were known at the time they done the labor, they would've asked for payment in something else.
Bitcoin is the best currency that has existed, because it is the first which is absolutely infeasible to forge, and it is simultaneously easy to verify its authenticity.
Anything could technically be used as currency. Historically people have always used something that is difficult to forge, because forgery results in inflation, meaning the currency which they hold loses its purchasing power over short times. It ends up not worth the labor they put in to earn it. If that were known at the time they done the labor, they would've asked for payment in something else.
Bitcoin is the best currency that has existed, because it is the first which is absolutely infeasible to forge, and it is simultaneously easy to verify its authenticity.
>Anything could technically be used as currency. Historically people have always used something that is difficult to forge.
It's estimated that $70 million dollars in counterfeit money is in circulation in the US. At an estimate of $0.12 per kWh of electrical use Bitcoin uses approximately 70 tWh of power a year. Lets see that comes out to about $120m. At what point is the cure worse than the disease? Again this is just for Bitcoin in its current state as a semi-novelty currency/commodity. How much would it cost to operate the grid for bitcoin if it was the worlds primary reserve currency?
It's estimated that $70 million dollars in counterfeit money is in circulation in the US. At an estimate of $0.12 per kWh of electrical use Bitcoin uses approximately 70 tWh of power a year. Lets see that comes out to about $120m. At what point is the cure worse than the disease? Again this is just for Bitcoin in its current state as a semi-novelty currency/commodity. How much would it cost to operate the grid for bitcoin if it was the worlds primary reserve currency?
You're missing the "extra dollars" that the central bank prints to fund the government's overspending. They call it "inflation" and tell you it is necessary and good for the economy.
Before your government can create its next spending budget, it needs to pay off its debts with interest. A big chunk of every dollar of tax you pay is taken before the government can even think about what it is going to spend the rest on. This is a viscous cycle because the government can't meet public demand with the remaining money it has and needs to borrow more again!
Each time they print, it devalues the dollar in your pocket by a few cents. This means when the government needs to pay back its debt with the interest, the money it is using to pay back is not worth as much as when they borrowed it. Ooops.
The cost to operate the Bitcoin grid is unimportant, because it is voluntary, and not taken from the public purse. You can chose not to participate directly if you don't want to put in resources, and rely on some other industry much in the same way you seem keen to rely on a government to do things for you.
Before your government can create its next spending budget, it needs to pay off its debts with interest. A big chunk of every dollar of tax you pay is taken before the government can even think about what it is going to spend the rest on. This is a viscous cycle because the government can't meet public demand with the remaining money it has and needs to borrow more again!
Each time they print, it devalues the dollar in your pocket by a few cents. This means when the government needs to pay back its debt with the interest, the money it is using to pay back is not worth as much as when they borrowed it. Ooops.
The cost to operate the Bitcoin grid is unimportant, because it is voluntary, and not taken from the public purse. You can chose not to participate directly if you don't want to put in resources, and rely on some other industry much in the same way you seem keen to rely on a government to do things for you.
What you're saying here goes against any reasonable macroeconomic theory.
Deflation causes spending to stop because people hoard money, as spending stops, economies dry up, and voila... economic stagnation at best. But no one without a formal education is Economics is likely to even be remotely aware of that.
Inflation, and Keynesian economics, have empirically served the world quite well. The government's and social policies that go with them not so consistent BUT and this is the important part-- Economics doesn't give a fuck. Inflation is a tool to allow an economy to grow, deflation is a tool to shrink an economy.
Economics is the science of resource management, it's not an opinion. Your opinion is as depressing to me as it is empirically wrong.
Deflation causes spending to stop because people hoard money, as spending stops, economies dry up, and voila... economic stagnation at best. But no one without a formal education is Economics is likely to even be remotely aware of that.
Inflation, and Keynesian economics, have empirically served the world quite well. The government's and social policies that go with them not so consistent BUT and this is the important part-- Economics doesn't give a fuck. Inflation is a tool to allow an economy to grow, deflation is a tool to shrink an economy.
Economics is the science of resource management, it's not an opinion. Your opinion is as depressing to me as it is empirically wrong.
Spending does not stop. It may slow. Most arguments against deflation are largely strawmen, and the historical examples of it are usually a result of too much government intervention, or it following a period of high inflation.
Here's an example of deflation: Moore's Law. If computing power is going to double in 18 months, then a computer I buy now will be worth much less in 18 months. If that's the case, best not buy that computer and wait 18 months right?
Another example is a car. It loses 20% of its value on purchase and continues to lose value year on year and is eventually worth nothing.
But nobody would buy a car if that were the case!
Economic theorists are mostly employees or funded by the banks, the central banks and the governments. There's a "consensus" among them that inflation = good because it benefits the industries they work for.
Anyway, it does not matter, because Bitcoin cannot be inflated, and if people now have the choice to hold a deflationary currency or an inflationary one, let them pick! We'll see if those economists were right after all when people actually have a choice.
Here's an example of deflation: Moore's Law. If computing power is going to double in 18 months, then a computer I buy now will be worth much less in 18 months. If that's the case, best not buy that computer and wait 18 months right?
Another example is a car. It loses 20% of its value on purchase and continues to lose value year on year and is eventually worth nothing.
But nobody would buy a car if that were the case!
Economic theorists are mostly employees or funded by the banks, the central banks and the governments. There's a "consensus" among them that inflation = good because it benefits the industries they work for.
Anyway, it does not matter, because Bitcoin cannot be inflated, and if people now have the choice to hold a deflationary currency or an inflationary one, let them pick! We'll see if those economists were right after all when people actually have a choice.
Try and be less literal - spending is suppressed. At every point there's an incentive to avoid spending as much as possible, and it's exponentially regressive - with enough wealth, and no investment - your wealth continues to increase beyond the amount you need to spend to survive.
"No investment" being the core point - the rich may get richer currently, but they have to buy stocks, bonds, start companies in order to do so - take risks and temporarily at least hand their money to people with less.
Under a deflationary model, they don't - the incentive is to avoid spending and investment, since the 100% safe investment is holding your money. The rich get richer - the poor are forced to part with any currency they have and can never join. Of course the system collapses if you don't have to buy in (i.e. no taxes) because why should anyone join such a regressive system?
Which, incidentally, is very much the reason no one should be getting into Bitcoin - all the coins were mined by early adopters, and you getting into Bitcoin is just allowing everyone who has cheap coins to cash out.
EDIT: And Moore's law is an ideal example of this problem really - at every point you shouldn't buy a new computer unless the present value you'll gain from one is outweighed by the depreciation in the future. Turns out computers are pretty amazing so this is a lot less of a problem - but computers actually do things. Bitcoins don't.
"No investment" being the core point - the rich may get richer currently, but they have to buy stocks, bonds, start companies in order to do so - take risks and temporarily at least hand their money to people with less.
Under a deflationary model, they don't - the incentive is to avoid spending and investment, since the 100% safe investment is holding your money. The rich get richer - the poor are forced to part with any currency they have and can never join. Of course the system collapses if you don't have to buy in (i.e. no taxes) because why should anyone join such a regressive system?
Which, incidentally, is very much the reason no one should be getting into Bitcoin - all the coins were mined by early adopters, and you getting into Bitcoin is just allowing everyone who has cheap coins to cash out.
EDIT: And Moore's law is an ideal example of this problem really - at every point you shouldn't buy a new computer unless the present value you'll gain from one is outweighed by the depreciation in the future. Turns out computers are pretty amazing so this is a lot less of a problem - but computers actually do things. Bitcoins don't.
> Try and be less literal - spending is suppressed. At every point there's an incentive to avoid spending as much as possible, and it's exponentially regressive - with enough wealth, and no investment - your wealth continues to increase beyond the amount you need to spend to survive.
If you use the same argument in reverse for an inflationary economy it doesn't add up. The argument would be that everyone would avoid saving. This is only true if you have hyperinflation. Small amounts of inflation are manageable. The same is true for deflation. If deflation is low, the effects it has are manageable. If we have hyperdeflation, then sure, people will avoid spending as much as possible.
If deflation is low, the amount which could be gained by holding the currency is tiny compared to the amount which could be gained by investing it in productive enterprises. The same is true in the inflationary model, because lenders must pay interest on borrowed money, their productive enterprises must earn at least the the amount lent plus the interest and the difference due to inflation, or they'd be making losses.
> Of course the system collapses if you don't have to buy in (i.e. no taxes) because why should anyone join such a regressive system?
This is why socialist types repeat the same mistakes over and fail to recognize them, or the value of free markets. The reason people would join such a system is because they want to get wealthy too!. People desire wealth. If they desire it enough, they will be productive and climb the ladder to get into the club. If they are unproductive, they will probably whine and complain that they should be entitled to other people's wealth. Socialism is a utopian ideal because it ignores human nature.
Bitcoin is extremely risky at this point, and was even more so 9 years ago. The people who invested then took massive risks in doing so. People investing now are taking huge risks. It will be a risky investment until it becomes pervasive. There will probably many more cycles of inflation and deflation because adoption does not match the supply rate. If people earn money from taking this risk, good on them. If people don't take the risk, they're not going to be part of the club. You've got to be in it to win it. Bitcoin is not like land rights which are exclusively granted by rulers or taken by force. There is no restriction and anybody can be an equal party.
The early adopters who have mined coins need to pay their electricity bills. It's not free money. They've had to sell the coins into a market. The distribution of coins is much more widespread than the mining process because of this. People hodl bitcoin even during inflationary periods because they believe it has a strong selling point which will give it leverage in the longer term. (They're low time preference people. Not necessarily the already wealthy.)
> And Moore's law is an ideal example of this problem really - at every point you shouldn't buy a new computer unless the present value you'll gain from one is outweighed by the depreciation in the future. Turns out computers are pretty amazing so this is a lot less of a problem - but computers actually do things. Bitcoins don't.
This is precisely my point. People still buy computers. The thing they spend their money on is more useful than the money itself. This is true of anything really. People need things to live, they need leisure and entertainment, and they're willing to spend a bit of money on it now, even though it will be cheaper later. It applies to most commodities: they lose value over time faster than the currency does. This is what makes the currency desirable to hold over those other commodities when people don't need to spend.
Inflation has the perverse incentive that it encourages people to spend when they don't need to spend. People are trained to have high time preference lifestyles, which are extremely hard to escape from if you're a low earner. You see the behaviours of low earners often do not help their situations at all, which is why they often get stuck in their economic position. The argument that economies should encourage spending (particularly among low earners) obviously doesn't help them either. They should be encouraged to save. The idea of intentionally building things to only last a few years, so that they need to buy a new one every few years doesn't help them (or landfills) either, but is supposedly "good for the economy."
If you use the same argument in reverse for an inflationary economy it doesn't add up. The argument would be that everyone would avoid saving. This is only true if you have hyperinflation. Small amounts of inflation are manageable. The same is true for deflation. If deflation is low, the effects it has are manageable. If we have hyperdeflation, then sure, people will avoid spending as much as possible.
If deflation is low, the amount which could be gained by holding the currency is tiny compared to the amount which could be gained by investing it in productive enterprises. The same is true in the inflationary model, because lenders must pay interest on borrowed money, their productive enterprises must earn at least the the amount lent plus the interest and the difference due to inflation, or they'd be making losses.
> Of course the system collapses if you don't have to buy in (i.e. no taxes) because why should anyone join such a regressive system?
This is why socialist types repeat the same mistakes over and fail to recognize them, or the value of free markets. The reason people would join such a system is because they want to get wealthy too!. People desire wealth. If they desire it enough, they will be productive and climb the ladder to get into the club. If they are unproductive, they will probably whine and complain that they should be entitled to other people's wealth. Socialism is a utopian ideal because it ignores human nature.
Bitcoin is extremely risky at this point, and was even more so 9 years ago. The people who invested then took massive risks in doing so. People investing now are taking huge risks. It will be a risky investment until it becomes pervasive. There will probably many more cycles of inflation and deflation because adoption does not match the supply rate. If people earn money from taking this risk, good on them. If people don't take the risk, they're not going to be part of the club. You've got to be in it to win it. Bitcoin is not like land rights which are exclusively granted by rulers or taken by force. There is no restriction and anybody can be an equal party.
The early adopters who have mined coins need to pay their electricity bills. It's not free money. They've had to sell the coins into a market. The distribution of coins is much more widespread than the mining process because of this. People hodl bitcoin even during inflationary periods because they believe it has a strong selling point which will give it leverage in the longer term. (They're low time preference people. Not necessarily the already wealthy.)
> And Moore's law is an ideal example of this problem really - at every point you shouldn't buy a new computer unless the present value you'll gain from one is outweighed by the depreciation in the future. Turns out computers are pretty amazing so this is a lot less of a problem - but computers actually do things. Bitcoins don't.
This is precisely my point. People still buy computers. The thing they spend their money on is more useful than the money itself. This is true of anything really. People need things to live, they need leisure and entertainment, and they're willing to spend a bit of money on it now, even though it will be cheaper later. It applies to most commodities: they lose value over time faster than the currency does. This is what makes the currency desirable to hold over those other commodities when people don't need to spend.
Inflation has the perverse incentive that it encourages people to spend when they don't need to spend. People are trained to have high time preference lifestyles, which are extremely hard to escape from if you're a low earner. You see the behaviours of low earners often do not help their situations at all, which is why they often get stuck in their economic position. The argument that economies should encourage spending (particularly among low earners) obviously doesn't help them either. They should be encouraged to save. The idea of intentionally building things to only last a few years, so that they need to buy a new one every few years doesn't help them (or landfills) either, but is supposedly "good for the economy."
> Small amounts of inflation are manageable. The same is true for deflation.
Only in the presence of a Reserve Bank, which Bitcoin doesn't have. There's no ability for any authority to increase the number of Bitcoins possible, which means it's permanently deflationary.
Inflationary currencies pay interest via Reserve Bank policies in order to be managed. Bitcoin has no such mechanisms, nor can any be implemented.
> The reason people would join such a system is because they want to get wealthy too!
Which is why ICOs are so popular. Why pay tribute to the original Bitcoin miners when you can just become you're own, recognizing that the only thing holding up the value is irrational in the first place (doesn't mean it's not a real way to get people to part with their money).
> The thing they spend their money on is more useful than the money itself.
Computers are one good in many-faceted economy. Deflationary currency means the currency is worth more against everything in the economy with each passing day. So not only will I not buy a computer with it, I will also not put it in a bank (why risk it?), not buy stocks, bonds, or even really loan it to anyone. In fact the right thing to do (if there was anything pinning it's value) would be to first spend all my non-Bitcoin money on necessities, and acquire and sit on, in offline wallets, as much Bitcoin as possible. But Bitcoin is a currency - to even be useful people have to actually use it.
So why don't people do this? For the aforementioned reasons - no one can actually require me to hold Bitcoin to pay taxes or extinguish debts. So just sitting on it is foolish since there's no real way to predict when the irrational market will end - except over the long term, I do know the price must crash since every Bitcoin market participant must eventually cash-out to pay taxes and electricity bills and what have you. So in fact there's nothing holding it up. The only actual reason anyone has to hold Bitcoins is when they get ramsomware'd.
Only in the presence of a Reserve Bank, which Bitcoin doesn't have. There's no ability for any authority to increase the number of Bitcoins possible, which means it's permanently deflationary.
Inflationary currencies pay interest via Reserve Bank policies in order to be managed. Bitcoin has no such mechanisms, nor can any be implemented.
> The reason people would join such a system is because they want to get wealthy too!
Which is why ICOs are so popular. Why pay tribute to the original Bitcoin miners when you can just become you're own, recognizing that the only thing holding up the value is irrational in the first place (doesn't mean it's not a real way to get people to part with their money).
> The thing they spend their money on is more useful than the money itself.
Computers are one good in many-faceted economy. Deflationary currency means the currency is worth more against everything in the economy with each passing day. So not only will I not buy a computer with it, I will also not put it in a bank (why risk it?), not buy stocks, bonds, or even really loan it to anyone. In fact the right thing to do (if there was anything pinning it's value) would be to first spend all my non-Bitcoin money on necessities, and acquire and sit on, in offline wallets, as much Bitcoin as possible. But Bitcoin is a currency - to even be useful people have to actually use it.
So why don't people do this? For the aforementioned reasons - no one can actually require me to hold Bitcoin to pay taxes or extinguish debts. So just sitting on it is foolish since there's no real way to predict when the irrational market will end - except over the long term, I do know the price must crash since every Bitcoin market participant must eventually cash-out to pay taxes and electricity bills and what have you. So in fact there's nothing holding it up. The only actual reason anyone has to hold Bitcoins is when they get ramsomware'd.
Cars and computers are not investments. They have direct utility. Money does not (unless you burn it for heat).
>the choice to hold a deflationary currency or an inflationary one, let them pick! We'll see if those economists were right after all when people actually have a choice.
We have them already. They just aren’t called currencies because their price instability makes them somewhat useless as currencies. See: gold.
>the choice to hold a deflationary currency or an inflationary one, let them pick! We'll see if those economists were right after all when people actually have a choice.
We have them already. They just aren’t called currencies because their price instability makes them somewhat useless as currencies. See: gold.
> Cars and computers are not investments. They have direct utility. Money does not (unless you burn it for heat).
Right. The deflationary argument is that people won't spend money because the money appreciates in value over time versus the things they would spend it on. Those examples, and there are many others tell a different story. People will buy things which have utility, even if they lose value relative to the currency over time.
>We have them already. They just aren’t called currencies because their price instability makes them somewhat useless as currencies. See: gold.
You say the price of gold is unstable, because you're taking a dollar as your reference point. Dollars are actually far more volatile than gold because they can be printed arbitrarily, where gold is only found in limited amounts. If you measure the value of the dollar in terms of gold, over time, you'll see which is really the useless one!
The reason gold is not used much any more is largely due to the historical practices of confiscation and outlawing of possession. Admittedly, it is not the best commodity to use as currency due to its weight and difficulty to verify the authenticity of.
Thankfully, Bitcoin can solve all of those problems. It can't necessarily be confiscated if you manage your keys correctly. Possession can be plausibly deniable. It doesn't have the problems of transport, and it is trivial to verify the authenticity of. As a bonus, it is well suited to our digital age where much of commerce is conducted remotely.
Right. The deflationary argument is that people won't spend money because the money appreciates in value over time versus the things they would spend it on. Those examples, and there are many others tell a different story. People will buy things which have utility, even if they lose value relative to the currency over time.
>We have them already. They just aren’t called currencies because their price instability makes them somewhat useless as currencies. See: gold.
You say the price of gold is unstable, because you're taking a dollar as your reference point. Dollars are actually far more volatile than gold because they can be printed arbitrarily, where gold is only found in limited amounts. If you measure the value of the dollar in terms of gold, over time, you'll see which is really the useless one!
The reason gold is not used much any more is largely due to the historical practices of confiscation and outlawing of possession. Admittedly, it is not the best commodity to use as currency due to its weight and difficulty to verify the authenticity of.
Thankfully, Bitcoin can solve all of those problems. It can't necessarily be confiscated if you manage your keys correctly. Possession can be plausibly deniable. It doesn't have the problems of transport, and it is trivial to verify the authenticity of. As a bonus, it is well suited to our digital age where much of commerce is conducted remotely.
Youre assuming that credit cannot be built on top of bitcoin. With bitcoin backed credit no bank/authority figure would be able to over-extend themselves to the same degree as we have today
Kenysian and austrian concepts are not mutually exclusive
Kenysian and austrian concepts are not mutually exclusive
The US government is not printing money as part of its normal funding cycles. Where does this stupid notion come from?
The normal funding cycle is this: government issues bond in exchange for cash now. These are treasury auctions and they happen constantly.
There is no injection of money in this process. If you don’t believe that, ask yourself this. Why did the exact same process work when the US dollar was backed by gold?
The normal funding cycle is this: government issues bond in exchange for cash now. These are treasury auctions and they happen constantly.
There is no injection of money in this process. If you don’t believe that, ask yourself this. Why did the exact same process work when the US dollar was backed by gold?
I think the idea is, you buy a bond for $98 to get $100 back on maturity in a year (as an example).
So $2 cash does get injected/"printed" when debt levels stay the same or go down.
We just issue more debt though in practice.
Cryptocurrencies are games and games have intrinsic value. AirBnB is a game, and if you implemented it as a cryptocurrency it would have value.
There’s nothing particularly special about AirBnB in terms of software. It’s barely more complex than Bitcoin.
But implementing games so that cheating is prohibitively expensive is very hard. That’s why we only have pretty simple games so far, like “ledger” and “compute”.
But we will some day have the entire set of Games Whose Cheats Can, With Some Effort, Be Made Prohibitively Expensive available to us as cryptocurrencies.
Tokens in those systems will all have intrinsic value proportionate to the value those games have in society.
There’s nothing particularly special about AirBnB in terms of software. It’s barely more complex than Bitcoin.
But implementing games so that cheating is prohibitively expensive is very hard. That’s why we only have pretty simple games so far, like “ledger” and “compute”.
But we will some day have the entire set of Games Whose Cheats Can, With Some Effort, Be Made Prohibitively Expensive available to us as cryptocurrencies.
Tokens in those systems will all have intrinsic value proportionate to the value those games have in society.
The difference, however, is that the compute is actually doing something: trustlessly verifying the ledger (or chain). Whereas in your description to your family members, your burning the match does nothing of any value, for anyone, for any reason.
I find many other issues with your framing of bitcoin, but the above is the most glaring, to me.
I find many other issues with your framing of bitcoin, but the above is the most glaring, to me.
Exactly. The value of Bitcoin comes from the fact that it's something scarce and un-counterfeit-able, just as money should be, while also being "de-centralised" and not tied to a government or corporation. The Proof of Work (the match burning) is just the means behind how that's achieved. It is absolutely not how Bitcoin derives its value; that's actually something we'd prefer it didn't need to do, but unfortunately it has to.
You're agreeing with him.
He's responding to people saying "hey, why are you criticising ETH, don't you like this stuff?" And he's saying that even the "blue chip" cryptocurrency projects are still very experimental phases and he takes them seriously enough to criticize them.
He's responding to people saying "hey, why are you criticising ETH, don't you like this stuff?" And he's saying that even the "blue chip" cryptocurrency projects are still very experimental phases and he takes them seriously enough to criticize them.
Except he seems to give BTC a pass. I'm not familiar with this guy and just skimmed his tweetstorm, but he seems to be part of a group that thinks BTC >>>> ETH.
ETH is theoretically better than BTC, while BTC is practically better than ETH.
Depending on whether you want something cool to experiment with, or something to actually use, one is far better than the other.
Depending on whether you want something cool to experiment with, or something to actually use, one is far better than the other.
I got more practical use out of ETH than I did out of BTC. In my case, the use was small-ish donations. ETH was cheaper and way faster.
Those are apple and orange. You don't necessarily say HTTP is better than TCP or JavaScript is better than HTML.
For some definition of "actually use". How would you define that?
I think the disagreement is on other cryptocurrencies. The author of the original Twitter thread has positive views of Bitcoin, e.g. this post which he linked in the thread:
https://medium.com/@tuurdemeester/why-im-short-ethereum-and-...
https://medium.com/@tuurdemeester/why-im-short-ethereum-and-...
ETH/BTC went up 7 fold after he wrote that, though it's back down a bit now. He seems a little biased against ETH.
There are a lot of valid arguments to be made, but it's not clear that being an experiment is a sufficient one. One need only think of the "Great Experiment" [0], to realize that immaturity and instability might not be too much of a hindrance if purpose and mindshare can be ultimately established.
[0] https://www.themorgan.org/exhibitions/the-great-experiment
[0] https://www.themorgan.org/exhibitions/the-great-experiment
What’s unstable about bitcoin apart from the price obviously?
Fact that without off chain transactions, it's not ready for any more transaction volume and Lightning is still very much alpha at this point.
You don't see the instability, it's just people can't use it much more with the current implementation. Unstable future perhaps the parent meant.
You don't see the instability, it's just people can't use it much more with the current implementation. Unstable future perhaps the parent meant.
> without off chain transactions, it's not ready for any more transaction volume and Lightning is still very much alpha at this point.
that's a pretty stable thing you're describing. and lightning is actually in beta now and has grown quite a bit.
> Unstable future perhaps the parent meant
the only stable thing about future is heat death of the universe. and even that is possibly up for debate.
shifting goalposts much?
that's a pretty stable thing you're describing. and lightning is actually in beta now and has grown quite a bit.
> Unstable future perhaps the parent meant
the only stable thing about future is heat death of the universe. and even that is possibly up for debate.
shifting goalposts much?
This link is only 6 months ago. I don't know yesterday's state but I also don't know your definition of beta. I thought it meant quite ready for production use, just getting rid of corner cases.
https://thenextweb.com/hardfork/2018/06/26/lighting-network-...
https://thenextweb.com/hardfork/2018/06/26/lighting-network-...
Yes, trying to send a transaction which is at or near the limit will result in it failing.
But that article doesn't mention that the limit is artificially imposed so that people aren't risking too much money on unproven code.
As the system is shown to be stable, that limit will be raised and eventually removed, and the issue here will no longer exist.
Plus, failure in this case means "using the blockchain", and for larger amounts of money the fees are generally a fraction of the amount transferred, even during times of high mempool.
But that article doesn't mention that the limit is artificially imposed so that people aren't risking too much money on unproven code.
As the system is shown to be stable, that limit will be raised and eventually removed, and the issue here will no longer exist.
Plus, failure in this case means "using the blockchain", and for larger amounts of money the fees are generally a fraction of the amount transferred, even during times of high mempool.
Lightning network is not Bitcoin. I was asking what’s unstable about Bitcoin.
Do we even think a person called Satoshi Nakomoto exists?
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By now the Ethereum bloat is so bad that cheaply running an individual node is practically impossible for a lay person.
This is an important yet under-appreciated point. It's now extremely difficult to sync an Ethereum node from scratch. If the processes ever completes on commodity hardware, it takes weeks. And that difficulty will only climb as more and more stuff gets dropped onto the Turing-Complete "world computer."
This situation drives users in ever greater numbers to services that tell them which transactions are valid or not. Verification with a full node, the bedrock of censorship resistance, dies a death of 1,000 cuts as a result.
This is an important yet under-appreciated point. It's now extremely difficult to sync an Ethereum node from scratch. If the processes ever completes on commodity hardware, it takes weeks. And that difficulty will only climb as more and more stuff gets dropped onto the Turing-Complete "world computer."
This situation drives users in ever greater numbers to services that tell them which transactions are valid or not. Verification with a full node, the bedrock of censorship resistance, dies a death of 1,000 cuts as a result.
It takes me about a day to sync parity on a consumer desktop with an ssd and a 7 year old i5 Intel cpu
For me, just about 18 hours with parity on a fairly new i7 and fairly fast (200mbps) net and NVMe disks. Haven't repeated enough to be sure, but I can't figure out how to replicate the "weeks" argument I keep hearing. I suppose on average American broadband (~15mbps) and spinning HDDs the week-long numbers start to seem reasonable?
Edit: It seems (based on the conversations in this thread) the argument is versus "full", "fast" and "light" sync methods. Full implies personally reverifying the entire chain and every transaction, which takes a week or more. Fast pulls down the entire chain (and all of its data), and takes ~18 hours (what I mentioned above), but still results in a complete Ethereum node. It becomes a philosophical argument if the "fast" sync method implies "enough trust", or if everyone should be expected to reprocess every transaction ever. Personally (and i'm not a mathematician) from what I understand of merkle trees, as additional transactions are verified, the "trust in the past" grows, as it would be increasingly difficult to have lied about (or rather, to change) a previous transaction.
Philosophy aside, it's really painless and takes less than a day to get a Ethereum node up and running and chugging away, hard stop.
Philosophy aside, it's really painless and takes less than a day to get a Ethereum node up and running and chugging away, hard stop.
My understanding that a full sync in Bitcoin means something different than a full sync on Ethereum. Bitcoin's database is modeled on UTXO (https://en.m.wikipedia.org/wiki/Unspent_transaction_output) therefore all clients need to validate all transactions from genesis to calculate final balances. Meanwhile, Ethereum is account based and state is global, and to determine the balances you only need to check the merkle proof, no need to store or re-validate each and every transaction, just the final result. Source: https://github.com/ethereum/wiki/wiki/Design-Rationale#accou... quote "The benefits of accounts are:Large space savings"
In Ethereum, the closet to a Bitcoin full node would be an 'full archive' node, those are keeping all the transactions, down to the stack traces and events, without pruning. These are usually run by block explorers, but you certainly don't need to store that much detail if you just want to interact with a dapps.
In Ethereum, the closet to a Bitcoin full node would be an 'full archive' node, those are keeping all the transactions, down to the stack traces and events, without pruning. These are usually run by block explorers, but you certainly don't need to store that much detail if you just want to interact with a dapps.
You say “check merkle proof”, how do you know what it’s supposed to be? Trust somebody gives you the right hash?
There is no difference between BTC’s UTXO model and Ethereum’s account model in this sense - both are aggregate structures and to have full certainty the aggregate you’re looking at is correct you have to run through all the transactions.
To speedup sync in BTC it is assumed that blocks older than some amount of YEARS are valid but you still have to go through their transactions to build up the aggregate UTXO set.
In ETH instead it is common to just download the result and trust it’s valid. And since it’s now impossible to sync from origin you can never tell if some account doesn’t have ether created from nothing.
There is no difference between BTC’s UTXO model and Ethereum’s account model in this sense - both are aggregate structures and to have full certainty the aggregate you’re looking at is correct you have to run through all the transactions.
To speedup sync in BTC it is assumed that blocks older than some amount of YEARS are valid but you still have to go through their transactions to build up the aggregate UTXO set.
In ETH instead it is common to just download the result and trust it’s valid. And since it’s now impossible to sync from origin you can never tell if some account doesn’t have ether created from nothing.
> how do you know what it’s supposed to be
The information is in the block headers.
> In ETH instead it is common to just download the result and trust it’s valid
Nope. You still have to download all the block headers from block 0 and check if they are valid, including the PoW and other hashes.. The blocks are basically tamper proof as in Bitcoin (but can also be vulnerable to a 51% attack)
Then that's where it all diverges from Bitcoin: in Ethereum, there are three merkle trees: one for the state, one for transactions and one for the transaction results (receipts). The roots of these trees are in the blocks, once you have these, you can verify a particular value of, say, a state value, without the need to verify each and every other value, by walking through the tree and doing a merkle proof. There's plenty of info on the web explaining how it works if you look it up, eg. Search for "ethereum state trie"
As for syncing, recently it improved a lot. I did it a few times last month with Geth on an old machine just to test it out. Synced within 2 days, a big improvement over the previous versions of Geth. And yes, it got all the blocks from 0 to current. Blocks by themselves are very light.
The information is in the block headers.
> In ETH instead it is common to just download the result and trust it’s valid
Nope. You still have to download all the block headers from block 0 and check if they are valid, including the PoW and other hashes.. The blocks are basically tamper proof as in Bitcoin (but can also be vulnerable to a 51% attack)
Then that's where it all diverges from Bitcoin: in Ethereum, there are three merkle trees: one for the state, one for transactions and one for the transaction results (receipts). The roots of these trees are in the blocks, once you have these, you can verify a particular value of, say, a state value, without the need to verify each and every other value, by walking through the tree and doing a merkle proof. There's plenty of info on the web explaining how it works if you look it up, eg. Search for "ethereum state trie"
As for syncing, recently it improved a lot. I did it a few times last month with Geth on an old machine just to test it out. Synced within 2 days, a big improvement over the previous versions of Geth. And yes, it got all the blocks from 0 to current. Blocks by themselves are very light.
> The information is in the block headers
> You still have to download all the block headers from block 0 and check if they are valid, including the PoW and other hashes..
and unless you validate those blocks you don't know if the chain you're looking at is valid. headers don't help with that.
> The blocks are basically tamper proof as in Bitcoin (but can also be vulnerable to a 51% attack)
vulnerability to 51% attack depends on cost of such attack. if it is "normal" in ethereum to trust third parties with state of just couple hundred blocks old - the attack becomes very cheap. and if i understand correctly that's the case with majority of ethereum nodes as they aren't fully validating and are in fast sync or light mode.
in BTC `--assumevalid` points to a block that is more than year and a half old.
> The roots of these trees are in the blocks, once you have these, you can verify a particular value of, say, a state value, without the need to verify each and every other value, by walking through the tree and doing a merkle proof.
except when the state you downloaded from third parties and assumed was valid, was actually forged. since you're not executing transactions you can't know what transaction receipts would have been created.
> And yes, it got all the blocks from 0 to current. Blocks by themselves are very light.
nah, i call bs. it might have downloaded them but didn't validate anything beyond headers and some recent transactions. admittedly i haven't checked for like half a year, but full sync was literally freezing and not completing at all on powerful laptops and aws instances. it's quite possible the wonder kids of javascript cryptocurrency finally fixed their shit but i wouldn't bet my money on it.
> You still have to download all the block headers from block 0 and check if they are valid, including the PoW and other hashes..
and unless you validate those blocks you don't know if the chain you're looking at is valid. headers don't help with that.
> The blocks are basically tamper proof as in Bitcoin (but can also be vulnerable to a 51% attack)
vulnerability to 51% attack depends on cost of such attack. if it is "normal" in ethereum to trust third parties with state of just couple hundred blocks old - the attack becomes very cheap. and if i understand correctly that's the case with majority of ethereum nodes as they aren't fully validating and are in fast sync or light mode.
in BTC `--assumevalid` points to a block that is more than year and a half old.
> The roots of these trees are in the blocks, once you have these, you can verify a particular value of, say, a state value, without the need to verify each and every other value, by walking through the tree and doing a merkle proof.
except when the state you downloaded from third parties and assumed was valid, was actually forged. since you're not executing transactions you can't know what transaction receipts would have been created.
> And yes, it got all the blocks from 0 to current. Blocks by themselves are very light.
nah, i call bs. it might have downloaded them but didn't validate anything beyond headers and some recent transactions. admittedly i haven't checked for like half a year, but full sync was literally freezing and not completing at all on powerful laptops and aws instances. it's quite possible the wonder kids of javascript cryptocurrency finally fixed their shit but i wouldn't bet my money on it.
Bitcoin nodes could download the most recent UTXO index too. Validating the entire history is necessary in both if you want to trust nothing except the client code you're given.
An archival node in Ethereum goes beyond a full node, and stores data not needed to do full validation.
A full node in Ethereum needs to download about 80 GB I believe, which is a tenth of what an archival node needs to download and store.
An archival node in Ethereum goes beyond a full node, and stores data not needed to do full validation.
A full node in Ethereum needs to download about 80 GB I believe, which is a tenth of what an archival node needs to download and store.
archival node doesn't need to download anything extra. It just reconstructs everything just from the blocks.
I guess you're not doing a full sync. Here's an example of a person trying to do it:
https://ethereum.stackexchange.com/questions/37348/parity-fu...
https://ethereum.stackexchange.com/questions/37348/parity-fu...
Ssd is needed (or enough ram) due to random access of state.
See my reddit post from a year ago, full sync took 25 hours:
https://www.reddit.com/r/ethereum/comments/7n4v64/correcting...
There's a lot of misinformation, some originating due to genuine problems (trying to use a hdd or geth with barely working garbage collector) and misunderstandings, some from intentional lies (especially two r/bitcoin moderators - thieflar and stopanddecrypt).
There's a lot of misinformation, some originating due to genuine problems (trying to use a hdd or geth with barely working garbage collector) and misunderstandings, some from intentional lies (especially two r/bitcoin moderators - thieflar and stopanddecrypt).
An archival node goes beyond a full node and downloads data not needed for full validation.
It doesn't download them, the state history is generated from the blockchain locally. The blockchain itself is 68GB (uncompressed, decimal G)
Similar experience with geth on an m5.large EC2 instance and 500G SSD.
The SSD vs. hard disk distinction is key. I ran into the "it will literally never complete" issue trying to sync to an external HD on my home MBP - I ran it for about a week and it didn't work. Tried parity as well, same result. Once I decided I'd just rent a big SSD from Amazon I had no problem.
The SSD vs. hard disk distinction is key. I ran into the "it will literally never complete" issue trying to sync to an external HD on my home MBP - I ran it for about a week and it didn't work. Tried parity as well, same result. Once I decided I'd just rent a big SSD from Amazon I had no problem.
Were you passing --gcmode=archive --syncmode=full flags? If not, then it's just a light node.
Here's an example: https://github.com/ethereum/go-ethereum/issues/16237
,,Seems like it does indeed proceed but very slowly. After 12 days on the 96gig ram machine I am finally at block 4732597... I will report back how long it takes to finish.''
Here's an example: https://github.com/ethereum/go-ethereum/issues/16237
,,Seems like it does indeed proceed but very slowly. After 12 days on the 96gig ram machine I am finally at block 4732597... I will report back how long it takes to finish.''
No, I was doing a fast sync (but not a light sync, which is different). I wanted and got the transaction history & full code for each smart contract on the chain, but didn't care about verification of each transaction in the chain.
You can run a full node that verifies everything on an ongoing basis without doing a full sync from the genesis block - just start it in fast sync, let the chain catch up, and then run it again in full mode. Unless you believe the Ethereum blockchain has already been compromised, there's no reason why your personal node has to verify everything from the genesis block.
You can run a full node that verifies everything on an ongoing basis without doing a full sync from the genesis block - just start it in fast sync, let the chain catch up, and then run it again in full mode. Unless you believe the Ethereum blockchain has already been compromised, there's no reason why your personal node has to verify everything from the genesis block.
gcmode=archive is not required for a full node. It indexes every transaction in a database, which is unnecessary for most applications. It’s similar to txindex in bitcoind, but the Ethereum db is already much larger, so it takes weeks to sync in this mode.
I see, the problem was that it's hard to find documentation about what's needed for an Ethereum full node. As I'm just running Bitcoin full node, I don't have any personal experience with it.
Parity CLI options:
https://wiki.parity.io/Configuring-Parity-Ethereum#cli-optio...
Geth CLI options: https://github.com/ethereum/go-ethereum/wiki/Command-Line-Op...
Understand the differences between syncing, validating, and pruning, then it becomes simpler... https://github.com/ethereum/go-ethereum/pull/1889 https://github.com/ethereum/go-ethereum/wiki/Tracing:-Introd...
Geth CLI options: https://github.com/ethereum/go-ethereum/wiki/Command-Line-Op...
Understand the differences between syncing, validating, and pruning, then it becomes simpler... https://github.com/ethereum/go-ethereum/pull/1889 https://github.com/ethereum/go-ethereum/wiki/Tracing:-Introd...
> This is an important yet under-appreciated point. It's now extremely difficult to sync an Ethereum node from scratch. If the processes ever completes on commodity hardware, it takes weeks. And that difficulty will only climb as more and more stuff gets dropped onto the Turing-Complete "world computer."
This is simply untrue. I recently synced an Ethereum node on a 2 year old desktop computer. Took ~1 day.
This is simply untrue. I recently synced an Ethereum node on a 2 year old desktop computer. Took ~1 day.
You did a fast sync, not a real full sync (which verifies the transactions since the genesys block).
Right, but re-verifying every txn (a "full sync") isn't exactly the topic. You do not need to re-verify every txn to run an Ethereum node, which is what the article suggests is extremely difficult. And that's not a "light" node, it's a full node, you're just trusting the network initially (additional "trust" is "built" as transactions are processed by the node, which is the beauty of the merkle tree structure). It certainly makes plenty of sense that single handedly reverifying the entire chain will become increasingly difficult with respect time and energy. It becomes a very complex argument about network trust at that point, but the point still stands that "It's now extremely difficult to sync an Ethereum node from scratch" is a very dubious statement (for admittedly varying definitions of 'extremely difficult')
I'm not saying that it's completely bad, but with Bitcoin the devs work really hard to improve the software to make sure that the time for full resync doesn't grow too much, and that it can run on an average laptop that has SSD.
The biggest problem with the fast sync is that sometimes when Ethereum node gets stuck, the devs just suggest to do a new fast sync, which - in my opinion - requires enourmous amount of trust in the developers. Hard forks also require a lot of trust, as old software can't be run side-by-side with new software to validate the blockchain.
The biggest problem with the fast sync is that sometimes when Ethereum node gets stuck, the devs just suggest to do a new fast sync, which - in my opinion - requires enourmous amount of trust in the developers. Hard forks also require a lot of trust, as old software can't be run side-by-side with new software to validate the blockchain.
> you're just trusting the network initially
Yeah, let’s “just” trust random strangers’ computers to tell us the state of financial system. What could possibly go wrong.
If you don’t understand importance of “don’t trust, verify” than you shouldn’t have anything to do with cryptocurrencies (or cryptography for that matter).
Yeah, let’s “just” trust random strangers’ computers to tell us the state of financial system. What could possibly go wrong.
If you don’t understand importance of “don’t trust, verify” than you shouldn’t have anything to do with cryptocurrencies (or cryptography for that matter).
Forgive me if I'm misunderstanding, but I disagree with you.
A merkle tree is a recursive structure. If you trust a substructure of it, then you don't need to repeatedly re-evaluate that substructure. What that means in practical terms is if the merkle-tree entry summarising the state of the chain as it was a year ago is assumed correct, then you don't need to keep any of the transaction data from before that point.
But this can only work if you don't have to look back. In Bitcoin, every transaction references an arbitrary previous transaction to prove that it has sufficient funds. You would therefore need "checkpoint" transactions that say "This is the amount of money everybody's got now; we can now forget the past".
A merkle tree is a recursive structure. If you trust a substructure of it, then you don't need to repeatedly re-evaluate that substructure. What that means in practical terms is if the merkle-tree entry summarising the state of the chain as it was a year ago is assumed correct, then you don't need to keep any of the transaction data from before that point.
But this can only work if you don't have to look back. In Bitcoin, every transaction references an arbitrary previous transaction to prove that it has sufficient funds. You would therefore need "checkpoint" transactions that say "This is the amount of money everybody's got now; we can now forget the past".
It is possible to create new transaction outputs using old UTXOs, hence nodes can do its own checkpointing if they wish, with a loss of transaction fee.
you are misunderstanding. you're given a state of accounts and it has "correct" signature (according to a third party) - without verifying every transaction that contributed to building that state you cannot be certain it doesn't contain invalid records. merkle has nothing to do with it, you either verify or you trust a third party.
checkpointing ethereum state or checkpointing bitcoin utxo set is a way to trade away security, decentralization and trustlessness for faster bootstrap. and ethereum folk have become way to relaxed about that fact.
checkpointing ethereum state or checkpointing bitcoin utxo set is a way to trade away security, decentralization and trustlessness for faster bootstrap. and ethereum folk have become way to relaxed about that fact.
Vitalik Buterin disagrees with you specifically on the topic of endlessly increasing impractical eth blockchain:
https://medium.com/@VitalikButerin/because-of-ethereums-expo...
https://medium.com/@VitalikButerin/because-of-ethereums-expo...
> state channels (ETH’s version of Lightning), but it is unclear whether main-chain issued ERC20 type tokens will be portable to this environment.
The Raiden project is the closest thing to Lightning, was recently deployed to the main chain, and explicitly supports any ERC20 token.
The article says Plasma is dead because...Peter Todd, a Bitcoin dev, claims they had a similar idea and rejected it? Meanwhile, on Ethereum a bunch of teams are actively working on it and the Loom project has a version up and running.
The article asks why if proof of stake is so great, didn't Ethereum just start with that? Because proof of stake had widely-recognized security flaws (like "nothing-at-stake"), and it took years of research to fix them all.
The entire article is of similar quality.
The Raiden project is the closest thing to Lightning, was recently deployed to the main chain, and explicitly supports any ERC20 token.
The article says Plasma is dead because...Peter Todd, a Bitcoin dev, claims they had a similar idea and rejected it? Meanwhile, on Ethereum a bunch of teams are actively working on it and the Loom project has a version up and running.
The article asks why if proof of stake is so great, didn't Ethereum just start with that? Because proof of stake had widely-recognized security flaws (like "nothing-at-stake"), and it took years of research to fix them all.
The entire article is of similar quality.
People like Tuur are so frustrating, because they complained about ethereum since day one (while lobbing lots of cheap shots at it) and now that it has turned into a big successful project, they are still around and say "see! I was right! It still hasn't cured world hunger!"
What is successful about ethereum? The price?
What metric interests you? Number of stories in mainstream publications? Number of projects based on the tech in corporations? Amount of developer interest? Market cap?
I agree that it is still in need of mainstream use cases, if that is your metric then you can justifiably argue no cryptocurrency is "successful".
I agree that it is still in need of mainstream use cases, if that is your metric then you can justifiably argue no cryptocurrency is "successful".
Yes, real mainstream use cases are a good measure of tech success. At least, I'd want to see some plausible early mainstream use and a path for it to broaden.
It's very typical that spruikers of tech hype cycles focus on the amount of press coverage, the number of projects rushing into the space, the amount of developer interest, or highly extrapolated market numbers. It doesn't prove anything about whether the thing has any real value or will be around in 10 years.
Given the allegedgedly vast scale of cryptocurrency deployments, there ought to now be some real uses and I don't see any, other than black markets, money laundering, speculation, and ransomware. Those are always going to exist and may be a stable base but probably aren't enough to justify the hype.
It's very typical that spruikers of tech hype cycles focus on the amount of press coverage, the number of projects rushing into the space, the amount of developer interest, or highly extrapolated market numbers. It doesn't prove anything about whether the thing has any real value or will be around in 10 years.
Given the allegedgedly vast scale of cryptocurrency deployments, there ought to now be some real uses and I don't see any, other than black markets, money laundering, speculation, and ransomware. Those are always going to exist and may be a stable base but probably aren't enough to justify the hype.
Yeah, I agree that to a casual follower of the space, the lack of mainstream use cases should arguably raise some red flags.
However, as someone now deeply involved in the tech, I'm pretty confident that the use cases are coming and are delayed solely because of peculiar obstacles that will likely get resolved in the near future.
However, as someone now deeply involved in the tech, I'm pretty confident that the use cases are coming and are delayed solely because of peculiar obstacles that will likely get resolved in the near future.
So to be clear you're confirming that nothing works now and that not only use cases but also working tech is still entirely speculative?
My two cents: We've been waiting for a non-speculative use for ethereum since 2013. After how many years might it be time to suggest that there is no non-speculative use?
It will naturally die if/when all ideas have been extinguished, and we all should hope no sooner. This is literally the process all invention goes through, some tech just more publically visible than others. What do you think?
Resources and creativity are being drawn into crypto, that could be spent elsewhere, perhaps more usefully. Not to mention vast amount of electricity.
A brute force exhaustive search of all possible technologies is not smart engineering.
A brute force exhaustive search of all possible technologies is not smart engineering.
I have been getting a number of people trying to get me to apply for crypto jobs recently. They list a load of buzzwords expecting me to be enthusiastic about the hot new tech. I explain that I am not (but that I will work for them if they are interested in a solid software engineer and they pay me enough).
I'd love to hear what those use cases are, and what the fixable obstacles are.
As someone who started a project to FIX the scaling problems of Ethereum, I have one metric I’d like to ask about:
NUMBER OF TOKENS USED FOR ACTUAL EVERYDAY PAYMENT IN AN ECOSYSTEM ON THE MAIN NET and not just pre-buying for speculative purposes.
Has there been a single one? Cryptokitties is the only one I can think of and that has nearly brought the whole “world computer” to a halt.
Projects like Kik Messenger which raised hundreds of millions even say in their whitepaper that they will get off ETH as soon as they can, because it can’t handle the volume of transactions they have.
NUMBER OF TOKENS USED FOR ACTUAL EVERYDAY PAYMENT IN AN ECOSYSTEM ON THE MAIN NET and not just pre-buying for speculative purposes.
Has there been a single one? Cryptokitties is the only one I can think of and that has nearly brought the whole “world computer” to a halt.
Projects like Kik Messenger which raised hundreds of millions even say in their whitepaper that they will get off ETH as soon as they can, because it can’t handle the volume of transactions they have.
the single promise of the project maybe? to enable transactions or way to fund distributed projects from direct sales to things as IPFS.
it's at most a hacker toy platform.
it's at most a hacker toy platform.
MakerDAO is platform agnostic but currently exists on the Ethereum blockchain.
MakerDAO is awesome, and would encourage you all to take a look.
https://cdp.makerdao.com/
intro https://www.youtube.com/watch?v=U3YL_D66TjA&feature=youtu.be
MakerDAO is awesome, and would encourage you all to take a look.
https://cdp.makerdao.com/
intro https://www.youtube.com/watch?v=U3YL_D66TjA&feature=youtu.be
It's enabled a lot of transactions, several by myself. Indeed yesterday I did a couple of ERC20 token transfers which took less than a minute and cost two cents each.
Besides Raiden, you can even impliment a simple state channel in about 50 lines of solidity & it shouldn't be too hard to adapt it to any token, see “Ethereum Payment Channel in 50 Lines of Code” by Matthew Di Ferrante https://link.medium.com/A4wqDWtj2S
> The entire article is of similar quality.
You cherry-picked some points and rebuffed them, then proceeded to generalize and dismiss all of them.
The reality is that any SQL database would be superior to every blockchain unless your motives are criminal nature.
Disclosure: I sold all of my cryptos in Q1 2018, after buying my first bitcoin in the summer of 2013 and loosing a (luckily) small chunk of it in the infamous MtGox hack.
You cherry-picked some points and rebuffed them, then proceeded to generalize and dismiss all of them.
The reality is that any SQL database would be superior to every blockchain unless your motives are criminal nature.
Disclosure: I sold all of my cryptos in Q1 2018, after buying my first bitcoin in the summer of 2013 and loosing a (luckily) small chunk of it in the infamous MtGox hack.
> The reality is that any SQL database would be superior to every blockchain unless your motives are criminal nature.
What if you're a person in China in the future, your social credit is crap, and the only way you can buy bread is over a government approved payment app?
What if you're a person in China in the future, your social credit is crap, and the only way you can buy bread is over a government approved payment app?
> The reality is that any SQL database would be superior to every blockchain unless your motives are criminal nature.
People in Venezuela and other political or economically opressed people around the world don't agree [1].
It seems you are wrongly extrapolating the context where you live.
[1] https://coin.dance/volume/localbitcoins
People in Venezuela and other political or economically opressed people around the world don't agree [1].
It seems you are wrongly extrapolating the context where you live.
[1] https://coin.dance/volume/localbitcoins
This is, I suppose, very similar to criminal motive, except that we find them sympathetic. A reminder that not all that is (locally, de facto) illegal is wrong.
One man's terrorist &c.
One man's terrorist &c.
Similar to criminal motives? It seems you never had 0 (zero) dollars and needed to receive a few dollars from your family outside your country with a government fully controlling the flow of capital.
The government being in the way of letting you receive a few dollars from your family is what's similar.
Using bitcoins in Venezuela isn't illegal.
[deleted]
Those people would rather be using USD.
I picked a few points, because rebutting all the article's ill-informed points would have meant writing an entire article myself, and I didn't have time for that.
If you hate blockchains in general, fine, but that's a different viewpoint than what the article espouses.
If you hate blockchains in general, fine, but that's a different viewpoint than what the article espouses.
Can you share those fixes?
First, some Proof-of-Stake setup:
1. Assume we have some set of "validators" who control the global consensus process. They come to consensus on the current global state of the system. These validators are vaguely analogous to miners in Proof-of-Work consensus.
2. These validators have coins bonded as collateral in exchange for more voting power in the consensus process.
One key idea necessary for Proof-of-Stake is to punish Byzantine validators, i.e., those who deviate from the consensus protocol, by destroying their bonded stake. If you misbehave, then you lose some proportion of your collateral. Thus, validators have incentive for participation (from rewards and fees) and a _disincentive_ for malicious behavior.
This is in contrast to Proof-of-Work consensus, where there is no way to punish a specific miner that misbehaves--we cannot programmatically take away physical mining ASICs. Changing the Proof-of-Work function is only an absolute last resort as it unfairly punishes the other honest miners.
So what constitutes misbehavior? When can we confidently punish another validator? An example is when a validator publishes signed attestations for conflicting forks--an example of equivocation. When presented with signed evidence of equivocation, the honest majority of validators can agree to punish the equivocator. This punishment system solves the original "nothing-at-stake" problem where a validator has no disincentive not to contribute to both sides of a fork.
On another note, the OP seems to misunderstand the fundamental consistency vs availability (in the event of a partition) trade-off that consensus algorithms must to make. Bitcoin's Proof-of-Work is more AP with probabilistic eventual consistency. In the event of a partition, the side with less mining power will make transactions unaware of the partition. When the partition heals, all transactions on the weaker side will revert, effectively double spending all transaction recipients on that side.
In contrast, many Proof-of-Stake protocols use a more traditional PBFT-style consensus process which favors consistency over availability. In the case of a partition, the weaker side will simply become unavailable (if it contains less than 1/3 of the voting power). In the event that no partition has >2/3+ of the voting power, the entire system will become unavailable. Also in contrast to PoW's eventual consistency, PBFT-style Proof-of-Stake allows for finality as soon as the validators come to consensus on the next block.
1. Assume we have some set of "validators" who control the global consensus process. They come to consensus on the current global state of the system. These validators are vaguely analogous to miners in Proof-of-Work consensus.
2. These validators have coins bonded as collateral in exchange for more voting power in the consensus process.
One key idea necessary for Proof-of-Stake is to punish Byzantine validators, i.e., those who deviate from the consensus protocol, by destroying their bonded stake. If you misbehave, then you lose some proportion of your collateral. Thus, validators have incentive for participation (from rewards and fees) and a _disincentive_ for malicious behavior.
This is in contrast to Proof-of-Work consensus, where there is no way to punish a specific miner that misbehaves--we cannot programmatically take away physical mining ASICs. Changing the Proof-of-Work function is only an absolute last resort as it unfairly punishes the other honest miners.
So what constitutes misbehavior? When can we confidently punish another validator? An example is when a validator publishes signed attestations for conflicting forks--an example of equivocation. When presented with signed evidence of equivocation, the honest majority of validators can agree to punish the equivocator. This punishment system solves the original "nothing-at-stake" problem where a validator has no disincentive not to contribute to both sides of a fork.
On another note, the OP seems to misunderstand the fundamental consistency vs availability (in the event of a partition) trade-off that consensus algorithms must to make. Bitcoin's Proof-of-Work is more AP with probabilistic eventual consistency. In the event of a partition, the side with less mining power will make transactions unaware of the partition. When the partition heals, all transactions on the weaker side will revert, effectively double spending all transaction recipients on that side.
In contrast, many Proof-of-Stake protocols use a more traditional PBFT-style consensus process which favors consistency over availability. In the case of a partition, the weaker side will simply become unavailable (if it contains less than 1/3 of the voting power). In the event that no partition has >2/3+ of the voting power, the entire system will become unavailable. Also in contrast to PoW's eventual consistency, PBFT-style Proof-of-Stake allows for finality as soon as the validators come to consensus on the next block.
> 1. Assume we have some set of "validators" who control the global consensus process.
This setup assumes there’s already consensus on a certain set of validators, but the challenge is arriving at this consensus in the first place.
This is the general problem of proof-of-stake: it assumes the presence of consensus in order to arrive at consensus. This is because consensus is reached by utilizing the scarce resource that is the chain’s token, but without consensus in the first place this token isn’t scarce at all.
Proof-of-work uses something external to its chain as the scarce resource that determines consensus (energy), while proof-of-stake uses something internal to its chain (the chain’s token). This means that when a PoW chain forks, the two chains have to share the external resource, while the resource is copied for PoS chain forks.
This setup assumes there’s already consensus on a certain set of validators, but the challenge is arriving at this consensus in the first place.
This is the general problem of proof-of-stake: it assumes the presence of consensus in order to arrive at consensus. This is because consensus is reached by utilizing the scarce resource that is the chain’s token, but without consensus in the first place this token isn’t scarce at all.
Proof-of-work uses something external to its chain as the scarce resource that determines consensus (energy), while proof-of-stake uses something internal to its chain (the chain’s token). This means that when a PoW chain forks, the two chains have to share the external resource, while the resource is copied for PoS chain forks.
> This setup assumes there’s already consensus on a certain set of validators, but the challenge is arriving at this consensus in the first place.
The validator set changes as people bond or unbond coins in exchange for stake. Running a fair and secure initial distribution is a somewhat orthogonal problem; perhaps you can run an open auction. Any Proof-of-Work or Proof-of-Stake systems has issues with low security in the beginning. Consider that until late ~2012 the total hashrate of the Bitcoin network was less than the hashrate of a single Antminer S9.
> This is the general problem of proof-of-stake: it assumes the presence of consensus in order to arrive at consensus. This is because consensus is reached by utilizing the scarce resource that is the chain’s token, but without consensus in the first place this token isn’t scarce at all.
Consensus and scarcity are tightly related. The consensus process and protocol spec are what make the token scarce, since by definition the majority agree on the token's inflation rate, supply, block reward, etc.... What happens when validators try to fork and change these parameters? They are directly incentivized to do so, yet similarly, what happens when Bitcoin miners try to change the block reward? Of course, they don't hold all the power; with sufficient cause and collaboration, users can signal a user-activated soft fork, or simply choose to follow the original unmodified fork.
> Proof-of-work uses something external to its chain as the scarce resource that determines consensus (energy), while proof-of-stake uses something internal to its chain (the chain’s token). This means that when a PoW chain forks, the two chains have to share the external resource, while the resource is copied for PoS chain forks.
Yes, this is called the "nothing-at-stake" problem, and it is solved by punishing validators who equivocate. This enforces scarcity of voting power across forks. The point is they can't exercise their voting power on both chains. As soon as they vote on one fork, they are committed. The validators on the other fork are incentivized to delete their stake if they vote on the other fork simultaneously.
The validator set changes as people bond or unbond coins in exchange for stake. Running a fair and secure initial distribution is a somewhat orthogonal problem; perhaps you can run an open auction. Any Proof-of-Work or Proof-of-Stake systems has issues with low security in the beginning. Consider that until late ~2012 the total hashrate of the Bitcoin network was less than the hashrate of a single Antminer S9.
> This is the general problem of proof-of-stake: it assumes the presence of consensus in order to arrive at consensus. This is because consensus is reached by utilizing the scarce resource that is the chain’s token, but without consensus in the first place this token isn’t scarce at all.
Consensus and scarcity are tightly related. The consensus process and protocol spec are what make the token scarce, since by definition the majority agree on the token's inflation rate, supply, block reward, etc.... What happens when validators try to fork and change these parameters? They are directly incentivized to do so, yet similarly, what happens when Bitcoin miners try to change the block reward? Of course, they don't hold all the power; with sufficient cause and collaboration, users can signal a user-activated soft fork, or simply choose to follow the original unmodified fork.
> Proof-of-work uses something external to its chain as the scarce resource that determines consensus (energy), while proof-of-stake uses something internal to its chain (the chain’s token). This means that when a PoW chain forks, the two chains have to share the external resource, while the resource is copied for PoS chain forks.
Yes, this is called the "nothing-at-stake" problem, and it is solved by punishing validators who equivocate. This enforces scarcity of voting power across forks. The point is they can't exercise their voting power on both chains. As soon as they vote on one fork, they are committed. The validators on the other fork are incentivized to delete their stake if they vote on the other fork simultaneously.
As a new user in a Proof-of-Stake protocol, how do I determine which chain to follow?
With PoW I can choose the 'longest' chain (chain with the most total work).
With PoW I can choose the 'longest' chain (chain with the most total work).
Easy. You'd probably pick the one with the biggest market cap. The whole point of money is that it is useful because everyone else is using it. So the one with the biggest market cap is almost certainly the one that you'd want to follow.
Or you could not do that. You could instead pick a different one. There is nothing stopping you.
If there are multiple networks, it would be obvious, and you can merely make up your own mind about which to follow.
Interestingly enough, this also applies to POW chains. There is nothing stopping you from picking a shorter chain. But if I had to guess, I would say that almost nobody would be following the shorter one.
This applies to POS coins as well. There would likely be 1 chain, that everyone is following. And this one chain would be obvious.
Or you could not do that. You could instead pick a different one. There is nothing stopping you.
If there are multiple networks, it would be obvious, and you can merely make up your own mind about which to follow.
Interestingly enough, this also applies to POW chains. There is nothing stopping you from picking a shorter chain. But if I had to guess, I would say that almost nobody would be following the shorter one.
This applies to POS coins as well. There would likely be 1 chain, that everyone is following. And this one chain would be obvious.
I haven't looked into this in quite some time, but as I recall, a new user can look at the available chains and determine which has the majority of stake behind it.
Is there a subtlety that makes that unworkable?
Is there a subtlety that makes that unworkable?
> Is there a subtlety that makes that unworkable?
The reason this can’t work is because it has no cost to create a new chain from scratch. I can create a thousand valid PoS chains in virtually no time, and there’s no decentralized way for you to choose the one everyone else chooses.
The only way to solve this is to give special rights to some set of stakers.
The reason this can’t work is because it has no cost to create a new chain from scratch. I can create a thousand valid PoS chains in virtually no time, and there’s no decentralized way for you to choose the one everyone else chooses.
The only way to solve this is to give special rights to some set of stakers.
Isn't that only an issue for a chain that's starting from PoS from the beginning? Ethereum already has a PoW chain that they plan to turn into PoS. If the ethereum protocol agreement is to switch to PoS at block N, then I don't see how you can create a valid-looking N+1 block without yourself putting a large amount of real eth at stake.
That’s a good point. I’ll have to think about that.
The client you download tells you, by giving you an accurate recent snapshot of the state.
So one has to trust distributors of the software?
I mean it’s been known about PoS systems since inception, it’s just funny how it’s supporters never like to admit it.
I mean it’s been known about PoS systems since inception, it’s just funny how it’s supporters never like to admit it.
Yes but you have to trust the distributors of the software anyway, even in PoW.
No you don’t. You only need to know consensus rules. You can use any software, you can build it yourself, you can order an audit, you can write software yourself.
Proof of work committed to the chain that is valid according to consensus rules you know is universal and objective measure that everyone will observe equally.
That’s where bitcoin’s security comes from and that’s how you can avoid to rely on trusting third parties.
Proof of work committed to the chain that is valid according to consensus rules you know is universal and objective measure that everyone will observe equally.
That’s where bitcoin’s security comes from and that’s how you can avoid to rely on trusting third parties.
How do you know the consensus rules?
from the internet. are you now going to argue that there is no difference between knowing a couple pages of text that describe how a system should work from downloading and running opaque binary from untrusted source?
I would like to see that couple pages of text that describe the Bitcoin consensus rules in such a detail that you could do a clean room implementation of a Bitcoin client.
Hint: They don't exist. That's because the specification of the consensus rules are in the reference implementation of Bitcoin and every other implementation has to implement the same behavior as the C++ client, including any possible programming mistakes.
So you only know if your re-implementation works "correctly" if you download and run it against an opaque binary from an untrusted(?) source.
Whatever you do, you need to anchor your trust somewhere. You should always be aware where you anchor it and what trade-offs there are.
Hint: They don't exist. That's because the specification of the consensus rules are in the reference implementation of Bitcoin and every other implementation has to implement the same behavior as the C++ client, including any possible programming mistakes.
So you only know if your re-implementation works "correctly" if you download and run it against an opaque binary from an untrusted(?) source.
Whatever you do, you need to anchor your trust somewhere. You should always be aware where you anchor it and what trade-offs there are.
it is true that bitcoin has a reference specification, but only a small subset of that code is actual consensus code, but the rest of your message is just bs.
knowing consensus rules is the easy bit - code is open source, there are multiple implementations, there is community, there are users, merchants, exchanges - they all agree what consensus rules are. but what's most important - I CAN VALIDATE FULL BITCOIN BLOCKCHAIN IN REASONABLE AMOUNT OF TIME AND VERIFY THAT I FOLLOW THE CORRECT CHAIN.
you seem to have forgotten what this thread is about. it's a short one - i'm sure you can track back and read it again, carefully.
edit: clarification.
knowing consensus rules is the easy bit - code is open source, there are multiple implementations, there is community, there are users, merchants, exchanges - they all agree what consensus rules are. but what's most important - I CAN VALIDATE FULL BITCOIN BLOCKCHAIN IN REASONABLE AMOUNT OF TIME AND VERIFY THAT I FOLLOW THE CORRECT CHAIN.
you seem to have forgotten what this thread is about. it's a short one - i'm sure you can track back and read it again, carefully.
edit: clarification.
So you're trusting someone on the internet to tell you protocol specifications (and then, since you don't trust the software distributor, doing a full audit of their software or writing your own client).
With Proof of Stake, you're trusting someone on the internet to tell you the hash for the most recent valid block.
And in practice the difference is even less significant. In reality, very close to every new user of a PoW blockchain just trusts the software distributor to be providing them with a client that works with the protocol commonly known as (Bitcoin-Cash, Ethereum, etc).
With Proof of Stake, you're trusting someone on the internet to tell you the hash for the most recent valid block.
And in practice the difference is even less significant. In reality, very close to every new user of a PoW blockchain just trusts the software distributor to be providing them with a client that works with the protocol commonly known as (Bitcoin-Cash, Ethereum, etc).
The two are very different.
Knowing consensus rules I can verify the chain and if I notice something fishy - I go back to figuring out if I’m being attacked.
If instead I simply accept what chain I should follow - I have no guarantees I wasn’t attacked.
With PoS it’s even worse - I can generate million different chains for zero cost and you have no objective measure to tell which one of them is more genuine and more secure. That’s exactly the issue PoW solves - gives you such objective measure to compare chains.
Knowing consensus rules I can verify the chain and if I notice something fishy - I go back to figuring out if I’m being attacked.
If instead I simply accept what chain I should follow - I have no guarantees I wasn’t attacked.
With PoS it’s even worse - I can generate million different chains for zero cost and you have no objective measure to tell which one of them is more genuine and more secure. That’s exactly the issue PoW solves - gives you such objective measure to compare chains.
why/? you can just review the code manually...
It's solved for Cardano (Genesis). A new user can determine which chain to follow without relying on third parties.
I'm skeptical of this claim.
From the Cardano paper [1] p. 47,
> Even if the attacker could find a strategy to generate an alternative chain with valid leader selection data, presenting this chain and its blocks generated at slots that are far ahead of time would not result in a successful attack since those blocks far ahead of time would be rejected by the honest stakeholders and the final alternative chain would be shorter than the main chain.
At first glance, the attacker then needs to gain the keys for almost all of the bonded stake at some point in the past. This is obviously a stricter requirement than holding keys for 2/3+ of the stake at some point in the past, but still seems remotely plausible when targeting the small set of validators in the early bootstrapping period. Remember also that these early validators could be totally cashed out of the system and thus have actually have no disincentive not to sell their keys.
Actually, even controlling only 2/3+ of some past stake, the attacker can likely grind on the randomness beacon outputs (since they control all the shares) to ensure his controlled keys have near 100% of the slots in the next epoch. Then the long range fork would be of a similar or possibly even greater length than the honest fork.
[1] https://eprint.iacr.org/2016/889.pdf
From the Cardano paper [1] p. 47,
> Even if the attacker could find a strategy to generate an alternative chain with valid leader selection data, presenting this chain and its blocks generated at slots that are far ahead of time would not result in a successful attack since those blocks far ahead of time would be rejected by the honest stakeholders and the final alternative chain would be shorter than the main chain.
At first glance, the attacker then needs to gain the keys for almost all of the bonded stake at some point in the past. This is obviously a stricter requirement than holding keys for 2/3+ of the stake at some point in the past, but still seems remotely plausible when targeting the small set of validators in the early bootstrapping period. Remember also that these early validators could be totally cashed out of the system and thus have actually have no disincentive not to sell their keys.
Actually, even controlling only 2/3+ of some past stake, the attacker can likely grind on the randomness beacon outputs (since they control all the shares) to ensure his controlled keys have near 100% of the slots in the next epoch. Then the long range fork would be of a similar or possibly even greater length than the honest fork.
[1] https://eprint.iacr.org/2016/889.pdf
How?
Miners are not responsible for validating the Bitcoin blockchain. Users are responsible for validation, miners are responsible for ordering blocks. If a miner produces an invalid block, their block is not accepted by the network of users.
Nevertheless miners have a strong incentive to validate, so they don't waste their effort on an invalid block.
What about tezos?
When reading this I think of my deep knowledge of TCP (especially the pain points) and yet it is "The Internet" for the past while. Compared to simpler protocols like Delta-T and later/better protocols like XTP, TCP still "won" for a variety of reasons (adoption, good enough, numbers of implementation, hardware implementation, etc)
There are a couple reasons I think Ethereum might prevail over bitcoin:
* Vitalik is young and "all in", god willing he will have many decades to refine and improve Ethereum. Think Linus and Linux versus the cabal of Bitcoin and BSD core leadership.
* Most of the criticism in this article are things that have slipped committed or expected dates. The community is aware of the problems and is looking forward to fixing them despite it taking longer than expected. It's ok to be wrong and off on dates if you get it right "just in time" which is only obvious after the fact.
All in all, Bitcoin might be BSD and Ethereum might be Linux. BSD was technically better for a decade, but Linux had the central leadership of a young Linus and scaled better in adding new developers and corporate users into the mix at the right time. That seemed to matter more than quality, stability, and longevity of governance at least up until now.
It's perfectly valid to point out the technical flaws and remind people they missed their commitments. But I'd caution against making financial decisions with too much weight on that alone, which would be about as effective as making them on the expected good will of the community of a cryptocoin :)
There are a couple reasons I think Ethereum might prevail over bitcoin:
* Vitalik is young and "all in", god willing he will have many decades to refine and improve Ethereum. Think Linus and Linux versus the cabal of Bitcoin and BSD core leadership.
* Most of the criticism in this article are things that have slipped committed or expected dates. The community is aware of the problems and is looking forward to fixing them despite it taking longer than expected. It's ok to be wrong and off on dates if you get it right "just in time" which is only obvious after the fact.
All in all, Bitcoin might be BSD and Ethereum might be Linux. BSD was technically better for a decade, but Linux had the central leadership of a young Linus and scaled better in adding new developers and corporate users into the mix at the right time. That seemed to matter more than quality, stability, and longevity of governance at least up until now.
It's perfectly valid to point out the technical flaws and remind people they missed their commitments. But I'd caution against making financial decisions with too much weight on that alone, which would be about as effective as making them on the expected good will of the community of a cryptocoin :)
>TCP still "won" for a variety of reasons (adoption, good enough, numbers of implementation, hardware implementation, etc)
Agreed
Ethereum is way ahead in the ecosystem race. There are lots more developers using eth and tooling available compared to other chains, and 2019 is poised to accelerate the ecosystem.
The technology still needs work in certain areas (by the way, so does btc). Talented and experienced people are working on it, despite what this tweetstorm says
Agreed
Ethereum is way ahead in the ecosystem race. There are lots more developers using eth and tooling available compared to other chains, and 2019 is poised to accelerate the ecosystem.
The technology still needs work in certain areas (by the way, so does btc). Talented and experienced people are working on it, despite what this tweetstorm says
I guess BSD and Linux were aiming to take the same position as OS where Bitcoin and Ethereum are not.
No one sane would get Bitcoin staffed with complicated features beyond its simple purpose of keeping a decentralized ledger.
Nothing else would go forward if it isn't for Bitcoin running in a stable way.
Bitcoin would be positioned as TCP whereas Ethereum would be regarded as HTTP protocol ready to run apps on top.
BSD's position is more like Bitcoin Cash (or SV). Similar purpose, different philosophy.
No one sane would get Bitcoin staffed with complicated features beyond its simple purpose of keeping a decentralized ledger.
Nothing else would go forward if it isn't for Bitcoin running in a stable way.
Bitcoin would be positioned as TCP whereas Ethereum would be regarded as HTTP protocol ready to run apps on top.
BSD's position is more like Bitcoin Cash (or SV). Similar purpose, different philosophy.
Except that HTTP literally does run on top of TCP, while Ethereum doesn't depend on Bitcoin in any way, unless you count price action and the minds of many speculators.
Interesting that you picked TCP given the fact that the TCP everyone runs today isn’t the original one.
>Ethereum is becoming increasingly centralized.
How do people see the forks, the ‘closed’ meetings, the pivots, the obvious influence that a couple devs have over the entire system - and still walk away with any notion there is decentralization?
How do people see the forks, the ‘closed’ meetings, the pivots, the obvious influence that a couple devs have over the entire system - and still walk away with any notion there is decentralization?
Because there are several different kinds of decentralization and it's not black and white.
Miner decentralization is important is the whole security model relies on nobody controlling >50% of hashrate.
Developer centralization is another important point. BTC arguably fails at this when a small group, combined with extensive propaganda campaigns, artificially constrains Bitcoin's throughput. There are no valid arguments against raising the blocksize to 2MB for example.
Then there's node centralization, wealth distribution and maybe other types I'm missing.
Miner decentralization is important is the whole security model relies on nobody controlling >50% of hashrate.
Developer centralization is another important point. BTC arguably fails at this when a small group, combined with extensive propaganda campaigns, artificially constrains Bitcoin's throughput. There are no valid arguments against raising the blocksize to 2MB for example.
Then there's node centralization, wealth distribution and maybe other types I'm missing.
>Developer centralization is another important point. BTC arguably fails at this when a small group, combined with extensive propaganda campaigns, artificially constrains Bitcoin's throughput. There are no valid arguments against raising the blocksize to 2MB for example.
If a handful of people could effectively destroy a “currency” at any point... it’s not decentralized in any sense of the word that is important for trustworthyness or longevity.
A government could crash its own money, but there is a strong incentive to not do that. Bitcoin or Eth has nothing tied to it, it’s entitely at the whim of some programmers who as I understand it, aren’t economics experts.
That’s the point I made above. You want to say the blockchain and hashing is decentralized, great. But when people use that word, they’re talking about (imo) how it’s “safe” to put money into because “no one owns the crypto coin” and if anyone still believes that latter part, well, they probably aren’t paying attention.
If a handful of people could effectively destroy a “currency” at any point... it’s not decentralized in any sense of the word that is important for trustworthyness or longevity.
A government could crash its own money, but there is a strong incentive to not do that. Bitcoin or Eth has nothing tied to it, it’s entitely at the whim of some programmers who as I understand it, aren’t economics experts.
That’s the point I made above. You want to say the blockchain and hashing is decentralized, great. But when people use that word, they’re talking about (imo) how it’s “safe” to put money into because “no one owns the crypto coin” and if anyone still believes that latter part, well, they probably aren’t paying attention.
That's not really true though. They didn't "destroy" it. They constrained it's development and hindered adoption.
They didn't do it by themselves either. They got miners and exchanges on board as well.
Also if you disagree and you think there's a better way to develop it you can by creating a fork or sell your coins. There is nothing stopping you.
> they’re talking about (imo) how it’s “safe” to put money into because “no one owns the crypto coin” and if anyone still believes that latter part, well, they probably aren’t paying attention.
There's a difference between believing nobody has significant sway over how the cryptocurrency should be developed and you personally having full control over your own coins.
They didn't do it by themselves either. They got miners and exchanges on board as well.
Also if you disagree and you think there's a better way to develop it you can by creating a fork or sell your coins. There is nothing stopping you.
> they’re talking about (imo) how it’s “safe” to put money into because “no one owns the crypto coin” and if anyone still believes that latter part, well, they probably aren’t paying attention.
There's a difference between believing nobody has significant sway over how the cryptocurrency should be developed and you personally having full control over your own coins.
The usual reply is "Ethereum Classic".
If Ethereum were as centralized as claimed ("cult of Vitalik", etc.), the survival of ETC wouldn't have been possible.
If Ethereum were as centralized as claimed ("cult of Vitalik", etc.), the survival of ETC wouldn't have been possible.
None of the things you mention have anything to do with the decentralization problem he's talking about. See the attached tweet.
It's about not being able to run a full node yourself, which consequently means everyone is using third-party services such as Infura.
It's about not being able to run a full node yourself, which consequently means everyone is using third-party services such as Infura.
If everyone being able to run a full node is necessary for bitcoin then it's simply going to fade away into irrelevance.
> 7/ Recently, a team of reputable developers decided to peer review a widely anticipated Casper / sharding white paper, concluding that it does not live up to its own claims.
That's rather misleading. The critique was about Casper CBC, which is very different from Casper FFG. Casper FFG is the basis of the Ethereum 2.0 design, and it's not very controversial. Casper CBC may be more controversial, but nobody is suggesting that it be deployed any time soon. It's Vlad's ongoing research project.
That's rather misleading. The critique was about Casper CBC, which is very different from Casper FFG. Casper FFG is the basis of the Ethereum 2.0 design, and it's not very controversial. Casper CBC may be more controversial, but nobody is suggesting that it be deployed any time soon. It's Vlad's ongoing research project.
As a developer, I checked Ethereum's code base. To be honest, it is not that complex in the tech itself.
I know it is not fair to just count code lines to compare the complexity. But the Ethereum python code base has only 30K-40K lines code including test while Linux kernel has 15M lines.
I know it is not fair to just count code lines to compare the complexity. But the Ethereum python code base has only 30K-40K lines code including test while Linux kernel has 15M lines.
Ethereum is predominantly written in C++. The python codebase you are talking about is the Ethereum client / virtual machine of which there are several implementations written in Java, Go etc.
Non of you are right. Go ethereum (geth), the official client is written in Golang
I know GETH is the official one now. But that does not matter at all. So a software written in Python is only 30K line with tests, it could become 15M lines once it is rewritten in Go? Of course, it is IMPOSSIBLE!
Btw, there is also a RUST implementation from Gavin Wood, which is much faster than Geth.
Btw, there is also a RUST implementation from Gavin Wood, which is much faster than Geth.
I have no idea what python implementation you're talking about. Concepts behind cryptocurrencies are most often not hard, but there are a million implementation details to consider if you want to write a production ready client
This is bitcoin maximalist dreck, I’m surprised to even see this nonsense upvoted on HN.
Perhaps, but its nice to see some discussion in these comments that isn't just taking a dump on all crypto currency like I have seen many times before.
>>12/ However, upon closer examination [Plasma] was the recycling of some stale ideas, and the project went nowhere
Past tense? this guy isn't very thorough.
Past tense? this guy isn't very thorough.
This is a very good read from what I call the thought leaders of HN and Silicon Valley. https://a16zcrypto.com/
Vitalik & Co have enough money to hire an army of top developers if they want to try and fix ETH. The fact that they don't is proof that it's unfixable and that they don't care.
There aren't enough devs who know how to write/research decentralized apps for them to hire. If you know of them, they will hire those people gladly
FB and Aws both have a branch of devs who know P2P and blockchain.
P2P is not that complex, just it is not worth time to work on it at this moment because it goes nowhere.
Actually, P2P research was only hot around 2000-2005.
P2P is not that complex, just it is not worth time to work on it at this moment because it goes nowhere.
Actually, P2P research was only hot around 2000-2005.