The Merge(avc.com)
avc.com
The Merge
https://avc.com/2022/08/the-merge/
176 comments
This wasn't supposed to be an argument about the relative exploitability of the attack-surfaces presented by implementations of the technologies of PoW and PoS consensus systems, though; but rather about the economics inherent in "cornering the market" in PoW vs PoS.
PoW and PoS both allow a single party to unilaterally control the network when they're working exactly as intended — just under conditions that are impractical in major networks. That impracticality can be measured in economic terms — as a dollars-and-cents cost to acquire the assets necessary to take control.
It's harder to buy out 51% of validation stake of a network of size N, than it is to buy the GPUs and the electricity to power them to do 51% of the mining for a network of size N. GPUs are technically unbounded — you can just build your own fabs, if you really care — and so the marginal cost of acquiring another GPU+electricity is constant. But stake is a pie; the marginal cost of acquiring more of it increases as less of it remains available on the market. (And many people will just never give theirs up, for ideological reasons.) Thus, it's harder to Sybil attack PoS than PoW.
PoW and PoS both allow a single party to unilaterally control the network when they're working exactly as intended — just under conditions that are impractical in major networks. That impracticality can be measured in economic terms — as a dollars-and-cents cost to acquire the assets necessary to take control.
It's harder to buy out 51% of validation stake of a network of size N, than it is to buy the GPUs and the electricity to power them to do 51% of the mining for a network of size N. GPUs are technically unbounded — you can just build your own fabs, if you really care — and so the marginal cost of acquiring another GPU+electricity is constant. But stake is a pie; the marginal cost of acquiring more of it increases as less of it remains available on the market. (And many people will just never give theirs up, for ideological reasons.) Thus, it's harder to Sybil attack PoS than PoW.
The hardness works both ways - these with stake can decline to process what they deem ungood and there's nothing one can do about it.
You see "hardness of Sybil attack", I see "rule of unelected comittee".
The very fact that GPUs are not pie, that GPUs are minted, gives an opportunity for a change if things do not go well for actual majority of users-as-persons.
You see "hardness of Sybil attack", I see "rule of unelected comittee".
The very fact that GPUs are not pie, that GPUs are minted, gives an opportunity for a change if things do not go well for actual majority of users-as-persons.
Right.
And PoW, more GPUs is a quality bound to physical mechanics. In order to build more GPUs, you need more fabs capable of doing so. You need a more educated populace capable of building and improving GPUs. You also need better energy generation to not destroy the planet and provide energy for an increasingly more energy hungry society. This leads to improvements via physical conditions of survival, resulting in better macrosocial outcomes.
PoS says “you have money so you make money for no reason and you get resource allocation privileges absent binding to physical properties”. In other words, one receives all benefit without any effort. Yet effort is implicit. Which means it become abstracted and convoluted, allowing one to offset effort to no-stakers.
In other words, decision making rights lacking any consequence. Also known as a caste system. Also freezing the castes making advancement highly improbable, and deeply / forever embedding dynasty algorithmically.
There then exists no forces within the body of the mechanism to improve compute capacity nor energy gen efficiency. This, taken to the limit, is a highly undesirable outcome for advancement to the next stage of existence. In fact, it sets us back by a potentially significant margin.
The result is nothing short of digital aristocracy.
Sure, in the short term it will be a secure global compute that can operate more “efficiently” for some time. But look around you. Look at what happens when you let people make decisions without earning it / understanding the full impact of their decisions.
And PoW, more GPUs is a quality bound to physical mechanics. In order to build more GPUs, you need more fabs capable of doing so. You need a more educated populace capable of building and improving GPUs. You also need better energy generation to not destroy the planet and provide energy for an increasingly more energy hungry society. This leads to improvements via physical conditions of survival, resulting in better macrosocial outcomes.
PoS says “you have money so you make money for no reason and you get resource allocation privileges absent binding to physical properties”. In other words, one receives all benefit without any effort. Yet effort is implicit. Which means it become abstracted and convoluted, allowing one to offset effort to no-stakers.
In other words, decision making rights lacking any consequence. Also known as a caste system. Also freezing the castes making advancement highly improbable, and deeply / forever embedding dynasty algorithmically.
There then exists no forces within the body of the mechanism to improve compute capacity nor energy gen efficiency. This, taken to the limit, is a highly undesirable outcome for advancement to the next stage of existence. In fact, it sets us back by a potentially significant margin.
The result is nothing short of digital aristocracy.
Sure, in the short term it will be a secure global compute that can operate more “efficiently” for some time. But look around you. Look at what happens when you let people make decisions without earning it / understanding the full impact of their decisions.
51% attacks aren't just a single actor dictating blocks, but the threat of a cartel of large stakeholders cooperating to attain 51% of vote power
Yes, and? This is orthogonal to PoW vs PoS. In either case, you can treat the resulting cartel as "a single party" for purposes of modelling them.
It's also not really a scenario worth considering.
In order to cooperate, the miners/validators need to have full alignment on their goals. Which is very unlikely for Sybil attacks, which almost always destroy systemic economic value — including the value held by the attackers. You might be able to find e.g. a government who wants to do a Sybil attack to accomplish goal X, and are willing to burn down $N billion dollars of their own staked assets to do so; but can you find a bunch of other governments or large corporations who also want to accomplish that same goal X more than they want their own stake-value? And who can be trusted to coordinate and not leak the plan?
A Sybil attack is basically like a bank heist where the attacker(s) have to pull up to the bank in their own personal aircraft carriers (destroying said aircraft carriers in the process, from the hull damage of sliding along several city streets), without anyone realizing they're coming. You can maybe theoretically do it as one entity with full internal goal-alignment. It's much harder to do it as multiple entities.
It's also not really a scenario worth considering.
In order to cooperate, the miners/validators need to have full alignment on their goals. Which is very unlikely for Sybil attacks, which almost always destroy systemic economic value — including the value held by the attackers. You might be able to find e.g. a government who wants to do a Sybil attack to accomplish goal X, and are willing to burn down $N billion dollars of their own staked assets to do so; but can you find a bunch of other governments or large corporations who also want to accomplish that same goal X more than they want their own stake-value? And who can be trusted to coordinate and not leak the plan?
A Sybil attack is basically like a bank heist where the attacker(s) have to pull up to the bank in their own personal aircraft carriers (destroying said aircraft carriers in the process, from the hull damage of sliding along several city streets), without anyone realizing they're coming. You can maybe theoretically do it as one entity with full internal goal-alignment. It's much harder to do it as multiple entities.
One relevant question is which system allows for the pooling of resources easier. In PoW you have mining pools, and a member changing pools is trivial as changing an address. In PoS you have large organizations like Coinbase running staking for users. Don't know how withdrawls will work, but that could be a very significant amount of eth. Coinbase would have to vote a certain way to comply with laws.
From the Coinbase User Agreement (https://www.coinbase.com/legal/user_agreement/united_states#...):
> 1.4. Governance and Voting. For certain Digital Assets, the underlying protocols offer stakers the ability to vote on matters related to the governance of protocol-level issues. Coinbase may or may not support voting for such assets, and may cease supporting voting at any time in its discretion. Coinbase will comply with your instruction to vote your Supported Digital Assets to the extent Coinbase or its affiliate supports voting for such Supported Digital Assets. In certain cases, Coinbase may vote on your behalf where Coinbase or the applicable protocol does not support delegated voting; in those instances, Coinbase will vote with the protocol’s recommendation.
But what about jurisdictions that compel them to vote in certain ways?
From the Coinbase page on Eth2 staking (https://help.coinbase.com/en/coinbase/trading-and-funding/co...):
> To be eligible to stake ETH, you must: [...] Live in a jurisdiction eligible for ETH staking.
> Which regions are eligible for ETH staking? [...] United States (excluding Hawaii & New York)
In other words: they're just not going to offer the service in any place that compels them to vote a certain way.
I presume most delegatable validators have chosen a similar option: avoiding the problem entirely by not taking anyone's money if they're from those jurisdictions. Just as most ICOs in 2017, when the US didn't have regulatory clarity on crypto being a security or not, just avoided the problem entirely by preventing (direct) sales to US-market investors.
> 1.4. Governance and Voting. For certain Digital Assets, the underlying protocols offer stakers the ability to vote on matters related to the governance of protocol-level issues. Coinbase may or may not support voting for such assets, and may cease supporting voting at any time in its discretion. Coinbase will comply with your instruction to vote your Supported Digital Assets to the extent Coinbase or its affiliate supports voting for such Supported Digital Assets. In certain cases, Coinbase may vote on your behalf where Coinbase or the applicable protocol does not support delegated voting; in those instances, Coinbase will vote with the protocol’s recommendation.
But what about jurisdictions that compel them to vote in certain ways?
From the Coinbase page on Eth2 staking (https://help.coinbase.com/en/coinbase/trading-and-funding/co...):
> To be eligible to stake ETH, you must: [...] Live in a jurisdiction eligible for ETH staking.
> Which regions are eligible for ETH staking? [...] United States (excluding Hawaii & New York)
In other words: they're just not going to offer the service in any place that compels them to vote a certain way.
I presume most delegatable validators have chosen a similar option: avoiding the problem entirely by not taking anyone's money if they're from those jurisdictions. Just as most ICOs in 2017, when the US didn't have regulatory clarity on crypto being a security or not, just avoided the problem entirely by preventing (direct) sales to US-market investors.
But what happens if/when a large amount of user ETH gets staked in a single country, in a few entities? End users don’t have the motive or skills to move their ETH to platforms or systems that better protect decentralization. The downsides of PoS is worth exploring.
+1 two different systems with their own pros and cons. So far PoW seems more resilient, but that may also have to do with Bitcoin treating nation states and centralized entities as adversaries from the start.
Ever since Fred pumped $Kin, I have a hard time taking anything he says about crypto seriously. Here he seems to be again talking his book, even when the facts don't agree with him.
This disclosure should be at the top of the article:
> Disclosure: My family and USV have large holdings in ETH and other crypto assets and may continue to add to them in the coming weeks, months, and years.
> Disclosure: My family and USV have large holdings in ETH and other crypto assets and may continue to add to them in the coming weeks, months, and years.
Most of the most knowledgeable people in the space probably have large holdings, since otherwise there’s not much incentive to learn about it.
People don’t need incentives to learn about technologies that solve real problems though. I saw the value in Macs, for example, without ever buying Apple shares, I use AWS without owning Amazon, I learned about Linux without profiting from its spread, etc.
Update: My point is simply that if “most knowledgeable people in the space probably have large holdings” as was claimed, this is arguably an indictment of the technology under discussion here. Useful technologies tend to have enthusiasts with no direct financial stake in their success. The fact that people happen to invest in tech companies and do well, or that many have indirect financial incentives to embrace tech, is orthogonal to my point. It is weird if a given tech is entirely or largely carried by people directly invested in it. It raises questions of whether it is generally useful. People who want Fred to front load his disclaimer are probably thinking by along these lines.
Update: My point is simply that if “most knowledgeable people in the space probably have large holdings” as was claimed, this is arguably an indictment of the technology under discussion here. Useful technologies tend to have enthusiasts with no direct financial stake in their success. The fact that people happen to invest in tech companies and do well, or that many have indirect financial incentives to embrace tech, is orthogonal to my point. It is weird if a given tech is entirely or largely carried by people directly invested in it. It raises questions of whether it is generally useful. People who want Fred to front load his disclaimer are probably thinking by along these lines.
I can only speak for myself but I built software in the cryptocurrency/blockchain space for about 5 years before I held any as an investment.
For me, the incentive was to learn about the tech for the sake of the tech. I actually wasn’t a believer in cryptocurrency as a long term useful concept. I was building into spaces that would benefit from immutability and transparency where accountability was low (high risk businesses and government transparency)
Really, it is something independent of the tech that allowed me to turn a corner on cryptocurrency. I accepted that large groups of believers can “create” value based on nothing but their shared willingness to continue to believe.
Bitcoin and Ethereum have such a critical mass of believers IMO. I wasn’t sure that the tech stack would live up to the hype but I was no longer worried that the price would drop to zero.
For me, the incentive was to learn about the tech for the sake of the tech. I actually wasn’t a believer in cryptocurrency as a long term useful concept. I was building into spaces that would benefit from immutability and transparency where accountability was low (high risk businesses and government transparency)
Really, it is something independent of the tech that allowed me to turn a corner on cryptocurrency. I accepted that large groups of believers can “create” value based on nothing but their shared willingness to continue to believe.
Bitcoin and Ethereum have such a critical mass of believers IMO. I wasn’t sure that the tech stack would live up to the hype but I was no longer worried that the price would drop to zero.
They don't but realistically that is the incentive and motivation for many people - including technologists who ultimately decide to use their understanding of the market to leverage capital rather than code or perform a similar technical function.
In your case one could argue that if you saw so much future value in the Mac/Apple ecosystem you missed out significantly by not purchasing Apple stock. Depending on when you made your observation, even a modest investment would have had a significant return over the past 20 years.
I actually use the Amazon example when people tell me how worried they are about Amazon becoming all almighty and taking over all commerce - that if they actually believe that then they should probably buy Amazon stock and use the profits to do something to counter whatever negative effect they perceive.
As a former software engineer and founder now VC what I personally realized is I could have the greatest impact on the industry from leveraging capital around my own industry thesis rather than continue to build it myself. It's all a layer cake.
In your case one could argue that if you saw so much future value in the Mac/Apple ecosystem you missed out significantly by not purchasing Apple stock. Depending on when you made your observation, even a modest investment would have had a significant return over the past 20 years.
I actually use the Amazon example when people tell me how worried they are about Amazon becoming all almighty and taking over all commerce - that if they actually believe that then they should probably buy Amazon stock and use the profits to do something to counter whatever negative effect they perceive.
As a former software engineer and founder now VC what I personally realized is I could have the greatest impact on the industry from leveraging capital around my own industry thesis rather than continue to build it myself. It's all a layer cake.
Is your career in a field where learning any of those things is useful? That's still a financial incentive.
You can trust that any link from avc.com has unstated financial conflict of interest. These links get on the front page because people gawk at “VC said X” not because there’s technical or even truthful discussion of X.
What unstated financial conflict of interest are you speculating this article has?
Why is it needed at all though? (I know it's the 'style' to disclose like this). Fred is a VC and he is blogging. It's assumed he has some interest or bias and anyone reading should be skeptical. This is not a news story. He could have a bias or an angle even if he doesn't benefit.
And what does 'large holdings' even mean anyway? Large to Fred what's large to Fred?
And what does 'large holdings' even mean anyway? Large to Fred what's large to Fred?
The idea that Proof of Stake is more secure against attack is beyond absurd, frankly. However you feel about the energy usage of proof of work consensus mechanisms, they are far more resistant to attack and centralization.
I agree that it's absurd today, but how many bitcoin halvings until it isn't? When people talk about the security of bitcoin, there's a tendency to pretend that the network's security isn't 98% subsidized by a diminishing pool of unminted bitcoin.
There are cryptocurrencies like monero that have implemented a constant "tail emission" block reward to fight off selfish mining attacks. So that leads me to believe that's a threat specific to bitcoin's tokenomics and not PoW cryptocurrencies in general.
Yes, if you don't bound the number of tokens it's not obviously doomed as time goes to infinity, but there's still no particular reason to assume that the rate of mining rewards is either good enough to secure the network or not massively inefficient.
Yeah, this is why I think bitcoin is long term not worthwhile. While the vision was a digital currency which would be widely used to transact with, it was plausible that transaction costs would be sufficient to secure the network (though it would still be difficult to actually price them effectively). But as a 'store of value', it will start to become either expensive or insecure as the mining rewards peter out.
The time to mine a block is "constant", in that it takes an average of 10 minutes whatever the network size.
When the mining rewards peter out, big ASIC farm miners leave the network, the mining difficulty goes down, and so does the energy and hardware investment required to mine a single block. But at the same time, smaller time miner can enter the network and mine with less powerful hardware.
If all miners were to quit tomorrow, the difficulty would go down so much that you could mine a block, in 10 minutes, with a Raspberry Pi Zero.
When the mining rewards peter out, big ASIC farm miners leave the network, the mining difficulty goes down, and so does the energy and hardware investment required to mine a single block. But at the same time, smaller time miner can enter the network and mine with less powerful hardware.
If all miners were to quit tomorrow, the difficulty would go down so much that you could mine a block, in 10 minutes, with a Raspberry Pi Zero.
There are beliefs that as Bitcoin continues to accrue value and users, the fees will be enough to sustain the network. I understand many are skeptical in this regard and the only thing that will them right or wrong is time.
And with most common type of attack discussed the 51% double spend... You get to keep the fees... On all that happen during attack period transactions... Depending on situation on network you might not even lose anything if there isn't enough well paying transactions around.
Why? PoW can only afford to be attacked twice. It even has a name: “spawn camping.” In proof of stake, this is pretty easy to defend against repeatedly.
https://vitalik.ca/general/2020/11/06/pos2020.html
https://vitalik.ca/general/2020/11/06/pos2020.html
If you are accepting that the network can hard fork to change the hash algorithm, then why not accept that they can do a soft fork to blacklist UTXOs or any one of who-knows-how many possible defenses? Changing the hashing algorithm is a nuclear option and probably not necessary in the astronomically unlikely event that someone managed to get 51% of hash rate for any amount of time.
edit: Blacklisting UTXOs is entirely possible as I mentioned, and as I said, it should be achievable by soft fork. This would be the proof of work equivalent of slashing. I have a hard time believing Vitalik doesn’t know this. Is he being dishonest? I don’t know.
edit: Blacklisting UTXOs is entirely possible as I mentioned, and as I said, it should be achievable by soft fork. This would be the proof of work equivalent of slashing. I have a hard time believing Vitalik doesn’t know this. Is he being dishonest? I don’t know.
Good question, I’d be interested to hear a core dev’s thoughts on this.
I’ve thought about this a bit more.
You can target the UXTO so that their value in crypto starts back at zero. But because they still have the mining hardware, they still control 51% of the hash power that secures the network. They can just mine from a different address and it won’t be clear who to target until they once again begin to produce majority blocks on the chain. This way they can continually attack the chain and render it useless.
When you burn a PoW miner’s crypto addresses, you aren’t burning their capital and stake, because it’s in the form of mining hardware, not tokens. When you burn a PoS staker’s crypto, you are burning their capital and stake which is in the form of tokens.
You can target the UXTO so that their value in crypto starts back at zero. But because they still have the mining hardware, they still control 51% of the hash power that secures the network. They can just mine from a different address and it won’t be clear who to target until they once again begin to produce majority blocks on the chain. This way they can continually attack the chain and render it useless.
When you burn a PoW miner’s crypto addresses, you aren’t burning their capital and stake, because it’s in the form of mining hardware, not tokens. When you burn a PoS staker’s crypto, you are burning their capital and stake which is in the form of tokens.
I don't understand how PoS changes this. Also, that blog post does not consider CPU-mined PoW which is unprofitable for miners and sustained attackers.
In PoW, if you control 51% of mining the users can defend by switching to another hash algorithm, meaning the attacker needs to re-buy a lot of new hardware. If they’ve anticipated this, and attack again with new hardware, there is not much further defence. In PoS, users can coordinate a soft fork to burn the attackers funds, each time they re-attack the chain, until they eventually run out of capital.
> they [PoW] are far more resistant to attack
Many meanings of "attack". A year ago China attacked the miners and they mostly left China. A nation attacking the btc network is real, and the miners physically moved.
It is easier to move a PoS validator, and harder to locate the validator in the first place.
Many meanings of "attack". A year ago China attacked the miners and they mostly left China. A nation attacking the btc network is real, and the miners physically moved.
It is easier to move a PoS validator, and harder to locate the validator in the first place.
China banning miners strengthened the network instead of weakening it. Within a 3-6 months the hash rate totally recovered and it was more decentralized than ever.
The argument that it is easier to move a validator than a miner is a very surface level argument, honestly. The incentives of mining ensure that miners will spread to every corner of the world, in every jurisdiction, in search of cheap electricity.
Meanwhile, proof of stake validation has no such incentive. It is financialized and it even has a guaranteed yield component. Since validators are financial and not industrial like miners, they will be incentivized to locate near other financial centers, like New York and London, and they will certainly comply with sanctions and other financial practices.
The argument that it is easier to move a validator than a miner is a very surface level argument, honestly. The incentives of mining ensure that miners will spread to every corner of the world, in every jurisdiction, in search of cheap electricity.
Meanwhile, proof of stake validation has no such incentive. It is financialized and it even has a guaranteed yield component. Since validators are financial and not industrial like miners, they will be incentivized to locate near other financial centers, like New York and London, and they will certainly comply with sanctions and other financial practices.
> It is easier to move a PoS validator, and harder to locate the validator in the first place.
I'd say it's much easier to single out PoS validators. Especially when they are congregating under unified capital and they are US based. Also, argument could be made that they are responsible for the transactions that they are making. The same can be hard to argue for Bitcoin, since anyone with a bit of a hashrate could generate a block and it's permission-less to contribute to the hashrate (and also anonymous)
I'd say it's much easier to single out PoS validators. Especially when they are congregating under unified capital and they are US based. Also, argument could be made that they are responsible for the transactions that they are making. The same can be hard to argue for Bitcoin, since anyone with a bit of a hashrate could generate a block and it's permission-less to contribute to the hashrate (and also anonymous)
Can someone clarify the point about expected price action changes for ETH/USD and other pairs?
Presumably the author believes a smaller proportion of Ether will be regularly traded than on the PoW system, but will the total staked (i.e. held) amount be sufficient to impact prices significantly? Also, why would we expect stakers to not take their profits on a regular basis?
What’s the meaning (and reasoning behind) the following statement:
> Ethereum will move from a system that has roughly $20mm a day of structural outflows to a system that has roughly a half a million dollars a day of structural inflows.
Presumably the author believes a smaller proportion of Ether will be regularly traded than on the PoW system, but will the total staked (i.e. held) amount be sufficient to impact prices significantly? Also, why would we expect stakers to not take their profits on a regular basis?
What’s the meaning (and reasoning behind) the following statement:
> Ethereum will move from a system that has roughly $20mm a day of structural outflows to a system that has roughly a half a million dollars a day of structural inflows.
Also, why would we expect stakers to not take their profits on a regular basis?
Currently it's impossible to unstake so the existing stakers are self-selected hodlers. Longer term some stakers will hodl and some will take profits.
Currently it's impossible to unstake so the existing stakers are self-selected hodlers. Longer term some stakers will hodl and some will take profits.
i am unsettled by the attention that cryptos receive from VCs . This is supposed to be a new economy, not the old one in sheep's clothing. And now they can buy their way into ETH government. No thanks, i hope it tanks
A less starry-eyed take:
https://davidgerard.co.uk/blockchain/2022/08/20/proof-of-sta...
https://davidgerard.co.uk/blockchain/2022/08/20/proof-of-sta...
I usually judge arguments on their merits, but on this case I'll make an exception and judge by the credibility of the author: that article is not worth reading. David Gerard is a permabear who has been criticizing crypto for about a decade now. Everything that happens in crypto is bad according to him. Ethereum moves to PoS? Bad. Ethereum doesn't move to PoS? Bad. There's no event in crypto that would be positive according to him.
Oh, that guy. He tends to be technically incorrect regularly and gets rather arsey when you call him on it.
He is a crank, he does post here sometimes to bicker with you which can be amusing
The core axiom is unfalsifiable because it hinges on asserting the intent, and relying on other unfalsifiable questions to try and ascertain intent ("why do decentralization if not to avoid legal risk of doing bad things?"), but the answers proposed by crypto proponents aren't ideals or scenarios that the writer empathizes with, it seems
Assuming a fork is expected and the PoW chain is running alongside the PoS chain, wouldn’t this cause a massive run up in ETH holdings to end up with assets on both chains?
No, because the merge in itself does not create new value, it simply splits existing value in two. So 1 old PoW ETH today will be worth (say) 0.9 PoS ETH and 0.1 PoW ETH tomorrow.
To be clear, that's the theory, reality is a little more complicated. This happened earlier with ETH and ETC, as well as BTC and a whole bunch of forks, and in practice there was always a bit of "value" created from thin air, at least temporarily, with original + fork > original before fork.
To be clear, that's the theory, reality is a little more complicated. This happened earlier with ETH and ETC, as well as BTC and a whole bunch of forks, and in practice there was always a bit of "value" created from thin air, at least temporarily, with original + fork > original before fork.
This already happened multiple times, e.g. Ethereum Classic and for Bitcoin with Bitcoin Cash a few years back.
It created quite a bit of drama when exchanges refused to give customers the respective forked coins.
It created quite a bit of drama when exchanges refused to give customers the respective forked coins.
Exchanges refused to give customers forked coins? Why?!
Forking a chain is trivial. There are websites that lets anyone do it with a single click.
You can't realistically expect exchanges to trade all possible fork coins.
You can't realistically expect exchanges to trade all possible fork coins.
It takes a certain amount of development work for an exchange to support a new coin so sometimes they don't do it.
I'm not sure it's that much work if there's something of tangible current value being held from their rightful owners, esp when they keep adding all sorts of coins. There should at least be a way to extract them even if the exchange doesn't support trading them
Those who care about claiming forks will not use an exchange. People have varying priorities.
I agree that's the way the world should be, but it isn't.
No mention of sanctions?
It's estimated that ~50% of staked value is held by US companies. These companies are going to have to make an impossible choice. Either:
1. Sign transactions coming from the sanctioned addresses, inviting the wrath of OFAC.
or:
2. Refuse to sign these transactions.
2a. If between 33% and 66% of the network refuses, the network will penalize dissenters by slashing their staked coins, until they no longer have a 33% stake. Billions of dollars of customer funds could be lost.
2b. If > 67% of the network refuses, transactions can be successfully censored. Now we no longer have decentralized ETH, we have "USA coin", where the government can censor anyone with a quick email to Brian Armstrong.
I don't see a way out. It doesn't look like the network is actually decentralized enough to handle a nation-state attack. This was not an issue with the old proof of work scheme. I'll be amazed if the merge is not delayed while they work on a solution to this.
EDIT: If Coinbase does lose that money, you could say the network is operating as designed in the presence of a hostile validator. But a LOT of people are not going to be happy with the result.
It's estimated that ~50% of staked value is held by US companies. These companies are going to have to make an impossible choice. Either:
1. Sign transactions coming from the sanctioned addresses, inviting the wrath of OFAC.
or:
2. Refuse to sign these transactions.
2a. If between 33% and 66% of the network refuses, the network will penalize dissenters by slashing their staked coins, until they no longer have a 33% stake. Billions of dollars of customer funds could be lost.
2b. If > 67% of the network refuses, transactions can be successfully censored. Now we no longer have decentralized ETH, we have "USA coin", where the government can censor anyone with a quick email to Brian Armstrong.
I don't see a way out. It doesn't look like the network is actually decentralized enough to handle a nation-state attack. This was not an issue with the old proof of work scheme. I'll be amazed if the merge is not delayed while they work on a solution to this.
EDIT: If Coinbase does lose that money, you could say the network is operating as designed in the presence of a hostile validator. But a LOT of people are not going to be happy with the result.
> 2b. If > 67% of the network refuses, transactions can be successfully censored.
Similar with PoW. For both PoW and PoS, the proper response is to socially coordinate forking out the censoring block producer majority (like with the Bitcoin UASF that was threatened over much less egregious miner misbehavior). PoS improves on PoW here in two ways:
1. Non-censoring PoS block producers can have a tiny meatspace presence compared to PoW mining operations, which makes it easier to physically evade pro-censorship forces
2. It's more effective to coordinate a direct confiscation of the censoring PoS block producers' on-chain capital investment, compared to making miners' equipment partially obsolete by coordinating an ad-hoc redesign of the PoW algorithm
https://nitter.net/dystopiabreaker/status/156071598642414796...
Similar with PoW. For both PoW and PoS, the proper response is to socially coordinate forking out the censoring block producer majority (like with the Bitcoin UASF that was threatened over much less egregious miner misbehavior). PoS improves on PoW here in two ways:
1. Non-censoring PoS block producers can have a tiny meatspace presence compared to PoW mining operations, which makes it easier to physically evade pro-censorship forces
2. It's more effective to coordinate a direct confiscation of the censoring PoS block producers' on-chain capital investment, compared to making miners' equipment partially obsolete by coordinating an ad-hoc redesign of the PoW algorithm
https://nitter.net/dystopiabreaker/status/156071598642414796...
With PoW, even if a majority of hashpower refuses to include a particular transaction in their mempool (and hence in blocks they mine), that transaction can be mined by some minority miner.
It's only when the majority is colluding to reorg the chain that the transaction can be censored.
It's only when the majority is colluding to reorg the chain that the transaction can be censored.
> It's only when the majority is colluding to reorg the chain that the transaction can be censored.
I'm assuming (like in the last tweets of the linked thread) that pro-censorship forces who can arrange for the supermajority in PoS to censor transactions can also arrange for the majority in PoW to not build on any uncensored head of the chain, i.e. they can mandate "always reorg."
I'm assuming (like in the last tweets of the linked thread) that pro-censorship forces who can arrange for the supermajority in PoS to censor transactions can also arrange for the majority in PoW to not build on any uncensored head of the chain, i.e. they can mandate "always reorg."
This is true also in PoS. If 90% of the validators censor a transaction, i.e. Do not include them in their blocks, the censored transactions would take 10x longer to be included but they would be included eventually.
"Socially coordinating" is how fiat works. It should only be a bootstrapping mechanism towards trustless behaviors, not the mechanism to cancel each other on-chain.
> "Socially coordinating" is how fiat works.
Or how wearing a UASF baseball cap worked as part of a social coordination movement against power-tripping miners.
> It should only be a bootstrapping mechanism towards trustless behaviors, not the mechanism to cancel each other on-chain.
Yes
Or how wearing a UASF baseball cap worked as part of a social coordination movement against power-tripping miners.
> It should only be a bootstrapping mechanism towards trustless behaviors, not the mechanism to cancel each other on-chain.
Yes
> This was not an issue with the old proof of work scheme.
Censorship of transactions because of OFAC is already happening in PoW mining.
https://twitter.com/takenstheorem/status/1560690035955011585...
Censorship of transactions because of OFAC is already happening in PoW mining.
https://twitter.com/takenstheorem/status/1560690035955011585...
Except in in PoW it only means delayed transactions, because only one miner has to "sign off" the block - everyone else accept it passively. A single miner, even with 0.1% mining power is enough to keep the network censorship resistant.
In PoS majority of validators has to actively approve a block containing "illegal" transactions, leading to permanent censorship.
The exact interpretation of validation vs mining responsibility in face of law and passive vs active is fuzzy , but it leaves miners is better legal position.
In PoS majority of validators has to actively approve a block containing "illegal" transactions, leading to permanent censorship.
The exact interpretation of validation vs mining responsibility in face of law and passive vs active is fuzzy , but it leaves miners is better legal position.
Interesting, so this is a problem if 66% or more decide to reject a transaction. How many blocks are currently signed by solo miners in PoW? Almost all blocks are signed by pools which looks like the PoS committees in practice yo my naive eyes. A miner with 0.1% hash power would probably be a very long delay.
I do agree this is probably the most concerning thing that Tornado Cash sanctions have shown us. Still don’t think the energy cost of PoW is worth it, and would rather see PBS and crList solve this problem.
https://notes.ethereum.org/@fradamt/H1ZqdtrBF
I do agree this is probably the most concerning thing that Tornado Cash sanctions have shown us. Still don’t think the energy cost of PoW is worth it, and would rather see PBS and crList solve this problem.
https://notes.ethereum.org/@fradamt/H1ZqdtrBF
The difference is that PoW pools are made up of individual miners who are free to go elsewhere if their pool misbehaves. Pools do not have their own mining hardware, and so they have an economic incentive to be well-behaved. If they misbehave, everybody leaves and they vaporize their business overnight.
PoS is tyranny of the majority: You cannot take your business elsewhere.
PoS is tyranny of the majority: You cannot take your business elsewhere.
It’s the same with staking. If you aren’t solo staking, you are just delegating to a staking pool. And you can withdraw that and deposit it elsewhere if they do not align with your values.
Again, it is not possible for staking pools to differ on "values". If a validator does not vote with the majority, their funds will be slashed by the protocol.
Trying to understand how this differs in practice. Anyone delegating to a staking pool is forced into their values. Ethermine recently started blocking OFAC transactions, so does the majority of miners in that pool agree with this? If so, what is the defence against censorship in this scenario except for some to exit the pool and use another that aligns with their values?
Ethereum is still using PoW as of today, so anything Ethermine did recently isn't really relevant to discussions about PoS. As long as Ethereum is using PoW, pools of any size can pick and choose what transactions to include in a block. Once Ethereum switches to PoS, that will no longer be possible (without further protocol changes)
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PoS seems very similar to PoW, and if one is fine (as we seem to think), the other is fine too.
In POW there are only block producers, and producing a block requires actively choosing transactions and transaction ordering.
Ethereum POS includes an additional attestation step where validators confirm that they have seen blocks without exercising any control over the contents of those blocks.
But this is exactly what PoW miners do when they extend the chain: every block is a vote for all previous blocks in the chain.
In POW there are only block producers, and producing a block requires actively choosing transactions and transaction ordering.
Ethereum POS includes an additional attestation step where validators confirm that they have seen blocks without exercising any control over the contents of those blocks.
But this is exactly what PoW miners do when they extend the chain: every block is a vote for all previous blocks in the chain.
A better legal position, until that is it's made illegal to accept unapproved blocks. PoW is not immune to the exact same regulatory pressure. The US gov can just force a fork of the chain by requiring US miners to only accept approved blocks.
You are wrong about the majority of validators having to approve a certain transaction for them to be included. Even if 80 % of the network were censoring, those transactions would, on average, make it into every fifth block.
Can you point to any sources? I would like to read about how this will be accepted even if the majority is against inclusion.
Because not attesting is against the network's fork-choice rules. If that censoring majority chooses to avoid said block, because it contains transactions that should be censored, they will perform an illegal re-org around the block. Sure, it won't be "illegal" as a majority of the network follows said re-org.
It's an extremely nuanced topic, and it was extensively discussed in the last core-developer call on Thursday. Every single operator has been warned that going against the fork-choice rules could, and ultimately will, result in social mitigations against spec-deviating behavior.
This could be set of socially executed slashings of validators that don't respect the fork-choice rules, or an honest-minority executed hard-fork that effectively causes misbehaving validators to bleed until they start respecting the protocol's rules.
I could be wrong on multiple counts, especially regarding re-orgs, but this is how I've understood the issue.
It's an extremely nuanced topic, and it was extensively discussed in the last core-developer call on Thursday. Every single operator has been warned that going against the fork-choice rules could, and ultimately will, result in social mitigations against spec-deviating behavior.
This could be set of socially executed slashings of validators that don't respect the fork-choice rules, or an honest-minority executed hard-fork that effectively causes misbehaving validators to bleed until they start respecting the protocol's rules.
I could be wrong on multiple counts, especially regarding re-orgs, but this is how I've understood the issue.
That appears to be a single miner, so the transactions will still go through.
so what if more do it? then you got a problem. just 3 miners control >50%
This isn't a bug, it's a feature. It's also something Bitcoin maximalists have been warning about for a long time.
Re 2b: While the scenario you're outlining certainly isn't ideal, I don't think it's fair to say that the transactions are "censored". All they can do is not validate blocks with this transactions in them. It's only a matter of time though before a block is validated by someone not under the purview by OFAC.
All blocks are voted on by the validators. If 67% of the network is censoring transactions, someone else could not just pop in and validate a block, because they would not have 67% of the votes.
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In the US, it would end up in court. It directly pits fiduciary duty against OFAC.
For example, if a US-based CEX that operates in New York has a slashing event, that brings regulatory consequences from NYDFS, regardless of the reason for the slashing.
For example, if a US-based CEX that operates in New York has a slashing event, that brings regulatory consequences from NYDFS, regardless of the reason for the slashing.
Not really. You can’t have a fiduciary duty to break the law. The downside risk is much higher to violate OFAC.
Game theory wise wouldn't it make sense for the 33% to try to get to 34% as that will lower the other players stakes thus increase their profits? So either lose your stake or incur possible legal action?
This is in fact already a problem with PoW and is happening right now. AFAIK ether mine stopped including TC transactions in their blocks.
I guess another potential option is that companies that stake large amounts of ETH don't exist in the US?
Where is the evidence that a validator signing transactions invites the wrath if OFAC?
Do you really think they wouldn’t turn they screw when the time came?
They might, but speculating on what the Gov might do is tough. I was very convinced that Bitcoin and all derivatives would be outright illegal just a few years after they went mainstream, and that has definitely not happened. In a sense every self-hosted bitcoin wallet could be seen as violating payments laws.
Making it illegal to have Bitcoin is not very easy.
What you call a "self-hosted bitcoin wallet" is just knowing some combination of bits that happens to be the private key that gives you the ability to sign transactions for some Bitcoin. How do you make it illegal to know something? What if I tell you my private key, does that mean you are then suddenly violating payments laws? What if you stumble upon it by accident?
Technically any string of 32 bytes is a valid private key that can hold Bitcoin. There just might not be any Bitcoin in the address associated with it at this time. What if I "know" a random string of 32 bytes, am I then suddenly in violation of laws when someone randomly deposits Bitcoin to the corresponding address?
The legal difficulty is that the action of having or holding Bitcoin (or mostly any cryptocurrency) is something that has no physical representation and is purely information based.
Mining or making transactions is a different story altogether. These require, amongst other things, that you send specific digital information across the internet which is certainly something that can be made illegal.
What you call a "self-hosted bitcoin wallet" is just knowing some combination of bits that happens to be the private key that gives you the ability to sign transactions for some Bitcoin. How do you make it illegal to know something? What if I tell you my private key, does that mean you are then suddenly violating payments laws? What if you stumble upon it by accident?
Technically any string of 32 bytes is a valid private key that can hold Bitcoin. There just might not be any Bitcoin in the address associated with it at this time. What if I "know" a random string of 32 bytes, am I then suddenly in violation of laws when someone randomly deposits Bitcoin to the corresponding address?
The legal difficulty is that the action of having or holding Bitcoin (or mostly any cryptocurrency) is something that has no physical representation and is purely information based.
Mining or making transactions is a different story altogether. These require, amongst other things, that you send specific digital information across the internet which is certainly something that can be made illegal.
“The idea of apolitical money is a fantasy”
Yannis Varoufakis, London, circa 2017
Either crypto follows the law or it gets banned. IMO this was inevitable.
Yannis Varoufakis, London, circa 2017
Either crypto follows the law or it gets banned. IMO this was inevitable.
You present a problem with Proof of Stake as an inevitable run in with the law and/or some folly of the crypto community. That's not very sound logic.
I personally believe in apolitical decentralized money winning against fiat which is governed on the whims of central bankers and crony capitalism. Every system where technology brings fairness, power to all, and hard rules wins. This will not be an exception. It is the separation of money and state, not very dissimilar from church and state, monarchy and nationhood etc.
I personally believe in apolitical decentralized money winning against fiat which is governed on the whims of central bankers and crony capitalism. Every system where technology brings fairness, power to all, and hard rules wins. This will not be an exception. It is the separation of money and state, not very dissimilar from church and state, monarchy and nationhood etc.
The power of law comes from the ability, to confiscate things, kick in doors and arrest people. Usually there is some social consensus such that most comply anyway most of the time.
This is true and always and trumps whatever your software says is meaningless if there is any conflict ("you and what army" is a very valid question.
Now, the law (a court) can of course allow your software and might even enforce a contract bases on your software
In good systems the governed people have a say in how those laws are created. In Bad ones it's literally whatever one person mutters with a mouth full of breakfast cereals and headaches.
This is true and always and trumps whatever your software says is meaningless if there is any conflict ("you and what army" is a very valid question.
Now, the law (a court) can of course allow your software and might even enforce a contract bases on your software
In good systems the governed people have a say in how those laws are created. In Bad ones it's literally whatever one person mutters with a mouth full of breakfast cereals and headaches.
I don't question the law's ability to do this, but believe that the ideal human societal state is one where money isn't controlled by centralized actors, and that the law would change in time to comply with what's best for society. This will happen sooner in functioning states and later in bad ones.
It's fine to want a different society/policies, but you need to expand on how that new society should look like then: How would sanctions work, for example? Or if there are none, will there be other means of defense/offense? Who would set the rules of the monetary system and what would give legitimacy to those rule setters? How to move from the old system to the new without (too much) disruption? ...
The endings of proper monarchies weren't always simple and nice events - if that is the magnitude of change you have in mind.
The endings of proper monarchies weren't always simple and nice events - if that is the magnitude of change you have in mind.
Sanctions don't stem from the existence of Fiat currency (at least directly), and may still exist depending on power dynamics. The move is on the way and will continue. It will be disruptive but I'm not sure exactly how it'll go. Regular military offense and defense systems will exist but just not ones where the US say prints infinite money for war and incurs sovereign debt. Wars might be a lot smaller scale then. Old world wars required rulers to raise money, taxation etc. They didn't print out of thin air, or bankrupt entire nations (eg Weimar Germany)
Non Fiat money has been the norm pre unpegged Fiat. It's been around for 2-3k years at least, whereas unpegged Fiat is 50 years old. I'm surprised we find the fall of Fiat as hard to imagine:)
Non Fiat money has been the norm pre unpegged Fiat. It's been around for 2-3k years at least, whereas unpegged Fiat is 50 years old. I'm surprised we find the fall of Fiat as hard to imagine:)
How is crypto not another fiat? It is not backed by convertability into a commodity either. It's (currently typically) not issued by a state actor but otherwise just like a typical fiat currency brought into being by something akin to a (community) decree.
I know from the US perspective often legal tender concepts are brought into the definition of fiat but the legal tender concept doesn't quite exist in the same way in a lot of other countries.
I know from the US perspective often legal tender concepts are brought into the definition of fiat but the legal tender concept doesn't quite exist in the same way in a lot of other countries.
It's true that it's not backed, and that's a pro (we'll get to that), but Bitcoin is better than Fiat for many reasons:
1) impossible to confiscate
2) fixed supply and issuance rate - can't just print it away when the fed wants
3) instant permissionless transfer so the government can't interject. If you think they can be trusted, might want to read about executive order 6102
4) not backed by another asset eg gold (say). This is great because gold is extremely hard to transfer physically and easy to confiscate. Read about how Nixon refused to allow dollar convertibility for gold for foreign nations which was the condition for Bretton woods agreement ie where all nations agreed to use dollar as a global reserve freely exchangeable for gold. Also read about how FDR outlawed private ownership of gold when the US had printed more money than their gold reserves and needed to fix their books.
Decentralized community decree is awesome. You don't have a central actor making rules that support themselves. Christine Lagarde has no way to get the euro out of the deficit hole. See this snippet from an interview: https://youtu.be/p-X-mIuDYFw. In a balanced system, the debt would be loaned from and owed to a market participant who cares about their money being returned, not this bizarre broken system where central banks print and then owe to themselves
1) impossible to confiscate
2) fixed supply and issuance rate - can't just print it away when the fed wants
3) instant permissionless transfer so the government can't interject. If you think they can be trusted, might want to read about executive order 6102
4) not backed by another asset eg gold (say). This is great because gold is extremely hard to transfer physically and easy to confiscate. Read about how Nixon refused to allow dollar convertibility for gold for foreign nations which was the condition for Bretton woods agreement ie where all nations agreed to use dollar as a global reserve freely exchangeable for gold. Also read about how FDR outlawed private ownership of gold when the US had printed more money than their gold reserves and needed to fix their books.
Decentralized community decree is awesome. You don't have a central actor making rules that support themselves. Christine Lagarde has no way to get the euro out of the deficit hole. See this snippet from an interview: https://youtu.be/p-X-mIuDYFw. In a balanced system, the debt would be loaned from and owed to a market participant who cares about their money being returned, not this bizarre broken system where central banks print and then owe to themselves
We'll find out if these things are seen as advantageous by enough or not. I don't necessarily agree that the points are all just pros, but I am open to democratic changes of monetary systems.
Agreed. The jury isn't out on Austrian v/s Keynesian economics. We've not had the former play out organically in recent history without Govt. intervention transforming it into the latter. I remain hopeful that there is change enough that technology imposes hard rules (fixed supply, fixed issuance, only taxation no printing etc.). Rules that nations earlier used to comply with (~approximately) with the gold peg but no longer do.
What "hard rules" can compete with actually enforced law? Don't you expect more "whims" (and scams) from private adventurers than from governments?
I expect all parties to act in their own best interests. I do in fact expect more scams from private bodies, but the government conducts a much larger scam in printing without accountability a currency unbacked by anything and not bound to any rules, a billion ton gorilla that moves the "free" markets at it's whim.
The people's interest imo is in fairness to all not asset owners who aren't as affected by money printing etc
The law isn't sacrosanct, but of course it needs to be followed. It is malleable and comes from lawmakers who may or may not represent the interest of the people, unwittingly or otherwise
The people's interest imo is in fairness to all not asset owners who aren't as affected by money printing etc
The law isn't sacrosanct, but of course it needs to be followed. It is malleable and comes from lawmakers who may or may not represent the interest of the people, unwittingly or otherwise
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Crypto itself can cross borders as a intangible virtual entity. You cannot. Your physicality means you're bounded by geographical borders to a nation state and thus its laws and regulations.
That assumes that people are the entities that the economy optimizes for, which hasn't been true for 10,000 years or so. People are disposable to capitalism - there are 7.7 billion of us, which makes individual humans about as significant to the economy as individual neurons are to consciousness. As long as there exist some humans that are in a position to do the crypto-economy's bidding, it'll happen, and it doesn't matter if some of them are thrown in prison or executed or die from poor government policies.
From the perspective of world history, this is a BFD. The monetary system of the past 80 years has been controlled by the ruling class of a ~150-300M person nation. The crypto economy imposes uniform rules on ~3B people, which is an order of magnitude greater complexity, and should see further specialization and gains from trade for those that participate in it.
From the perspective of world history, this is a BFD. The monetary system of the past 80 years has been controlled by the ruling class of a ~150-300M person nation. The crypto economy imposes uniform rules on ~3B people, which is an order of magnitude greater complexity, and should see further specialization and gains from trade for those that participate in it.
People should really try to understand what’s happening in blockchain. Eventually the computational capacity will reach the levels that virtually any app can be replicated inside of it, with a much lower fee for the developers/owners/users and often having full open source code for the components. The blockchain development environment is fundamentally less terrible than the centralised database world, and eventually the computational differences between the two will be so low that centralised databases will be less desirable just because do the warp in the social contract.
Databases encourage centralisation of power to developer/owners, with aggressive bent towards monopoly. Blockchain encouraged opennesss and portability. It’s simply a better social contract.
Databases encourage centralisation of power to developer/owners, with aggressive bent towards monopoly. Blockchain encouraged opennesss and portability. It’s simply a better social contract.
People do understand. Please stop telling us how hypothetically, possibly, sometime in the future things may one day be somehow better and more amazing than it is today for some yet to be understood reason. You must not be paying attention to say something like "The blockchain development environment is fundamentally less terrible than the centralised database world" given the perpetual controversy in the developer communities of every major cryptocurrency.
Im not sure what you mean by perpetual controversy either.
What I mean by “less terrible” is socially, not technically.
Centralised datacenter based development leads to digital feudalism, where the owners of the datacenters take control of the “digital land” and build moats around them (often fake, imaginary - see how text messaging has no interoperability anymore when 10 years ago it did)
In blokchain / decentralised databases development this is not possible - people can always access the data that’s on chain, and they can extend your code, see it, change it (depending on the license even copy it and just make a slightly different product, a la Uniswap V2 and Sushi Swap). This leads to a real free market for applications, instead of the digital feudalism that naturally results from centralised data centers.
What I mean by “less terrible” is socially, not technically.
Centralised datacenter based development leads to digital feudalism, where the owners of the datacenters take control of the “digital land” and build moats around them (often fake, imaginary - see how text messaging has no interoperability anymore when 10 years ago it did)
In blokchain / decentralised databases development this is not possible - people can always access the data that’s on chain, and they can extend your code, see it, change it (depending on the license even copy it and just make a slightly different product, a la Uniswap V2 and Sushi Swap). This leads to a real free market for applications, instead of the digital feudalism that naturally results from centralised data centers.
> people can always access the data that’s on chain
Doesn't that have heavy privacy implications? Or is this a solved problem the solution to which doesn't get much publicized?
Doesn't that have heavy privacy implications? Or is this a solved problem the solution to which doesn't get much publicized?
That’s a good point I don’t have a rebuttal to.
The potential dystopia is that crypto can lead to something like a digital society that’s completely naked to the nation state and everyone knows what everyone else has done, forever, always. Every transaction, movement and digital app usage would be in a transparent public ledger with everyone’s IDs attached to it.
It’s not a good scenario and which is why I feel like any idea that CBDCs are a good idea seem delusional.
The potential dystopia is that crypto can lead to something like a digital society that’s completely naked to the nation state and everyone knows what everyone else has done, forever, always. Every transaction, movement and digital app usage would be in a transparent public ledger with everyone’s IDs attached to it.
It’s not a good scenario and which is why I feel like any idea that CBDCs are a good idea seem delusional.
- Who pays for the low latency high capacity data storage costs?
- The ad-model subsidizes almost all costs for the end user. I couldn't even DREAM of storing an arbitrary amount of photos and videos and text spanning years, highly available all the time, ability to search and communicate with anybody etc for free without this.
There are huge costs involved with this that the "data moat" subsidizes.
Note that I'm not referring to the "morals" of doing this, my question is pragmatic.
- Why will say, a Facebook do this with "decentralized data"? - How do they pay their bills, what monetization structure do you envision? - Will people pay for something they have always had for free? It won't be a nominal amount since they have to bear the costs of running the service, there's no subsidization.
Note that I'm not referring to the "morals" of doing this, my question is pragmatic.
- Why will say, a Facebook do this with "decentralized data"? - How do they pay their bills, what monetization structure do you envision? - Will people pay for something they have always had for free? It won't be a nominal amount since they have to bear the costs of running the service, there's no subsidization.
Those are all great questions. I honestly don’t expect rich media to be stored on chain for a long, long time - not unless some Pied Piper type solution shows up!
On monetisation structures - no idea, the only thing blockchain does is build a permissionless system where people will be able to experiment wildly with different models. Like Jobs said when he launched the iPhone “I’m excited about the stuff we don’t know about” more than what’s out there now (Ethereum being at best now a rough Beta project).
Certainly the monetisation of digital art has changed a lot of what some of my favourite 3D artists have been doing - they no longer compete for likes on Instagram (worthless) but actively promote their NFTs from which they can make good money out of. They are producing the exact same kind of output - digital art - but NFTs are quietly taking over the whole space and changing the whole economic structure.
On monetisation structures - no idea, the only thing blockchain does is build a permissionless system where people will be able to experiment wildly with different models. Like Jobs said when he launched the iPhone “I’m excited about the stuff we don’t know about” more than what’s out there now (Ethereum being at best now a rough Beta project).
Certainly the monetisation of digital art has changed a lot of what some of my favourite 3D artists have been doing - they no longer compete for likes on Instagram (worthless) but actively promote their NFTs from which they can make good money out of. They are producing the exact same kind of output - digital art - but NFTs are quietly taking over the whole space and changing the whole economic structure.
> actively promote their NFTs from which they can make good money out of.
People pay for inherently worthless NFTs with inherently worthless tokens, so they're not making good actual money unless they happen to cash out on an upswing.
People pay for inherently worthless NFTs with inherently worthless tokens, so they're not making good actual money unless they happen to cash out on an upswing.
Thinking that cryptocurrency doesn't have value at this point is a hopeless perspective.
NFTs work and they allow artists to
- make money off digital art in a global permissionless market (didn’t exist before) - easily charge royalties in perpetuity for resale of their art
Some aspects of DeFi - the ones that were properly audited and whose function is not a ponzi derivative - work absolutely fine. Compound, AAVE, Uniswap, Curve Finance.
- make money off digital art in a global permissionless market (didn’t exist before) - easily charge royalties in perpetuity for resale of their art
Some aspects of DeFi - the ones that were properly audited and whose function is not a ponzi derivative - work absolutely fine. Compound, AAVE, Uniswap, Curve Finance.
Of all the artists I follow, not a single one has had anything good to say about NFTs. Their only interaction with NFTs has been dozens of scammers fraudulently minting NFTs of all their work, followed by exchanges putting the burden of proof on the artist to show that each individual NFT is fraudulent.
Maybe there's some legitimate business happening in the art NFT space, but if so, it's a drop in an ocean of fraud.
Maybe there's some legitimate business happening in the art NFT space, but if so, it's a drop in an ocean of fraud.
There's huge amounts of legitimate business happening in NFTs.
I would find it hard to imagine an argument that Beeple's huge sale was somehow not legitimate.
I'm hoping a technical solution appears soon for fraud. NFT fraud is no different from a person on the street doing a high quality print of someone else's artwork, and unlike that situation, a technical solution for NFT fraud is conceivable.
I'm hoping a technical solution appears soon for fraud. NFT fraud is no different from a person on the street doing a high quality print of someone else's artwork, and unlike that situation, a technical solution for NFT fraud is conceivable.
> I would find it hard to imagine an argument that Beeple's huge sale was somehow not legitimate.
An argument that Beeple's huge sale was somehow not legitimate: https://amycastor.com/2021/03/14/metakovan-the-mystery-beepl...
An argument that Beeple's huge sale was somehow not legitimate: https://amycastor.com/2021/03/14/metakovan-the-mystery-beepl...
> - easily charge royalties in perpetuity for resale of their art
Can they really? The art itself is not recorded on any blockchain. Just the link and/or hash can be stored there because of costs. Both can change without noticeably modifying the art. Thus a working legal system is still required and blockchain does not provide any meaningful benefit over a standard contract.
Can they really? The art itself is not recorded on any blockchain. Just the link and/or hash can be stored there because of costs. Both can change without noticeably modifying the art. Thus a working legal system is still required and blockchain does not provide any meaningful benefit over a standard contract.
Those two things don’t cancel each other out.
The art being recorded on a blockchain or not doesn’t matter - what you’re selling in an NFT is a signature not the art. An NFT is a decoupling of the art and the signature, because digital art is infinitely reproducible. The NFT introduces scarcity - but only for an authentic signature (which can’t be faked) not the digital art itself.
And want you’re saying is not necessarily true - my understanding is that some markets do place the art on IPFS, but I’d have to look into it’s exact working to know for sure.
But I believe for the old Hic et Nunc that was the case.
In this particular case - it is better than a standard contract because the previous method of authenticating work is hugely expensive for the artist and has immense gatekeeping. Minting an NFT takes 30 seconds. Getting you work into an art gallery takes months if not years of battling and requires other people to make the decision whether they want your art in their sales space or not. In crypto you can just do it yourself and figure out your own personal authentication method (usually twitter).
The art being recorded on a blockchain or not doesn’t matter - what you’re selling in an NFT is a signature not the art. An NFT is a decoupling of the art and the signature, because digital art is infinitely reproducible. The NFT introduces scarcity - but only for an authentic signature (which can’t be faked) not the digital art itself.
And want you’re saying is not necessarily true - my understanding is that some markets do place the art on IPFS, but I’d have to look into it’s exact working to know for sure.
But I believe for the old Hic et Nunc that was the case.
In this particular case - it is better than a standard contract because the previous method of authenticating work is hugely expensive for the artist and has immense gatekeeping. Minting an NFT takes 30 seconds. Getting you work into an art gallery takes months if not years of battling and requires other people to make the decision whether they want your art in their sales space or not. In crypto you can just do it yourself and figure out your own personal authentication method (usually twitter).
My NFT anti-fraud solution has ~195m NFTs indexed and analyzed (everything on Ethereum, Polygon, and Solana). Here's the breakdown of current storage methods across all of them:
curl https://match.tovera.com/api/v0/stats/nft/storageMethods
[ { "storage": "https", "ratio": "0.39163250000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "ipfs", "ratio": "0.58654950000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "unknown", "ratio": "0.00090250000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "chain", "ratio": "0.01584000000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "http", "ratio": "0.00507550000000000000", "counted_at": "2022-08-20T05:55:01.164Z" } ]
2% on chain (almost all SVGs), 60% on IPFS, and 40% on HTTPS (total above 100% because I rounded).
curl https://match.tovera.com/api/v0/stats/nft/storageMethods
[ { "storage": "https", "ratio": "0.39163250000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "ipfs", "ratio": "0.58654950000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "unknown", "ratio": "0.00090250000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "chain", "ratio": "0.01584000000000000000", "counted_at": "2022-08-20T05:55:01.164Z" }, { "storage": "http", "ratio": "0.00507550000000000000", "counted_at": "2022-08-20T05:55:01.164Z" } ]
2% on chain (almost all SVGs), 60% on IPFS, and 40% on HTTPS (total above 100% because I rounded).
Thank you for this. The fact that you did this shows that there is a potential for a solution for NFT/art copies. Hopefully markets will begin doing this themselves and stop this plague.
Decoupling of the art and the signature??? Do you read what you write before you write it?
There’s a reason NFTs are easy and gallery placements are hard: one has value
There’s a reason NFTs are easy and gallery placements are hard: one has value
people are making millions of dollars from NFTs, but sure. You're the determiner for what has value in the world.
The NFT market has been briefly popular and since then has cratered. Also there's a huge amount of wash trading, so most of that activity isn't even real.
Throwing the baby with the bath water. The baby is small and there is a lot of water, but the baby is there.
I'm not sure how this comment answers what I said
There are real artists making real art and selling them on NFT marketplaces.
> In this particular case - it is better than a standard contract because the previous method of authenticating work is hugely expensive for the artist and has immense gatekeeping. Minting an NFT takes 30 seconds.
As you said NFT is just a signature so how do the NFTs solve the problems of authenticating art?
As you said NFT is just a signature so how do the NFTs solve the problems of authenticating art?
I'm sure what you mean. NFTs allow for a market for digital art, in that there's an immutable ledger where artists can say "I am selling 10 'signed artworks' of this piece". Because the ledger is known to be immutable, and it allows for transactions between users, you have a market where there wasn't one before.
The problem of authenticating art before this, for a digital artist, was that you HAD to have a gallery do it with you in order for it to work. No one trusted anyone, not even the artist, to say that there would only be "10 copies" of that digital artwork, since they couldn't do any follow through if the artist decided to say there were ten copies but sold 10 000. This was an issue with digital art that was previously only solved by the reputation of X art gallery - the art gallery would say - "we certified only 10 copies, and our reputation as a gallery protects this artwork from being certified again".
With NFTs you just do it. The problem was gatekeeping, the need for an "authority" to certify your signatures on digital art, and the process involved. NFTs are a click of a button and a few dollars to mint.
Does that answer your question?
The problem of authenticating art before this, for a digital artist, was that you HAD to have a gallery do it with you in order for it to work. No one trusted anyone, not even the artist, to say that there would only be "10 copies" of that digital artwork, since they couldn't do any follow through if the artist decided to say there were ten copies but sold 10 000. This was an issue with digital art that was previously only solved by the reputation of X art gallery - the art gallery would say - "we certified only 10 copies, and our reputation as a gallery protects this artwork from being certified again".
With NFTs you just do it. The problem was gatekeeping, the need for an "authority" to certify your signatures on digital art, and the process involved. NFTs are a click of a button and a few dollars to mint.
Does that answer your question?
> The problem of authenticating art before this, for a digital artist, was that you HAD to have a gallery do it with you in order for it to work. No one trusted anyone, not even the artist, to say that there would only be "10 copies" of that digital artwork, since they couldn't do any follow through if the artist decided to say there were ten copies but sold 10 000. This was an issue with digital art that was previously only solved by the reputation of X art gallery - the art gallery would say - "we certified only 10 copies, and our reputation as a gallery protects this artwork from being certified again".
> With NFTs you just do it.
No, you can't. Anybody can go right now and mint their own series of BAYC or any artwork they want. The blockchain will allow it. It won't even care if you mint it against the exact same data, because as far as I know nothing in the blockchain cares that there's more than one NFT pointing to the same URL, or pointing to an URL that resolves to content bit-by-bit identical to something somebody else already minted.
The only guarantee you can have is an extremely weak one, in the form of "this precise collection, with this precise unique ID is set in stone". That's not going to stop anybody from creating another one 5 minutes later.
> With NFTs you just do it.
No, you can't. Anybody can go right now and mint their own series of BAYC or any artwork they want. The blockchain will allow it. It won't even care if you mint it against the exact same data, because as far as I know nothing in the blockchain cares that there's more than one NFT pointing to the same URL, or pointing to an URL that resolves to content bit-by-bit identical to something somebody else already minted.
The only guarantee you can have is an extremely weak one, in the form of "this precise collection, with this precise unique ID is set in stone". That's not going to stop anybody from creating another one 5 minutes later.
You are correct. NFTs do not prevent counterfeiting. One could argue that it makes counterfeiting easier due to their open nature.
However, it also makes detecting counterfeits trivial. So trivial that the consumer can detect it using their own devices and freely available wallet software. No need for special skills or trust anchors like appraisers (other than the public blockchain and public standards).
This isn’t a complete solution for scams because most people don’t realize how trivial it is to check before they buy. I believe the remaining problems are in usability and education problem. The tech does lower the barrier to achieving a safer ecosystem.
We could have a healthy debate over whether the tech solved the hard side or the easy side of the problem.
However, it also makes detecting counterfeits trivial. So trivial that the consumer can detect it using their own devices and freely available wallet software. No need for special skills or trust anchors like appraisers (other than the public blockchain and public standards).
This isn’t a complete solution for scams because most people don’t realize how trivial it is to check before they buy. I believe the remaining problems are in usability and education problem. The tech does lower the barrier to achieving a safer ecosystem.
We could have a healthy debate over whether the tech solved the hard side or the easy side of the problem.
> However, it also makes detecting counterfeits trivial. So trivial that the consumer can detect it using their own devices and freely available wallet software.
Only so long that the authentic source is present. You can detect the authentic BAYC because BAYC has a large presence and everyone knows their wallet ID.
Now let's say I take a photo, and you find a NFT for it on OpenSea. How do you know if it's authentic?
Only so long that the authentic source is present. You can detect the authentic BAYC because BAYC has a large presence and everyone knows their wallet ID.
Now let's say I take a photo, and you find a NFT for it on OpenSea. How do you know if it's authentic?
If you (the artist) have no presence in NFTs, it’s fake.
If you do, then I can trivially verify that you are the minter.
Crucially, the person that has the incentive to mint (the artist) also has all they need to establish the provenance of the photo.
No 3rd parties, no specialized tools/skills.
If you do, then I can trivially verify that you are the minter.
Crucially, the person that has the incentive to mint (the artist) also has all they need to establish the provenance of the photo.
No 3rd parties, no specialized tools/skills.
Okay, and how do you know whether I have a presence in NFTs? Go and check, and do tell me how you figure it out.
This is incorrect, as the parent explained the point of an NFT is the signature, this proves you bought from a certain collection that was created by a certain wallet
You can create your own BAYC, scammers do it all the time but they aren’t too successful because it’s trivial to see it came from an unknown wallet.
Sure, you could infringe on the copyright of a non-crypto artist and pretend to be the artist in an NFT marketplace, but then it becomes a normal copyright claim
NFTs don’t replace the legal system, they simply remove the need for the artist to be trusted by a third party (an art gallery, etc) before they can authenticate their own work to a buyer.
You can create your own BAYC, scammers do it all the time but they aren’t too successful because it’s trivial to see it came from an unknown wallet.
Sure, you could infringe on the copyright of a non-crypto artist and pretend to be the artist in an NFT marketplace, but then it becomes a normal copyright claim
NFTs don’t replace the legal system, they simply remove the need for the artist to be trusted by a third party (an art gallery, etc) before they can authenticate their own work to a buyer.
> This is incorrect, as the parent explained the point of an NFT is the signature, this proves you bought from a certain collection that was created by a certain wallet
Note that the parent seems to be arguing something in the system removes the need to trust in the artist, that it stops the artist from creating more items than they promised. But how? Nothing stops the artist from creating a second wallet, or a second collection.
> NFTs don’t replace the legal system, they simply remove the need for the artist to be trusted by a third party (an art gallery, etc) before they can authenticate their own work to a buyer.
I don't see how. How do I know that a given wallet ID is connected to the right person? OpenSea or whoever just takes the place of the gallery, and is effectively in charge of answering takedown requests.
Note that the parent seems to be arguing something in the system removes the need to trust in the artist, that it stops the artist from creating more items than they promised. But how? Nothing stops the artist from creating a second wallet, or a second collection.
> NFTs don’t replace the legal system, they simply remove the need for the artist to be trusted by a third party (an art gallery, etc) before they can authenticate their own work to a buyer.
I don't see how. How do I know that a given wallet ID is connected to the right person? OpenSea or whoever just takes the place of the gallery, and is effectively in charge of answering takedown requests.
It doesn’t stop the artist from re minting the same art, but if he does it will be associated to his wallet, his reputation will be tarnished, an they won’t be able to keep selling their art. The incentives are hugely against it, and unlike even physical art (who stops me from painting the same piece 20 times in secret) the ledger for the existence of the NFT is public.
That rises another question, imho: who cares?
I don't mean that in a dismissive way, I actually mean why is authenticity important or even desirable when using a medium that allows for infinite copies at near-zero marginal cost?
It's just not the right medium for it. It would be like expecting to be able to digitally transfer a statue.
I don't mean that in a dismissive way, I actually mean why is authenticity important or even desirable when using a medium that allows for infinite copies at near-zero marginal cost?
It's just not the right medium for it. It would be like expecting to be able to digitally transfer a statue.
This has been mysterious to me for a long time and it still remains mysterious to me, but I have to accept that people do care. This isn't just limited to NFTs, people buy signed copies of things despite signatures being trivial to forge, people buy authentic branded items even when indistinguishable counterfeits are available, people pay more for "original prints" of digital photographs!
In short, people care about provenance. NFTs guarantee provenance for data, even if the process of "attaching" it to a jpg or whatever is a bit clunky. I don't understand why people care so much about provenance, but they do, and NFTs provide a partial solution.
In short, people care about provenance. NFTs guarantee provenance for data, even if the process of "attaching" it to a jpg or whatever is a bit clunky. I don't understand why people care so much about provenance, but they do, and NFTs provide a partial solution.
> Does that answer your question?
No it doesn't. Your claim was that NFTs make authenticating art easier. What you wrote has nothing to do with art authentication.
Basically I can take some digital art made by somebody else and be the first to release an NFT of it. What now? How does an NFT help us here?
No it doesn't. Your claim was that NFTs make authenticating art easier. What you wrote has nothing to do with art authentication.
Basically I can take some digital art made by somebody else and be the first to release an NFT of it. What now? How does an NFT help us here?
It doesn’t. It just allow for a market of digital signatures for digital art. but technical solutions to the problems you’re talking about are conceivable.
Than why did you claim that:"it is better than a standard contract because the previous method of authenticating work is hugely expensive for the artist and has immense gatekeeping.", when by your own admission NFTs play no part in authenticating art??
I misspoke. All I mean is it allows for the artist to sell certified digital signatures associated with specific artworks.
Doing that previously required an art gallery to certify the signature. That’s easier in NFTs.
Doing that previously required an art gallery to certify the signature. That’s easier in NFTs.
They don't. An example search from my NFT anti-fraud solution:
https://fnftf.io/?results=982ce32629ebcbd7dce30baf2f84adafb5...
So there you have it - dozens of copies of the same art across the same chain and other chains plus dozens of other low-quality "remixes" that don't qualify as an original work. Nothing in the space (other than solutions like mine) do anything to authenticate the content in any form or fashion.
In fact, on FNFTF we make a pretty big deal of searches that only return one result (original and unique content) because it doesn't happen very often:
https://fnftf.io/?results=81cd744ab237b0eb68fbe1702c82db9cdf...
Shameless plug I suppose but there isn't anything else publicly available that shows just how bad and widespread this issue is.
https://fnftf.io/?results=982ce32629ebcbd7dce30baf2f84adafb5...
So there you have it - dozens of copies of the same art across the same chain and other chains plus dozens of other low-quality "remixes" that don't qualify as an original work. Nothing in the space (other than solutions like mine) do anything to authenticate the content in any form or fashion.
In fact, on FNFTF we make a pretty big deal of searches that only return one result (original and unique content) because it doesn't happen very often:
https://fnftf.io/?results=81cd744ab237b0eb68fbe1702c82db9cdf...
Shameless plug I suppose but there isn't anything else publicly available that shows just how bad and widespread this issue is.
>... easily charge royalties in perpetuity for resale of their art...
Hi. Artist here. I have yet to actually see any example of this occurring with a piece of NFT art. Do you have an example of an NFT that is actively collecting royalties for the artist via resale?
Hi. Artist here. I have yet to actually see any example of this occurring with a piece of NFT art. Do you have an example of an NFT that is actively collecting royalties for the artist via resale?
web3 dev here.
nft contracts are turing complete. you can put whatever code you want in them. usually people inherit the openzeppelen base nft contract which doesnt have royalties turned on by default (perhaps new version has the functionality already implemented. but you can (and its not that uncommon) to go in the ownership transfer function and add a fractional fee that either goes to the contract host or a creators address. its very very trivial to do. and ive seen it a zilion times.
3 lines of code.
if ur a coder go check out the openzeppelin nft contract and find the function used for transfer of ownership. and look up the "payable" and payment functionality in solidity. if not then youll never understand what im saying anyways hahahaha. base concept though is correct. royalties are contractual, settable, and enforced by the contract. no way around them when theyre there
if ur a coder go check out the openzeppelin nft contract and find the function used for transfer of ownership. and look up the "payable" and payment functionality in solidity. if not then youll never understand what im saying anyways hahahaha. base concept though is correct. royalties are contractual, settable, and enforced by the contract. no way around them when theyre there
https://opensea.io/collection/nickelodeon-rugrats-heyarnold-...
My company is one of the largest NFT companies. This is one of our projects. Millions of dollars in secondaries on OpenSea and our hosted marketplace at https://Nickelodeon.xyz/
We collect all royalties and remit payment to the rights holders which include all artists and creators with residuals on Rugrats, of which there are many. They get their check quarterly along with all the other payments (movies, tshirts, video games, etc.)
This isn’t exactly rocket science
My company is one of the largest NFT companies. This is one of our projects. Millions of dollars in secondaries on OpenSea and our hosted marketplace at https://Nickelodeon.xyz/
We collect all royalties and remit payment to the rights holders which include all artists and creators with residuals on Rugrats, of which there are many. They get their check quarterly along with all the other payments (movies, tshirts, video games, etc.)
This isn’t exactly rocket science
So, are you saying that you run a centralized third party that is charged with collecting the royalties and passing it on to the artists? Because nowhere in the ERC-721 standard is there a way to differentiate between a "sale" and a "transfer between wallets".
So tell me, please, exactly how "blockchain" is bringing "decentralization" to the art field. I am all ears.
So tell me, please, exactly how "blockchain" is bringing "decentralization" to the art field. I am all ears.
A sale happens in a marketplace. Marketplaces collect royalties and forward them to the address specified. We are indeed a centralized player, just as all NFT creators are centralized entities (i.e. people) but the assets trade on decentralized networks.
I think you have a fundamental misunderstanding of how all of this works and have a sneering, dismissive affect because this is something you don’t understand embraced by people who don’t care what you think.
I think you have a fundamental misunderstanding of how all of this works and have a sneering, dismissive affect because this is something you don’t understand embraced by people who don’t care what you think.
So if they don't use your marketplace are the royalties not collected?
There is an Ethereum protocol standard (similar to RFCs in the internet context) that defines a standard for NFT royalties https://eips.ethereum.org/EIPS/eip-2981
FYI I am an author of this standard. It is widely supported across the ecosystem https://royaltyregistry.xyz/
My company doesn’t care where our NFTs travel or trade on. We get our royalty regardless.
FYI I am an author of this standard. It is widely supported across the ecosystem https://royaltyregistry.xyz/
My company doesn’t care where our NFTs travel or trade on. We get our royalty regardless.
> The royalty payment must be voluntary, as transfer mechanisms such as transferFrom() include NFT transfers between wallets, and executing them does not always imply a sale occurred.
So how is this an improvement over what we have right now? If the buyer and the seller may wish to do so, out of the goodness of their hearts, they can always send part of their sale price to the artist. So why are NFTs necessary in any way, if you cannot programmatically enforce it? (And you never can, the reason of which you already know: if I wish to do so I can make a transfer between my two wallets and a sale look exactly the same.)
At which point do these selective, and potentially intentional misleading claims about NFTs go from ignorant to fraudulent? Especially when you may stand to earn a lot by making people believe in your misleading claims?
So how is this an improvement over what we have right now? If the buyer and the seller may wish to do so, out of the goodness of their hearts, they can always send part of their sale price to the artist. So why are NFTs necessary in any way, if you cannot programmatically enforce it? (And you never can, the reason of which you already know: if I wish to do so I can make a transfer between my two wallets and a sale look exactly the same.)
At which point do these selective, and potentially intentional misleading claims about NFTs go from ignorant to fraudulent? Especially when you may stand to earn a lot by making people believe in your misleading claims?
The Rarible exchange contract supports all kinds of external royalty interfaces, among them two that Rarible defined themselves, being an early player in the NFT space:
https://hackernoon.com/enabling-nft-royalties-with-eip-2981
ERC721, 1155 & 2981 together act as a toolkit for the encoding of royalty administration.
For example, if an NFT collection owner only implemented one of Rarible’s royalty distribution schemes mentioned above, another marketplace that’s not aware of that interface can simply call the common registry’s getRoyaltyView function. It tries to query all known royalty interfaces on the token contract and translates any response to a commonly useable result.
Collection owners who haven’t put any royalty signaling scheme into their contract can deploy an extended “override” contract and register it with the common registry. This registration method will ensure that only collection owners (identified by the owner public member) can call it
The Rarible exchange contract supports all kinds of external royalty interfaces, among them two that Rarible defined themselves, being an early player in the NFT space:
For example, if an NFT collection owner only implemented one of Rarible’s royalty distribution schemes mentioned above, another marketplace that’s not aware of that interface can simply call the common registry’s getRoyaltyView function. It tries to query all known royalty interfaces on the token contract and translates any response to a commonly useable result.
Collection owners who haven’t put any royalty signaling scheme into their contract can deploy an extended “override” contract and register it with the common registry. This registration method will ensure that only collection owners (identified by the owner public member) can call it
```function royaltyInfo(uint256 _tokenId, uint256 _salePrice) external view returns (address receiver, uint256 royaltyAmount);```
The interface also completely works off-chain, so marketplaces that trade assets on alternative infrastructure can still query the creator fee without knowing anything else besides the interface signature of the EIP-2981 method.
PaymentSplitters: Sending NFT Royalties To More Than One Receiver.
Open Zeppelin's PaymentSplitter primitive allows setting up individual split contracts that keep funds safe until their payees claim them, and their receive function requires the bare minimum of gas to run. NFT collection builders can create an inline PaymentSplitter containing the wanted list of beneficiaries and their respective share amounts and let their EIP-2981 implementation yield the address of that split contract.
https://hackernoon.com/enabling-nft-royalties-with-eip-2981
ERC721, 1155 & 2981 together act as a toolkit for the encoding of royalty administration.
For example, if an NFT collection owner only implemented one of Rarible’s royalty distribution schemes mentioned above, another marketplace that’s not aware of that interface can simply call the common registry’s getRoyaltyView function. It tries to query all known royalty interfaces on the token contract and translates any response to a commonly useable result.
Collection owners who haven’t put any royalty signaling scheme into their contract can deploy an extended “override” contract and register it with the common registry. This registration method will ensure that only collection owners (identified by the owner public member) can call it
The Rarible exchange contract supports all kinds of external royalty interfaces, among them two that Rarible defined themselves, being an early player in the NFT space:
For example, if an NFT collection owner only implemented one of Rarible’s royalty distribution schemes mentioned above, another marketplace that’s not aware of that interface can simply call the common registry’s getRoyaltyView function. It tries to query all known royalty interfaces on the token contract and translates any response to a commonly useable result.
Collection owners who haven’t put any royalty signaling scheme into their contract can deploy an extended “override” contract and register it with the common registry. This registration method will ensure that only collection owners (identified by the owner public member) can call it
```function royaltyInfo(uint256 _tokenId, uint256 _salePrice) external view returns (address receiver, uint256 royaltyAmount);```
The interface also completely works off-chain, so marketplaces that trade assets on alternative infrastructure can still query the creator fee without knowing anything else besides the interface signature of the EIP-2981 method.
PaymentSplitters: Sending NFT Royalties To More Than One Receiver.
Open Zeppelin's PaymentSplitter primitive allows setting up individual split contracts that keep funds safe until their payees claim them, and their receive function requires the bare minimum of gas to run. NFT collection builders can create an inline PaymentSplitter containing the wanted list of beneficiaries and their respective share amounts and let their EIP-2981 implementation yield the address of that split contract.
Sure, look at the last sale for this piece https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac...
The artist got 0.21 ETH in the transaction despite not actually having a direct role in the sale.
Here is that sale transaction https://etherscan.io/tx/0xcd157ff73439e20903a8573ef2a280571a...
Here is the artist’s wallet https://etherscan.io/address/0x4de5ae339b406a8cd5037e9138a62...
I just picked a random entry, I don’t know this piece or artist. There are a lot of examples easily found on the major markets (opensea is one such market)
The artist got 0.21 ETH in the transaction despite not actually having a direct role in the sale.
Here is that sale transaction https://etherscan.io/tx/0xcd157ff73439e20903a8573ef2a280571a...
Here is the artist’s wallet https://etherscan.io/address/0x4de5ae339b406a8cd5037e9138a62...
I just picked a random entry, I don’t know this piece or artist. There are a lot of examples easily found on the major markets (opensea is one such market)
Most markets allow you to set royalties for your NFT. I know Versum, Hic et Nunc, pretty sure Opensea. Almost certainly Foundation and Nifty and all the others must do it too?
> Eventually the computational capacity will reach the levels that virtually any app can be replicated inside of it, with a much lower fee for the developers/owners and having full open source code.
How do you figure? Skilled developers have struggled to efficiently scale an application from one to two rack servers connected with Infiniband, never mind a hodgepodge of heterogeneous hardware and WAN interconnects running a distributed VM. There is nothing in blockchain (nor immutability generally) that actually addresses the underlying issues here, and if anything I would expect the requirement to cryptographically validate all data committed to the chain to make inefficiencies related to synchronization orders of magnitude worse, not better.
How do you figure? Skilled developers have struggled to efficiently scale an application from one to two rack servers connected with Infiniband, never mind a hodgepodge of heterogeneous hardware and WAN interconnects running a distributed VM. There is nothing in blockchain (nor immutability generally) that actually addresses the underlying issues here, and if anything I would expect the requirement to cryptographically validate all data committed to the chain to make inefficiencies related to synchronization orders of magnitude worse, not better.
I assume something like Moore’s Law applies tbh.
I agree of course it makes order of magnitude slower. The point is - how long until this slow is good enough to perform immensely useful things, with a better distribution of wealth generation than the current datacenter model?
I would say in the next 5 years we’ll start seeing breakthrough apps.
Like I said above I don’t expect everything ever to go on chain in the near future, you can have very useful apps that only touch on chain for the truly necessary. Even doing the “truly necessary” was painful until very recently, but now with Ethereum Layer 2 solutions, Algorand, Polkadot and Solana, it’s becoming more and more accessible over time.
I agree of course it makes order of magnitude slower. The point is - how long until this slow is good enough to perform immensely useful things, with a better distribution of wealth generation than the current datacenter model?
I would say in the next 5 years we’ll start seeing breakthrough apps.
Like I said above I don’t expect everything ever to go on chain in the near future, you can have very useful apps that only touch on chain for the truly necessary. Even doing the “truly necessary” was painful until very recently, but now with Ethereum Layer 2 solutions, Algorand, Polkadot and Solana, it’s becoming more and more accessible over time.
> I assume something like Moore’s Law applies tbh.
We're nearing the limits of physics already. I do expect hardware to get much faster still, but not forever and not as fast as now.
> I agree of course it makes order of magnitude slower. The point is - how long until this slow is good enough to perform immensely useful things, with a better distribution of wealth generation than the current datacenter model?
I think really never. Because the rest of the world doesn't sit idle, and most anything can be done the traditional way.
You could pay huge $$$ to create a smart contract on ETH, or you could get more power than any normal person could afford on the Ethereum blockchain on the AWS EC2 free tier. If you think paying amounts with a few zeroes in them is a sensible thing, then you have far more computing power available.
I think the only reason to use the blockchain is if you really need the blockchain. And the vast majority of computing doesn't. And as we're seeing, the blockchain is very much vulnerable if the world wants to push it around badly enough.
We're nearing the limits of physics already. I do expect hardware to get much faster still, but not forever and not as fast as now.
> I agree of course it makes order of magnitude slower. The point is - how long until this slow is good enough to perform immensely useful things, with a better distribution of wealth generation than the current datacenter model?
I think really never. Because the rest of the world doesn't sit idle, and most anything can be done the traditional way.
You could pay huge $$$ to create a smart contract on ETH, or you could get more power than any normal person could afford on the Ethereum blockchain on the AWS EC2 free tier. If you think paying amounts with a few zeroes in them is a sensible thing, then you have far more computing power available.
I think the only reason to use the blockchain is if you really need the blockchain. And the vast majority of computing doesn't. And as we're seeing, the blockchain is very much vulnerable if the world wants to push it around badly enough.
Mostly everything can be done in the traditional way - and much faster indeed. The point of blockchain is a superior social solution, not technical.
I agree with you we will use blockchain where it’s necessary, but I suspect that’s a decent percentage of our future digital world.
I agree with you we will use blockchain where it’s necessary, but I suspect that’s a decent percentage of our future digital world.
> Mostly everything can be done in the traditional way - and much faster indeed. The point of blockchain is a superior social solution, not technical.
That's highly arguable. It's a superior social solution if you buy into a very, very specific kind of "social", and are happy with systems that operate within a very limited realm.
Eg, if you like the existence of things like chargebacks, then the blockchain isn't the kind of solution you want.
And you also need for the entire problem to reside inside the blockchain ideally. Blockchains lose any power if they have to interact with the outside world. You can make guarantees around how ETH moves from A to B, but if say, a physical product is involved then the blockchain can't do anything about it.
That's highly arguable. It's a superior social solution if you buy into a very, very specific kind of "social", and are happy with systems that operate within a very limited realm.
Eg, if you like the existence of things like chargebacks, then the blockchain isn't the kind of solution you want.
And you also need for the entire problem to reside inside the blockchain ideally. Blockchains lose any power if they have to interact with the outside world. You can make guarantees around how ETH moves from A to B, but if say, a physical product is involved then the blockchain can't do anything about it.
This is true and also why I think NFTs worked so well - they solved a digital asset problem, not a physical asset problem. I suspect that’s the kind of problem blockchain will solve more. The “physical things on blockchain” movement is sort of not working out imo.
I don't think NFTs worked well at all -- they had a brief spike of popularity then were mostly forgotten.
Right now BendDAO is in trouble because nobody really cares about NFTs anymore, they can't sell the ones they got as a collateral, and already ran out of funds.
Right now BendDAO is in trouble because nobody really cares about NFTs anymore, they can't sell the ones they got as a collateral, and already ran out of funds.
The NFT scene I am part of, running on Tezos markets like Versum and FXhash, is incredibly vibrant. The idea that somehow the market is gone is really only true for the wash trading / BAYC madness, which was silly and meaningless to begin with.
Artists on FXhash are selling out editions of 200 in 15 minutes. It’s an incredibly vibrant market and the whole concept of FXhash is a revolution in generative art.
NFTs are not dead.
Here are 3 real artists selling NFTs right now.
Deeway Kwon
https://twitter.com/deekaymotion?s=21&t=ipDuaTxacsrVG2ZqS5Nb...
Kato https://objkt.com/profile/tz1LA28RxLyzg4iV9jxDLrmzgC6WwCHT2f...
Jose Gasparian https://objkt.com/profile/gasparian/created
Most of “web3” is scams, ponzis and foolishness. But NFTs are changing the lives of digital artists everywhere.
Bizarrely this seems to be something that most people at HN are completely alienated from. But NFTs work.
The fact that not everyone is making millions anymore is irrelevant - as a working artist in a cheaper country you can make a decent living if you develop a community. It can also be a very healthy second income.
Artists on FXhash are selling out editions of 200 in 15 minutes. It’s an incredibly vibrant market and the whole concept of FXhash is a revolution in generative art.
NFTs are not dead.
Here are 3 real artists selling NFTs right now.
Deeway Kwon
https://twitter.com/deekaymotion?s=21&t=ipDuaTxacsrVG2ZqS5Nb...
Kato https://objkt.com/profile/tz1LA28RxLyzg4iV9jxDLrmzgC6WwCHT2f...
Jose Gasparian https://objkt.com/profile/gasparian/created
Most of “web3” is scams, ponzis and foolishness. But NFTs are changing the lives of digital artists everywhere.
Bizarrely this seems to be something that most people at HN are completely alienated from. But NFTs work.
The fact that not everyone is making millions anymore is irrelevant - as a working artist in a cheaper country you can make a decent living if you develop a community. It can also be a very healthy second income.
You're pulling on my leg, right? Let's see:
kato is being followed by 43 people, Jose Gasparian by 24. That's "nobody cares" territory. I've seen not particularly amazing furry artists sign up for a new site and gather 200 watchers in a single day by just posting a couple decent pictures. Both of those people seem to have been around for about a year.
If you look at the lists you posted, nobody's offering anything. kato has a single picture with "offer = 0.30". Gasparian has a single picture with "offer = 5.0".
Okay, let's see what fancy stuff those people own instead:
https://objkt.com/profile/gasparian/owned?sort=lowest_ask:de...
https://objkt.com/asset/hicetnunc/768355
Oh look, in the history they all sold for 3, and now somebody is trying to sell their copy for 500.
Now for kato:
https://objkt.com/asset/KT1C6ikdV1dCEdzfqG1wevsfMtZbP5zr1Tuh...
Same shit, bought a thing for 1.5 trying to resell for 1000.
Look at activity: https://objkt.com/asset/fxhash/1110428
In a single day, a NFT goes from creator through half a dozen owners. Yeah, I don't think those people even look at what they buy, and lots of people own lots of random crap, like barely distinct pictures from the same series.
I don't know what this is, but it's not an art market, because it certainly never occurred to me to buy a picture and then put it for sale again on the same day for a couple dollars more. That's more like using NFTs as money. It could be money laundering, or payments for services, or wash trading, but whatever it is, it doesn't much like an art market to me.
kato is being followed by 43 people, Jose Gasparian by 24. That's "nobody cares" territory. I've seen not particularly amazing furry artists sign up for a new site and gather 200 watchers in a single day by just posting a couple decent pictures. Both of those people seem to have been around for about a year.
If you look at the lists you posted, nobody's offering anything. kato has a single picture with "offer = 0.30". Gasparian has a single picture with "offer = 5.0".
Okay, let's see what fancy stuff those people own instead:
https://objkt.com/profile/gasparian/owned?sort=lowest_ask:de...
https://objkt.com/asset/hicetnunc/768355
Oh look, in the history they all sold for 3, and now somebody is trying to sell their copy for 500.
Now for kato:
https://objkt.com/asset/KT1C6ikdV1dCEdzfqG1wevsfMtZbP5zr1Tuh...
Same shit, bought a thing for 1.5 trying to resell for 1000.
Look at activity: https://objkt.com/asset/fxhash/1110428
In a single day, a NFT goes from creator through half a dozen owners. Yeah, I don't think those people even look at what they buy, and lots of people own lots of random crap, like barely distinct pictures from the same series.
I don't know what this is, but it's not an art market, because it certainly never occurred to me to buy a picture and then put it for sale again on the same day for a couple dollars more. That's more like using NFTs as money. It could be money laundering, or payments for services, or wash trading, but whatever it is, it doesn't much like an art market to me.
How glib.
Kato has 4000 followers on twitter https://twitter.com/TrofimovaKato
Jose has 2300 on twitter https://twitter.com/josegasparian
The place where people meet and follow each other on the NFT space is twitter, not OBJKT. OBJKT is just where the art is sold.
Jose has just recently sold out his first piece on FXhash - 200 editions at 2xtz - 400$ - in 15 min.
It's a art market, even if you don't want to see it. I just took two random artists out of a hat that I like.
You're also of course conveniently ignoring DeeKay because he doesn't fit your pattern - he just had a piece recently sell for 1$ million.
Kato has 4000 followers on twitter https://twitter.com/TrofimovaKato
Jose has 2300 on twitter https://twitter.com/josegasparian
The place where people meet and follow each other on the NFT space is twitter, not OBJKT. OBJKT is just where the art is sold.
Jose has just recently sold out his first piece on FXhash - 200 editions at 2xtz - 400$ - in 15 min.
It's a art market, even if you don't want to see it. I just took two random artists out of a hat that I like.
You're also of course conveniently ignoring DeeKay because he doesn't fit your pattern - he just had a piece recently sell for 1$ million.
> Kato has 4000 followers on twitter https://twitter.com/TrofimovaKato
> Jose has 2300 on twitter https://twitter.com/josegasparian
Still very, very small potatoes
> It's a art market, even if you don't want to see it. I just took two random artists out of a hat that I like.
No, it's not. It's an art market used as a proxy for something else. I like art. I get reselling it. But when you buy a bunch of stuff and immediately put it back for sale for a few bucks more, that's not art appreciation. In the best case it's arbitrage, in the worst case it's something more sinister.
> You're also of course conveniently ignoring DeeKay because he doesn't fit your pattern - he just had a piece recently sell for 1$ million.
It's very much an outlier yes, so probably something very different.
I don't really buy that this piece makes somebody feel anything worth paying $1M for. Come on, we've been doing this theme for ages. Here's an ad based on that concept: https://www.youtube.com/watch?v=brsI6z13Su8 -- it's from 2002.
If somebody has $1M to spend on a single picture, why would they? They could hire a dozen artists for a year. Have them safely work on some sort of masterpieces, or have them at the patron's beck and call to make any random ideas the patron has.
There are reasons to spend $1M on a single art piece, but pretty much none of them have anything to do with the art.
Still very, very small potatoes
> It's a art market, even if you don't want to see it. I just took two random artists out of a hat that I like.
No, it's not. It's an art market used as a proxy for something else. I like art. I get reselling it. But when you buy a bunch of stuff and immediately put it back for sale for a few bucks more, that's not art appreciation. In the best case it's arbitrage, in the worst case it's something more sinister.
> You're also of course conveniently ignoring DeeKay because he doesn't fit your pattern - he just had a piece recently sell for 1$ million.
It's very much an outlier yes, so probably something very different.
I don't really buy that this piece makes somebody feel anything worth paying $1M for. Come on, we've been doing this theme for ages. Here's an ad based on that concept: https://www.youtube.com/watch?v=brsI6z13Su8 -- it's from 2002.
If somebody has $1M to spend on a single picture, why would they? They could hire a dozen artists for a year. Have them safely work on some sort of masterpieces, or have them at the patron's beck and call to make any random ideas the patron has.
There are reasons to spend $1M on a single art piece, but pretty much none of them have anything to do with the art.
[deleted]
jameskilton(1)
I don't think so. At best, we can say that the attack surface will have changed. How it has changed will unfold. But to claim that POS is "more resistant to attack" is complete rubbish and a sign the author is clueless about the technological ramifications.
It's kind of like saying that traveling 2 miles below the ocean's surface by submarine is safer than traveling by car because you can't get hit by a drunk driver.