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Comment by jstanley | Hacker News Reader

> Should all token development stop now that we have ETH? Should ETH never have been created because we had BTC? Should BTC never have been created when the USD was already a liquid medium of exchange?

Bitcoin was created because it isn't possible to do Bitcoin with USD.

Ethereum was created because it isn't possible to do Ethereum with BTC.

Bancor was created because you want to make fat stacks of cash. It would work just as well (or better) if it was using ETH directly instead of having its own token.

Disclaimer: I am almost completely uninformed about Bancor.

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I must admit that my familiarity with the term "Bancor" was only from Yanis Varoufakis explaining about Keynes, Bretton Woods, the Nixon Shock as background explaining the current plight of the Euro and the Eurozone:

https://en.wikipedia.org/wiki/Bancor

Me too. I got to know the Bancor via proxy (Varoufakis).

Te idea is more than intriguing, what I would like to know is if JMK expected the US to go with it or knew it was a dead-end but had to pursue it anyway.

I believe that it was one of the most obscure and important mewtings of post WWII.

If you are referring to Bretton-Woods Conference, it is not obscure at all. It is probably the most important monetary event in modern history and probably everyone with economics background knows about it. Also it was during WWII. But you are right that parts of it (like the international clearing union and its implications) are just mentioned in passing in economic courses and rarely acknowledged nowadays.

Do economists look at things like Bretton-Woods from a purely "theoretical" perspective (for lack of a better term) or do they also take into account the political and global power level tensions driving that kind of decision making?

As a general rule, economists tend to look at theoretical models of how systems are supposed to work and whether those assumptions fit the data and economic historians tend to look at why policies were introduced or recommended and what their proponents and detractors thought about then. They do tend to share departments, students and reading lists though.

That would appear to be like someone coming up with a theory of the movement of sailing boats without accounting for the weather! :-)

That's economics for you. That's why I switched fields some time ago. It is a "science" that consistently gives flawed predictions and it's is often used to provide cover for political ideologies.

Or evaluating code without intimate familiarity with the internal politics of the dev team that wrote it :-)

It's only my faint impression, but I think there's some renewed interest in some sort of international financial / monetary framework similar to Bretton-Woods.

The governor of the Chinese central bank publicly expressed interest (and explicitly invoked Bretton-Woods) a few months ago. And other 'mainstream' central banking authorities seem to be acknowledging that there are big deficiencies with the current model (e.g http://www.bis.org/speeches/sp160210_slides.pdf)

I think the problem is that it's such a huge issue. It makes sense the original agreement was hammered out towards the end of WWII: people were 'thinking big' at the time. I worry that we are only capable of making such big and forward-thinking moves in the wake of some catastrophe or war...

EDIT: The 'renewed interest' is actually mentioned in the Wikipedia article on Keynes' Bancor proposal, and it looks like the governor of the Chinese central bank has been talking about this for some time now: https://en.wikipedia.org/wiki/Bancor#Proposed_revival

Similar to what was actually agreed at Bretton-Woods (which was effectively what the US dictated) or what Keynes proposed?

There was some noise about bringing about a world reserve currency in the years after 2008 but not much came of it. There was a big increase of the SDR allotments to handle the bailouts that were expected immediately after the crisis. And Chinese currency is now part of the SDR basket. But I don't think a world currency outside of US control will be allowed to exist.

Also Keynes' ideas on handling imbalances goes in the face of what politicians have been saying for decades: "Deficits are bad, and surpluses are good." So neither the public nor the politicians are ready to even acknowledge that there might be problems with this logic.

In a closed system your surplus is someone else's deficit, that's not a hard concept. The problem is seems to be cultural (some cultures consider debt a sin or a divine punishment) and educational (even renowned economists trying to explain macro-economics to the layman resort to false analogies e.g. Comparing the economy of a country with a household economy, when in reality the way these work is the exact opposite).

> Ethereum was created because it isn't possible to do Ethereum with BTC.

I don't think that is true. You can absolutely reuse BTC for your so called "smart contracts".

In theory, but in practice almost nobody did.

I've been looking into this question. Szabo first proposed "smart contracts" in 1994, but Ethereum is basically the first practical smart contracts platform ever - the first one that people actually use a whole lot.

(You can squint at things and say "well that's a bit like a smart contract", but that's retrospectively applying a label - like calling Git a "blockchain". I'm speaking of things that were expressly labeled "smart contracts".)

Too bad it's not the first secure smart-contract platform; that honor probably goes to the folks who developed Joule, E, etc. in the mid-90s. Szabo and his contemporaries were steeped in capability theory, but Ethereum glossed over all of that in favor of hype and cash.

Worse is better, yet again.

That's not entirely true. Bitcoin's scripting language is not Turing complete, among other limitations that Ethereum addresses.

https://github.com/ethereum/wiki/wiki/White-Paper#scripting

It is true that Ethereum has a more powerful scripting language. The real question, however, is if that feature has practical value.

I think the jury is still out on that question but I personally lean towards no. If and when there are profitable applications of this technology, ones that wouldn't have been possible without ethereum scripts then I will be glad to change my mind.

I agree that it is still an open question whether the EVM will have profitable applications. I lean towards yes.

It is (in my opinion) no question that the feature has theoretical value. I think the only question is whether that feature's value will outweigh the considerable costs of using a blockchain.

I think there are definitely cases where it will be profitable, but think blockchain tech in general is probably overhyped right now.

I would lean towards no but perhaps I will be surprised.

We have had about a year of dapp development gone by so far and there isn't a single dapp with any meaningful userbase.

I think if another year goes by and we are 2 years in the dapp development cycle and there is no successful dapp that will probably mean it's not a successful model.

I am also concerned about these dapps having insane valuations and raising huge sums of money just by releasing a vague whitepaper, without having a working product with users.

Normal startups would usually start with a seed round of hundreds of thousands USD but raising 50 millions or more is just obscene, that's a series B or C round for a fast growing startup with tens of millions real users and hundreds of employees usually.

I am interested how this whole situation plays out but remain skeptical for now.

The ICO scene right now is insane. Definitely bubble-ish behavior.

I agree with you. I wonder if the best use case for ethereum scripts is actually with private block chains. For private chains the trust problem with external input to the scripts (which is needed for any serious dapp) would be minimized.

I've seen so many technologies hyped, fail to live up to expectations, and then disappear. Etheruem has some interesting ideas, I'm worried that they have grossly over-stated its potential and it will soon fall off the hype cliff.

For scammers and thieves, Ethereum is the place to be. Can't wait until Underhanded C Contest winners discover Solidity.

You can build some smart contracts on Bitcoin, but it's not nearly as powerful as with Ethereum.

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