Vitalik Unveils Ethereum 2.0 Roadmap
medium.com
medium.com
Clearly Ethereum has had more than its share of problems, but as things stand, I feel it has a greater chance of becoming a truly disruptive technology than Bitcoin, which seems to have become stuck in a technical quagmire.
If Vitalik got hit by a bus tomorrow Ether price would drop 95%. A currency does not need a leader who directs it. Also it should be very difficult to make changes to a 150 Billion $ currency.
A platform that isn't finished needs a leader, and I would say Ethereum needs a leader a lot more than Bitcoin. If all development on Bitcoin would stop tomorrow, it would still keep running and have a potential future as digital gold. If all development on Ethereum would stop tomorrow, it would most likely fail as a project. The value proposition is very different.
Also, since oil isn't very useful without something to use it in (a car, plane, other use cases), it actually makes perfect sense (to me).
ETH could very well also become a functional currency once the supply gets capped in a future hard fork. But for now, it's more oil than currency.
This could be some central bank for example.
Between ETH and BTC I think ETH has a better shot at being at the core of that, unless the Bus accident actually happens.
[1] https://www.imf.org/en/News/Articles/2017/09/28/sp092917-cen...
[2] And break through means: I can realistically get rid of my Visa card and use blockchain tech for day to day transactions at many stores.
To be fair, he's already beyond set for life
Do they have something up and running yet?
EOS uses DPos (delegated proof of stake). This means that token holders vote for block producers: 21 block producers are voted in to produce blocks in a round-robbin manner. In the future these block producers will be huge computer clusters in data centers. The whole network has only 21x redundancy in it, and there is no proof of work. Ethereum currently has Nx redundancy, where N is the number of nodes, and nodes are supposed to be as small as laptops. This way currently EOS is the only blockchain that can reach VISA level transactions/second. There are tons of things I am excited about in EOS (like contracts are written in WebAssembly instead of Solidity.)
They have working software on Github, people are running their own testnets. There will be a public testnet in December. But what is more important is that the CTO is the creator of already working high-performance DPos blockchains: BitShares and Steemit. The Steemit blockchain has the highest traffic currently among all blockchains.
The only technical critisism against EOS I heard is that some people say that DPos easily becomes centralized. I think proof of work can become much more easily centralized because in the end if one entity can get the electricity even slightly cheaper than others, it will be the only entity that can be able to mine profitably. This is explained by EOS CTO in more detail here:
https://steemit.com/eos/@dan/in-defense-of-consortium-blockc...
Interesting. I have (one of the) standards by which I judge cryptocurrencies and that is, if tomorrow USD (or any major currency of a western country) is marred by hyperinflation, which currency is capable of allowing people to continue business as usual (of their consumer spending).
So far, no cryptocurrency is capable of doing that, and the most promising in this aspect were Ethereum's raiden network and IOTA (EOS wasn't even on my radar btw).
The presented material by Vitalik is largely similar to his Devcon 3 presentation. Most (all?) Devcon 3 videos were just posted today as well: https://www.youtube.com/channel/UCNOfzGXD_C9YMYmnefmPH0g/pla...
For those that don't like watching videos, here's the FAQ which summarizes sharding: https://github.com/ethereum/wiki/wiki/Sharding-FAQ
And here's the actual code for the sharding python poc: https://github.com/ethereum/sharding
These new ICO's are manufactured to give the company that develops them hundreds of millions or even speculative billions in paper.
How long until people realize again that these products have near-zero marginal cost?
Artificial scarcity can be circumvented by just copying Ethereum and creating cheaper alternative.
It wasn't clear if you were talking about actual Ethereum itself or any of the ICOs that are based on it. If you were talking about ICOs, the answer is even simpler: they are just like stocks. It's like you asking "why are people giving all this money to that company?". It's because some of those companies have a business, or a business idea and people want to support it. (There are scams too, of course, but sometimes it's not easy to know which one is real and which is a scam, and so people take chances.)
> Artificial scarcity can be circumvented by just copying Ethereum and creating cheaper alternative.
You're welcome to try, if you think it is so simple. Ethereum Classic-people have tried, and they even had an actual legitimate reason (the DAO hack), not just a vague "we want to create a cheaper alternative" motive. Look at the price charts and see how well it went for them.
Yes. I agree.
The potential capital efficiency for for these services is vastly greater than credit cards. You are trying to undersell the potential in distributed computing platform and smart contract technology if you defend the current cost structure.
The promise of these technologies is to reduce cost of financial transactions almost without limit.
Lets look into the future of efficient and revolutionary transaction and smart contact technology.
If billion people do 10 transactions per day (alternatively 10 billion 1 transactions per day) with cost $0.01 per transaction, the cost of this service would be only $10 million per day or 3.65 billion a year. Remove the operating costs in competitive markets and the profit margins will be extremely low.
The beauty of efficient established markets is that profits will be driven down. Artificial scarcity created by different coin protocols is temporary phenomenon. It dies when the hype dies.
But I get your point - imagine a world where we were all paid competitive wages to work on OSS instead of high-ROI investments.
In this case it's because of a path to mass adoption: http://coinivore.com/2017/11/26/bitcoin-reaches-time-high-95...
"12 Million ETH were created to the development fund, most of it going to early contributors and developers..."
At today's rate that's $5,860,200,000 USD. Who were these early contributors, how much did each get, and why do they get to have 12.5% of the entire economy on day 1? How is that a fair currency? I've read there were only 60 some "early contributors". Where's the list?
On their FAQ, under "Is the ether supply infinite?" there are two paragraphs of goobly gook basically saying "we haven't decided yet" ("an area of active research").
How can anyone take this currency seriously? What is so special that makes you invest in this instead of Bitcoin?
Why does Larry Page or Google Engineer #1 own billions of dollars of Google stock? Because he was there on day 1 and you weren't :)
In the Ether ICO, a big whale friend of Vitalik could have sent his Bitcoin in during the ICO sale, got Ether for it, then Vitalik sent him his Bitcoin back. Poof, Ether printed out of thin air - there is no way to prove this did not happen.
That is the problem with these ICOs vs. using Proof of Work to fairly distribute the currency.
https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...
First, PoW can't be said to fairly distribute the currency but rather to secure the currency against double spend attacks. If it is a fair method or not is another discussion where many models are possible.
On the other hand there are questions about who develops the currency and how the team is funded. In this case Ethereum, Zcash and others propose this model which is valid. Bitcoin development is not progressing from thin air and it is not funded by the PoW mechanism anyway so the consensus method and the development work are different problems.
But... the stock did get printed out of thin air. When Google was originally being started — like any startup — the founders could have, and regularly did, make stock appear out of thin air. For example, that's what dilution is. If you've ever worked at a pre-IPO company that's raised money from VCs, at some point your company likely printed stock out of nothing, diluting your share of the company however much they liked — and there's not much you can do about it.
In fact, all of the stock sold in the Google IPO was at one time printed out of thin air. That's where stock comes from. When Larry and Sergei and their lawyers (and whoever) drew up the initial documents when they were incorporating Google, they decided there would be X shares, and then over the course of many years increased that number semi-arbitrarily as they saw fit to sell to VCs, and eventually to sell to the public. All of the stock was made up, and it was distributed mostly to the founders and the early investors, just like any startup. They weren't being particularly evil or unfair, that's just how startups work.
In fact, the Google board could, today, legally decide to invent more Google stock out of nothing and sell it, or give it away. Here's some good reading on Investopedia about dilution and stock issuance, along with a recent example of a company legally creating stock out of thin air and giving it to their new CEO, diluting existing shareholders: https://www.investopedia.com/terms/d/dilution.asp
Ether had a one-time initial sale, and everything since is Proof of Work. In terms of being certain that Ether isn't being printed out of thin air, it's IMO quite a bit more trustworthy.
(And if you want to really get down into the details, printing money out of thin air is a daily occurrence with the US government: that's how inflation works. We make dollars out of nothing. For good reason, but still!)
It becomes notibly problematic if the total distribution is produced within a small window of time, locking out entire swaths of the population to be at the whim of horders (assuming there would be a genuine demand for the supply).
And the more they hold, the better for the community as a whole as they have more at stake for the project to succeed.
Even if one provided blockchain transaction logs, they might just be moving funds to wallets owned by the same user.
There is no evidence on the contrary point either, many have lost the private keys to 2k ETH wallets at this point...
This value is influenced by free decisions of people, like you, who decide to invest in it. If those people (just like you) would decide that the developers are getting an unfair share and therefore, the currency is not valuable for them, Etherium wouldn't have such valuation.
But for some strange reason, people don't care about how much do developers get and how "fair" their compensation is, as long as they get their value out of it.
(I'm sorry for the rant, but I always feel really irritated when people bring the word "fair" into a situation which is controlled by a free market with a lot of small individual agents who are free to act in any manner they like and are not dealing with something they need for the basic survival.)
Further the vague wording about the supply size means it is unlikely that it would hit bitcoins level of value because there is no scarcity.
this is the nature of all the PoW coins. The early contributors take the most risk and the most reward (if the coin succeeds).
No, Satoshi did not "premine" bitcoin. Premine means on day zero you have created currency for yourself already. The only block we know Satoshi did mine cannot be spent. There is also zero evidence that Satoshi mined additional blocks once the network got up and running. (It took days for the second block to be found.)
The difficulty curve often further benefits early miners to be taking minimal risk when the design is reverse logarithmic.
Early adopters invested almost nothing compared to the amount of money moving around now (at risk on a speculative investment). Their risk was negligible and certainly far less than folks getting into the game now, coin for coin.
You’re right that if one buys 0.05 btc today for $400, it’s the same risk as someone investing $400 years ago to mine hundreds or even thousands of coins, but real investors aren’t buying 0.05 btc.
Satoshi easily could have chosen a linear algorithm anticipating additional work input with more users, instead he designed a system to exploit late adopters.
The aspect of Bitcoins having a limited supply is mostly ineffective, as all the features of Bitcoin are now available in other service networks which are including more advanced features and better ASIC resistant algos.
Are you suggesting he provides a bigger reward for work as time goes on, thereby providing more currency later in the piece?
That would be counter-intuitive to the idea of bitcoin as a fixed store of wealth (strong libertarian influence, anti-bank ethos being kinda the cornerstone of the origins of bitcoin).
His plan was that the transaction fees would be what sustains the miners due to bitcoin being worth a lot once the block reward was low. The deflationary nature was not "manipulative" in the way you are implying, it was done in order to slowly wind down the reward and currency generation so eventually the transaction fees were the purpose for mining.
>The aspect of Bitcoins having a limited supply is mostly ineffective, as all the features of Bitcoin are now available in other service networks which are including more advanced features and better ASIC resistant algos.
Whether or not this is true is neither here nor there, the effectiveness is non consequential when it comes to the intent. He was not attempting to exploit late adopters.
Yes.
The minting design Satoshi choose merely granted a few users the majority of the supply for the least amount of work. They can then horde and hope to sell at a profit to late adopters.
>That would be counter-intuitive to the idea of bitcoin as a fixed store of wealth
No, the total supply remains the same. Distribution and production is the issue. The linear curve should align to match the energy and work input, assuming that is representative of additional users joining the network.
Fixed store of wealth is even more difficult to achieve, as users must trust the design to be desirable.
I understand what you are saying (even if I disagree with the concept), but I think you are missing that this was created as a run away from the GFC, heavy inflation would run a counter to what libertarians and anti-global economics people would believe in.
I didn't say anything about your particular opinion on wealth distribution on crypto, I'm just saying your opinion that satoshi was attempting to exploit people is baseless.
The end result is early users exploiting users who join the network after them. Ponzi style.
Imagine someone tells you they've created a money printing machine that prints 21m BTC, and they design the machine to give them most of the BTC and when it arrives in your town the man says "well it looks like the rules have changed now and your work isn't worth as much as my work because you encountered the magic box after me"
The users who ran the software on the network in 2010 required much less value input to generate bitcoins. Acording to Satoshis design, a user running the software now on an identical computer would not produce the same rewards for their work. This is essentially an intentional ponzi design.
Users who aquired bitcoins for low capital input are incentized to psychologically convince late adopters to purchase their bitcoins for more than it cost to produce and acquire.
The semantics matter here. Perhaps the later comers were more opportunistic and optimistic about the likelihood of achieving a favorable return. But they had to take more risk, since they were later to the party and risked more capital (as you noted).
The output is actually completely inverse. More work, more users, less output.
The consistency you're thinking of is likely the algorithm that adjusts blocktime to 10 minute intervals.
Penalising late adopters is just the reverse of rewarding early adopters and bitcoin needed early adopters to keep the network alive so it makes sense to reward them. I dont really buy that late adopters are being penalised though.
If OpenOffice team gives out their software for free, does it mean that Microsoft is somehow morally evil for selling their own Office package?
Difference between effort/expense does not seem to be important here, the point is that Ethereum developers put something real into it (work, resources, etc - quantifiable and provable), for which they claim that they should be reimbursed in form of a pre-mine. This information is publicly available, and known by most network participants, who still voluntarily participate in it. I don't see any problem here.
The Bitcoin model is simply unsustainable if the exchange price continues to explode.
And it would be nice to have even smaller fees on Ether and transaction time less than a second, so it could be better than VISA/Mastercard.
The issue of Bitcoin is not the technical part; it's that no consensus can be reached between people on what is the right course of action, leading to multiple forks of the network.
Take a look at the charts here, http://bc.daniel.net.nz
It's not "free" to process more transactions. At some point you are no longer p2p and decentralized when the requirements to run a node go up so high, so quickly .
I'm assuming those full nodes will eventually be intended to be run in data centers.
I was talking just about Ether, what happens to time/fees if number of transactions goes 1000x?
> The issue of Bitcoin is not the technical part; it's that no consensus can be reached between people on what is the right course of action, leading to multiple forks of the network
I don't think it's a problem of Bitcoin. It has its pros and cons, but it allows bitcoin evolve, assessing different approaches. It's like saying that main problem of open source projects is that they can be forked. Is it a problem or is it a feature?
At this rate we'll have 10 forks with minor changes in 5 years, and that just isn't good. Some pragmatism in working towards a common goal should be expected.
Unless people believe the current state of Bitcoin is good enough to be digital gold. It might very well be.
I'm curious, how many drug dealers do you know that accept Ether?
Leaving aside the question whether PoS even works at all https://download.wpsoftware.net/bitcoin/pos.pdf
Back in 2014 it made sense to divest a small proportion from bitcoin if you made significant gains. Fresh, crypto-wealthy people with little to no investing experience (or even basic wealth management) tended to look to new cryptocurrency projects rather than fiat vehicles for divestment. Say what you will about that line of thinking, but it paid off for anyone that held onto their presale ether. At the time there were many new similar projects running presales. Some of those are now at a loss based on bitcoin's value, others are breaking even or failed and ethereum has gone parabolic.
The going rate if you participated near the beginning of the ethereum presale was 2000ETH/BTC which was ~$600 at the time. This was an easy gamble for anyone with double digit bitcoins and the foresight to invest conservatively. One bitcoin invested in the ethereum presale is now worth nearly $1M.
Does it make sense invest in this space now as an independent investor? Definitely not. The signal to noise ratio is god awful, the economics don't make sense (to me, at least), the sharks are circling and it is going to take a long time for the technology to catch up with the hype.
When we see crashes of epic proportions I believe it is going to bring heavy-handed regulation and many are going to lose everything. People will be looking for blood and they will look to projects like ethereum for their pound of flesh.