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Comment by chrisco255 | Hacker News Reader

DAPP Radar is not the authoritative source for all Ethereum applications. There are many like Augur, Golem, MakerDAI, etc that aren't even included on that list.

Depends on when "early days of internet" is defined? The internet could be seen as an evolution of ARPAnet https://en.wikipedia.org/wiki/ARPANET which was defined in the mid-1960s and took years to deploy and probably decades to evolve to the usefulness you describe.

ETH network is moving to a Proof-of-Stake consensus algorithm which will reduce it's electricity impact: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQs

And meanwhile, there are other blockchains, like Qtum, that are already Proof-of-Stake and run Ethereum VM and create blocks on Raspberry Pis, for minimal energy consumption: https://github.com/qtumproject/qtum/wiki/Installing-Qtum-on-...

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As per your citation, ARPAnet came online in 1969 and emails were being exchanged by 1972, barely 3 years later.

Blockchains have been around for 10 years now and every year they cause bigger problems without actually solving any.

> Blockchains have been around for 10 years now and every year they cause bigger problems without actually solving any.

Being able to transfer value between two parties without having to trust anyone has value. We can argue about how much value, but it's non-zero.

> without having to trust anyone has value

There is a lot of trust involved in a cryptocurrency transfer. You have to trust your technical competence to securely mount your wallet. You have to trust the wallet you're sending money to is the wallet it's supposed to go to. You have to trust the person you're sending money todo what you're paying them to. You have to trust the network to maintain the value and convertibility of the currency you're sending and receiving. Et cetera, et cetera

In practice, nobody wants to do these things. So we see centralization at exchanges. Precisely in the way people not wanting to handle cash use banks.

> There is a lot of trust involved in a cryptocurrency transfer. You have to trust your technical competence to have securely mounted your wallet. You have to trust the wallet you're sending money to is the wallet it's supposed to go to. You have to trust the person you're sending money to will do what you're paying them to do. You have to trust the network to maintain the value of the currency you're sending and receiving. Et cetera, et cetera

That's clearly not the point. The transfer itself does not require trust. That's the value.

> The transfer itself does not require trust

Cash transfers and barters are trustless. Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing). Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk.

> Cash transfers and barters are trustless

Yes, but they require physical presence.

> Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing).

Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise.

> Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk.

I think I agree with this statement literally. The question is what price are we paying for that reliability? And does blockchain offer an alternative tradeoff that we might like better?

> Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise

The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks. Blockchains are a neat technology which should have never been marketed as a currency.

> The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks.

What does that have to do with what we're talking about?

The statement you are defending was "Being able to transfer value between two parties without having to trust anyone has value." Compared to wire transfers, one is required to trust the intermediary in that case.

I think at that point it becomes fair to ask: what is the likelihood that I am going to lose money unexpectedly to my credit union, or my recipient to her bank? And then by comparison, what is the likelihood that I or my recipient are going to lose money to coin theft, exchange failures, fluctuation in valuation, or other things inherent to dealing with blockchain transfers?

Rightly or wrongly, I think many people would rate potential losses higher with blockchain solutions than with USD wire transfers. I know I would.

> Compared to wire transfers, one is required to trust the intermediary in that case.

You're totally right. But let me flip the question around a little bit. What would our financial system look like if we didn't have to place so much trust in our intermediaries?

It's not that banks aren't trustworthy. They are. They're extremely good stewards of the public trust, for the most part. But the fact that we place so much trust in them has systemic effects that are stifling to innovation. And I think that's what blockchains may allow us to overcome.

I hear what you're saying about banks stifling innovation. I think current blockchain alternatives highlight the tradeoffs, though.

I think risk is associated with stores of value. "I rob banks because that's where the money is." So we move the stores of value from banks to blockchain exchanges and hot wallets, and the risk moves accordingly. Now, instead of the risk being borne by organizations with decades or centuries of experience mitigating it, backed by the Fed, it's borne by people who barely understand the wallet software they downloaded, and Magic: The Gathering card traders who aren't as smart as they thought they were, and people who are absolutely definitely sure that smart contra--oops, let's just "fix" that.

So what you describe as centralized stores of trust stifling innovation can also be described as centralized stores of risk mitigating loss. And I think that's pretty much what we've seen so far.

I agree. Fundamentally, what we have here is the potential for an alternative model. It remains to be seen whether this model can evolve to be better - I absolutely agree that it is not better right now. I think that it has the potential to be though.

How exactly blockchains helps with that? It's open protocol which helps but most of the people interact with it through centralized points wallets providers, exchanges etc and we already see classic centralization. It seems to me similar as it is with Facebook which interacts with open protocols but is many people have to go through it and solutions seem to be legislatively rather than technological(although I hope projects like blockstack can help with this)

I think the main point is having an open protocol built on top of decentralized, trusted infrastructure. In that way, anyone can start a bank, and get to 'trust scale' immediately.

"But the fact that we place so much trust in them has systemic effects that are stifling to innovation"

Large banks have a lot of money to buy influence; that's the source of their systemic risk.

But you can do wire transfers at small banks and credit unions.

Yes, but even those small institutions are enormously careful with what they do, and are regulated heavily.

> What does that have to do with what we're talking about?

Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank).

> Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank).

That's certainly true. But the issues around people losing their coins and having their keys stolen can be solved by better UX and application security. Essentially crypto transmutes the problem domain, from a people problem to an application design problem. It's still a problem. It still needs to be solved, but the domain-transfer allows it to be solved cheaply at scale in a way that the human one can't be.

In other words, i'm making the claim that the issues you cited are not essential properties of blockchains, merely transient properties of their present implementations and UX. If you want to make the case that they are in fact central, i'd be happy to listen to that though.

"Essentially crypto transmutes the problem domain, from a people problem to an application design problem."

The fact that nobody understands how human institutions work is an advantage, because it prevents malicious actors from subverting them. Whenever someone figures out how institutions work, they destroy them and civilizations fall, so they evolve to be incomprehensible. So "transmuting the problem domain" seems like a bad move to me.

We may just have to agree to disagree here. I've never been a fan of security by obscurity, though obviously it does have some use cases. I think we have the opportunity to design secure systems that do not rely on the frailties and biases of human judgment, and I think it's worth exploring.

> If you want to make the case that they are in fact central

End financial services users repeatedly choose convenience and risk guarantees over self-management. This isn't something which can be papered over with a saucy UI, particularly when the tangible benefit is difficult to describe. ("Decentralization" isn't a benefit, it's an attribute.)

> End financial services users repeatedly choose convenience and risk guarantees over self-management. This isn't something which can be papered over with a saucy UI, particularly when the tangible benefit is difficult to describe. ("Decentralization" isn't a benefit, it's an attribute.)

Totally agree. In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose.

> In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose

The problem with this vision is those people using centralized services see no benefit. They are better off sticking with the status quo.

Cryptocurrencies make sense for people who wish, for philosophically reasons, to control their own money. That vision doesn't require a "crypto dominated world." It does, however, require shrinking the vision from "re-imaginging the financial system" to "solving a need for a small group of devoted people." That's okay, and if that's how crypto were marketed it would (a) be more honest but (b) come with a lower value.

It's not true that they see no benefit. They will see benefit in:

1) cheaper financial services 2) broader financial services 3) real-time financial services 4) access to financial services regardless of location (or nation) 5) decentralized applications fully integrated with financial services

The average Joe doesn't need to control their own private keys in order to gain these benefits.

But think of it this way. What would be more difficult, for an organization or company, today?

A) start your own bank B) start your own key management service

A) make an application that accepts payments as low as $0.01 B) make an application that accepts payments as low as .001 ETH

A) create a new protocol layer on top of the banking system B) create a new protocol layer on top of Ethereum

---

Today, we rely on perhaps at most a few dozen companies (PayPal, Stripe, VISA, MC, etc) to build interfaces with our banking system.

There is no "app store" for banking system financial services. It's hard, hard work to build anything on top of that archaic system.

Blockchain makes currency an internet-native construct. Which has profound implications that we are just beginning to see the very earliest examples of.

1. This was clearly true in the beggings now to so much. Scalability is hard issue which centralized solutions doesn't have.

Existing solutions also evolve and has become cheaper, faster and more accessible. Sure there are exceptions like political dissidents but that's relatively small group. If you would like to solve this issues on large scales like Venezuela than solutions would be mostly political rather than technical.

"1) cheaper financial services"

If a million people want to deal with each other without any trusted party to intermediate, then they have to keep a million ledgers and agree on a protocol for reconciliation. Once you've conceded over a million-fold factor of inefficiency, being cheaper doesn't seem plausibly within reach. I don't see the details as mattering much; it's the big picture that doesn't make sense.

> The problem with this vision is those people using centralized services see no benefit. They are better off sticking with the status quo.

Narrowly, yes, that's true. But I think there's a broader context to consider than that. Our current financial system is architected around these financial centers of gravity. Blockchains represent an alternative to that structure. Yes, there will still be intermediary institutions, but they will not have the same fundamental centrality that the current ones do. I think this is an important change, and one that is likely to lead to other changes that will be more directly appreciated by consumers and the broader economy than the philosophical self-sovereign money issues.

"But the issues around people losing their coins and having their keys stolen can be solved by better UX and application security"

Unless it's an Mt.Gox situation.

Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise.

Personally I trust those entities much more than some shlocky fly-by-night crypto exchange.

To each his own, I guess.

> Personally I trust those entities much more than some shlocky fly-by-night crypto exchange.

You aren't trusting an exchange when you send a transaction on the blockchain.

> You aren't trusting an exchange when you send a transaction on the blockchain.

This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity?

Edit: As I post this I remembered that Paradex, a decentralized exchange for ERC20 tokens built on 0x, was recently acquired by Coinbase[1], the largest centralized crypto exchange, who in turn might soon be acquired by Facebook[2]

1. https://www.reuters.com/article/crypto-currencies-coinbase/c... 2. https://www.independent.co.uk/life-style/gadgets-and-tech/ne...

> This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity?

Sure, that's true. But once you own them, they're yours to do with as you please. You can also buy them from someone peer to peer if you really want to onramp in a 'decentralized' way.

> You can also buy them from someone peer to peer if you really want to onramp in a 'decentralized' way

Now we're back to no advantage over cash or bartering.

Only for the onramp. I know that you know that, too. Why are you arguing disingenuously? You have a reasonable case to make, you don't need to stoop to that.

> You can also buy them from someone peer to peer if you really want to onramp in a 'decentralized' way.

This makes it seem like you can onramp via an exchange and still maintain all the benefits of decentralization. If I don't onramp in a decentralized way then there will also be a centralized entity with tremendous power.

What do you mean by that?

"Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise."

They have a strong business interest in not doing so. Because the identity of the entity is known, and thus subject to reputation loss.

"And does blockchain offer an alternative tradeoff that we might like better?"

Why do I care about limiting the options to blockchain?

Cash and barter require trust that your counterparty won't club you and take your stuff, since you have to be physically present.

> The transfer itself does not require trust. That's the value.

Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion? Which seems just like trusting that, say, your bank or the Mastercard servers will process your transaction properly? Not to mention the more mundane aspects like the fact that you still need to trust that your ISP won't cut off your access to the network, etc...

To me the value seems to be that nobody can forge a transaction based on your currency (or whatever it is you have), not the idea that you somehow don't need to trust anyone when you do transfer value.

> Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion?

Yes, but their incentives are structured to align with yours in that scenario. You are trusting them to act in their own interest.

Isn't that the same with credit cards, wires, etc.? They make money from your transactions too.

That's true, but the degrees of freedom are different. The node processing your transaction cannot steal your money in crypto. It can only choose not to broadcast your transaction, and they are also in perfect competition with all the other nodes. Which means that if one node chooses not to process your tx, another will soon.

> That's true, but the degrees of freedom are different. The node processing your transaction cannot steal your money in crypto. It can only choose not to broadcast your transaction, and they are also in perfect competition with all the other nodes. Which means that if one node chooses not to process your tx, another will soon.

Hence we circle back to exactly what I said in the last line of my comment: https://news.ycombinator.com/item?id=17493508

You're right, sort of, but I don't think those two things are really distinct capabilities. You trust your bank, because your bank could theoretically forge a transaction to themselves of all of your money. Or just tell you that your balance is zero and refuse to give it to you.

I don't really follow what you're saying now or how it related to the previous discussion to be honest. But to respond to what you currently said, I trust my bank because there's a chain of trust between us via the government and its relevant laws, not because of what the bank itself is or isn't physically capable of doing.

This is the last line to which you were referring, right?

> To me the value seems to be that nobody can forge a transaction based on your currency (or whatever it is you have), not the idea that you somehow don't need to trust anyone when you do transfer value.

What I meant is that the capability that "nobody can forge a transaction" and "don't need to trust anyone" are actually the same thing. You are forced to trust your bank because your bank could forge a transaction on your behalf. You trust them not to do this. That is the nature of your trust in them. Blockchain eliminates this weakness, and it is in that sense that you do not have to trust a 3rd party.

> What I meant is that the capability that "nobody can forge a transaction" and "don't need to trust anyone" are actually the same thing. You are forced to trust your bank because your bank could forge a transaction on your behalf. You trust them not to do this. That is the nature of your trust in them. Blockchain eliminates this weakness, and it is in that sense that you do not have to trust a 3rd party.

If this is really what you're saying, then you've completely changed your argument 180 degrees to match that of me and the above commenter (which is cool!), because earlier you said the exact opposite. Specifically, when the above commenter said "you have to trust the network to maintain the value", you rebutted that that "is clearly not the point. The transfer itself does not require trust. That is the value." Now that you've concluded that the actually is trustless storage rather than in trustless transfer, yes, I think we are in agreement!

Notwithstanding the above, by the way, it simply isn't true that "I am forced to trust my bank because they could forge a transaction on my behalf". It's actually the opposite... I don't trust my bank for precisely that reason. Rather, as I stated above, the reason I nevertheless end up ultimately trusting my bank is that I trust the government will have my back if the bank decides to screw me over illegally. Again: it has nothing to do with the bank's capabilities or lack thereof, and everything to do with the legal system.

I haven't changed my position at all. The transfer does not require trust. Both the transfer and the storage do not require trust.

> I don't trust my bank for precisely that reason

Yes you do, unless you don't have a bank account. The fact that you presumably have a bank account with a non-zero balance is evidence that you trust them not to steal your money.

> There is a lot of trust involved in a cryptocurrency transfer. You have to trust your technical competence to securely mount your wallet. You have to trust the wallet you're sending money to is the wallet it's supposed to go to. You have to trust the person you're sending money todo what you're paying them to. You have to trust the network to maintain the value and convertibility of the currency you're sending and receiving.

Good point. Although I would draw a different conclusion. Your point assumes this new technology is for direct human consumption. For me decentralisation, smart contracts and "the internet of money", along with AI, will allow autonomous agents operate and interact without human intervention. That will be transformative.

That's not really accurate though. Only in a perfect, unhackable world would you not have to trust anyone. People have their local wallets attacked and stolen through an incredibly diverse set of attacks, people fell for "mental wallet" concepts that were then easily stolen, and people have lost an enormous amount of value by trusting storage mechanisms and memory for passwords and wallets. Then on the flipside at least what, 80% of exchanges now have had compromises? Do you think this technology has really moved the bar forward around trust as a concept?

This is wrong. The trust is still centralized, but on the developers of the platform/crypto chain/smart contract, rather than on an institution. This has the incredible downside that if something goes wrong, I have no recourse.

> Being able to transfer value between two parties without having to trust anyone has value.

The value of a currency is based on nothing more than trust. It’s because people trust a (crypto)currency that it has a value; trust is the very thing that makes a dollar bill having more value than a random piece of paper.

Emails were being exchanged, to what extent? Could you email anyone in the world in 1972? No, like two people could e-mail each other. It's not like you had Gmail or even AOL in 1972.

Yes, email was used for business purposes in the 80s...but it took a long, long time for the internet to reach mass adoption and maturity. Decades.

Meanwhile, Ethereum was launched in 2015. Unless you think the tech has hit an evolutionary dead end...that it's not going to go any further, I think it's incredibly ignorant to criticize this nascent technology based on where it's at today.

The fairer comparison might be between services intended and hyped for mass public use. In that respect the nine year old Bitcoin protocol and its much hyped offspring and first nine years of the "information superhighway" world wide web are, to put it mildly, not comparable in a manner remotely flattering to crypto. And crypto had the web as a vector to push adoption and didn't require a high proportion of users to buy their first personal computer.

Sure, Ethereum will definitely have more things built on it, and attract new users and in all likelihood become more user friendly. But if you can write or evaluate bulletproof code, resolve oracle problems and trust the token's value to remain stable you can automate some transactions without third parties isn't a proposition as obviously universally appealing once bandwidth and adoption is there as anyone can be given access to anything that can be shared on a computer anywhere, any time.

"Newsgroup experiments first occurred in 1979. Tom Truscott and Jim Ellis of Duke University came up with the idea as a replacement for a local announcement program, and established a link with nearby University of North Carolina using Bourne shell scripts written by Steve Bellovin. The public release of news was in the form of conventional compiled software, written by Steve Daniel and Truscott. In 1980, Usenet was connected to ARPANET through UC Berkeley which had connections to both Usenet and ARPANET. "

"Usenet gained 50 member sites in its first year, including Reed College, University of Oklahoma, and Bell Labs,[5] and the number of people using the network increased dramatically; "

"UUCP networks spread quickly due to the lower costs involved, and the ability to use existing leased lines, X.25 links or even ARPANET connections. By 1983, thousands of people participated from more than 500 hosts, mostly universities and Bell Labs sites but also a growing number of Unix-related companies; the number of hosts nearly doubled to 940 in 1984. More than 100 newsgroups existed, more than 20 devoted to Unix and other computer-related topics, and at least a third to recreation"

Sites participating in Usenet were using UUCP, which also allowed email.

https://en.wikipedia.org/wiki/Usenet#Network

The rate of adoption of new technologies has sped up almost exponentially over time. You cannot compare email with Ethereum because of that. If you want to compare it to something, compare it to Docker which was introduced in 2013, and now containers are everywhere, because they are actually useful.

DappRadar is a useful but ultimately hand-curated list. For a more comprehensive look, https://blockspur.com/ethereum_contracts/transactions ranks every Ethereum smart contract by transactions, "users," and "revenues." The top 3 contracts with the most number of users in June had 370K+, 210K+, and 88K+ "users" respectively. (Disclaimer: maker)

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