Comment by zelly | Hacker News Reader

Comment by zelly | Hacker News Reader

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Ethereum was responsible for the 2017 bubble, but not because it is useful or smart contracts are useful or blockchain is useful. It was ICOs/scams running on Ethereum. Everyone saw their friends getting rich from Bitcoin and wanted in on one of the supposedly Next Bitcoins.

Blockchain is just a database, a slow and expensive one at that. “Legacy” tech (like a RDBMS) is much more efficient, reliable, and cutting-edge than blockchain. The only benefit of a blockchain is censorship-resistance—not needing to rely on government or centralized third-parties because a swarm maintains consensus (the longest Merkle tree). Financial markets operate in broad daylight with real identities enforced by judges and men with guns. There is absolutely no use case for censorship-resistance in that space. It is a lose/lose. How is it even supposed to work? Bankers pay miners to secure a log of their transactions? Ok, say someone robs a bank. A banker calls in to report the loss; a block gets mined showing that money is lost. Why did you need a blockchain? Why not just trust the banker to update a RDBMS cluster since you're trusting the banker's word anyway? Blockchain only works for purely digital things...like Bitcoin.

Smart contracts also do not need censorship resistance. People get along fine with the current legal system at least for civil lawsuits.

You need a blockchain iff:

- The data you are representing are other data in the same tree, not entities outside the data structure (much less entities irl).

- You need censorship-resistance because you're Silk Road or Wikileaks or trying to overthrow your government.

- The data is publicly/www world accessible by parties who do not trust each other.

TL;DR A blockchain is a domain-specific data structure internal to the Bitcoin project circa 2009.

>Smart contracts also do not need censorship resistance. People get along fine with the current legal system at least for civil lawsuits.

Really? How can a financially censored person access financial services? If you aren't allowed a bank account then you are immediately cut off from services which smart contracts could substitute for.

A coinbase account can be closed but an exchange built out of smart contracts like UniSwap can't censor its users.

You may not be able to access credit without a bank but you can get a loan on a smart contract money market like compound. You can even use a smart contract to lend money to yourself (Maker).

You may not have a bank account but you can use a smart contract wallet to give yourself bank-like protections such as withdrawal limits.

And so on.

I created an account just to respond to you.

You're too focused on the trees, you can't see the forest.

https://thedefiant.substack.com/p/ether-is-the-best-model-fo...

> I created an account just to respond to you.

Honored. Thank you.

I read the article. It seems Ethereum 2.0 will double down on its wildly successful model of collecting rent from all the ponzis that live on it. Good strategy. It's still not useful though.

The litany of already-existing financial services the Ethereum community aims to replicate just proves my point--these use cases for crypto are already solved problems. It would be one thing if it's 10x better than the incumbent, but it's not even 1x better. A version of something that already exists "but with crypto" is actually a worse, slower, more expensive version of that thing. There has to be some hurdle uniquely overcome by decentralization that would justify the increased costs of this horrible implementation…like censorship by armed thugs. Who is censoring your ability to open a CD? A retirement account is the most boring thing in the world.

I feel for the people in Iran and Venezuela who cannot (easily) access foreign banks, but these people are better served by using cryptography in other ways (e.g. TOR; E2E encryption/DHKE) to access back channels to funnel money overseas to a free country's financial services. People living under totalitarian states sanctioned by the U.S. will always be a superminority (let alone of the population with real money to invest). The answer to their problems isn't to blanket adopt a new currency with performance characteristics so poor they would only be feasible if we in fact lived under a totalitarian state also.

Product-market-fit for Ethereum is designed for a dystopia where banking services are illegal; lending is illegal (and borrowers are required to over-collateralize their loans (?!!)); financial markets are inaccessible (stocks and businesses do not exist in this world, only lone wandering merchants with Trezors); every other currency is defunct or so volatile that somehow ETHEREUM is the best choice as a stable settlement layer; and you can't move because every country in the world is like this (yet somehow Ethereum coexists with global totalitarianism).

Reimplementing financial services "but with ETH" is also very certainly not innovation.

> You're too focused on the trees, you can't see the forest.

Don't get me wrong--buy Ethereum. It is completely useless, but the price has nothing to do with its usefulness or anything I said above. It could be worth $100k without any use case because humans.

You've clearly never tried to use "a free country's financial services" in this context. Even as a US citizen it is prohibitively difficult to open even the simplest of checking accounts from overseas.

There is no global, trans-national solution for financial services better suited for solving these issues than crypto. Your position of privilege in a first world country blinds you to the disruption available to bringing financial services to the 2nd/3rd worlds, though you are right -- it is the slowest moving gold rush we've seen from tech.

You also drastically underestimate the utility the global economy associates with tax avoidance -- disregarding the moral and legal implications, because that's what rich people do.

Blockchain is raw garbage. The bitcoin network ALONE undid every single bit of good we achieved in terrestrial-used solar energy over 40 years, literally every gain from that wiped straight out in less than two years. Ethereum was #2 as far as energy usage goes.

We had this back in the 70s, FWIW. It failed as a miserable hunk of garbage then, it's failing as a miserable hunk of garbage now by all metrics except how efficiently it parts fools from their money.

> We had this back in the 70s, FWIW

Sorry, what?

We had permissionless distributed databases (that's all blockchain is) in the 70s. They failed because they are hugely inefficient and extremely resource intensive with each added node.

What's old is new again. I'm old enough to have used one of these in the early 80s, learned about from a BBS I was frequenting.

I suppose that referred to Merkle trees? Those are from 1979.

I guess. "Merkle trees are a miserable hunk of garbage" seems like a slightly extreme view to me.

Blockchain is raw garbage.

That's the problem though - blockchains aren't garbage. They're useful.

The actual problem is that currency speculation is garbage. If people were using BTC for its intended purpose (transferring money to and from people they don't trust) it'd be brilliant and it'd have a much more minimal environmental impact.

> blockchains aren't garbage. They're useful.

If they were useful, all these corporate pilot programs would be raging successes by now. Instead they quietly fizzle.

I personally haven't seen an application that isn't better implemented with pre-existing technologies.

They are not useful at all, or else when we first had permissionless distributed databases in the 70s we'd freaking keep using them to this day. Regular databases like we have now are more robust and reliable, don't eat up a ton of energy like distributed permissionless databases (Bitcoin eats up an estimated 34TWh per year and growing as of 2017, there's no other database on the planet that consumes so much yet does so little) and regular databases don't need fucktons of environmentally-wasteful hardware to operate.

We figured this out in the 70s. That some idiot resurrected the idea in the '00s and got a bunch of people to buy into it tells much about the state of "technology enthusiasts" on the internet.

The thing is transferring money with guarantees is a solved problem. All you need is banks and laws and judges and police. We have those. Also transferring funds isn't enough to make a viable currency, it has to also act as a store of value.

Microlending ventures clearly demonstrate the existence of under served markets.

Also, I think instead of "solved problem" you mean "solved for white people in rich countries"

>All you need is banks and laws and judges and police.

Wow that's all? Seems so much easier than just having a crypto wallet and sending anything to anyone at any time.

Oh yeah, why don't I just sue the scammer from a third world country who charged back his PayPal payment instead of using cryptocurrency that makes it impossible. I'm sure small claims court will be happy to get me my money back.

The problem is that cryptocurrencies still require laws and judges and police. The only thing they replace is banks, and they do that bit pretty poorly.

> If people were using BTC for its intended purpose (transferring money to and from people they don't trust) it'd be brilliant and it'd have a much more minimal environmental impact.

Making BTC transactions is the very thing that costs electricity in the BTC network. If no one made any BTC transactions today, then no blocks would be added and every miner and node would be idle.

BTC doesn't scam people. People scam people.

Maybe the scamming is the problem - and you're not going to solve that with technology.

Cat videos have impact quite bigger than Bitcoin. Prove me wrong. :)

Cat videos provide more value. Prove me wrong.

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