If a group of bodyguards at a concert vote democratically and 51% of them decide the singer shouldn't be allowed to go on stage and sing (because of a grudge or whatever), is that a problem? Yes absolutely that's a problem, and probably all of them are going to get fired.
Same sort of idea here. If the miners aren't serving the best interests of the network, the network has no obligation to continue paying the miners tens of millions of dollars per day (no joke, that's how much miners on Ethereum make in revenue right now) to continue sticking around.
These people are spending millions of dollars in electricity keeping things ticking away. If they stop, Ethereum's vested interest drops significantly. Since it is a fiat currency, less participants make it, unfortunately, less valuable.
Telling 60% of holders their currency (or income toward driving that currency) is not how you keep them on your side, just like old mining town scrip is only worthwhile if the mine works. The second the mine shuts down on a union strike, the scrip becomes paper.
On a personal note, I hope the miners get their due, because it was the initial philosophy of Ethereum. If they don't, I am curious to see how Ethereum moves w/r/t proof of stake vs proof of work guarantees. PoS seems at odds with the initial platform, and possibly long-term problematic for their "contracts-first" architecture.
Unlike with employers and real world unions, the Ethereum network is not bound by labor laws to negotiate exclusively with unionized miners, or refrain from replacing them with non-unionized miners. Without those laws, unions are pretty powerless, which is why the late 19th century had such low unionization rates.
>>I hope the miners get their due, because it was the initial philosophy of Ethereum.
The initial plan of Ethereum was to launch with Proof of Work, and very quickly afterwards switch to Proof of Stake. Miners have already gotten much more time to earn from ETH issuance than was originally planned.
And that’s the problem... it’s a bait and switch, because the miners had to bear the capital costs of investing in mining rigs, which would suddenly lose a lot of value in a switch to PoS. I think this is the original sin of Ethereum, and the network will be forever plagued by conflict because of it.
Miners are not supposed to serve anyone but themselves. Everyone for themselves. A right system economically incentivize the right action by design, like in Bitcoin. Important to understand the first principles before judging any distributed system.
I'm not sure how this can be true as long as conditions are met:
1. original creator of decentralized network still exists
2. people still respect and give authority to creator
Bitcoin is visionless because it was theorized anonymously. Not so with Ethereum
The miners are mercenaries. They have no loyalty to the network and the network has no loyalty to them (hence the push for proof of stake).
For what it's worth, EIP-1559 wasn't Vitalik's idea, but the change is almost universally supported by the Ethereum application developers and users.
At any rate the sooner we get off proof of work the better. Users are spending $20M a day on transaction fees. Let's put that money back into the ETH community by switching to proof of stake and burning the transaction fees.
Miners would be the ones who settle and publish the lineup.
The problem here is with the design of eth, eth was a rushed blockchain from the start, now vitalik is trying to rush the release all of a sudden because the people managing his network are not happy with the up coming changes?
What the hell kind of decentralization is this if vitalik can escalate major decisions about network? Eth is not a decentralized project if one individual(or a few) can decide to go against 51% of the stakeholders of the network.
Miners are only one participant in the ecosystem, there are also users, merchants and developers. Governance of any cryptocurrency is extremely touchy subject and one thing you don’t want to do is setting a precedent for making a controversial change. If you justify such change by “majority of miners want it” - you’re basically handing over the protocol to their hands. Nothing will prevent miners to adopt changes that eventually centralize currency control, increase rewards(inflation), etc.
What? Not really. Miners do indeed dictate the protocol rules, its is the miners agreeing to following a certain version of the consensus algorithm that makes a blockchain do what it does. So they are partly responsible for more than just mining blocks. Like I said initially it is hard to say who the actual decision makers of the chain are because it is not defined properly by eth.
>>Miners are only one participant in the ecosystem, there are also users, merchants and developers.
Like I mentioned in my previous comment, my whole disagreement with the OP of this comment chain is, their analogy calling miners bodyguards only, my argument is that its hard to tell, because anyone can play any role in this network, on eth the incentives are set up in such a way that each actor can be multiple actors, and there isn't any clear distinction as to who gets to decide what on the network.
>>If you justify such change by “majority of miners want it” - you’re basically handing over the protocol to their hands. Nothing will prevent miners to adopt changes that eventually centralize currency control, increase rewards(inflation), etc.
I am not trying to justify it as majority miners want it, my criticism of the eth chain is they have done this sort of nonese in the past (remember the DAO hack where vitalik and co decided to serve their own interests and rolled back a blockchain? )
It clearly shows eth hasn't grown or come up with a solution as to how to govern their blockchain in a decentralized manner. At the moment, a small select group of people, rather than the majority of its stakeholders get to decide what happens to the blockchain, and that to me doesn't look like decentralization.
Whats to stop a powerful government forcing vitalik and co to implement or remove what they want in the future?
Who dictates the rules is who controls the logic of the chain where the value resides. The miners can create their own fork, and Vitalik can create his own fork. I think we know where the value will go.
> Who dictates the rules is who controls the logic of the chain where the value resides. The miners can create their own fork, and Vitalik can create his own fork. I think we know where the value will go.
Vitalik only has this power because he appears to be choosing freely and the public agrees with him. If it appeared he was being forced to do something, or he did something that people didn't like, the value wouldn't follow him.
It is in this economic sense, and only this economic sense, that crypto is democratic. The only votes that matter are the dollars people trade to buy Ethereum.
You have cause and effect mixed up.
The miners that follow the same consensus rules that the merchants and exchanges do, get paid. The others do not.
A majority of miners following incompatible consensus would look like a huge drop off in mining capacity from the end users perspective. Similar things have happened multiple times.
This is why I refuse to hold ETH... when the financial big boys finally start moving to blockchain rails, they are going to look at ETH and think “WTF is this?” and pass it up for more principled designs like Cardano.
This got me thinking. How likely is it that, if and when crypto grows into a significant financial sector, the actual government will take over the governance.
It seems likely that the public (or their representatives) will grow increasingly uneasy with such an important matter being handled by random internet people and foundations. Especially if these institutions are not willing to include themselves into other policy making processes.
I believe that sooner rather than later effective control will be wrestled away from people like Vitalik, through laws and regulations.
Users would be overjoyed, and the user base would grow dramatically.
People aren't using bitcoin day-to-day because it lacks a government backing.
People are actually using Bitcoin strictly because it lacks a government backing. For those users who want an asset that is government-backed, there are already lots of options and there is little need for cryptocurrency to try and compete in that space.
- https://en.wikipedia.org/wiki/Petro_(cryptocurrency).
In fact colleagues at Status went to Venezuela to check how payments worked there:
- https://www.figma.com/community/file/780788775246577039?prev...
A hard fork is essentially a large coordinated migration from one blockchain to a new blockchain, generally with a shared history.
Vitalik does not have the sole power to go against the stakeholders of the network and make massive changes to Ethereum. The power that Vitalik has is one of leadership. If he attempts to coordinate a mass migration from one blockchain (old Eth) to another (new Eth), Vitalik actually needs to convince everyone that this is a good idea. He can't force it to happen if people disagree that it's the right thing to do. If Vitalik launches a hardfork and 80% of the network upgrades, that definitionally means that Vitalik had the support of 80% of the network, otherwise they wouldn't have followed the upgrade.
Blockchains are about consent. If you don't like what's happening on a blockchain, make a change. A single person making a change in isolation isn't interesting, but a large group of people making a change together IS interesting, and can be successful even if that group is just a minority. You end up with two different networks, each capable of thriving on their own.
Miners depend on the users of a blockchain for revenue. If a blockchain has no users, there will be no fees, and no revenue. The reverse is not true. If the users determine that they are better off selecting a different set of miners to build and preserve consensus, they can fork the network in a way that changes who is able to mine effectively, but does not otherwise impact daily use of the blockchain.
This is pretty similar situation. Incentives of the miners are not aligned with those of the users.
Some resources (they link to DPoS alternatives and discuss them):
- https://vitalik.ca/general/2016/12/29/pos_design.html
- https://vitalik.ca/general/2017/12/17/voting.html
If the incumbent miners stop mining in protest of their future profits declining, then new miners will just come in to take the profits they are refusing to collect today. There is no incentive for them to conspire and every incentive for them to not conspire.
it’s that simple.
And everyone doing work wants Proof of Work
* there is no legal entity representing the Ethereum blockchain because it is decentralized
* the correct chain is not dictated by a single person or group of people
What you are seeing is an implicit form of democracy or people acting in shared interests and in support of Ethereum’s original developer and “leader”. The moment vitalik loses it and the organization loses credibility, alternate plans will be made according to the common interests of the people who have a stake in the system. Perhaps there will be a fork, but in the end the greatest demand will be for the most universally accepted version and the other will whither into insignificance ala Ethereum classic.
Hence GP talking about bodyguards at a concert-- who would typically be a minority of persons there.
Miners are wrong not because you believe different people should have different weighted power to change the system, they are wrong because the roadmap for PoS was well-established long long time ago giving them more than enough time to re-structure their revenue channels and invest accordingly. Therefore for them to say "we have been used. we invested a lot and now we are pushed aside" doesn't make any sense because the investment they had made until the roadmap for ETH2.0 was public has a ROI multiples times of what they invested already as of today.
For them to say this there are 2 options.
1) They were living in a cage and missed the plans for ETH2.0 and even after the roadmap is public they kept investing in mining equipment which will be useless soon. 2) They are just greedy and they just want to keep the same earnings although they have not got even a single argument for "why keeping the high fees is good for the ecosystem" apart from it means more money for them.
In other words, their business just goes away, but they can always start some other business?
I know it’s tempting to discard miners’ concerns, but it would be a great mistake. Miners need incentives, without incentives we’ll start allocating capital and resources somewhere else.
We are not greedy, not crazy, not confrontational: we are just rational.
If someone don’t like us, then could do without us.
https://github.com/ethereum/eth2.0-specs/tree/dev/specs/phas...
Vitalik is proposing a role reversal to take place earlier than it was previously planned (not completely accurate in a technical sense re: previous plans, but effectively the same):
Eth1 mainnet will hand-off consensus responsibility to Eth2 mainnet (PoW -> PoS), while Eth1 nodes continue to "run the code" that executes smart contracts / processes transactions.
If the plan is put into motion, and as long as some miners / mining pools don't yank the plug on their mining nodes in the canonical Eth1 mainnet, then the canonical mainnet — per consensus among the Ethereum Foundation and aligned developers, Eth2 validator operators, orgs/companies/exchanges/etc — will transition suddenly from Eth1 (PoW) to Eth2 (PoS). And that will be the end of all mining on the canonical Ethereum mainnet.
Miners/pools who find it impractical or undesirable to reallocate resources from mining to staking may band together to continue running an alternate mainnet chain based on PoW (ETW?); market forces would then decide whether that chain is viable, as well deciding the fate of the evolved (PoS) Ethereum mainnet chain.
I am not saying this EIP, or PoS, are bad. It's the way you do it that matters.
It's a difficult thing to do, though. Hashpower based mining is easier to get going. Proof of stake has issues like the nothing-at-stake problem, where theoretically you could stake-mine on multiple chains: https://ethereum.stackexchange.com/questions/2402/what-exact...
https://www.cbsnews.com/news/richest-1-percent-control-more-...
(2) social power with blockchains (i.e. having people's ears on the social networks) is far more important than $$ power: If nobody wants to install and use your blockchain, no amount of $$ can fix that.
I think they could mean a total number of crypto users, recently estimated to be over 100 mln.
I picked that because I didn't think if babies and non-earners were included when calculating the top 1% of highest earners.
Imagine what would happen if one person held literally all the money. It may be easier to imagine a 100-person community rather than the whole world.
One thing that would have to happen is everyone else would develop their own money/currency, which would turn mean that the one person with all the money is no longer the one person with all the money.
A thing quite likely to happen is that everyone would decide that whatever the money is that the one person has, everybody would decide it is not money.
It isn't entirely dissimilar from me claiming I have all the Jerfoleans on the world, and what the world is really doing about that currency right now. They're worth a zero so zero-y that even an infinite number of them is still worth a flat zero. Someone who has "all the money" might find themselves in a similar boat.
If you make a fresh piece of gold and show it to the world, you are proving that you have done some known — or at least bounded — amount of work.
In gold’s case, that work is gas, electricity, and human labor. If someone shows up with gold that cost less to produce, the price goes down.
Work for the sake of work is not valuable.
You could record video proving that you dug a hole 20 feet deep with your bare hands and then filled it up again.
That's a lot of work, but it wouldn't be valuable to anyone, except maybe as comedy.
However, should it be impossible to copy videos and the only way to do a video would be to capture the events as they happen, then perhaps your video would have value.
https://www.theguardian.com/technology/2016/nov/28/cards-aga...
Making origami pirate ships also requires a certain amount of work. That doesn’t give it value.
1) Ethereum already has a market cap of $73B [0]. That's a lot of money.
2) Controlling 51% of Ethereum would probably cause the value of it to drop [1].
So you'd spend a lot of money to control Ethereum and then end up with something that's far less valuable than it was before you took control. Not really sure what you'd get out of doing that.
[0] https://en.ethereumworldnews.com/ethereums-market-cap-is-big...
[1] https://ethereum.org/en/developers/docs/consensus-mechanisms...
I think you're misinterpreting the paragraph. It's not that controlling 51% will cause the value to drop (it won't, see bitcoin miner control), it's that controlling 51% and trying to pull off an attack will cause it to drop.
To me "it" is pretty clearly referring to controlling 51% of staked ETH.
I don't know about the economics behind whether that would cause the value of ETH to decrease, but Bitcoin seems like a different situation altogether since miners don't control the the cryptocurrency itself.
It's convenient to measure wealth in dollars in a "how much you could get if you still it" way and it's possible because dollars are very stable but there is very little reason for the amount of dollars circulating to represent existing wealth.
That's what they do. That's what inflation is. We work hard and save up $100,000, they (the 1%) turn that into $25,000 in 25 years.
Because it's not in their best interest. If the 1% pulled something like that off, the price would drop a lot and therefore their ETH would be worth less.
It's one of the core pillars of any blockchain, that the incentives are aligned in a way so the best outcome for people is the one where the gain the most, so it forces them to go for that way.
The basic idea is that stakers' deposits act as security bonds. If a staker commits to two conflicting chains, any other staker can see that they did so, and get rewarded for publishing a proof of that. Then the cheating staker gets their stake destroyed on both chains.
I'd say the value of currencies is that you have to pay your taxes in one that is legal tender. In that case, the value of Eth is that you have to pay transaction fees in Eth. You decided how valuable those transactions are.
The Ethereum network is congested because it has users. Ethereum has the critical mass and first mover advantage.
The clones need to be sufficiently attractive (10x ?) to break that hold, it's not a technical problem but an economic, marketing and educational one.
Scarcity is unrelated to network congestion or usage.
We also used to call this situation a potential "fork" (as in, the thing with two prongs) before the word "fork" was somehow redefined to mean "protocol update everyone agrees on, with a linear history without any prongs".
The miners, as I've predicted here before, disagree, because this fork obliterates their entire business model. Shocking.
If miners want to make another Ethereum Classic dead chain let them do so. The innovation, the users, and all the developers will be on Ethereum 2.0.
Just because too much of a thing is bad doesn't mean the thing is bad in lower quantities.
Drinking ten liters of water in an hour is bad. That doesn't mean you shouldn't drink any water.
The protocol ensures that there is on average a block produced every 10 minutes.
As hash rates increase, and blocks are found slightly faster, the difficulty is adjusted upwards to ensure that the 1 block per 10 minutes is maintained.
We've seen difficulty drop in the past, it doesn't necessarily rise forever. It only makes sense to increase when it's still profitable to mine at the current difficulty.
If the difficulty rises to a certain level and the price falls, and it becomes unprofitable to mine for some miners, they switch off their rigs and the difficulty adjusts downwards after a period of time to compensate.
Over the years we have seen the price rise and hash optimizations made, which have both driven the difficulty upwards.
But that's not plausible in the scenario where the world's financial system eventually runs on a proof of work cryptocurrency.
Since all miners compete over the same finite profits, each miner individually has an incentive to increase their hash power and therefore power consumption.
Even if the price was on average constant, the game theory would predict a competition over finding the cheapest way to burn the maximum amount of power.
Empirically, there were some transient drops in hash rate for both bitcoin and ethereum, on top of a constant massive run up.
Why? It's a fork.
Monero has pre-planned hardforks every 6 months or so, is it ridiculous to describe them as forks?
Describing things accurately should be the norm.
The fork that left ETC as the original chain was a rollback of the chain that destroyed the concept of its immutability for the purpose of fixing a massive financial mistake.
There were no other chains left as a result of such a fork. It is a fork, and ETC is the original chain. Those are facts.
If this were obviously true, there wouldn't be a problem. I think a better formulation talks about distributed ledgers working better when the interests of users and miners are aligned.
And of course they never quite are (miners want profit, users want minimal transaction costs with high security).