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Comment by randomhodler84 | Hacker News Reader

Will the miners accept 1559? It’s an optional space, miners are free to maintain the old chain and split. Of course this would be catastrophic. I know my history, this isn’t anything like the other times.

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Not quite. They would need to coordinate a new hard fork before Mid-End August because of the incoming ice age which intentionally slows the chain to a stop unless a hard fork happens.

Simply saying "No I don't want to do that" isn't enough, you need to get together people to form at least one suitable alternative.

That's why the ethereum devs could maintain control of the chain and the Bitcoins couldn't.

Consequently the Bitcoin chain is not able to incorperate any innovations that would ever so slightly hurt mining profit in the short term even if it would be great for the ecosystem as a whole

So it's not up to the miners and the consensus to decide what's best for the network? The leadership can decide the rules of a new fork unless everyone else coordinate to oppose it?

Edit: What prohibits the leadership to do an arbitrary fork? How do cryptographic protocols factor the fact that leadership can just say 'no' and do the opposite and the chain will follow. Especially the word 'secure' in every coin looses it's meaning isn't it?

It is up to the consensus. If enough people opposed a release and were able to coordinate their own fork then they are still free to do so.

> The leadership can decide the rules of a new fork unless everyone else coordinate to oppose it?

You are 100% free to not install the latest upgrade on your node(s). Unless you have enough people who agree with you and coordinate their refusal to upgrade you will be a network of one that goes entirely unused. This is exactly how decentralization is supposed to work. You have to obtain some level of consensus to get anything done. This isn't a situation where "everyone" has too coordinate to oppose something, just "enough" people to form a fork that has enough hashpower/security to attract users. Even if a large enough minority of miners were able to coordinate a new chain, fork the code, make the necessary code changes and start their own version of Ethereum they still have to get people to use their network.

Sounds like 'you are in your right to opt out of our policies if you disagree with an upgrade, it will immediately terminate all of your mining'

And then saying that most people support you because only small percent of people opted-out

There are other evm compatible chains out there that people use: bsc, matic and avalanche c-chain come to mind.

They all on some level opted out of some of the assumptions in go-ethereum.

In think there's a subtle difference. A side effect of Bitcoin's rules is that people with more hashing power have a disproportionate amount of weight in deciding the future of the protocol. Eth solves this by putting a hard deadline on some replacement being chosen. This can be the current maintainer's updated fork, or it can be a fork someone made that's identical to eth today with the date pushed back a few more years.

95% of Bitcoin miners voted to increase the block size and it didn't happen, but you're right about the benefit of the ice age.

A thousand times this

You mean 95% by people, not by mining capacity, presumably. How is that determined, do you have a reference?

I don't know about 95%, but from https://bitcoinmagazine.com/technical/2x-or-no2x-why-some-wa...

> Over 90 percent of miners (by hash power) are currently signaling support for SegWit2x.

I believe he means 95% of miners and my memory tells me something similar.

At a certain point it was only blockstream and their reddit who really opposed bigger blocks, and it turns out that is sufficient to stifle Bitcoin progress.

https://en.bitcoin.it/wiki/New_York_Agreement this was the era if you are looking to do research.

No, presumably I mean 95% of the hashrate which is the only thing that is measurable on-chain.

https://github.com/bitcoin/bips/blob/master/bip-0009.mediawi...

https://github.com/bitcoin/bips/blob/master/bip-0091.mediawi...

How did you expect a decentralized, consensus-driven network to operate without some level of consensus? You think 1 node forks should be as viable as 10,000 node forks?

Besides miners and developers, exchanges are a major stakeholder. If exchanges declare that a particular chain is Bitcoin or Ethereum, others tend to agree.

Also see https://vitalik.ca/general/2021/03/23/legitimacy.html

Why the hell should I trust the miners more than the leadership? You say this like the leadership is this big, scary, shadowy group. The Ethereum leadership is one of the main reasons I invested in the coin. I love the leadership, and I trust them to make good decisions for the ecosystem.

'Ethereum leadership' did a rollback once, so there is zero reasons to believe they won't do this again if this will be in their interests. You see, 'code is a contract', but then it isn't.

In “their” interest, as in, in the interest of thousands of people that got rug pulled because of a hack

Code is law ... until it doesn't suit my interest.

I think he’s talking about the DAO situation which was not a hack, the contract executed exactly as it was written. But it was also a long time ago.

All hacks are code executing exactly as it was written.

Not necessarily, a large class of exploit has to do with manipulating the call stack.

At this point you realize that value is fundamentally a human creation, dependent on the belief and action of other humans, and there's nothing crypto or burning a power station's worth of electricity can do to change that.

The only thing prohibiting arbitrary forks is the risk of loss of trust in the leadership. And there's no guarantee of their long-term trustworthiness; what does succession planning look like among the dev team? What will you do when they retire?

I wonder why do people spend their time (and money) on this? Real-world crypto is 'solved' by nano, with its feeless and instant transactions. I'm very new to the crypto world but ETH (especially BTC) seem way, way too complex, expensive and slow for any real world application. No wonder why there isn't any.

Nano doesn’t have smart contracts, so you cannot really do much with it.

That’s why you are new. Nano ain’t anything special. It’s another PoS shitcoin that scammers promote to sell their bags. When you don’t actually do any work, it’s cheap to transit garbage

Nano does have PoW, but only on the client side as spam protection. It's quite clever actually, if someone is trying to spam the network your wallet can just include a higher difficulty PoW to get your transaction processed ahead of all the spam.

Because of the existence of stablecoins, forking Ethereum is essentially infeasible. Only crypto assets, namely BTC, exist on the Bitcoin chain. Crypto assets can be forked, but real assets cannot. Whatever chain USDT/USDC recognize automatically becomes the "true chain" regardless of how much hash power the miners throw behind the fork.

Doesn’t that seriously centralize the network overtime?

It does. But the majority of people who follow Ethereum closely view non-algorithmic stablecoins as generally an evil. Ideology means little to most people yet I think the decentralization ideology around Ethereum has had and does have an impact on enough people to sway the network in a certain direction. It's early. Fingers crossed.

We'll see. Stablecoins are a workaround for the current price fluctuations, if the cryptos stabilize they might replace the stablecoins at some point in the future.

If cryptos stabilize 99% of users will lose interest.

Derivatives are then dreamed up to add more excitement and volatility (beta) to the underlying boring asset?

Why? The obligations of USDT and USDC are unrelated to what system hosts them.

But the custodians have to choose just one chain because they only have enough assets to back one copy. They don't want a situation where there's, say, 50B USDCA and 50B USDCB backed by only $50B in assets. So if there's a fork, a custodian will decide that the USDC on one chain is redeemable and the USDC on all other chains is not redeemable (i.e. worth zero), then other DeFi assets on the losing chain will go to zero as well, and it snowballs.

That implies that USDCblah is actually backed by traceable assets, 1:1. Have any of the so-called stable coins actually passed a complete third-party asset?

s/asse/audi/

That's largely an orthogonal point. You may be suspicious of USDT or USDC's claim. But the point is that at least some fraction of the market is not, which is why USDT trades at $1.00.

Now that may turn out in the future to be revealed to be a sham, and the market will lose faith. But right now USDT only has market value because some segment of people believe in the promises made by the Tether Corporation. If I fork the chain, and I'm running a clone of USDT, and the Tether Corp says "there are no promises behind that token", then very clearly forked-USDT will be worth zero.

not quite. stablecoins do not get stability from belief in the backing assets. they get stability merely from a shared agreement to pretend the coin is stable, so as not to lose whatever stake they have put in.

But that shared agreement still does not transfer to the forked blockchain.

I don't think "pretend" is enough. I've certainly used USDT as a medium of exchange for a few minutes because it has a stable exchange rate, but I wouldn't hold it for an extended period.

Shared agreement is not quite enough, that’s why algorithmic stablecoins fail. You can say that’s due to lack of agreement but it all comes down to incentives.

The only reason stablecoins work is because they have a mechanism where you can quickly 1. mint a new coin and sell it for slightly more than $1 for it 2. buy a coin for less than $1 and redeem it for $1 in value

Yeah, I think in the case where one tries to fork the chain state and expects the assets on the new chain automatically be redeemable for something doesn't really work out.

Though this may happen in reality because of bridges (centralized/decentralized + permission/less): one asset is locked in a smart contract (or many smart contracts) on one chain, then minted in equivalent amounts on another, people will trade as if holds the equivalent value modulo liquidity for the bridged asset (as long as the locking/minting assumptions with the bridges hold true).

What if they choose two different chains?

That would explicitly break the one promise they made, which is that their coins are backed 1:1.

I meant what if USDC and USDT pick two different chains to bless as their “official” chain? Is that not possible?

EDIT: I just realized the last letter in your examples are “A” and “B” to signify two versions of the same thing. My eyes aren’t what they used to be!

It is possible.

USDT is already running on multiple chains. That is trivially possible. The question is what happens if one of those chains were to split.

Because anyone can create a fork of a chain the forks have to be authorized. The easiest way to authorize a chain would be to let the custodian (is that the right word?) of USDT decide which chains are authorized for USDT. If the custodian authorizes overlapping USDT then it is equivalent to creating an empty chain and creating USDT out of nothing to fill the newly created chain. In other words it would dilute the value of USDT.

This is an interesting problem because it shows a fundamental flaw in blockchains. They only have authority over themselves. No wonder cryptocurrencies and their advocates are so self centered. Because nothing that exists outside their chain (even other cryptocurrencies) is graspable!

It's not trustless because the trust (in the algorithm) is still there, the difference is that they minimized the need for trust to the absolute minimum. It's no longer about how much you trust but about what you trust.

Frax, USDT, and TrueUSD allow people to deposit into bank accounts and mint on eth mainnet or avalanche c-chain now (note: not mint on both places at the same time), neither make the claim that they are 1:1 backed (except for TrueUSD), but they make the claim that if you wanted to at any time (if you meet the criteria) you can withdraw from eth mainnet or avalanche c-chain to your bank account.

When did Tether USDT stop (fraudulently) claiming to have backing assets?

None of this is related to the minting/burning across multiple chains or their cross chain redeemability (or lack thereof) but here are their respective claims:

USDT claim (“Every Tether token is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).”) [1]

TrueUSD claim ("We work with independent third-party financial institutions to provide cash management for the underlying reserves backing TUSD tokens so that each TUSD token is backed by an equivalent amount of dollar deposits, cash equivalents, short-term government treasuries, or liquid investments. To achieve this, a portion of the dollar deposits backing TUSD are held in one or more depository accounts at our Banking Partners whose deposits may not be insured by the Federal Deposit Insurance Corporation (“FDIC”). [2]

Frax claim ("FRAX stablecoins can be minted by placing the appropriate amount of its constituent parts into the system. At genesis, FRAX is 100% collateralized, meaning that minting FRAX only requires placing collateral into the minting contract. During the fractional phase, minting FRAX requires placing the appropriate ratio of collateral and burning the ratio of Frax Shares (FXS). While the protocol is designed to accept any type of cryptocurrency as collateral, this implementation of the Frax Protocol will mainly accept on-chain stablecoins as collateral to smoothen out volatility in the collateral so that FRAX can transition to more algorithmic ratios smoothly. As the velocity of the system increases, it becomes easier and safer to include volatile cryptocurrency such as ETH and wrapped BTC into future pools with governance. ")[3]

[1] https://tether.to

[2] https://trueusd.com/terms-of-service/

[3] https://docs.frax.finance/overview

Wouldn't a custodian have a potential conflict of interest here, picking a chain whose rules, say, give the custodian a recurring "management fee" to support their important role?

I don't think the Ethereum community cares about conflicts of interest.

In theory perhaps. In practice, their primary incentive is to pick the most popular fork, because otherwise people will move away from that stable coin.

They’re only honored on one canonical chain. It’s not like their supply would double in the event of a fork

People keep bringing this up, and the question you need to ask is why would anyone other than miners choose the non-fork chain? The fork will happen as long as one person is willing to mine it.

Difficulty bomb ensures that forking is incredibly difficult.

The code change to defeat the code change is easy to make (just delete a section of code) but you have to distribute clients that ship with the difficulty bomb removed on top of EIP 1559 not being implemented, on top of people actually downloading the changed version.

Good luck trying to convince the Geth or other client teams to ship that version.

in reality, this is irrelevant in this case. all of the on/off ramps, applications, wallets, etc will point to the consensus chain. in the case where miner rewards are completely removed (ie the switch to PoS), then there are definitely some issues, and those issues are being worked on.

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