Fe – An emerging smart contract language for the Ethereum blockchain
github.com
github.com
https://vyper.readthedocs.io/en/stable/
Vyper is being used in Curve and Yearn (both billions of dollars of TVL): https://ethereum.org/en/developers/docs/programming-language...
https://blog.ethereum.org/2020/01/08/update-on-the-vyper-com...
that’s not to discredit anyone using vyper, just that when putting “billions of dollars” in play on a project like this, you better have teams of folks looking into the security implications of using such a technology with known caveats that the ethereum foundation team publicised.
now things may have changed in the meanwhile between the time that notice was published and now, but if you are using or recommending vyper, it’s worth it to ask or state explicitly “which” vyper and “which version” of vyper, or “did you fork vyper in order to fix some of the issues outlined in the audit” as well as “if you are using vyper in critical applications, are you contributing your fixes back to the community?”
If some of the answers are
"the ethereum foundation team are too conservative"
"the audit doesn't mean anything"
"we don't have anyone looking into the security aspects of vyper"
then you have your answer: they're going to get hacked.
Vitalik was pushing Vyper quite hard for a while, but he seems to have ramped that down.
I wonder if Vyper is in any way better than Solidity.
At any rate, smart contract languages have security / verifiability constraints that few other domain of application have, and I don't believe any of the current languages offer what is really needed (integrated formal proof of behavior of the smart contract).
In solidity, there are types called "contracts" which are like classes in other languages. When you call a function in a different contract, the dispatch is routed using the first few bytes of the has of the signature [1].
For example, to transfer ERC-20 tokens you dispatch using `hash(transfer(address, uint256))[:4]`, meaning that you put those first four bytes at the beginning of the data that you pass to the receiving contract.
Just like the native world, this causes a problem when you try to interface between different languages. In Fe, the types have different names so this hashing scheme can't work without a translation layer. From some of the issues it looks like interoperability may be a problem [2]. That's ok if you write all the contracts that your dApp interacts with, but as time goes on dApps interact and call into one another more and more often.
There are probably also lots of opportunities here for exploiting confusion at these boundaries, so if you're inclined and know how to use tornado you may be able to make quite a bit of money off contracts that use Fe.
[1] https://docs.soliditylang.org/en/v0.8.10/abi-spec.html#funct...
https://github.com/ethereum/fe/blob/bfeffe82b4f8623330c1ebb1...
It's not obvious to me though and I couldn't find documentation for ABI compatibility. For example, does delegatecall to solidity work? That requires that Fe also use the same "binary" layout for storage in which slot index is used to generate the storage hash:
https://docs.soliditylang.org/en/v0.8.10/internals/layout_in...
I am a longtime smart contract developer who has been burned by Solidity’s downsides so I am excited about new EVM languages. I’ve read the Fe README, the announcement blog post, and the Uniswap v2 examples, but still have no concrete set of improvements over Solidity that I can point to. Maybe it’s just because things are still early, but from 15 minutes looking at Fe it still seems like Solidity but this a Pythonic syntax. As a Solidity dev, I want to see concretely how Fe improves on my existing smart contract language.
Thank you for pushing the frontier on smart contract development! I feel we’re in the very beginning of smart contract development and languages like Fe can be the path towards preventing tons of these hacks we see every week.
Vyper also had other issues such as (IMHO) its choice of implementation language which led to a lot of internal tech debt. Also, at the time I was working on Vyper, it actually used Python's standard parser library and so we often had to shoehorn language features into the Python syntax. Vyper may have corrected those things since then but I don't know. In any case, I eventually just decided to start over in my spare time using Rust as an implementation language.
There was other work planned for Fe such as providing a "strict" compiler mode that would facilitate formal verification of contracts written in Fe (that was basically a goal of Vyper). Also, we planned to provide a thorough specification and semantics for the language also for that purpose. I believe a lot of those plans are still in place but the current team should probably comment.
As you say, I think part of the issue is that things are still very early. The core devs are always figuring out useful things to add along the way that end up differentiating the language from its competitors. I'd say more but I'm on my phone :).
What's the reasoning behind this? I thought we have a lot of documentation about inheritance being bad, but in Solidity not only this is core, but multiple inheritance is also core. This is then combined with (occasional) implicit access to permanently stored data, and with something that I can only describe as function inheritance.
While discovering this, I started having the thought that it was done on purpose (easy to find faulty contracts that could be hacked for money). This was a nasty thought, indeed, but I found a lot of anti-features.
Nice pun.
This claim sounds suspicious. If the authors really solved this, they have a bright future. A turing award for sure.
With this language, it looks like: they force all dynamically-sized objects (any string, any array) to set a maximum size at compile time, and limit loops to be statically sized (or on the length of one of those static sized objects). It feels like this gets them most of the way.
The missing bit is some reasoning about recursion: I didn’t look close enough to see what they do, but it seems like you could either disallow it (not great, but in the smart contracts I’ve written it’s not been super useful anyways), or you could do some sort of static reasoning about the recursive parameters to the function getting smaller (the gas accounting seems tricky here).
IMHO, the hard part of this language is convincing anyone the compiler is totally bug-free. In as hostile an environment as a blockchain, where a single bug can lead to all your money going bye bye, using a “new” language is a risk most people will choose to avoid, unless there is a seriously good reason to choose this new language.
IMO, decidability is not a killer-enough feature to convince people to take this risk.
https://github.com/clarity-lang/reference/blob/master/refere...
There's a game-theoretic argument that pretty much solves the issue: you pay money to run your smart contract.
The more it runs, the more it costs, until you run out of funds (gas).
Sounds pretty decidable to me.
But that would cost you such a large amount of money that no one does it.
In other words, the system, while breakable in theory, isn't in practice because of a set of economic incentives (or as it were, dis-incentives in this case).
And I'm saying this as a fan of cryptocurrencies and someone who wants to see them succeed.
I think the real world use case is to try to make money from zeroes and ones on a blockchain.
And I'm not being flippant. The problem with "code as law" is that it isn't established law and your investments can be vaporized in an instant with no recourse.
Most people do not find useless tech to be interesting.
For example, in the last 24h Ethereum processed 1.24M of transactions and netted a revenue of $ 60M in transaction fees.
Bitcoin processed 0.24M transactions in the same time period and netted a revenue of $ 0.88M.
Source: messari.io
The transition to PoS cuts the energy consumption by 99.95%, btw.
- Gas fees are based on price
- As price increases it's more attractive to mine. That means devs will increase the mining difficulty. That means more electricity use.
> The transition to PoS cuts the energy consumption by 99.95%, btw.
It also makes Ethereum Visa, so what's the point?
This is not correct. Gas fees are essentially an auction for blockspace, the basefee is adjusted dynamically via EIP-1559 but the tip is essentially an auction (highest bidders go first). If demand outstrips blockspace gas fees go up, independently of ETH price. If supply of blockspace is greater than demand, then gas fees go down irrespectively of ETH price.
EDIT: To clarify. What you say would be the case if gas fees were a set amount of ETH. Then, of course, gas fees denominated in $ would be totally correlated with ETH price. But this is not the case. Gas fees work as explained above and thus are, in principle, decoupled from ETH price. Although some correlation might occur due to market dynamics (bull markets bring network activity, bear markets take away network activity) but is not built-in into the gas price mechanism.
> - As price increases it's more attractive to mine.
This is correct.
> That means devs will increase the mining difficulty.
The mining difficulty adjusts itself, the devs do not need to modify. Same as in Bitcoin, it's designed to adjust to maintain an even block production. You might be thinking of the difficulty bomb that needs to be defused once in a while but it has nothing to do with this topic.
> It also makes Ethereum Visa, so what's the point?
Not following.
Did you mean extra steps or fewer? Either way, I think it mostly remains to be seen on the centralization question. The newer-fangled PoS chains are certainly more centralized than Bitcoin or Ethereum, but nobody has actually tried distributing tokens broadly through a bunch of years of PoW and only then switching to PoS. It could plausibly end up being quite a bit more decentralized than Bitcoin.
Eh I was trying to be extra clever but, that's practically a synonym for being opaque.
To zoom out a little, I just think these systems have a kind of reverse entropy. Think about all the "decentralized" systems we started off with: email, newsgroups, payments, web apps, State government in the US. They kind of congeal into walled gardens, one and all, and that's probably because frog boiling is very easy (give up an imperceptible amount of control for a hugely perceptible amount of convenience) and the end goal is very profitable.
Like, any company would love to be able to scan every Gmail user's email for ad leads. Holy shit. And we let that happen because of... idk search, anti-spam and storage so large you never have to think about it. Maybe a good deal, honestly, I don't know.
And we're seeing this happen in crypto right? The pitch of literally every crypto service is "simple and you'll get rich". Well this is the same thing: people are giving up imperceptible levels of control for super perceptible levels of convenience. And sure, that's their choice. And we can laugh in people's faces when they get rug pulled saying "not your keys not your crypto" but that's not gonna win us any friends. And we'll be laughing while the blockchains centralize (as they are already doing, right now).
So I think PoW is centralization with extra steps. I think PoS is also centralization with extra steps, but the huge buy-in bakes centralization in right at the beginning, so it's fewer steps than PoW. Crypto was supposed to democratize money and payments! Why is there a $130k entrance fee? And then for those who can't afford that, how many of them will really band together to buy stake shares? How much of that will be a scam? How much of that will be big conglomerates who actually run the nodes, give you your 2% return, but meanwhile they've seized control of the Ethereum network, all while you funded it! So if we're taking crypto's values earnestly, I really do think we have to see PoS as an acceleration towards centralization and a big step backwards.
~~~
I can't even get excited about some potential positive outcomes (PoS happening, energy use declining, centralization also happening, crypto dying, switches to PoS causing schisms, crypto dying, nations banning crypto mining, crypto dying) because so many good, honest people have been hoodwinked into this bonkers scheme and they'll lose so, so much money.
And honestly, for what? So banks can't stop you from making an ACH transfer for weed? Seriously, just get out there and vote already.
~~~
Broadly I think this a problem with the fundamental libertarian underpinnings of blockchain currencies. They sort of presuppose that everyone starts from the same place, and then you're rewarded in line with what you contribute to the network. But in the world we live in, there's huge inequality--we absolutely do not start from the same place. So unless your protocol has some mechanism to even things out, it'll just reproduce that inequality.
And that inequality has a lot of second order effects. Rich people can buy a lot of mining or a lot of stake. They can afford to start businesses like exchanges or crypto news websites (or buy them after they get popular). They can afford to buy ads pumping their coin, or astroturf campaigns against changes they don't like. They can build services on the chain and collect rent. Same as it ever was.
There's this whole conundrum in progressive politics about why some people so consistently vote against their own self interest. There's a lot of reasons, but one I thought was just absolutely wrong was "well, everyone thinks they'll be rich someday"--so they vote against taxes and regulation and such. But that is 100% the dynamic in crypto right now. I honestly don't see any positive outcome from any of this, I really don't.
Just to say one thing: something I like about PoS is that it forces validators to keep skin in the game. If validators do anything that screws with the legitimacy of the protocol (like big validators getting together to collude on some nefarious action) then that will affect the value of the asset that they are forced to hold in order to be a validator. So they have an incentive to run the network in the way users expect.
FWIW: there is a good (in my view) decentralized staking protocol called RocketPool just launched, which I hope will be popular among those who don't have $130k.
I'm not so sure it's a given that corrupting the network outright destroys it though. That defense mechanism assumes at least a few things:
- Enough people would notice
- Enough of those people would sell their ETH as a result
- Enough of those people would sell enough of their ETH
I think it's pretty plausible some off-chain action would occur instead, like a fork or some governance issue. It seems unlikely that the majority of ETH holders would participate in a mass sell-off that would bankrupt many (most?) of them, to say nothing of the social (my whole life is ETH) and investment (my whole business and the businesses/careers of all my friends are ETH) costs.
You could also imagine a conglomerate doing this for "noble" reasons. "We reversed transaction Y because they're child pornographers" or whatever the worst thing is in the crypto community (maybe they discover Hillary Clinton's wallet address or something). This could be enough grey area for most people to not pull a run on ETH.
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(Sorry hit Submit by accident, if you can believe it)
Rocket Pool looks, idk it makes me nervous. From a quick read (could be getting this wrong) they're essentially selling their tokens for ETH, but you can't redeem your tokens to get your ETH back unless the staking pool can cover it, which I think they currently can't because the Beacon chain isn't sending ETH rewards yet. So you spend fiat for ETH, and you spend ETH for an IOU.
I guess my preference here would be something like a straightforward DAO where people buy shares of a staking operation and there some kind of governance when they want to leave. Anything more complicated than that and my spider sense starts tingling.
But as a broader comment, one of the things that makes me (and probably others) suspicious about the crypto space is that it's just littered with small and large reminders of how rich you're gonna get. Like the docs about their rETH token is a green graph going up tremendously with an example of how you're gonna make a 25% profit [1]. Like, I'm not saying all examples should include a losing money case and all graphs should be red lines going south, but there are real MLM vibes everywhere you look.
[1]: https://docs.rocketpool.net/guides/staking/overview.html#the...
Also I didn't know the network would automatically set the difficulty, but yeah good to know.
PoS centralizes to the rich, which is the existing payments system, e.g. Visa.
PoS is not more centralizing than PoW. I explained this in detail in another post: https://news.ycombinator.com/item?id=29390152
Feel free to counter the points made there.
[0] https://www.coindesk.com/business/2021/11/19/banksy-painting...
And yeah, I do think probably most people still think in fiat, so if you kind of elide all of the ETH/GWei steps and say:
> Hey, buy a mining rig for $2k, you'll make $60/day after electricity costs, you'll make your investment back in a month and after that it's pure profit
That's all people care about, and rightly so. If, on the other hand you say:
> Hey, buy a mining rig for $2k, you'll lose $10/day after electricity costs... that's it
That's not super appetizing right. And the only way the system makes fiat is if ETH is worth fiat. You can't abstract it out of the system, it's the only reason the system is relevant at all.
If Visa could be shared by anyone (without restriction) that is willing to stake capital into it, if it took at least 66% of the shares to try to collude, if it managed to do it at a fraction of the cost of the existing financial infrastructure, if it were uncensorable by governments and if it continues to be permissionless... then Mission. Fucking. Accomplished.
Meta aside, you described the stock market. You don't even need 66%, just a big percentage of shareholders (there are efforts to do this with big evil companies like Exxon).
Uncensorable is a pipe dream, crypto isn't beyond the reach of governments, as China's mining ban has demonstrated. And you're wildly mischaracterizing the costs of the existing payment systems vs crypto; maybe you think there wouldn't be all the ancillary bureaucracies and services, but that's literally all the exchanges and such are so you'd already be wrong.
Unlike most companies in the stock market, the fact that Ethereum has a low point of entry leads to two things happening:
- The sheer amount of people needed to be involved in collusion would make such an attack practically impossible.
- The chance of such an attack being profitable is so low to make it economically unattractive. An attack of the network would lead to a loss of the value of Ethereum itself, so unless those in collusion have other assets on the chain that are more valuable than the staked Ethereum itself, it will end up being net negative.
> Uncensorable is a pipe dream (...) China's mining ban has demonstrated.
China may ban mining as much as they want, this is not the uncensorable part I am talking about. What I am talking about is that there is no single entity that can stop you from making transactions on the blockchain. Even if someone is deemed "subversive" in China and gets denied a service by the social credit system, they can still have access to the blockchain, buy, sell and use services.
We don't need even need to talk about China. Just think of all the people who had problems with Paypal and had their funds frozen with no recourse. Think of all the people that live in countries with strict capital controls and can not move their money if they want to. This is what I mean by "uncensorable".
> you're wildly mischaracterizing the costs of the existing payment systems vs crypto
Currently, it costs more (a lot more) to make even simple transfers on the blockchain, but as the technology scales and new solutions come up, these will go down. There will also be insurance, fraud-detecting and even conflict-resolution [0] systems based on the blockchain, so at one point the UX will be just as good as swiping a credit card.
[0]: https://kleros.io
As far as censoring or control or whatever, sure there are institutions that can do this (and have): governments and banks. All they have to do is ban crypto just like they ban buying anything else. It's so, so super easy.
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Ok so, to be a little less antagonistic, I also think banks are junk and buying things should be private, etc. I think those things are a little at odds with preventing things like the drug trade and modern slavery, but I don't think the financial system is the place to attack them.
Broadly I just don't think blockchains are necessary for payments, privacy, distributed computing, you name it. Literally everything anyone can "imagine" (insurance, fraud detection, oooooh) already exists and works great.
Maybe it's corny but, I think these problems are best solved by functioning democracies. Elect people who think bank regulation is important, etc. Erecting a shadow financial system based on blockchains seems about the worst way to it.
- Please continue to talk about PoW as a strawman for blockchain in general.
- "Governments and banks can just ban crypto" is beyond missing the point. The more "banks and governments" try to shut it out and stop people from using it, the more people will be marginalized and get to the point where crypto will be their only choice. Black markets thrive in authoritarian societies, not free ones.
- The world does not care about what you think. "Oh, you can solve that with functioning democracies!" No shit, genius, what a revelation. Now go tell that to the people in Venezuela who can not run a fucking grocery stand without the government telling them they are not allowed to take a profit, and tell the others that it is okay to starve to death or being forced to flee to Colombia because "blockchain is burning the planet".
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Just like 99% of the "critics", you don't know what you are talking about you and you project your totalitarian tendencies onto others, while having this childish arrogance of claiming to have a monopoly on what is moral and just.
At least now I am certain that it is just a waste of time to discuss with you.
The block reward is only loosely related to popularity, in that more transactions trying to get into blocks will increase fees and demand for ETH will increase price. But as the sibling comment already pointed out Ethereum is more "popular" than Bitcoin by many counts.
[1] reward being: (block subsidy + fees) * price
Processing smart contracts requires processing power, which requires energy.
> the block reward[1] per unit of difficulty is less. That's the real determinant for energy used
Doesn't this go out the window as ETH's price goes up? Also EthHash requires a lot more energy than Bitcoin's SHA-256 (this [1] says SHA-256 is in the Th/s where the latest EthHash ASIC is in the Gh/s), so if the dinosaur BTC dies and ETH takes its rightful place, aren't things much worse?
[1]: https://en.cryptonomist.ch/2019/06/15/mining-algorithms-proo...
My point is the energy used to process smart contracts is so small compared to the energy used to find a low block hash, it rounds to 0. Also, if we're comparing to Bitcoin, then by that same token Bitcoin also requires energy to process its "smart contracts" (ScriptPubKey/ScriptSig scripts, which are just small programs). There is nothing special about contracts in Ethereum.
> Also EthHash requires a lot more energy than Bitcoin's SHA-256
More energy to perform 1 hash. But what does it matter how many hashes are performed? What matters is how much energy is used to perform those hashes. If you made the hashing algorithm 10x more efficient you would have 10x more hashes, not 10x less energy spent hashing on the network.
Re: hash difficulty, this is a function of the network right, so as ETH mining capacity goes up, difficulty has to go up, increasing energy usage. Everyone's answer to this is "PoS!", but PoS is essentially centralization to the rich.
What else does it let you do?
- To make transactions with anyone in the world without being blocked by a bank or a financial institution.
- To put your resources to use without having limits. If you have a bicycle, you will be able to join a distributed bike-sharing program, fully insured. You will be able to finance micro-credit programs for people in countries without having to go through tons of red-tape or corrupt middlemen.
- you will be able to be fully sovereign over your online identity(ies). Think of how easy it is to switch between server hosting providers. As long as you control the domain name, you are not forced to stay with a vendor you don't like. With blockchain identities, you will be able to do the same with service you use.
The only thing you are showing with your pseudo-criticism is that you are in quite a privileged position if you are okay with the status quo, and also you have no imagination.
So to me, the 2% doesn't seem like an incentive. But I don't think it was designed that way? I thought it was to make the rewards more equitable, and also continue to keep validator skin in the game (why would you corrupt Ethereum, you get paid in ETH). I don't know if it really succeeds at these things; I think rich people can stake multiple times and the initial big miner investment are probably sufficient skin (plus like, are people committed to ETH because of their mining rigs or because of the gains?), but that's just conjecture, hard (impossible?) to know for sure.
> people committed to ETH because of their mining rigs or because of the gains?
ETH is not to be priced like a stock. ETH is to be priced like a non-renewable commodity like oil. If the network is not efficient, people will move away from it, demand for ETH goes down and so does its price. People staking ETH are betting that the network utility will grow and the demand for ETH will grow as well.
> I think rich people can stake multiple times
If you think it is a bad allocation of the capital, why would you think that people with lots of it would put so much into stake?
OK I mean, my point is in whatever fiat you want to pick, 32 ETH is a lot.
> ETH is not to be priced like a stock. ETH is to be priced like a non-renewable commodity like oil.
I don't know if ETH is like oil; when we run out of oil we legit run out, like it's gone. We can run out of blocks on Ethereum, but ETH sticks around "forever".
As a result, I think the stock comparison is actually more accurate. Shares are divisible, their value relative to fiat fluctuates, they're transferable, etc. Or I mean, we could also view it as a currency. I just don't think it's a commodity at all, especially because it doesn't have physical utility. Every other commodity (like oil as you point out, or orange juice or cotton or copper) has physical utility. ETH doesn't.
> If the network is not efficient, people will move away from it, demand for ETH goes down and so does its price.
Well idk, the network is pretty inefficient right now. Buterin just posted "Endgame" where the main theme is basically "we'll get the transaction rate up". Relative to centralized transaction rates, Ethereum is very slow.
And there are networks with faster transactions rates! And yet Ethereum remains popular. I think a lot of crypto advocates get caught up in the actual attributes of a network but then can't explain why clearly inferior networks like Bitcoin and Ethereum are super popular. Well, it's because they're worth a lot of fiat--very few people care about the nitty gritty of blockchains, they just want to get rich. So I don't think "people will move away from it" as long as the fiat price is high.
And this just kind of torpedoes crypto optimism right? We have these networks that clearly solve a lot of problems that Bitcoin and Ethereum have, but it turns out the path to success and popularity is to make your coin as casino-like as possible. I think that's a compelling reason to be pessimistic, not optimistic.
> People staking ETH are betting that the network utility will grow and the demand for ETH will grow as well.
Yeah I mean, "bet" is the apt word here.
>> I think rich people can stake multiple times
> If you think it is a bad allocation of the capital, why would you think that people with lots of it would put so much into stake?
I think the reasons other people would are legion:
- I'm rich and I'm bored/interested
- I understand the technology and I think we'll overcome the risks and downsides
- As a libertarian I super hate liberal democracy and any kind of gatekeeping, and I'm willing to take some pretty drastic, risky actions to subvert its financial system
- I believe a lot of people are disillusioned by capitalist economies and that will drive adoption of alternative economies and currencies
FWIW I am in the 4th camp. I just think subverting financial systems set up by democracies is deeply immoral so I can't bring myself to profit off of it. Also I don't have 32 ETH to throw around haha.
The point is that the staking contracts were set at 32 ETH since the time when ETH was about $100. There is a good amount of people that staked then when it was a lot easier, and today there is always the possibility of staking pools (just like there are mining pools)
> ETH sticks around "forever".
Not since July, when the EIP-1159 introduced gas fee burn. There has been since then a lot of blocks were more ETH was burned with the gas then generated as miner rewards, so ETH can be
> network is pretty inefficient right now. (...) And there are networks with faster transactions rates!
The mistake you are making is that - like the $130k comment above - you are thinking in terms of a static system. Ethereum is constant development precisely as a way to address the bottlenecks that are being hit.
There are already people using Layer-2 systems for making transfers and for decentralized exchanges. This year we also are starting to see more complete scaling solutions. The more Layer-2 solutions come up, the less important the base-layer performance becomes for users.
Talking about the base-layer when it has been widely established that Ethereum is heading to the direction of scaling through roll-ups and other layer-2 systems is either ignorance or intellectual dishonesty.
> "bet" is the apt word here.
Pretty much in the same way that people "invest" in Uber or other Unicorns even if they go years without turning a profit, people "invest" in Ethereum (or Bitcoin, or Cardano, or Solana, or whatever) because they expect that in the future that network will be useful. It is a bet that it will be more profitable and create wealth in the future.
> I think the reasons other people would are legion:
You misunderstood my question. You were criticizing PoS because you claimed that it wasn´t capital efficient (2"% is not much..."), at the same time you pointing out the "issue" that "rich people" could put more at stake than others. These criticisms are at odds with one another.
> I just think subverting financial systems set up by democracies is deeply immoral
Not only you are clearly mistaking opinions for facts; this single statement seems to be based on a worldview that:
- assumes that "financial systems" were "set up" by democracies.
- assumes that being a "liberal democracy" is a binary property.
- assumes that leaders and elites from the "liberal democracies" are actually working with the interests of people at heart.
- assumes that "liberal democracies" are the inevitable endgame for government.
- assumes that people working with decentralization are only concerned about "finance".
- is based on a false dichotomy of "full-anarchy" vs "globalized world subject to a set of universal values as defined by liberal democracies"
> so I can't bring myself to profit off of it.
Do you own any stock? Pension funds? a 401-k? Worked for any VC-funded company? Bought anything made in China even though you knew there was an alternative product made in $wherever_you_live?
Then yes, you are profiting off of it. So please just get off the high horse.
> The point is that the staking contracts were set at 32 ETH since the time when ETH was about $100.
That's not relevant because they're still in the category of "people who have $130k to stake". Kind of doesn't matter how you came about it.
>> ETH sticks around "forever".
> Not since July, when the EIP-1159 introduced gas fee burn.
Oh cool I didn't know that. I guess this is to avoid the money laundering via gas fees thing--your ETH gets black holed instead?
Again I don't know that it's that relevant though. With oil--again your example--you only get utility out of it by destroying it. It's not like I have to burn ETH to light a lamp, destroying that ETH forever. So I still think it's less like an expendable, finite resource and more like a currency or a security.
But all that said, Ethereum users don't want Ether to all get burned, right? I assume what everything thinks will happen is that the increasing scarcity increases the value of unburned ETH, so that even if there's 1 ETH left it's still worth $50 gazillion or whatever and we just trade fractions of it. So also not like oil, because it would be pretty weird if every time I burned a teaspoon of it every other barrel of oil became more... flammable?
>> network is pretty inefficient right now. (...) And there are networks with faster transactions rates!
> The mistake you are making is that - like the $130k comment above - you are thinking in terms of a static system. Ethereum is constant development precisely as a way to address the bottlenecks that are being hit.
> There are already people using Layer-2 systems for making transfers and for decentralized exchanges. This year we also are starting to see more complete scaling solutions. The more Layer-2 solutions come up, the less important the base-layer performance becomes for users.
Layer-2 is an MEV-generating machine, and there's no way around it. It's fundamental because L2 is a desync from the chain. It doesn't really matter for dApps, and maybe it's tolerable for payments and such too, but we're stacking a lot of caveats on "send money to anyone anywhere at any time (also pay gas fees also they have to get a wallet also you'll get MEV'd). Plus, how is this not just middlemen (miners, banks) running yet more rent-seeking operations on yet another payment system?
And we're not even talking about all the different incompatibilities between different L2 solutions.
> Talking about the base-layer when it has been widely established that Ethereum is heading to the direction of scaling through roll-ups and other layer-2 systems is either ignorance or intellectual dishonesty.
There's a third option you should consider carefully: that you're wrong and someone's trying to politely point it out to you. You're super closed-minded about this stuff, and I think you'd benefit from a little introspection as to why. You and I are just a couple of naive humans stumbling ignorantly through an infinite darkness. We know almost nothing and are almost always wrong about everything. The only reason I know anything about crypto is I assumed I was wrong about it and read a bunch. I'm just representing what I think; I'm not astroturfing; I'm not talking my own book. I'm not saying I'm not ignorant; I am! But it's possible I'm not as ignorant as you think I am.
> <democracy stuff>
Look I'm no strong defender of the current state of democracy, and I'm pretty anti-capitalist. I just don't think blockchains are good solutions to governmental problems (or, good solutions to any problem tbh). If you want to argue that blockchains return power to people and are decentralized, you have to answer for multiple successful 51% attacks and Ethereum in particular hard forking the chain for political/financial reasons.
> Do you own any stock? Pension funds? a 401-k? Worked for any VC-funded company? Bought anything made in China even though you knew there was an alternative product made in $wherever_you_live?
> Then yes, you are profiting off of it. So please just get off the high horse.
There is no ethical consumption under capitalism. That said, there's a difference between incidental consumption and direct exploitation and subversion. Maybe it seems like I'm high-roading you, but I don't think capitalist consumption gives us ethical carte blanche. "Hey I know I scammed millions of people but, I had a 401k and you know what they say, in for a penny in for a pound". Yeah, that rings false.
You know what is so grating about this conversation?
Every comment you wrote shows your knowledge is incomplete and based on only what you heard/read, and yet you talk like you know all the theory and therefore you can prove how it doesn't work in practice. When presented with new information that shows how you are wrong, you double down on your theoretical background instead of looking at what people empirically achieved.
You end up sounding like someone who studied a bit of aerodynamics and then goes to believe they can teach birds how to fly. Or worse, you see a beetle flying in your face and start claiming "this is physically impossible, it's not real!"
Please, don't be those people who can not do anything useful with their life and end up just shitting or doubting on the works of others.
The whole thing about "L2 is a MEV-generating machine". Fucking hell, dude. If someone tells you (like I did in another thread) that you can not make an international transaction without losing at least 7% of the value, and that I already have made and received payments on layer-2 systems for fractions of a cent, what is so hard to acknowledge that the people doing it are not idiots?
Setup costs are one-off and independent of the value you are transferring off-chain. They are amortized through all the lifetime of your "account" and the transactions you made.
Paypal does not work like that. Credit cards do not work like that. Loopring does. Zksync does. Even if all these systems did was to make transfers of stabletokens from A to B, they would be already miles ahead of the status quo.
Yes, there are still "middlemen", but they are both (a) cheaper compared with existing methods and (b) part of a global market with no monopoly. Almost all of the tech that is being adopted is open-source, so there is no large competitive advantage that one can establish over the other. If a roll-up starts trying to jack up fees, others can basically make a clone and take all of the userbase overnight.
If you think that "Ethereum isn't popular", please explain why so many people are complaining about network congestion and network fees.
The "extra smart contracts" do not take processing power. The problem for scaling blockchains is on blockspace and network synchonization. It is I/O bound, not CPU bound.
Ethereum validators will not consume a lot more power based on its usage, and currently the energy consumption of eth validators is 10000x smaller than of the energy of consoles playing videogames.
You really don't know what you are talking about, but you will be too proud to admit it.
Also I/O here means adding a block, which is proc-bound, which roasts the planet.
Finally, video games have entertainment utility. Cryptocurrencies have no non-crime utility. It's not useful to compare the energy use of things that have utility to things that don't.
As for "utility": You don't get to decide what is the utility and the value of what people do on the blockchain, just like we don't get to decide what is the value of playing GTA V or Minecraft.
Again, you are just wrong but too proud to admit it.
I believe current PoW ethereum actually runs more transactions than the bitcoin chain, but I am not defending its energy usage. If it doesn't ever manage the switch to PoS then it will deserve the same criticism with respect to energy usage.
If you read these threads you must know this isn't a universal for cryptocurrencies as it does not apply to multiple of the biggest projects. Even Ethereum which this post is about is scheduled to move away from PoW next quarter though their timeline claims are to be taken with some salt.
Comparing a discussion on a programming language to eugenics and phrenology just shows you have a bone to pick rather than trying to be helpful.
I was intentional in lumping crypto in with eugenics and phrenology, because they're all bad ideas that are super harmful for humanity. That's how bad climate change is!
But more broadly, this is just another example of a crypto person crying ignorance or ad hominem rather than having any cogent arguments or new information. The tech isn't that hard to understand. We get it. It is actually just bad.
Your seperate PoS concerns of centralization (whether valid or not) at most make it as 'evil' as any other centralized service.
2. If it's just as bad as what we have now, seems like a lot of effort for no reason right?
I don't think you should give them too much credit for a switch to PoS that hasn't actually happened yet. There's no intermediate benefit of "planning to switch."
The switch has already started. The PoS validators are already running. The time it is taking is just to make sure that the transition occurs safely and that there are enough diversity of clients and stakers in the network.
As an aside: do you run a node?
> As an aside: do you run a node?
Hah is this some reference to PoW miners coming out swinging against PoS to protect their mining infrastructure investments?
1. Of course not
2. This is a great demonstration of how centralized these "decentralized" networks are; people are even worried about the PoW miner lobby.
Yeah but we're only talking about validations and mining. PoS gets rid of mining, but it's still the case that Ethereum is a very expensive distributed consensus system based on validation nodes. And again, for what reason?
You mean energy production?
Do you apply the same standards to threads about personal vehicles? Or for that matter, energy consuming/producing technology in general like, you know, computers?
I'm happy to talk about energy efficiency in the micro (dishwashers) or the macro (shipping), but we have to first agree that crypto has no legitimate use cases and is just waste, so we can dispense with this whataboutism that's currently in vogue in crypto threads.
The mining of the USD is oil extraction, especially in war-torn or human rights abusing countries. Why aren't we talking how the US economy is based on extracting and selling and speculating the very thing burning our planet? Not even counting the numerous wars it created.
I don't think the BTC hash function has a hard requirement on using energy from fossil fuels, does it?
Fiat currencies are real because we all agree that they're real. You can pay your taxes with them, you can buy a house or your groceries. I don't think Bitcoin, or other crypto, can yet claim they're real because their worth is expressed almost exclusively in terms of fiat currency. Even if some business does accept crypto, it's expressed as a conversion from an underlying price in terms of fiat.
Because it's yet more whataboutism? We can debate how we should transition to renewables and what we really need energy for, but I think we agree we need it?
> I don't think the BTC hash function has a hard requirement on using energy from fossil fuels, does it?
I'd love it if the crypto community kicked out fossil fuel miners. That'll obviously never happen.
But again I ask you, what's the point of cryptocurrency other than crime?
And we are talking about currencies and the utility of said currencies. About the governing structures and operating costs of those currencies. Looking at USD, a well accepted traditional currency with the backing of the territorial violence monopoly we so kindly call sovereign nations, is certainly a reasonable argument as we are essentially comparing green apples to red apples.
So what does the traditional economy system gives us? War, global unrest, dependency on fossil fuel extraction.
Choosing to have a personal war with a system that proposes to do away with the violence monopoly because it requires a nuclear power plant or two of power to operate is an odd position.
It also gives you roads, education, safe travel, global commerce, global communication,...
All blockchains and crypto coins do are doing is spending several countries worth of energy expenditure on scams.
> proposes to do away with the violence monopoly
Next time you buy anything physical with crypto and it doesn't arrive, you'll be the first in line to demand monopoly on violence.
Well I mean, what do you use it for?
> territorial violence monopoly we so kindly call sovereign nations
Literally every civilization is this. It's the first thing you learn in social contract theory and is super easy to derive from first principles. Basically in order to have a more secure society, individuals band together by giving up the use of violence on each other in order to focus their efforts on protecting themselves and their livelihood.
> So what does the traditional economy system gives us?
Literally everything we have. Feel free to cherry-pick some of the worst things but, also I mean hey, I'm enjoying Firefox, HN, and my radiator heat thank you traditional economy.
> Choosing to have a personal war with a system that proposes to do away with the violence monopoly because it requires a nuclear power plant or two of power to operate is an odd position.
Why is it so hard for crypto advocates to come to grips with the current reality of their ecosystem? No one would be upset if crypto all ran on green energy, and if you all really cared about it you'd make it happen. You obviously don't. Which is fine! But you can't have it both ways; you can't belch billions of tons of CO2 into the atmosphere for your projects and then be like, "well, we're fixing it, we promise". I mean, if you really believe that, shut down until it's fixed.
Because it has an army, a government, and an economy behind it that can enforce a great many things (both good and bad) on people using it. And extracting oil is not the single (and I'd say not even the single biggest) source that makes USD a reality. Besides, USD is not the only currency.
On the other hand, if you buy a physical item with your magical coin and it doesn't arrive, or someone is in a breach of your magical contract, or <a thousand other use cases>, good luck.
>With a technology that is extremely damaging to the entire planet for no reason…
Not all blockchains are based on PoW. If you actually read even a brief summary of the basics of crypto you’d know this since it’s mentioned nearly everywhere these days. It seems you are therefore either ignorant on what you speak, or are willfully misleading people to fit your own narrative.
>…come away with the opinion that it's junk tech that roasts the planet, both because it's true and because climate change is a very serious problem.
You’re stating opinions as facts and being far more intellectually dishonest and misleading than any crypto native I’ve seen on here.
> If the end result is that cryptocurrency discourse is effectively run out of HN…
You and you alone don’t get to decide or arbiter what HN is used for or who it is used by. This is gate keeping trash that erodes intellectual debate and discourse into an echo chamber of more curmudgeonly people patting each other’s curmudgeonly backs.
> Like it or not, HN is an important forum. People with a fair amount of influence come here.
HN is an important forum full of important people. On this we agree. My opinion, then, is we should probably be open to discussing new technologies, difficult topics, and unsavory ideas as these are the types of conversation from whence innovation springs. Nobody ever got smarter debating which JavaScript framework is the new hotness on the front page of HN.
> …similar to phrenology or eugenics…
Eugenics is worth discussing as it will once again become a cultural hotbed debate as we move into an era of designer genetics. I find it mostly amusing that you punctuate your point about quelling curiosity by dismissing away another topic that requires thick skin and intellectual rigor to properly discuss and even lump these in with phrenology. This is kind of like saying “discussions of meteorology, astronomy, and astrology should be banned.” One of these things is not like the other…
Based on this comment alone, I’d say you also probably like burning books.
I reference other networks in my other comments. If you think the facts I've stated aren't actually facts, provide some controverting evidence (all you do is call them opinions, ironically making you guilty of the thing you're accusing me of). I'm not gatekeeping and obviously have no such power; I'm participating in an internet forum politely. Eugenics is gross. I haven't burned a book since... middle school probably.
Let's talk about uses for cryptocurrencies! Your turn!
EDIT: This is genuine question. I want to understand if this is considered a real world use case or not.
There is a "real world use case" that most would agree with, just cynical. Borrowing and lending crypto is not a taxable event. You can have a capital gain on the blockchain and borrow stablecoins against it, indefinitely delaying taxation. At the same time, as of this moment you can wash trade crypto and tax harvest any new bottoms, making this tax favorable (a common assumption here is that crypto is an expected value 0 gambling game).
Example in the wild https://twitter.com/mcuban/status/1465002539603185668
In this way, it resembles high finance trades e.g. that Matt Levine of Money Stuff used to do to lower client taxes
I know people who get a loan on their stock portfolio. For that they need to apply for the loan at their bank. This takes time and could be denied. But, if you get it you have a nice lever to play with (basically re-invest in stocks).
The principle is exactly the same with DeFi, isn't it?
People have been borrowing and lending for centuries before blockchain.
"On the current trajectory, Bitcoin miners will surpass coal miners as a major contributor to greenhouse emissions."
source: https://www.sfchronicle.com/opinion/openforum/article/Bitcoi...
"real world use case" is in the eye of the beholder.
My grandmother never wanted a telephone (landline) and never understood the "real world use case" however much people told her they couldn't live without it.
She was not stupid in any ways I can think of. She just lived in a way that made the device uninteresting.
In any case, you should take a look at the gaming space.
Lots of movement around unique items, characters, or more generally control of virtual property and managing them through a blockchain so as to allow use across gaming platforms.
But that's not a "real world use case" after all, it's just gaming (a tiny, $90B industry).
Come again? Platforms as in different games? Then one would need the cooperation of the games publishers to make the items shareable. Platforms as in different devices? No different. Why does this need blockchain? A cenral authority works just fine. Is it to prevent scammers? Hah, I've read 1 too many "smart contract exploits" to know scammers will just concentrate on that.
But anyway, wouldn’t unique items or virtual property just be an extension of the kind of loot box (and marketplace) mechanics that people seem to complain about a lot online?
> self-referential babble
Second, crypto boosters -- I am not one, but interested and not pessimistic -- would say that an economy or a monetary system is nothing but a closed, self-referential bubble that has the useful property of sometimes correlating to predictable real-world activity. It's an abstraction over the real world: not the real world itself, but a way to influence it. It it were the real world, you would presumably have a much easier time determining whether and how much inflation is actually rising. As it is, you have a debate over it today because numbers say one thing, and people experience another.
The crypto people are attempting to bootstrap just such another system, except one that doesn't rely on central banking. So I don't think self-referential is an effective critique then, because that's the intention.
Maybe the core question of this entire endeavor is whether the legal system is a necessary component for layering a system of abstraction on top of the real world, or merely a useful one.
Edit: fixing babble
I am interested in this space, but I do share this criticism that so many of the things touted as evidence of it being useful are fundamentally circular. Take the first three things from the parent comment: Aave, Compound, Yearn. None of these make sense if there is no value in the cryptocurrencies they allow you to lend, borrow, and invest. But then they can't themselves be evidence that there is value. It's circular. Same thing with Gnosis Safe; it's only useful to have a multisig controlling crypto assets if those assets have value.
I think the current thought is that NFTs are what does / will bring inherent value or value connected to the rest of the world in some way onto the blockchain, and then everything else derives its value from there. This seems like a tenuous and somewhat shaky foundation to build so much hype atop, but it's at least a theory of the case that makes more sense to me than the circular "ethereum is valuable because of Uniswap and Aave".
It's a way of tying names to public keys in a decentralized way. It doesn't have to be used only for identifying Ethereum wallets.
Link: https://medium.com/avalancheavax/initial-litigation-offering...
Why? Any written contract can be reviewed and understood by a person. These contracts can be enforced by the use of the existing institutions.
Where as something something tokens offering:
- Contracts are written in an esotheric programming language that pretends to reflect a real-world contract
- These contracts are unenforceable
- And they still depend on some entity somewhere to enter correct info into the system.
All that can be done and is being done by hundreds of companies without the use of bullshit tech.
I don't know if this ILO thing is useful at all, but it doesn't have to be brand new to be useful. If it eliminates some inefficiencies in some part of the process, that's useful. If you could have eliminated those same inefficiencies using a database and a normal company running services on top of it, that's interesting, and the question is whether there is some competitive advantage to implementing it this way instead of that way.
Enough people think there is an advantage in implementing these things that require coordination using public blockchains to make me think there might be, but it is not obvious enough that there is an advantage to make me certain. But I don't think knee jerk dismissal is the right stance to take.
No. No, I couldn't. The value of email was immediately evident and apparent. One of the major reasons fax survived for as long as it had is the lack of good/accepted digital signatures.
> and yet email is still better.
You said it yourself: email is better.
Is "run-esotheric-programming-language-on-worlds-most-innefecient-computer" better? While keeping literally every other part of the process either the same (litigation, proceding, money etc. are handled through the same old channels) or worse (everyone has to get onto this particular coin)
> it doesn't have to be brand new to be useful. If it eliminates some inefficiencies in some part of the process, that's useful.
Does it? Where's the proof it does? And "by eliminating some inefficiencies, how many new inefficiencies does it introduce"?
> Enough people think there is an advantage in implementing these things that require coordination using public blockchains to make me think there might be
No. Enough people are enamoured with the idea of getting rich quick that we are witnessing a never ending (for now) rat race to develop with and come up with justifications for the tech.
> But I don't think knee jerk dismissal is the right stance to take.
I literally provided reasons why this is bullshit. There's nothing knee-jerk about my reaction.
However, crypto-peddlers have the same knee-jerk reaction to any criticism: "crypto will magically solve all the issues because crypto" and "crypto is the next email/world-wide-web/fairy-pixel-dust/cure-for-cancer, you just have to believe it".
The email thing is a metaphor. The point it attempts to make is not about obviousness of superiority of a technology, but that not all new technologies are novel. Sometimes they do an existing thing in a different way.
I do think it is inaccurate to say that everyone interested in the space is just in it as a get rich quick scheme. There is a very unfortunate and distracting amount of hype and speculation, but lots of people are just trying to build stuff they (correctly or incorrectly) believe will be useful, just like I've seen people do during the mobile boom and the web boom before that.
I share your skepticism, but not your certainty.
No. We don't "fundamentally disagree". We're looking at proposed "solutions" and immediately see the vast disconnect between what they claim to do/solve/improve and what they actually do/solve/improve.
Any questions and criticism of these claims and solutions is immediately dismissed because these are unquestionable magical solutions beyond any reproach.
And proponents of these things can't even show how and why they are better beyond "because crypto", "because decentralised", "because blockchain", as if this explains things and makes thing automatically better. No, they don't.
Do you have an example of this happening in this thread? Because I don't think this is the case on HN generally.
> And proponents of these things can't even show how and why they are better beyond [...] "because decentralised" [...] as if this explains things and makes thing automatically better. No, they don't.
You seem to be agreeing with my point about how the value of a decentralized solution is a fundamental disagreement.
This thread doesn't say this outright, but these basically says the same thing:
- "We had fax machines before we had email. You could have said..."
- "I don't think knee jerk dismissal is the right stance to take."
> You seem to be agreeing with my point about how the value of a decentralized solution is a fundamental disagreement.
No, I don't agree. Your original quote is:
"But this is why critics will never see any use cases as valid, because they fundamentally disagree that the thing blockchains do (decentralized coordination) is valuable."
Critics do not disagree that decentralized coordination is valuable. Decentralized coordination is an interesting and complex topic.
We will never see any use cases as valid because none of the provided use cases are valid because of either or both of these:
- a staggering amount of issues introduced by using blockchains. Because the people proposing blockchains have little to no understanding of what the real world needs
- solutions already exist that provide the same thing faster, better, and with significantly more guarantees than any blockchain solution. First and foremost because none of the moving parts in the solution actually have a need for a blockchain
All this has nothing to do with the "value of distributed coordination". Blockchain is a distributed append-only ledger. Give me a use-case for that, and I, as a critic, will say: yup, a valid use case. If you're saying "yes, litigation funding needs blockchain because crypto and decentralized", I will come at you with criticism, and will ask you to prove that bringing blockchain into the equation actually improves things or solves any significant number of issues.
If we go down this line of arguing we will end up with one or more of
- It's actually a good thing for a central bank to control the money supply
- We should be able to censor/reverse certain transactions
- Ordinary people don't actually care about those things
proving my point that if you don't value decentralization then you will think that existing solutions that don't have it are better.
This is a solution in search of a problem.
> If we go down this line of arguing we will end up with one or more of
Yes. Yes we do. And for a good reason. And no, not just those, though I see why you would only chose those.
And yes, "ordinary people" do care about these things when it comes to reverting transactions, enforcing contracts, guaranteeing safety of funds etc. etc.
> proving my point that if you don't value decentralization
When you select your own questions that you assign to your opponent, it's so easy to win an argument, doesn't it?
For example, you and sanderjd completely skipped the three bullet points I provided as criticism. And it's no wonder you did. Because all you, and other crypto-peddlers, can talk about is "BIG BAD GOVERNMENT CONTROLS AND CENSORS THE MONEY", and have literally nothing to offer in terms of actual concrete arguments for the "solutions" you peddle.
Blockchains in their current form are 13 years this year. And these are still the only talking points you have.
I will not engage in this thread anymore, so don't bother to reply.
Dude, I'm not even trying to argue in favor of crypto in this thread. My point was critics will never be satisfied by proponents' arguments because they don't value the one thing blockchains do, which is arrest control from central parties. And here you are, saying it's a solution in search of a problem (i.e. it adds no value) and making arguments like
> reverting transactions, enforcing contracts, guaranteeing safety of funds etc. etc.
which is exactly what I said you would come back with. Because when you don't value decentralization, the lack of centralized control looks like nothing but downsides. Thank you for proving my point.
> don't bother to reply.
It's no bother :^)
Do they?
Let's see how you and @jallen_dot_dev engaged with the criticisms I had in the form of a short list:
- "knee-jerk reaction"
- "it's like email vs. fax"
- "you disagree that distributed coordination is valuable"
Nope, my proportions are definitely not off. Even in the context of "litigation funding" any criticism is dismissed because blockchain. Even though it's on crypto-peddlers to prove that their "solutions" improve anything, not on the rest of the world to point out obvious flaws and problems.
But, no. If it's blockchain, it's immediately good, and perfect, and improves things. If you do't agree, it's a knee-jerk reaction of a person embracing fax against the glorious new email. Because anything blockchain is always revolutionary in all "it's just a metaphors".
I will not engage in this thread further.
Whatever else is true about cryptocurrencies / blockchains, "beyond reproach" is not one of those things; I can't think of much in technology that I've seen come in for so much reproach. Which is fine, I agree with you that nothing should be beyond reproach, but it just isn't true that there is no healthy full throated pushback on these technologies.
I believe Bitpay and Square are some of the largest.
Edit: what I mean is the customer can pay in whatever, and you get the USD equivalent.
- stablecoin
- high apr savings account by lending to defi leverage pool
- crypto.com visa card for real world offramp https://crypto.com/us/cards
I'm a founder and my cost of living is $40k/yr post-tax cashflow mediated by wells fargo checking + credit card. I think it just became possible to get wells fargo out of my life!
Where "not far" you mean "as far as it is from Mercury to Pluto", then yes, not that far.
Easy question to gauge distance: how does defi handle refunds and enforcement?
I think this approach would work for me right now! The only remaining issue is if I can get a mortgage – but I already have one. Everything else (like cars) I can purchase outright
Compared to most users here, I live in the middle of nowhere. Most stores don't even accept credit cars or do so begrudgingly because cash payments allow them to pocket tax money. Even if this whole crypto-nonsense doesn't crash and burn in the end (which I consider highly unlikely, but what the hell do I know?), it will be ready to replace my bank in… let's say 50-60 years. Let's get extremely reliable internet connection to every shithole on the planet first, and then we'll see.
2. price "collapse" of 90% is actually not a collapse if it's up more than 10x in a small number of years
3. MEME-POWER is an incredible force, HODL may be enough to keep the perpetual motion machine moving. Markets are only as rational as humans!
4. the TIMING of collapse matters – covid/climate policy is perpetuating the bubbles and it seems governments might fracture before crypto fails, at which point where would you rather be, dollars or crypto?
5. the costs of inflation/bubbles is shouldered on the middle class and poor, so it actually is being paid for and may not actually be out of balance
6. We may be looking at a housing market generational situation. The answer is not to second guess the market, that's how you miss generational gains.
I used to be a fan of cryptocurrencies but I stopped when I realized how bad the consequences are at scale. All of them involve consuming real-world resources, so basically hurt our planet. How come nobody is smart enough to invent a cryptocoin that has resource consumption several orders of magnitude lower than the current ones?
You should read about Proof of Stake which does reduce resource consumption by several orders of magnitude compared to large PoW chains.
Proof of Stake blockchains aren’t the environmental concern that Proof of Work blockchains are.
In reality, the market for money is extremely important for everyday life. Being able to trade off money now for more money later, and being able to do it in a variety of ways, is an essential ingredient modern exponential GDP growth and high quality of life to materialize.
IMO current DeFi products do this in a way that is already better than the traditional banking sector, and it gets better all the time. I suspect that in 20 years a majority of US people will use some kind of DeFi product instead of a savings account.
Gas fees can be hundreds of dollars to interact with a DAO (even simple contracts like Uniswap to get the right tokens is expensive.)
There are not banks hacked where people lose all of their money.
People lose passwords all the time. With banks, you can get access to your account back. With DAOs, if you lose your private key…RIP.
Coin prices are absurdly volatile. This is awful for currencies. The cryptokids point out all the time that 5% inflation means USD is a bad currency. Bitcoin dropped 20% in 24 hours. Imagine you need your savings right now. First you’d have to pay hundreds of dollars to access those funds and then you’d have 20% less than you expected. That’s garbage.
Those are things to start off with. Can you make a serious case that DAOs are better _right now_?
And if so, which _specific_ projects are better?
> Gas fees can be hundreds of dollars to interact with a DAO
It's not "hundreds of dollars" to withdraw tokens from a savings account. More like $50. That's still way too much, but I don't pull money out of my savings account often enough for it to matter. It will get better over time.
> There are not banks hacked where people lose all of their money.
Not in the US, but there are other countries that exist. None of the DeFi platforms I have ever used have been hacked, but I'm glad for the possibility! It gives me more options in terms of risk vs. reward.
> People lose passwords all the time.
Yep this one is bad, but there are ways to improve it (social key recovery etc) that people are working on. On the other hand, I've spent a ton of time on the phone with banks trying to get access to my own accounts every time I move. I've never had that problem with DeFi because they don't KYC.
> Coin prices are absurdly volatile.
Doesn't matter at all, I'm talking about stablecoins. I only really use fiat backed stablecoins, so there's almost no principle risk.
Also from this point I think it's pretty clear you don't understand how people use DeFi. Nobody is holding strait unleveraged BTC in a DeFi platform. You would just hold BTC directly, in which case the cost to withdraw would be ~$3 right now.
> Can you make a serious case that DAOs are better
For me they are infinitely more convenient. I've spent at least 10 hours this year on the phone with banks and financial institutions. I've spent 0 minutes trying to get access to my defi accounts. I use a trezor for cold storage.
The rates are better because I'm willing to tolerate more risk (and I think that smart contract and collateral risk for certain platforms is currently mispriced).
> which _specific_ projects are better
Compound, other savings platforms (I don't want to name them). Centralized exchange savings products are mostly made possible by DeFi, and these are also better products than traditional banks for people like me. Including Coinbase, Binance, even OKEx.
Assuming you're talking about the smart contracts functionality here - what about something like decentralized escrow? Multisig wallets and hash time-locked contracts are a pretty direct analogue to how we handle escrow in the real world, but the counterparty risk is just move to the VM/chain/network.
Its not perfect, and many details need to get ironed out, but that particular use case has always struck me as pretty obvious.
Compare: human-readable contracts enforced by legal systems vs. complex programs written in an esoteric programming language running on world's most inefficient computer.
I fail to see how you view this as an "obvious case that makes sense"
Why this is better than central DB: Allows govt to outsource IT Public interest in the data will result in 3rd party clients being developed It makes that govt data more accesible for all parties - no gatekeeping
Use case examples All modern houses have a ton of compliance docs - window installers, insulation installers, HVAC, etc. Recording that data on the public blockchain provides a universal storage mechanism and API to that data. There is no reason for that data to be private / behind gatekeepers and a whole range of stakeholders - home builders, academics, environmentalist - want access.
Tracking highway per mile marker. Similar to the home building example - the govt collects a whole bunch of data (accidents, pollution run off and constituents, expenses). Many entities could use that data and relying on all govts worldwide to provide it seems cumbersome to unlikely.
Have you ever heard of lending protocols? You can park dollar in a smart contracts and earn a couple of percent interest per year. AAVE and Compound are quite popular examples.
DAI is a decentralized stable coin trying to track the dollar value that’s been running for years. It is also implemented as a smart contract.
Then there are decentralized exchanges where you can swap different tokens on the Ethereum block chains. You can also park tokens in such money pools and also earn interest.
The biggest problem with Ethereum right now are the very high transaction fees that render these otherwise quite successful examples useless for people holding only small amounts of tokens. But this can be blamed on the ongoing crypto bubble.
Ransomware, tax laundering and a relatively safe method for organized crime money transfers are excellent use cases (just not 'good' ones).
(My dismissal was of the smart contracts of the OP, not crypto in general, which many commenters seem to assume.)
They power decentralized apps and defi. Without them then a blockchain doesn't have much utility aside from processing transactions.
Mmmh, that's a little bit of a stretch.
They're building infrastructure (eg taproot) with a goal to support them in the future.
But doing ETH-like dapps on Bitcoin is nowhere near ready (or, if you listen to some Bitcoin folks, even desirable).
However, Bitcoiners consider this an advantage as this makes it less vulnerable to exploits. And the Lightning Network is quite an exciting development.
I consider the competition between the two networks good as they are exploring different but nonetheless useful niches.
Tether is a smart contract itself
Here’s the most recent (that I’m aware of) https://www.theverge.com/platform/amp/2021/12/2/22814849/bad...
They never learn their lesson
Were these all front end exploits too?
https://ndxfi.medium.com/indexed-attack-post-mortem-b006094f...
https://www.elliptic.co/resources/defi-risk-regulation-and-t...
https://arstechnica.com/information-technology/2021/12/hacke...
https://therecord.media/hackers-steal-29-million-from-crypto...
https://www.cnbc.com/2021/08/19/liquid-cryptocurrency-exchan...
https://www.dw.com/en/hackers-steal-600-million-in-record-br...
https://fortune.com/2021/06/24/bitcoin-ameer-raees-cajee-the...
But I at least like to know the general terms that are floating around, both in case one of them happens to change my mind on cryptocurrencies, and so that I know what to warn family members away from if they ask.
* Proof of Work is unethically wasteful. Proof of Stake is unethically oligarchical.
* Far too wild of price swings to be used as a currency.
* Inventory tracking with blockchain has the same problem as any other inventory tracking system, that it relies on humans putting in truthful information.
* Smart contracts assume that the hard part of a contract is the enforcement, not the meeting of the minds. Having a human as part of the conflict resolution (i.e. the legal system) is necessary.
* Irreversible transactions are a bug, not a feature, and are what drove the rise of ransomware.
* Negative impact on the GPU market for actually productive uses.
Cryptocurrencies are fantastic for money laundering and paying for illegal services, but I don't think those are exactly good reasons to keep them around.