Web3? I have my DAOts
networked.substack.com
networked.substack.com
Bitcoin found some early use cases. Drugs first. Then getting money out of China. Money laundering. Tax evasion. Scams. Bitcoin is the scammers dream - remote, anonymous, irreversible transactions. Much less risk of the mark coming for the scammer with a baseball bat.
Then China cracked down on cryptocurrency, shut down all the miners, and arrested a few hundred of them. Financial regulators in the more legit countries started regulating Bitcoin exchanges, so the operators couldn't just steal the money. Know Your Customer became a thing. In the US, the IRS, FinCen, the FBI, and the SEC all started paying attention to what was happening on blockchains. Cryptocurrency crime was no longer risk-free for the crooks.
But by now, sheer momentum kept Bitcoin going up. That's a powerful force. It's not forever, though. Check out meme stocks a few years later. Remember, all this stuff is zero-sum. For every winner, there has to be a loser.
That's what provides the engine behind "Web3", NFTs, DAOs, and whatnot. It's not the technology.
Investing against the popular opinions of Hacker News is an easy way to get rich.
We don't need another nation level energy guzzler for a spy/disinformation network.
> Climate researchers say two Google searches emit 7g of CO2 – the same as boiling an electric kettle.
> ...
> If Wissner-Gross is correct then 3,500 tonnes of CO2 (500m x 0.000007 tonnes) are emitted every day through all of us performing Google searches. Or put another way, 1.28m tonnes a year. That's about the same as Laos emits each year, the 151st biggest emitting country in the world.
Compare: https://fortune.com/2021/11/06/offsetting-bitcoins-carbon-fo...
> All told, Bitcoin emits—by Forex Suggest’s estimate—some 57 million tons of CO2 annually, more than double Ethereum’s footprint. It’s noteworthy that for Bitcoin, all that energy generates a relatively low number of transactions. Because its distributed network is so slow, its users post only around 12,000 purchases, sales, and transfers on the blockchain each hour. That’s approximately 115 million transactions a year. By contrast, Ethereum handles over four times those volumes—devouring, once again, far less than half the juice. The result: Bitcoin deploys an incredible 707 kWh of electricity per transaction, 11 times as much as Ethereum, and emits 1,061 pounds, or half a ton, of CO2 every time you tap the app to buy a latte or zap a fraction to a buddy who beat you on a golf bet. Ethereum sends less than one-tenth of that carbon skyward for each purchase or transfer it processes.
----
So, roughly, bitcoin has a footprint that is ~45x larger than Google search.
Facebook is probably lighter than that, though that's only a "its probably lighter than that" guess.
We don’t know much about how its energy is being created. If 90% of Bitcoin’s energy use would be from renewables its CO2 footprint wouldn’t be 45x as large as that of Google.
There was a study a couple of years ago suggesting Bitcoin’s global footprint is comparable to that of a medium sized city. But its assumptions are probably outdated.
Edit: https://www.sciencedirect.com/science/article/pii/S254243511...
I would much rather that the demand for green energy increase due to a desire to transition away from other energy sources.
If the demand for energy is increasing and being met with green energy without removing the other sources of energy, that's not entirely a win in my book.
Why does BTC increase demand for green energy but not other kinds of energy? Or does it increase demand for all types of energy available in the grids in which it's generated?
Both Google (and Bitcoin) are optimizing for lower electrical costs - wherever that may be. Often this is associated with grids with hydroelectric power. Places like https://www.google.com/about/datacenters/locations/the-dalle...
The point isn't "this is how much CO2 google and bitcoin produce" but rather using the metric of CO2 footprint as a proxy for energy consumption to compare Bitcoin to Google to Facebook.
Whatever Bitcoin's CO2 footprint is, overall Bitcoin is consuming about 45x more power than Google over the course of a year.
I wonder if there is any mapping of “gas” to electricity. I guess it would have to be approximate but still, it’d be interesting to estimate how much electricity a particular smart contract consumed per execution.
Your counterfactual is nonsense. There is no world where Bitcoin remains stable for a decade. It's precisely the nature of Bitcoin that it either eats a large fraction of global monetary value or ends up close to zero. Bitcoin's existence provides the purest possible application of Gresham's law. The price of Bitcoin reflects the imputed probability of bitcoin eating monetary value, as well as the fraction it ends up eating.
> all this stuff is zero-sum
Bitcoin is positive-sum if you believe in the benefits of sound money, but yes, people who are net dollar bagholders (e.g. US govt and people with US govt debt) will lose wealth if Bitcoin successfully demonetizes the dollar. It would probably be wise to hedge against this scenario by balancing long dollar positions with long Bitcoin positions.
A trillion dollars goes into Sovereign Debt. The government can issue endless sovereign debt to dilute that.
A trillion dollars goes into the stock market. The companies on the stock market can issue tons and tons of new shares to dilute that.
A trillion dollars goes into paper gold. The commodities markets can naked short paper gold for however long they want to since there's cash settlement allowed of futures contracts.
A trillion dollars goes into bitcoin, the price just goes up and there's no dilution. This is what makes it a symbol of resistance against those assets and the way corporations, sovereigns and commodity market makers use their particular rules to extract wealth from their investors.
Also, Bitcoin is open source. So you can download the Bitcoin code and fork it and call it THE SUPER NEW IMPROVED BITCOIN, and set the "super new improved bitcoin" generation to a trillion bitcoin an hour, but the original bitcoin nodes are still around and doing their thing. However, there's nothing stopping people who want to do it your way from using your chain.
Bitcoin has negative cashflow, the only way it goes up is by more people putting money into it. I'm not saying that is a bad thing. Picasso paintings also have negative cashflow when you account for storage and security of the art. The only way a Picasso goes up in value is if more people with more money want to buy one. It is unfair to call Bitcoin a Ponzi scheme because no one calls a Picasso a Ponzi scheme.
Both are immoral but only one is illegal. One can do a double-Irish-Dutch sandwich and rat fuck both employees and suppliers all in the name of creating value for the shareholders. While employees piss into bottles the forward thinking CEO engages in union busting methods to prevent them from organizing. Legal or not, why not, if you can get away by stalling until a court decides and you settle (or purge the board from the toxic elements and restart what you do with a new CEO).
¹ Treasure Islands: Tax Havens and the Men who Stole the World: https://en.wikipedia.org/wiki/Treasure_Islands
The way I understand it, the kind art that is most often used in money laundry schemes is the more controversial kind. When some people think that a painting is a waste of perfectly good canvas while some rick collectors think it is the expression of god himself, how can you assign a value? This extreme subjectivity is what makes it ideal for money laundering.
Bitcoin prints money ( eg tether)
Bitcoin just doesn't work. It's centralized now to fix it's issues.
Best of all, none is regulated and the whales hold the power. Even more in the future with proof of stake.
There is more dilution and misunderstanding with crypto in general then I've ever seen.
Tether keeps printing billions of dollars with no oversight or regulation. They lied about it being backed by cash reserves, and now make a much softer claim that its backed by "some cash" and other assets (other assets include more crypto IIRC).
Basically, it feels like tether is inflating the price of BTC, and the exchanges all have a vested interested in continuing to pretend tether is worth something. If there was a run on tether (i.e. everyone tries to exchange for fiat) it could be catastrophic for all of crypto.
(Disclaimer: I am not a financial expert, and have just picked this up from reading about tether over the last few months).
In practice they basically use their trusted position within an exchange (as the 1-to-1 representation of a US dollar) and simply create new Tethers from thin air, move them to an exchange, buy BTC, pump the price, and essentially act as a stabilizer whenever the price starts tanking. For instance they've printed over $2 Billion worth of Tether since Saturday, with absolutely no evidence that real people actually put $2B into exchanges to buy crypto.
It's an amazing scam since anytime it looks like the floor is about to fall out, they print billions more and keep their position alive by pumping crypto back up.
Anyways the reason it's important is because Tether and other stablecoins are supposed to be the fiat offramp in the event that you want to withdraw money from an exchange. After all, to buy BTC you really first bought Tether (or USDC) and then traded your tether for BTC a minute later. So all of the hard cash in the exchange is supposed to be represented by Tether... guess what happens when people realize their cash isn't actually there 1-to-1 like it was promised? Massive liquidity crises and all cryptocurrency falls 90%+.
Be careful my friend.
You've spoken to Evergrande and friends?
> to buy BTC you really first bought Tether (or USDC) and then traded your tether for BTC a minute later
Nnnnno, not everyone uses sketchy and/or first-gen CEXs...
Anyway, I agree with you, and hope Tether goes away soon.
- Both are not really audited
- Both have retracted claims of being fully USD backed ( only tether had to do it after court and USDC changed it a bit later)
But they are the exchange, even if they claimed for long they were not.
They don't claim that any more. They only claim a tiny percentage is held in cash now, the rest is in 'commercial paper' apparently.
I'm not sure what your actual gripe is, but you certainly have no idea what you're talking about.
Simple example:
https://en.m.wikipedia.org/wiki/Tether_(cryptocurrency)
> Research by John M. Griffin and Amin Shams in 2018 suggests that trading associated with increases in the amount of tether and associated trading at the Bitfinex exchange account for about half of the price increase in bitcoin in late 2017.
Your gold example is also very contrived because the futures market doesn't literally dilute away physical gold.
As for Bitcoin: You're missing the fact that while Bitcoin can't be manipulated away from 21 million, the Bitcoin markets can definitely be heavily manipulated by sufficiently large players and insiders. And there does seem to be ample evidence that this is happening.
If gold doubles, supply dramatically ramps up. Same with most commodities.
Sure; however governments do dilute their share... err citizens away ;)
So what will the argument be when this market is regulated? Gary Gensler is obviously a fan of Bitcoin. He considers other digital assets in a different light, and seems to consider many of them to be securities. What happens when crypto exchanges are regulated and the level of manipulation is much harder, similar to traditional financial markets? The 21 million cap on Bitcoin is going to look more attractive then, I think, at least to those who aren't considering that now. Plenty of folks already consider the 21 million cap on Bitcoin very attractive, and I think this will only increase over time.
Also the other comments that I see arguing how Bitcoin could be changed tells me that those people have not followed the history of Bitcoin very closely. It seems one of Bitcoin's main goals over the past 10 years is ossification and hardening of the system, i.e. being very strict and careful about changes. This seems built into the ethos of the system. The Bitcoin Cash fork is an example of this. Bitcoin Core refused to change the block size and that led to a fork which has not done well in terms of price in comparison to Bitcoin. One could say that so far the Bitcoin Cash fork has failed in comparison.
Bitcoin can be just as much manipulated, if not more, because there's barely any regulatory oversight. Remember the two bots that traded Bitcoins with each other on Mt Gox to drive the price up (https://www.theguardian.com/technology/2014/may/29/bitcoin-b...)? What makes you think something like this doesn't exist anymore? Especially with the Tether guys at the helm, who have been proven to lie in the past (https://ag.ny.gov/press-release/2021/attorney-general-james-...), Bitcoin and other cryptocurrency investors should be worried.
indeed. decentralization of mechanical infrastructure =/= decentralization of human control over said infrastructure.
if anything, the former serves mainly to obfuscate the latter, rather than eliminate it.
Isn't someone just going to create a Bitcoin-denominated derivative or fractional reserve bank, assuming that hasn't already happened?
Bitcoin is thoroughly manipulated. Tether is minting a billion dollars a day now, with zero oversight and close ties to the major exchanges. Exchanges themselves have been found front running customers, running wash trades on their own coins etc etc. Fraud is rampant in this space and there is zero oversight from the normal regulatory bodies.
A trillion dollars goes into bitcoin, the price just goes up and there's no dilution.
But there is significant manipulation and absolutely no clarity about whether a trillion dollars has in fact gone into cryptocurrencies or whether things like the trillions of dollars that tether has minted affect the price more than real money flowing in. The numbers you can quote from exchanges are unaudited and highly suspect. At least those other assets have some sort of auditing in place to prevent fraud and market manipulation (which still happens, but would of course be rampant and largely hidden without regulation).
Also, Bitcoin is open source. So you can download the Bitcoin code and fork it and call it THE SUPER NEW IMPROVED BITCOIN
Ah, so the supply of this new money is in fact unlimited, since you can add new coins at any time. The supply of bitcoin may be limited (for now, by fiat), but the supply of cryptocurrencies and now nfts is constantly growing, there is no scarcity, and any we have is invented.
If you think Bitcoin is a symbol of resistance you're a mark making the likes of the Winklevoss twins and JL Van der Velde even richer. Get out now if you can.
2. The rules can also be changed with a simple fork if enough users are persuaded to move (Bitcoin Cash) - and somehow the price of both is preserved (how? why? who benefits?).
3. The price is provided by unaudited exchanges and can be manipulated by manipulating linked assets and collusion with exchanges, as Tether has shown.
This is a house of cards waiting to collapse.
2) Again there is a reason why Bitcoin Cash is a fraction of BTCs value it's not the same.
3) Everything can be manipulated. You go and see how Soros did that in the 90es. But again that's not the measurement here. It can't be changed.
It's been a house waiting to collapse for 12 years now. Maybe you should ask yourself what it would take for you to admit to yourself that you were wrong. How long does this have to be a thing?
What would stop it being changed?
It's been a house waiting to collapse for 12 years now.
Tether has only been trading since 2015 and only prominent the last few years. Other cryptocurrencies have seen multiple bubbles and collapses. The thing that would convince me personally is that all the get-rich-quick marks and scammers leave the space and people start using it for actually useful things like payments.
Unfortunately distributed consensus with a global public ledger is particularly badly suited to payments or a currency, though it seems well structured for a ponzi scheme.
Tether has "only" minted $78 billion, not trillions
Does anyone really believe 78,423,306,967 USD are currently invested in Tether?
1) https://en.wikipedia.org/wiki/Tether_(cryptocurrency)
Edit: I see elsewhere somebody saying "nobody in the commercial paper markets have heard of them"
That "commercial paper" could very well be IOUs from themselves to themselves
So basically, like most other things they say, it's simply not credible.
https://www.ft.com/content/342966af-98dc-4b48-b997-38c008042...
The China crackdown was this year. The US agencies mentioned all started examining bitcoin in 2012 at the very latest, and had a decent grip by the next year. Left off the list is the agency with the most impactful jurisdiction- the DHS- who essentially "signed off" on the "legality" of Bitcoin in 2013, specifically citing the ease of tracing bitcoin transactions. The IRS gave its guidance on bitcoin (and classed it as property for taxation purposes) in 2014. FinCen was not particularly concerned at this time, according to someone at FinCen at the time.
Cooperation between compliance specialists (like Promontory) and major investors and the federal government (for KYC and AML) hit full steam by end 2013, by necessity. The FBI seizes assets suspected of being used in the commission of federal crimes, and bitcoin is simply another asset for them to seize, which the Justice Department has done successfully for a decade now.
One could argue that bitcoin was able to go to the moon because of these decisions, actions, and verdicts.
Sources: people who worked in these agencies or organizations at the time and the publicly available information at the time that it was disseminated.
The IRS has been gradually upping the pressure. Form 1040 for 2020 included, for the first time on the main form, the question "At any time during 2020, did you sell, receive, send, exchange or otherwise acquire any financial interest in any virtual currency?" The IRS has access to Know Your Customer data from many crypto exchanges, so, anyone who checks "No" and has a crypto exchange account will get attention. Here's a history of the IRS slowly tightening its grip on cryptocurrencies.[3]
[1] https://www.sec.gov/news/press-release/2018-53
[2] https://finance.yahoo.com/news/sec-brings-ico-crackdown-open...
[3] https://hub.accointing.com/our-crypto-platform/report-taxes/...
American crypto exchanges were actually reporting predating that announcement; they had to in order to not get shut down. Thoughtful people knew that certain regulation would have to be met from the beginning, but that memo wasn't universal and there's no one who goes door to door with the facts for hungry home speculators. There's likely to be a continual wave of retroactive enforcement for some time. That's why most sincere people in the space have been paying any required taxes generated by their activity starting for the year 2015 at the latest.
Incidentally, bitcoin hasn't been considered a security by the IRS yet, but the infrastructure bill that just passed has a whole sea change of new regulation for the space. I don't feel I've been informed well enough yet to comment much regarding macro implications. But there is something in there that could effect the latest buzzwords to go media viral: NFTs. Securities-related Know Your Counterparty and Anti-Money Laundering regulations that will be in effect starting in 2023 may apply to NFT sales, for any seller. That could have a real impact. You would need the EIN or social security number of your buyer.
We could call this tightening or a crackdown, but I think it also might be fair to call it reigning things in to prevailing standards. I don't really know. All this revolves around interesting questions about how the standards continue to be established for what constitutes a digital security vs digital property/currency.
As to the ICOs crackdown, it was nice to see regulators actually take real action on straightforward and often inept securities fraud. They were enabled by capability advances that weren't as feasible with bitcoin alone. They were old grifts cycled around again for a round of digital "innovation," so they were nipped in the bud pretty quickly. These kinds of fraud will probably spring up at every stage of the digital asset technology development cycle. The noise can be a bit maddening, and I can understand your general sentiment.
If IRS only started tightening their grip in 2020... Their statements prior to 2020 didn't have any effect, yet.
I'm not saying "it's doom and gloom for crypto". I'm saying it's fair to claim things didn't fully play out yet.
It's just like everything else, literally, and tax evasions only get media coverage under pretty limited circumstances.
Taxation in the space has always had a foregone conclusion that some have chosen to handwave or rationalize away. Not a bright strategy IMO.
The SEC is basically reactive. They wait until people complain about losing money in a scam. Then they bring the hammer down. This avoids complaints about over-regulation.
(A "forward looking NFT" is something like land in a virtual world that doesn't exist yet. You're funding an enterprise run by others to build the thing. That's an investment contract, which the SEC regulates. An NFT that represents "art" that exists at the moment of sale is probably just a collectable.)
By the way, none of this is new. See "Swampland in Florida" on Wikipedia for the 1950s version of the same concept.
Which area of modern tech is not about "make money fast" ? Lol You're ngmi amigo
Whether or not you agree with the different thoughts people have about any of these things, I think it's possible that there's in fact a movement into Bitcoin borne out of more than just "greed," but instead, fear and hedging.
I agree that there are a lot of horrible shit coin projects out there, but there are also several blockchain projects utilizing the new technology for its intrinsic value of decentralization and what that affords.
Hillary Clinton seems to believe that cryptocurrencies are about nation state vs the next social mechanism [5]. It's likely true, and that change is being brought forth by blockchain. Books changed the world. Churches changed the world. Radio and TVs changed the world. The Internet began to decentralize it... and blockchain is finishing the job.
[1] https://i.redd.it/8csx4xepjm381.png
[2] https://fred.stlouisfed.org/series/M1SL
[3] https://www.theguardian.com/us-news/2021/may/24/republicans-...
[4] https://www.nytimes.com/live/2021/12/06/nyregion/ghislaine-m...
[5] https://www.bloomberg.com/news/articles/2021-11-19/cryptocur...
I mean, I'm not sure you're wrong here, it just seems like a step was missed. Your comment is about bitcoin, but your conclusion is about a bunch of stuff that does not run on the bitcoin blockchain. What's the missing piece here?
Completely agree with this sentence. Now, have you happened to frame this sentence in your head when talking about fiat money? Just wondering.
That's not how it works.
Suppose Bitcoin comes into existence and people mine a billion dollars worth of it. They now have a billion dollars worth of Bitcoin. Nobody else has lost anything.
If they sell the Bitcoin and someone else buys it, the buyer hasn't lost anything. They had $100 worth of cash and now they have $100 worth of Bitcoin. Provided the price is stable, their net worth doesn't change. If the price goes up, they make money. If the price goes down, they lose money. That part is zero sum, but the initial mining still created the value that it created.
It would only be zero-sum if Bitcoin goes to zero. Not just 5% of where it is now, actually zero. Because otherwise it would still have created whatever non-zero asset value people still ascribe to it.
Everything else is positive sum. Trading, moving money, storing wealth...
If Bitcoin goes to $0.01 or even $5, I bet that makes most mined Bitcoins underwater like how pennies and nickels cost more than their face value.
If you mine $100 worth of Bitcoin, there is $100 worth of Bitcoin created, whether the electricity cost you $20 or $120.
If Bitcoin goes to zero I still made my $20.
Imagine you and your friends collect and trade rocks you find on the beach. The more rocks you pick up and put in your personal baskets, the scarcer they become (just like mining bitcoins), so the work of finding more rocks becomes harder. This makes all the rocks you've already found "worth" more. Let's say for this thought experiment that there are 1000 rocks on this beach total.
The value of the rocks is only realized when someone decides they want to pay you dollars for your rocks in your pile instead of going out to pick up rocks themselves. This transaction (say $1 per rock for 100 rocks) now suddenly makes everyone's pile of rocks valuable, because there's someone out there who was willing to pay $1 per rock. If the next person pays $2 per rock for 100 rocks, then everyone's rock piles double in value. This means that the "market cap" for rocks on your beach is $2000 ($2 x 1000 rocks), but that doesn't mean that there is suddenly $2000 of USD in you and your friends' pockets. There's only the $300 that the two buyers paid into the system, but it wasn't generated by collecting rocks.
Let's say that the last 100 rocks are super hard to find - they might be buried deep in the beach and not worth digging with your hands. After a few hours the supply of rocks has essentially capped. The only way to get more rocks for yourself is to trade dollars for rocks. You open your wallet and buy 100 rocks from your friend for $500 dollars.
Now everyone knows that 1 rock = $5. Market cap = $5000.
Someone else wants to buy but it's hard to get anyone to sell. They spend $100 to buy just 10 rocks. Now 1 rock = $10, Market cap = $10,000.
Now that each rock is worth $10, people get shovels and try to find more rocks buried. Finally they've all been found. Let's say that 100 people total are now holding at least 1 rock.
Let's freeze it here and look at who has won and who has lost. Assume that finding the rocks didn't cost anything. From the perspective of everyone who simply picked up rocks, they hold rocks worth $10 each, but haven't paid anything to acquire them. Great right? Well not necessarily - nobody actually paid them anything yet, so they have realized exactly $0 in gains.
Let's look at the four transactions that occurred which gave the rocks value. The first saw $100 go from person A to person B, for a net of $0. The second saw $200 from one person to another, for a net of $0. Third, etc - fourth and final, also net of $0.
Within this example, trading dollars for rocks is clearly a zero-sum game. The only reason that crypto "looks" different is that it's a much larger beach with millions of rocks and millions of people trying to trade them and pick them up. But it's the same thing.
Except that they still have a rock that the market currently values at $10. The value of that clearly isn't zero, because it's $10.
The argument that not everybody could sell their rocks all at once and still get the same price is only relevant if that's what happens. It's like saying your shares in an S&P 500 index aren't worth the market price because of what would happen if everyone sold at once.
Dividends mean that the "rocks" you hold spit out a few pennies magically every so often. While fewer stocks today pay a dividend, many still do.
For holding bonds you get the coupon payment, which again is like your rocks spitting out pennies every so often.
In the real world, companies and governments are paying you to hold their rocks.
That's why the stock market/bond market isn't zero-sum.
By analogy, it would be the value of the currency as a currency, i.e. to facilitate productive financial transactions that would not otherwise occur. The reason non-speculators would ultimately want to have any.
Bitcoin doesn't generate intrinsic value from a business operation - it's just a digital version of a rock. There's no money for it to pay out. Therefore you have to limit the example to the exchange which gives it value, which again is a zero-sum game in a way that traditional markets for business and government equity and bonds is not.
Except that it makes the rocks not worth as much.
You had a corporation with a million dollar business and a million dollars in cash. It pays out the million dollars in cash as dividends. Now the rockholders have a million dollars in rocks and a million dollars in cash, when they used to have two million dollars in rocks. Their rocks decline in value by the amount of cash no longer inside the corporation.
> Bitcoin doesn't generate intrinsic value from a business operation
Sure it does.
Bob wants to buy something from El Salvador, the merchant in El Salvador wants payment in Bitcoin, so Bob has to buy some Bitcoin in order to pay the merchant. The more Bobs there are, the more valuable Bitcoin is as a currency, and the more the person holding the rock can get for the rock.
You, the holder of rocks, get the increase in business value as "rock price appreciation" rather than dividends, but you still get it.
So BTC for you is at the same time an asset AND a currency ?
How does it work ? It goes to the moon forever, so a loaf of bread cost goes ever higher forever ?
Nope, that is not the way it works. When you have ownership of a company (by holding stocks), the company can pay out a dividend and the price of the stock does not go down. On the contrary, the price of the stock may go up because the company has proven that it generates cash and will pay this cash out to shareholders periodically.
This is why companies viewed as assets have “intrinsic value” and something like BTC does not. If I own stock in a company that pays out dividends and the stock does go down, at least I still get money in the form of dividends. I can be assured that if the dividends continue (not a given), then the price of the underlying stock will “correct” to match the intrinsic value of the company over time.
Contrast that with BTC - I have no real way of knowing the “real” value of BTC. If the price goes down, then it may stay down forever as there is no way of accurately pricing it based on some real-world metric. It produces nothing, therefore this is why some people say it is not a good asset to own.
The important thing that differentiates shares and bonds from other assets such as commodities and virtual currencies, is that the former produce income (in the form of profits or interest) while the latter don't.
This really depends on what you think is going to happen going forward. Surely the current value is propped up by speculation, but are the speculators right? Is future-Bitcoin going to be very useful and thus valuable for something, so that the speculators will eventually have someone to sell their Bitcoins to other than just more speculators?
It's not impossible for that to happen just because it hasn't already happened. It's also not impossible that it doesn't, in which case the speculators themselves will be the ones left holding the bag. But that's how it goes, isn't it? High reward, high risk.
Early Bitcoiners have known this and predicted it several times. See this post from a decade ago for reference:
https://www.reddit.com/r/Bitcoin/comments/1c5j46/you_people_...
Did Finney ever explain how he came to be the recipient of the first ever Bitcoin transaction if he wasn't Satoshi?
Who do you think is Satoshi, if not Finney?
I find the hesitance towards bitcoin and crypto extremely puritan in ways that nothing else can live up to.
Bitcoin have had several booms and busts. Each time it crashed it found a new higher floor. This has been going on for more than 12 years now.
s/scammers//
also, not anonymous without huge effort and deep expertise.
exactly what money of the future is supposed to be.
want reversibility - build a company that offers it by taking on risk. want any other service that modern financial system provides - build it. doesn't have to be baked into the currency especially with all the destabilizing levers that come with those features.
I think it's incorrect to the of crypto-currencies/etc as heading towards some sort of equilibrium.
>>"Check out meme stocks a few years later. Remember, all this stuff is zero-sum. For every winner, there has to be a loser."
I think this is similar to the mistake of the last 4 decades' monetary/macroeconomic theory and practice. Expecting that inflation/default would ultimately balance/equilibrate rising public debt. Well... debt rose for decades while inflation remained much lower than it had in earlier periods.
Same here. Sure, the equilibrium price for bitcoin may be zero. In that case, for every winner there is a loser.
And so what if criminals are using it? It's just like cryptography: you can't choose who it protects. If anything, the fact criminals are using it strengthens its value proposition because it means it works. KYC/AML are just the financial version of global warrantless surveillance and should be opposed on principle just as strongly as we fight for our privacy on every other front. If that makes life a little harder for authorities then so be it.
Technology is not what makes Uber, Airbnb, Booking.
It's a bit like playing with a programming language in a sandbox that has (1) has no I/O functions[1], and (2) has enormous costs associated with even the most basic of computations. Ok, it's not like that; it is exactly that.
Sure, you could build a crypto toy and convince some suckers to transfer some of their wealth to you, but calling it an app platform or the next evolution of the web is definitely a stretch. I sincerely wish that wasn't the case (I'd love to find an exception), but that's what I've come to conclude.
[0] Don't get me wrong, there's tremendous value in being able to move money around the world without the blessing of governments and central banks!
[1] Any interaction with entities outside the blockchain require oracles, and at that point, you might as well throw away the other benefits of being on a blockchain.
i am not even a person who is a fan of blockchains (since they are mostly poorly designed, unfounded, etc)
I've been seeing this claim for years now. It's gotten quite old.
If the data on chain becomes valuable enough, an ecosystem of open source, auditable programs operating on it seems powerful to me.
And yeah tx fees are facemeltingly expensive right now, but scalability tech is making gradual progress.
There are I/O functions - oracles like Chainlink which put real-world data on the Blockchain. Those can also be further decentralized or at minimum used only for services where you have to trust a centralized entity without having to exit the Blockchain just for that. Those already enable me to e.g. quickly bet on TSLA via synths with money I have in crypto without cashing out and going through a broker.
>(2) has enormous costs associated with even the most basic of computations.
On one of the chains (Ethereum) but there's plenty of other popular chains with much lower costs.
There are non-EVM solutions as well like Solana, which has substantially higher throughput while transactions cost a fraction of a cent.
Try out other chains than ETH before ruling out web3 imo. There's a lot of engineering and incredible products outside of the main ethereum ecosystem which is being masked due to ETH's scalability problems.
There are also standalone computation solutions that are under development such as Truebit, which if successful, could allow for smart contracts to execute complex calculations off-chain, avoiding both the increased gas fees due to complexity, and bypassing the gas limit altogether.
Edit: but I agree there are already ways Web3 things can be done, and decentralization can be done without blockchain - the question I think is whether this impressive engineering is better than the existing ways
BGP - as in for routers? I’m talking end user applications
SMTP - needs a server I believe, in any case there may be a way to craft and send emails on the cli but end users aren’t using that
What's true for SMTP also holds for BTC etc. Most users are just handing custody to exchanges, so crypto isn't really decentralized either.
Really, the way I look at this is that in the past few years we have had a lot of engineering talent to explore the space and come up with unique products and ideas that the web3 toolkit enables, and we'll continue to see growth in the space.
My first proof of concept dapp I made earlier this year was a scheduling application that allows for you to arbitrarily schedule something on another ethereum address' calendar, assuming that they have initialized their profiles and set their rates, using an escrow to handle all monetary interactions. I could then host my dapp on a file storage system like arweave or IPFS, paying one time for hosting instead of a perpetual hosting fee. It wasn't perfect but it was a fun proof of concept.
But yeah, I think we'll continue to see a lot of innovation in the space, and see some really cool products over the next few years. If you have any doubt, the fact that a company the size of Facebook decided to pivot their company, brand and all, towards metaverse development (which will directly be utilizing NFTs), that should be a signal that web3 is going to continue to evolve.
The only alternative is ethereum L2s. Avalanche, solana, etc are centralized VC chains that do not have the foundation needed to be the infrastructure of tomorrow.
Edit - It's really, really easy to see that a transaction on Ethereum is not even remotely worth the gas it charges today. I remember hearing ETH people trashing BTC transaction prices in 2017, but yeah I'm sorry, this is so beyond absurd I cannot support or recommend anyone use ETH as a layer 1 until it is actually a scalable chain. Not in theory, but actually works. Wasn't sharding and layering discussed in 2017? How much longer until it's actually usable? Gas price for minting a JPG the other day for me would have been $300. This isn't worth it in any world unless you are sitting on a fat stack of ETH you bought under $200. But then you should just sell it instead of actually using it. Don't you see the problem? Why do you think there's so many articles talking about how terrible Web3 is? It couldn't possibly be that people's first impression of the tech is on a financially impractical chain.
I like working in Solidity and think the EVM is great, and there's a lot of cool projects in the Ethereum ecosystem. But ETH is an unusable L1 for the vast majority of people until they solve scalability. No amount of decentralization dreams are worth it. Hell, you could even just use Ethereum classic if you wanted. It does everything ETH does because it's just ETH except they didn't have a centralized Ethereum foundation mutate the chain history because someone stole a bunch of money from them and only costs like $50 the last time I checked. If you care so much about decentralization shouldn't you like the chain that didn't have it's history changed by a centralized organization?
If you really want the most decentralized network possible, Bitcoin is it. I haven't looked into the taproot update too much yet, but maybe it'll be actually supported before ETH scales at this rate.
The idea is that users will onboard straight to Layer 2 and stay on Layer 2. Layer 1 will only be used by protocols and extremely important transactions like nation-state transactions. You'll also be able to move between L2's via bridging protocols like Hop.
This isn't just Ethereum BTW. Other chains are moving to layer 2 rollups because that's just how blockchains scale. Ethereum is getting a lot of shit because it's dealing with unprecedented demand and it refuses to cut corners on important things like decentralization. Other chains will have the same fate if they grow large enough.
I hope that the ETH vision works out because right now it's kind of a clusterfuck tbh. But until the planned vision is not theory and is fully realized, I think it's absurd to refuse to work with other L1 solutions like Solana simply because Ethereum has a large head start on decentralization. I think that if people try some Web3 apps on a chain like Solana or Avalanche, more people would be excited about the potential that Web3 can bring. Instead, we have people blindly yelling about how NFTs are bad for the environment or whatever nonsense, or that it cost someone $100 to move $50.
And regarding using ETH for nation state transactions, you can simply just use BTC for such important transactions. It's more decentralized than Ethereum and is just going to continue to decentralize.
Really though, unless these transactions become more obfuscated crosschain this ETH ecosystem feels like an over engineered nightmare on a chain that couldn't scale. I keep hearing from ETH maximalists like you that this is the only way, while hearing it does not have to be this way from your direct competitors.
Take Solana for example. It takes a powerful computer with 128gb+ of RAM just to run a Solana node. You can run the ETH software on a raspberry pi.
High hardware requirements means fewer people can afford to join the network. This makes Solana more centralized. They also do some sketchy things. For example, in proof-of-stake algorithms the nodes vote on the next block. Solana counts votes as transactions which inflate their transactions-per-second numbers.
The Solana network has also been taken down by a software bug. This is much less likely to happen with Ethereum since there are multiple, independent development teams writing Ethereum client software. A bug in one client will only take down part of the network but not the whole thing.
Let's take another popular competitor Algorand. With Algorand they have two types of nodes relay and participant. The relay nodes take care of consensus. However, you have to send in an application to the Algorand foundation just to be allowed to run a node. There is not a lot of info on relay nodes but apparently the harware requirements are non-trivial.
Cardano I don't know as much about. However, there has been some debate over whether it's PoS algorithm is too similar to DPoS with similar vulnerabilities. Also, the founder of Cardano, Charles Hoskinson, is a known psycho and liar. This isn't just my opinion, just google him.
Polkadot has parachains which is kinda like sharding. However people are also developing Layer 2 rollups for polkadot. This helps prove my point that layer 2 isn't just an ethereum thing.
I don't really have issues with Bitcoin on a technical level, although I think they are too slow to change and adapt. Bitcoin also has multi-dollar transaction fees just like Ethereum which helps prove my point. They are also looking into layer 2 with the lightning network which, again, helps prove my point.
Overall, I really don't see any compelling alternative to what Ethereum is doing. Other chains are starting to look into similar Layer 2 solutions. Other chains are cutting corners to boost their transaction-per-second numbers. And other chains are run by questionable folks.
I'm an applications developer - to me the most important things are lessened complexity, performance, and usability. You can certainly use chains like Polygon, which I might do in the future. However, from my viewpoint, the more complex the ecosystem becomes, the less likely it is to achieve widescale adoption unless there is a lot of masking of the underlying complexities. I've been interested in crypto for years, and been in the space as an engineer for about 6 months, and cannot keep up with how complex the Ethereum ecosystem has grown and how these chains scale. If I cannot keep up, there is no way I can expect for people who've never even touched crypto to be able to wrap their heads around it. I do know that there are efforts to mask crosschain EVM interactions, and personally haven't tried them out too much yet beyond standalone bridges like Synapse. If these projects work out and a year or two from now the ecosystem's complexities are masked, that is fantastic.
For me, I will happily take the tradeoff of making it more difficult / costly to become a validator (in the case of Solana), with the huge performance improvements it provides compared to EVM. While the cost of hardware does mean it is more centralized to entities that can afford to run a Solana validator, to me it is not a concern. It's still decentralized, albeit not as much as Ethereum. I was skeptical of Solana at first until I used it as an end user and am quite happy with the experience, there's a gigantic difference between a 1-5 second transaction time vs 30s - 1 minute (or higher, if you submit a transaction while there's a sudden dip in gas price). I've had transactions stuck on ethereum for an hour and a half because the gas price metamask suggested was too low, there was a 5 minute window I submitted my transaction where the average gas price was super low. Same with Polygon, I've had a transaction stuck in a processing queue for half an hour.
These interactions to me have driven me to look into non-EVM solutions because it truly leaves a bad taste to have to wait helplessly on ETH to process these transactions. Hence, Solana's throughput and promises that they will not need to rely on L2 solutions to achieve scalability (whether that is true is to be tested by time I suppose) are incredibly attractive. It being down for a day was bad, yes, but the mainnet has only been live since last year and is still in beta, and has only happened once to my knowledge. I will still take that downtime given the incredible performance the chain provides. And if it is true that Solana will not require L2 solutions to scale in the same way ETH has, then it's even more attractive to me as an app dev. I think it's likely to be a lot easier to convince the average person to use a platform like this, compared to a complex ecosystem which is multichain only to allow for scalability.
I definitely understand that to a lot of people, decentralization in ETH is the number one driver. However, I do want to emphasize there are certainly reasons to use a chain like Solana, despite having a lessened degree of decentralization.
Input: User identity, money.
Output: Digital services, site subscriptions, digital assets, in-game items, NFT's representing real world assets held by trusted companies (wine, event tickets, tokenized securities).
None of this requires oracles and exists today.
Your mistake is thinking that just because the base layer is decentralised that we're somehow not allowed to connect to companies we choose to trust, just like we all already do.
Then it becomes interesting because there's a programmable market for these assets/services that didn't previously exist because the underlying value was not represented in an exchangable form. The outputs are also inputs.
Ethereum is the trustless, standardised substrate on which trusting parties can interact.
HackerNews will continue to fail to see the utility of this system for years to come until it's mature and undeniable. It will be an interesting case study into how experts missed the potential of emergent technology in the same way we look back on yesterday's commentators not realising the disruption of Amazon or the internet.
As to your second point, it's unlikely the end user will ever want to transact on layer 1. Layer 2 technology is making steady progress. See l2beat.com for examples.
This means both parties no longer need any relationship between the initial sale and claiming the eventual goods. The winery will simply be able to wait for someone to return with proof of ownership at a later date.
If the winery gave out certificates or built some app it would need to verify and maintain that. With an NFT there is very little work on their end.
Ultimately this turns these type of products into highly liquid assets. This will greatly increase their value to a potential customer and the initial purchase price. Which will make the winery more money for the wine it sells.
This can effectively be done with anything that can be claimed at a later date after initial purchase.
("Continuously" is probably not the right word, unless you are envisioning the rather unlikely case of this transfer happening on an annual basis!)
If the wine cellar wants their customers to trade wine, I'm sure a centralized ledger based on a SQL DB would be much easier and cheaper to implement and scale to millions of transactions.
Can I trade my wine at 5pm? Ah no, European wine stock market is closed then.
When you really 'own' the ticket, you can trade it anywhere you want, without being dependent on some exchange that's only open whenever and takes some fixed cut without any competition.
that's why rules around potentially addictive things are needed.
When you allow people to write their own smart contracts, bugs will happen. This can't be fixed, only dampened with a weakened interface to the blockchain.
When a bug in a smart contract happens you may now have a dispute, across borders, over the intent of the smart contract and the actual behavior.
Who handles this situation?
Issue is blockchain tech doesn't actually solve anything
There are dozens of popular mobile wallets that make viewing, sending, receiving coins / nfts trivial.
The problem that it solves is that there is no need for you imaginary ledger company to exist at all in a blockchain model, the winery cuts out a rent seeking service and the user gets a more secure and portable product.
Automation isn't just going to hit manual labor, blockchain and web3 will allow for the emergence of fully autonomous "companies" that operate via smart contracts.
If I hold that contract and have to take delivery of rancid wine instead of fresh wine like I imagined, what's my recourse?
Basically how do you ensure the state of the real-world asset remains fixed throughout the duration of the contract?
So for actual wine, right now, you have no recourse: you bought the risk. I don’t think this would be any different with NFT-wine. Now and in the NFT case you already paid the winery, you owe them nothing more.
Now if they cheat and give you water instead of wine… I guess whatever real-world contract says you can exchange this token for wine would say which wine?
Most likely the first N wineries to do this would do it as a publicity stunt, and if it proved useful then there would be some precedent. Much of the wine world operates on reputation and trust.
For the vast majority of physical products that are not like wine: you’d need real-world contracts to back your smart contracts and the latter would only be useful for decentralization of the secondary market.
What are we actually inventing here?
Ah. You mean "a centralized entity creates a centralized way of providing and verifying ownership of wine"?
1. How does blockchain factor into this?
2. As always, descriptions like this betray how little crypto-peddlers know about real world. Buying future wine has been a thing as long as there has been wine https://www.winespectator.com/articles/buying-futures-3495
Of course I could just transfer directly to your Ethereum wallet. But why do that when I could explain you need to sign up to 'winespectator.com', I'll email them to arrange the ownership transfer, and if you're trading that weapon let's both sign up for a pre-agreed escrow service online and pay them a commission to arbitrage. How many forms do we need to fill in, and who is processing that data? I currently own my crate anonymously- only the person who eventually burns the token will need to provide details to the company for delivery.
As always, descriptions like this betray how little engine-peddlers know about horse breeding. Managing a stable has been a thing as long as there's been horses.
You truly believe this can't be done without blockchain?
> You're the 1000th customer to my site.
You truly believe you can't track customers without blockchain?
> Or maybe you want to trade me for that in-game weapon.
You truly believe it's impossible to implement in-game trading without blockchain?
> Of course I could just transfer directly to your Ethereum wallet.
The only thing you could transfer is some meaningless numbers. What makes them meaningful is some central, trusted authority that will accept these numbers as proof of something. But then, since you depend on that authority to verify this... you don't need blockchain.
I used to survive without a cellphone. It wasn't hard. You just called your friends when you and they were at home.
The popularity of centralised exchanges vis-a-vis blockchain wallets suggests the opposite is true.
In which shape, way, or form is it more practical with a blockchain?
The anti-blockchain narrative on here is constantly attacking the strawman of "literally everything must be decentralised".
I'm arguing that a decentralised medium of exchange through which separate points of centralisation can interact is still a useful construct.
You're comfortable with your assets being codified in a thousand different databases in a thousand different representations but the concept of having a common database representing them as "meaningless numbers" is suddenly unacceptable.
To reiterate: The only thing you could transfer is some meaningless numbers. What makes them meaningful is some central, trusted authority that will accept these numbers as proof of something. But then, since you depend on that authority to verify this... you don't need blockchain.
It hasn't. It standardised the transfer of otherwise meaningless numbers, that's true.
In order for your winde order to work, a centralised, trusted party has to verify and accept those numbers, and say that, yes, they represent something meaningful to them.
The same goes for every other example. "Want to trade something for an in-game weapon": This only works if that game a) provides means of trading in-game items, b) can verify that a number in the blockchain actually represents an in-game item etc.
Without countless external entities agreeing to and cooperating on the meaning of this data this "standardised transfer" is literally meaningless. And these agreements will go as well as they already do in reality. How does blockchain factor into this?
> if you're trading that weapon let's both sign up for a pre-agreed escrow service online and pay them a commission to arbitrage.
Now who's attacking straw men.
Ah yes. The market of on-chain assets. Self-reinforcing, self-congratulatory mass speculation and scams. There's an abyss between this, and even wine futures.
>It hasn't. It standardised the transfer of otherwise meaningless numbers, that's true.
Sure, but that alone can have value. The idea being that people have already built entire trading platforms around tokens, fungible or not. Somebody who wants to enable easy trading of some asset (or futures contract or whatever), hoping for improved liquidity, could see using the platforms built for crypto token trading as much easier than trying to build their own exchange. Especially if it is anticipated that physical settlement demands will not be especially common.
To be more concrete: It might be simpler to get your single-vineyard wine futures up and running on crypto than trying to get it listed as a new contract type in a traditional futures exchange.
Now sure, nothing about getting your weird futures contract into some form of widely used exchange requires blockchain technology. It is merely leveraging the existing infrastructure others have already built around crypto.
This is not too dissimilar from the various ways people have found to get say precious metals as listed items on stock exchanges, despite traditional commodity exchanges or brokered OTC trades also existing. Obviously nothing about speculating on (or maintaining market liquidity for) precious metals requires a stock exchange, since we have those other ways of trading. However people have found getting access to the stock trading market to be worthwhile.
Obviously settlement for physical goods is a centralized processes (or possibly a somewhat decentralized process relying on courts and contracts). This is equally true for any exchange, crypto-based or not. The actual order matching process somewhat separate from the settlement process in traditional exchanges too.
I certainly would not argue that similar platforms could be set up not reliant on crypto in any way, and those could be superior (although network effect problem tend to plague attempts to set such things up if any sort of scale is desired). Most crypto stuff is still extremely overhyped, and a lot of interest in crypto seems to stem from crazy speculation, or people trying to avoid their government in some manner. (The latter is not just things like drugs, arm sales, or money laundering. It also includes more innocent reasons like people in countries with failing economies being terrified that their government can just seize the contents of forex accounts, stock exchanges etc, making their attempts to hedge against local economic collapse potentially futile. But governments cannot readily seize crypto wallets the same way, at least not unless you leave your holdings at some exchange.)
Yes. It may have perceived value. I mean, people spend money on useless skins in games, and perceive those as having value.
> Especially if it is anticipated that physical settlement demands will not be especially common.
Of course, you're buying wine futures and you're hoping that no one will demand the actual physical settlement of, you know, delivering you the actual wine. Sure. That's what NFT scam is all about.
> It might be simpler to get your single-vineyard wine futures up and running on crypto than trying to get it listed as a new contract type in a traditional futures exchange.
Call me when
1. might becomes is, and
2. it actually requires blockchain, and
3. has any applicability on the real world (like enforcement of contracts)
> Obviously settlement for physical goods is a centralized processes (or possibly a somewhat decentralized process relying on courts and contracts). This is equally true for any exchange, crypto-based or not.
Your so close to getting it.
> like people in countries with failing economies
I wish crypto-peddlers would stop pushing this extremely stupid narrative.
The interesting thing is that if you can sell the futures as (for example) NFTs then you put them into this Wild West of crypto enthusiasts where
1) All kinds of unpredictable things might happen to the token between sale and redemption! And
2) The culture of crypto enthusiasts might very well lead to much higher prices for your wine than people who actually know about wine think it’s worth, cf. Beeple.
Either or both of these things might motivate a winery to give it a shot, tokenize a few thousand future cases of their weakest plonk, and see what happens.
Just because your market works fine without the blockchain doesn’t mean there’s nothing to be gained by trying.
On the other hand, it might be illegal because: alcohol.
What's the wine equivalent of apes and punks? :)
Today the way this works is usually with a ticket or a receipt. The guy with the email receipt on his phone gets the food he ordered. The guy with the ticket gets into the concert.
There IS a secondary market for event tickets. Legitimate transfers frequently happen everywhere else e-commerce happens. Questionable transfers happen on the street in what I assume is low volume.
https://www.winemag.com/2019/10/01/a-beginners-guide-to-wine...
I’m not saying blockchain makes this any better, except in one sense: a lot of people with a lot of money are enthusiastic participants. If I had a winery you bet I’d be selling wine future NFTs, just to try and get the price bid up.
What is someone steals my NFT? I would expect a court would say the wine is still mine, so the NFT doesn't represent ownership any more.
What is someone loses the private key to their NFT? Do we just throw the wine down the drain? Again no.
https://en.wikipedia.org/wiki/Bearer_bond
IIRC with wine futures you have to either collect your wine or pay for its storage, if you abandon it then at some point (per the contract) it belongs to the winery. At least with wine I think there is a lot of precedent here, there are norms you’d want to fit your crypto doings around.
Personally, I don't want the world to go back to "Bearer Bonds", and given they were banned I'm guessing the US government (and I imagine other countries) doesn't either. However, I'm glad to hear a basis for NFTs.
Admittedly, there is little to program, but we can imagine all sorts of auctions, games (tokens becoming playable items in a virtual world, but still exchangeable for real bottles), etc., around those tokens.
The key feature of cryto is around connecting trustless entities. Once you centralize on a physical product stored in a trusted location by a trusted party you lose point involving cryto. Who cares how secure the token is when the winery can switch labels?
That’s a little like saying “why would the winery need Apple to make computers for them, the winery could just develop their own computer hardware and software.” It doesn’t make sense for most wineries to develop its own online exchange system, and the fact that it’s technically possible for a winery to develop its own exchange system doesn’t mean that all existing exchange systems are pointless.
If the central party charges 1% transaction fee, it's a 1% transaction fee. If they only open on weekdays, you can't trade in the weekend, etc.
When it's your token, you can trade it wherever you want.
- first, the token has to be usable by any exchange it's traded on. Different blockchain technologies may not be compatible. (For instance, you can't move an NBA Top Shot NFT from Flow to Ethereum.) This is a solvable problem from a technical standpoint, but given how fiercely ideological different blockchains are, there may be non-technical stumbling blocks that arise here.
- second, there has to be an "off-the-blockchain" legal connection between the token and the object the token represents, something that's recognized legally as a "bill of sale." This isn't a huge hurdle and I'd assume the purchase of the token includes language that covers this, but that legal language might include arbitrary limitations, such as stipulating that if you don't use their preferred exchange they'll charge you extra fees, or even restricting the token to specific exchanges entirely.
This is an issue that I think a lot of "smart contract" proponents just haven't come to grips with yet: when you read "contract" in terms of a blockchain, think "API contract" rather than "legal contract". A cursory search suggests there are Flow to Ethereum NFT converters out there, but if you run your NBA Top Shot NFT through one, does the NBA still consider it valid?
- third, this example is specifically tying the token to a physical object, which adds other complications. You may be able to successfully trade your token on Sunday, but the wine store may still only be open on weekdays.
Ethereum would give it another payment option for customers. But also another payment option for suppliers. Could open a new hidden supply chain where a middlemen is not required.
It doesn't solve physically shipping but it does resolve one problem. Prompt payment resolution. A check can take 7 years to bounce.
The longer I live the more insane the current system feels. I really don't understand why we put up with this stuff.
> None of this requires oracles and exists today.
While I only mentioned oracles specifically, I should have clarified: I'm referring both to oracles (making queries to external data sources and providing the results to the blockchain), and to external code that interprets data stored on the blockchain and acts on it. I'm not sure if there's a name for it in common use (I'd call it something like a "performer"). Either way, the issue is the same as that with oracles; whatever decentralization or smart contract guarantees you had on the blockchain disappear as soon as you have external code interpreting blockchain data to then make decisions in external systems (digital services, site subscriptions, digital assets, in-game items, NFT's, etc). If oracles provide inputs to the blockchain, these non-blockchain pieces of code provide the real-world outputs.
Example: even if somewhere in the blockchain I can prove that I should own something in the real world, it's still up to your site/service/app/whatever to honor that through external code. If it doesn't honor it, I'm stuck relying on traditional legal means to intervene, just as with any other standard contract. That legal system – as flawed as it is – tends to work for contracts written on the back of a napkin, stored in a SQL database, or coded in a smart contract (though that's probably the most questionable at the moment).
If I'm wrong, please correct me, but I've been interested in this stuff for a while, and I haven't found anything that actually solves the fundamental problem of oracles and the interpretation of blockchain data. That problem is important because it undermines many of the primary selling points of smart contracts.
> Your mistake is thinking that just because the base layer is decentralised that we're somehow not allowed to connect to companies we choose to trust
So, honest question: why care about the base layer being decentralized if in the end, you choose to trust those companies? What did the decentralization do for you in that interaction?
Answer: You have a cause of action for breach of contract. In UK/US/Aus/Canada/etc, you can "call" / take it to a court, and they may grant you the remedy known as specific performance, which is essentially a court order to do the thing that was promised. This remedy is available because the thing to be done was the transfer of property. The remedy is part of the law of Equity, a set of doctrines and principles that has been in development since the 13th century. It got its big break with people complaining to the King of England that "the law is too harsh, it should be fair!!!" and went from there, eventually becoming a huge body of law about exactly what it means to make the law fair, what principles to follow when doing that, and how to deal with the many categories of unfairness that come up regularly.
You might look at the DAO hack in this context and think, the Ethereum folks really threw out the baby with the bathwater when they decided to invent a new financial system that didn't have to play by the existing rules. Many people talk about ICOs etc taking us back to the 19th century and the Wild West, but smart contracts take us back hundreds of years further back, with echoes of literally the first people to complain to the King demanding a writ to remedy the injustice of the Common Law. If since then blockchain enthusiasts have come up with something better than Equity, I would ask that they let us know.
Main message from the people in The System to you: We have thought of all of these problems before, and we have solved them all before, and if ye who have spurned the legal system come running for help, ... we will actually welcome you with open arms, like we aspire to do for everyone else.
On the contrary, it's a strong argument for using those methods of establishing and recording ownership that are blessed by the relevant local legal system (or, sure, ultimately by those who control local violence, if you want to go all the way down). It's the reason why you get lawyers still insisting on using faxes rather than emails.
A lot of important, trusted systems often don't have particularly sophisticated security in every single layer. Homes and mailboxes have simple locks. Online transactions have fairly basic digital integrity checks (ie. you connected to a bank's server using HTTPS with a secret cookie). Credit card chips and card readers are riddled with vulnerabilities. We still sign legal documents with like, pen and paper and a scribble that even children can forge.
These systems are still trusted because trust isn't established by infallible recordkeeping processes, it's the humans and the organizations and the written/spoken promises we make that matter. A legally recognized scribble is as trustworthy and useful as a foolproof NFT. Crypto's complexity adds very little in practice.
You are confusing things here.
With enforcable, what is meant is anything that can be programmed into a contract and be executed will be executed (enforced).
That can as an example be someone raising a million dollars for a crypto game by offering 10000 tokens for 100$ each. The million dollars are going to be unlocked in phases. 50k for proof of concept, 250k for alpha etc. Each phase have to be approved by the toke holders. If they dont agree that the proof of concept is good enough they can vote the unlocking down and there is nothing the game developers can do about that. That is what is meant by enforable.
I can't help you see something you don't want to see.
Because, quite honestly, I don't what your claim is. You're saying that a blockchain can "enforce DIGITAL" which is a meaningless sentence. Are you claiming that you can write a program and execute it on a blockchain? Sure. I can do the same on my computer. This is not an example of enforcing property rights, which was what we were talking about.
how?
it's all based on cryptographic keys, if I stole the keys, how can blockchain block me, without someone intervening?
This is only a problem if it's in fact enforcable. There are many ways to solve the stealing among others multisig.
the only thing the system can do is ask more and more from their users, but there is no way to know if the transaction is good: if it looks good, it is good.
so it can't enforce anything on its own.
a CC payment can look good, but it can be reversed because there other other channels, outside of the CC circuit, to prove those transactions are to be considered fraudulent.
There is no such mechanism in the crypto space, so basically they are good unless you have an issue that can't be solved by the chain itself.
Because the chain can't enforce anything.
p.s. note that I wrote the keys (plural) not the key (singular)
basically your answer is "have a multifactor authentication" but if that is broken by some malevolent actor, I can go to the police.
There's not true fro Cryptos, if they are stolen they are lost.
nothing you can do about it, except begging
https://www.vice.com/en/article/v7dv4a/hacked-cryptocurrency...
"A CC payment can look good, but it can be reversed because there other other channels, outside of the CC circuit, to prove those transactions are to be considered fraudulent.
There is no such mechanism in the crypto space, so basically they are good unless you have an issue that can't be solved by the chain itself."
This is a feature NOT a bug. It comes with it's own consequences of course but that's exactly what makes it enforceable just like physics enforce its laws.
You are still not understanding what is meant by enforcing.
You seem unable to form coherent ideas.
The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key.
https://www.nytimes.com/2017/12/19/technology/bitcoin-winkle...
Imagine something like Robocop hooked up to the EVM, if you put your RealID in the escrow contract and then the ubiquitous camera network is unable to verify that you honored the transaction, well then you have 15 seconds to comply…
We're not that far from having a DAO that can bid on zero-days and use them against a list of targets of its choice. If a DAO can make POST requests it can launch exploits. A script kiddie without the kiddie.
No, there's no utility in that, if ultimately enforcement relies on an entity that needs to be trusted and can override the blockchain.
> A centrally managed registry would never be suitable for this task for a multitude of obvious reasons.
Centrally-managed registries are already in use and have been in use for a long time, they exist in every single country, and entire markets depends upon them, but somehow they "would never be suitable for obvious reasons"? They have already been shown to be suitable, what on earth are you talking about?
I'm talking about a global, universal API layer supporting standardised contract enforcement and value transfer between applications. A centralised implementation of this would clearly be a bad idea.
If you don't see utility in this I don't know what to tell you.
What does that even mean? How is a global API going to support the enforcement of a rental agreement? Or of a bond indenture? Who is actually going to enforce the contract? And what is the role of a global API in that? And what do you mean value transfer between applications? You want to transfer "value" (like a bag of rice?) between computer programs??? None of that makes the slightest sense. Meaningless gibberish intended to fool gullible idiots into thinking that blockchains are some kind of disruptive technology that is going to turn everything upside down. Nonsense. It's a pump & dump scheme, and little else.
Value can be transferred between programs through Ethereum. The tokens you mentioned have value, because people are willing to exchange them for money. So it's not an inaccurate statement. Web3 provides the standardised API through which these programs can communicate.
> Whether they have value is irrelevant as far as the technology itself is concerned.
I'd argue that it's not irrelevant. The whole point of the technology is, at risk of more 'marketing buzzwords', a decentralised way of moving value around (moving digitised tokens which have value on the market, around).
I had a look at your post/comment history. It's almost exclusively cryptocurrency focussed. I'm curious why you spend so much time discussing a technology you clearly don't think has a future.
Why are my comments focused on cryptocurrency? Because I like to discuss cryptocurrencies. I have thought a lot about them, and I think it's an interesting phenomenon from an sociological point of view. Plus, I like arguing with people who I think are wrong.
But the point is that the centralized system that managed property deeds does not require an absolutely gargantuan amount of computation to be performed to do a basic transaction. And since I already need the state to enforce property rights, why not have the state also be involved in the recognition of who owns what?
My trust extended only as far as a single interaction/asset. The rest of my wallet and the assets within are completely unaffected. A company might rip me off, and I might have legal recourse, or I might not. Such is life. We won't ever be able to decentralise away all trust. A single entity isn't able to manipulate all my assets, or print more tokens, or confiscate my money. The network is solid even if all the 'performers' are not.
To build a centralised 'universal API' on which applications can communicate and exchange value is a terrible idea. Who would own it? But such an API is surely a useful technology.
We do need reliable oracles for external data feeds- prices, weather, news... can all feed into contracts for extra utility. This is a hard problem being tackled by ChainLink and others.
All the arguments here are tech stack obsessions instead of looking at real world use.
HN users earn their living by being the best at what they do and choosing the best tech stack is a part of it, which is why they don’t understand blockchain. It’s an inferior tech stack, but it beats every other stack on game theory, which is not the usual purview of the average developer. Hence they reject it as “inefficient” because they keep looking at it through the prism of tech instead of society.
For society trustless distributed systems are better, but if you keep looking at it from a tech/throughout perspective, you’ll never get it.
Just like ~2008-2012, ~1999-2002, ~1994-1996, ~1982-1986, etc.
On the technology side: distributed Byzantine consensus is an open problem with some promising prototypes. It would have very cool use cases: remittance is huge, ENS is fucking cool, Brave/BAT is cool, NFTs for e.g. concert tickets or restaurant reservations or whatever would be cool, IPFS is cool.
The technology isn’t there yet. POW doesn’t scale. Ouroboros Praus/Genesis needs a clock oracle (see: Spanner), Tendermint/Algorand/PBFT are too slow (global 3-phase. commit, right). Solana/ICON/etc. are expensive cloud databases. L2 rollups/Lightning/sharding are “kick-the-can” exercises. But it took time to go from the Paxos paper to Chubby as well, maybe someone solves it.
Yeah, it’s mostly scams today. But it’s always been mostly scams. Microsoft bundling IE was a scam. Pets.com was a scam. Path was a scam. Uber and AirBnB were (are?) illegal as hell. Third-party cookies powering Google and FB is a scam.
When the dust settles some amount of this stuff will have been worked out technically, legally, and financially, and the rest will be “lol do you remember when…”.
This time some people will be rich who neither had rich parents nor knew Bay Area royalty, but YC wasn’t always part of the machine either. I’m sure Goldman and YC will eventually embrace those people with open arms.
I for one look forward to us collectively getting our knickers untwisted about it so we can go back to rewriting every calculator app on earth in Rust (I kid! Don’t hit me! Doofy Haskell is better than no Haskell!).
;)
I think Web3 will be a thing… we just don't know what and how exactly. It's like going to a very misty field, hoping to find something there. We'll find _something_.
But as far as I understand it's all some variation on "we're going to anchor something on the slow, expensive, trustworthy chain that represents a promise that we're going to settle stuff over here and report back to the big, slow, expensive but trusted chain".
Often that anchor is some variation of a multi-sig custodial wallet with a bunch of blockchain bigshots on it, i.e. a fucking bank. If people want to evade banking regulations that's their business, but calling it cryptographic novelty is stupid.
Sometimes it's "we're going to settle transactions on some shard, so it doesn't matter that it's somewhere between a slow wristwatch and a fast potato in terms of throughput", in which case the people I want to transact with need to participate in that shard, in which case you've got Metcalfe's Law working against you: you're on the wrong side of the polynomial. I want to buy some shit from merchant $FOO but they're not on my shard. Damn, guess I need to route some $COIN up through the real chain and down to the shard where my pot dealer is.
The point is that if the thing you were deferring the transaction onto was both trustworthy and scalable, then you'd just use that. It's this non-terminating recursion where each invocation of the Y-combinator kicks off a fat token offering. Which is why the Lightening whitepaper is now $ZILLION pages long when it started at 18: every hole they patch creates 3 more.
IO-HK is somewhere south of RenTech and somewhere north of NASA in terms of the Nobel laureates they've got working on Ouroboros [BFT|Praus|Genesis]? and they can't get it to work: ADA is getting pushed around a warmed-over Tendermint still (really fast potato).
The ParityTech people seem to have learned the hard way that Google barely made it fly with friggin cesium clocks and satellites in a non-Byzantine setting when they put together BABE [BADASS|SASAFRASS|WHATEVER]? and slapped GRANDPA on it. Ethereum v2 gets delayed with roughly the same cadence as viable fusion power (but Casper the FFG!).
If someone knows how to do a chain that's truly secure, truly decentralized, and doesn't cost $500 to buy a $5 ENS domain then I missed that paper.
If you know of a project that actually works I want in on the governance token. It'll make BTC look like a victim of hyperinflation.
But as you say, one day there might actually be real value here. But here's the rub, this is all decentralized, and thus anyone at any time can create their own chain, and many have already done so. And these technologies might just not need blockchain at all, for instance IPFS looks likely to lose to Torrents.
So why would I buy a piece of an existing chain, when I can just wait for the technology to be created and spin it off on a new chain, for a price of $nearly_free instead of $massive? This is not the same as investing in Google or Amazon in 1999. If I am buying into the coin for the utility and not for the hype, I would never touch a mainstream coin. If a AAA game were to create their own NFTs, they would do so on their own chain. I would generate my own chain to confirm my own identity.
No coin that currently exists has a long-term value above $0.
There is clearly an asset bubble in cryptocurrencies. But I'm borderline weirded out by how singled-out the crypto asset bubble is compared to say, the US equities asset bubble, or residential real-estate asset bubble, or any of the other places that we're warehousing major currencies inflation. It doesn't really matter if you look at `SPY`, or the Qs, or just one of the FAANGs: from right before the COVID overreaction to the present day a dollar (which hasn't really slipped all that badly against any of its easing-addled peers) buys you about half the amount of Big Tech as it did on Jan 1 2020. Nothing Earth-shattering has happened to the business models or 5-year outlooks of any of these companies. The smartphone market is every bit as saturated as it was 2 years ago. The FB/IG feed ad load is no less maxed out, Waymo isn't running 10MM pilot level 5 autonomous taxi rides across 50 cities in 20 countries, and Elon Musk sure as hell hasn't colonized Mars (at least his stated ambition justifies a PE ratio in the hundreds: he's on record that he's trying to own a planet).
So I'd argue that Apple stock hasn't 2-3x increased in the last 2 years in any other way than dollar-denominated.
I'm the last person to try to sell you a cryptocurrency token, I don't give a shit what the price of ETH is. But just because Gamestonk or `ETH` is the lottery ticket available to people who don't know a guy who knows a guy who knows Ron Conway doesn't mean that going to school, working hard, and saving a quarter of every paycheck is going to get you anywhere in a casino economy where the CPI doesn't seem to move with the cost of healthcare or education or any of the shit that's really eating the working person alive (at least in the US).
`BTC` and `ETH` may turn out to be worthless tulip bulbs, it's not even all that unlikely from a Bayesian standpoint, but the pervasive implication that the `/r/crypto` people are at a casino and the A16Z people aren't is absurd. The A16Z people can just afford to lose a hand or two, and the `/r/crypto` people have nothing to lose.
Doesn't make em stupid.
You often see advocates of decentralization hail networks for being pro-immutability, battling censorship.
How does it deal with data you absolutely do _NOT_ want to be shared and propagated around? I'm talking about things like CP, terrorist media, fake news, scams/frauds, and what not.
An interesting possibility is that illegal content gets permanently inserted into a blockchain, which could make running, for example, an ethereum node very illegal.
I've heard this called a "pee in the pool attack."
Block chains like Ethereum and Bitcoin have one intrinsic defense: they don't support very large data objects. So that makes inserting CP problematic. But someone determined enough and willing to spend money could insert a really horrible image as a series of transactions.
Also if say CP is currently distributed through compressed archives even if they are PW protected it’s not like that 7zip then somehow becomes the illicit material. If you host the archive you are on the hook of distributing CP even if it’s encrypted…
Leaked encryption keys for example come to mind, but I'm sure there's other examples.
E: I realise after digging it back up it's what you said with encryption keys but maybe someone else wants to look at the link too or whatever
https://en.wikipedia.org/wiki/AACS_encryption_key_controvers...
They tried to censor the blu-ray key, but that survived 3 years before bitcoin was invented
https://www.theguardian.com/technology/2018/mar/20/child-abu...
This is precisely why they'll fail (aside from technological issues): the rank and file person on the internet does NOT want a Wild West when they go to visit a news feed. Hell, the average person doesn't even really like curated content. They want a chronological list of things they decide to be relevant and nothing else. Just look at all the complaining every time Instatwitter changes an algorithm and hides the method for sorting by most recent.
And what they don't know yet is that all these big companies, if they use this technology, they're going to use them in very focused ways to reward people and prevent them from abandoning their platforms. Because "free" has many meanings, but none of them are inherently exclusionary from corporate competition.
For example, IPFS "solves" this by allowing requests for takedowns per gateway. The upside of IPFS is that you can go after every host, the downside is that everyone knows what content you visit. The network still propagates the illegal content, so you end up with a witch hunt.
It's probably a good thing paedophiles haven't widely discovered IPFS+TOR.
Paedophiles discovered Freenet long time ago. Source: I took a look at TOR, I2P and Freenet years ago, and noped the fuck out.
This is similar to other technologies like cash, paper, and computers* which also don't, as technological phenomena, implicitly include censorship as a feature.
*it looks like consumer computing is moving away from general 'free' computing to ASICs from folks like Apple which likely will include built-in censorship features moving forward.
Ultimately, the relevant question is if the root layer of open data systems should allow erasure. There are good arguments to be had on both sides. If you feel that if we don’t have systems that are fundamentally censorproof, the net result will be an eventual all consuming global censorship regime in the limit given enough time, then there is little choice, however.
People should realize that writing a law on a piece of paper doesn't make it real or enforceable
It's a bit like cryptocurrencies and banks. Because it becomes such a big burden for banks (to prove that the money obtained by selling crypto is not related to funding terrorism, crime, etc.), many banks simply refuse service to customers dealing with crypto. Either closing accounts, freezing money, or whatever.
Perhaps this problem can be solved somehow, but the alternatives have their problems.
I think if you are a business you should choose technology that allows you to be compliant with the law.
Unless the law violates personal liberty, which GDPR does.
I am very curious if you can pinpoint what exactly from it violates personal libery.
It's a cookie cutter rule that restricts contract liberty to create more regimented social interaction.
Not the ones I've worked on... Flag as hidden and delete after some number of days is the best practice which I think (and hope) is commonly done?
Practices may vary by organisation and type of removal requests, but the claim that no removals occurs is absolutely false.
For legally-proscribed content, platforms will go to extraordinary lengths to remove not only the backing store but all possible CDN copies of content. This can ammount to millions or billions of items of content (multiple sizes and versions, replicated across multiple geographic locations).
Other instances in which UGC / USC (user generated/supplied content) have been removed are quite public, as with Google's shutdown and data deletion of its Google+ social network.
That is censorship. The correct answer is you don't. When you obscure evil, it propagates. When you shine a light on it, it disinfects. Awareness of the thing leads to discernment of the thing. Unless you think people are default evil, bad ideas will stay bad ideas without an intermediary forcing their will upon them.
> Unless you think people are default evil, bad ideas will stay bad ideas without an intermediary forcing their will upon them.
This is also not correct. People aren't neccessarily evil by default, but they are stupid and easily manipulable. Just look at QAnon for another example.
I know CP is bad and I have no interest in seeing it. However, I do also know that there is a group of people out there that do want to see it. Is the "anti-censorship" approach to just "shine a light on it" and let those people watch CP that's on the immutable data store?
This whole post doesn't just assume that people are by default good, it assumes that there are no bad people. That's the only scenario in which the proposed "solution" would work. Personally, that's not a bet I'm willing to make, or even entertain.
It's the same thing as any other infectious disease, really. If you don't do any covid prevention and hang out with a bunch of unvaccinated people in close quarters, you're more likely to find out if somebody had covid, but at the cost of potentially infecting everyone.
This is about reducing harm by reducing infections.
Your argument boils down to "oh well, now there's CP forever accessible because its on this immutable data store, but at least we now know that somebody wanted to post CP".
That doesn't make any sense for CP. It's not like people who weren't into that crap before stumble upon it and are like "oh, now this is MY THING."
What I'd propose is having a "known bad content" (as flagged by users/operators) list that gives node operators a rating they can filter what they propagate by.
For example: if you have A, B, C, and D ratings (A being harmless, D being CP), you'd get a self-policing network because node operators could say "I only host/seed B+ content." Very few people given the choice would even want to seed D-rated content (and if I'm wrong, then we have a much bigger problem at a societal level).
It'd be imperfect, but so is blatant censorship. Arguably this approach would help you to find the worst stuff fastest.
What you are proposing is just censorship with extra steps, it seems to me, where the operators are the censors. What's the point, other than making everything more complicated and difficult to work with?
In essence. Except it's by consensus, not by decree. That's my personal issue with censorship. One or a few people deciding "this is bad," which starts out with good intentions eventually gets abused and used to subjugate groups of people. In this design, it's voluntary. You can be on the network, but that doesn't mean your stuff will be propagated.
It's not. When you silence ignorant people, they get more radical and more willing to do things they otherwise wouldn't because they no longer have an outlet. Silencing a neo nazi forum increases the likelihood for "those f'ing j*s shut us down, let's get em!" behavior. And even if that didn't happen, it's far easier for law enforcement to surveil people planning violence if it's out in the open.
> Just look at QAnon for another example.
I know multiple people who went down this rabbit hole (one of them is still down it). And what I said above applied exactly when they started getting booted off social networks. Before then there was no plotting or aggressive stance. They just thought they were "on to something."
If so, they are ok with it.
Why is it normalized that all our communications are bugged and analyzed? This is not something that people should expect if there is going to be correspondence between the physical and the virtual world.
For what it's worth, this is changing as we speak. ENS recently had a very successful launch of a DAO [1] which will soon be in control of these contracts, therefore making it fully decentralized. It's also already impossible for anyone (not even the root holder, be it mult-sig or DAO) to revoke your ENS registration.
Also, NBA Top Shot is a very cherry-picked example. I'm not even sure I'd classify those as NFTs right now, given they are completely separated from the broader ecosystem and not yet interoperable at all.
[1] https://ens.mirror.xyz/5cGl-Y37aTxtokdWk21qlULmE1aSM_NuX9fst...
So far it's a case where I don't think the blockchain is adding any value whatsoever. Blockchain is just a poor fit if you're going to keep it locked down to one administrator.
Flash loans, arb bots, fully autonomous companies interacting via smart contracts.
Its really pretty fascinating.
Even the most widely accepted use case which is crypto-currency fails to break out of the theoretical value outlined in the different white papers. I own several crypto-currencies and there hasn't been a single moment in which I thought of buying something with a crypto-currency. I have crypto-currencies because I'm speculating in their asset class value, not necessarily because I'm betting on their utility.
Now, I know that crypto coins are indeed used in real service/product transactions, but I think there's a difference between the present economical use of cryptos and its potential mainstream use where cryptos can effectively replace fiat currencies in super wide economic settings.
I believe that Web3 would happen but I honestly can't see a clear trajectory for Cryptos, NFTs, DAOs etc to become effective instruments that can replace existing Web2 instruments.
In fact the reason why everything in Web3 feels like BS right now is because everything in this space uses Web2 distribution. People promoting NFTs on Twitter feels a little bit like someone faxing you a webpage. Owning the rights to a random JPEG is something that feels too abstracted from the present Web2 mental model and value proposition.
Again, I’m still skeptical about most of this stuff, but this one thing seems like a pretty good and somewhat practical idea.
And if you're letting someone else store the key, then it's just another form of "Login with X".
> doesn't seem to solve meaningful, mainstream problems yet
What you are proposing is actually a lot better than the tech we have now. If I ever lose my Google login and their customer service does not want to deal with me then honestly, I'm not sure what I'd do. I'd rather trust my friends and family to help me out than FAANG.
When my partner clicks on a phishing link, not only are they exposing themselves but potentially also my identity in this multisig world.
On the real, I think there are people who will want to try this if it’s made easy enough. Some people could try getting a name and keeping a wallet through a 3rd party, in which case they’re no better or worse off than they are now. But at any moment, if they feel the need, they could transfer that username to a cold wallet if they want to take control of their security. Or transfer it back to the third party if they later decide that’s too much work.
The cool thing about this is that it’s another option out there and it offers flexibility. For the record, again, I’m not one of those people calling this a revolution or “the biggest thing since the invention of the web”. I just think this one idea is kind of neat.
Luckily there's a way to have other people store your key without the key ever technically existing outside your own computer - https://app.tor.us/, and using common web services (like email) to retrieve everything you need to construct the key in your browser whenever you need it. You can even use this to send money to a public key before its corresponding private key has ever been constructed by anyone! Meaning you can send money to someone who lacks a wallet by email, or by telegram, or by discord, or by reddit, or by anything, and they retrieve the money without anyone else ever seeing their keys or having to manage their keys themselves.
How it works: https://tech.tor.us/
Disclaimer: NOT associated with torus, just think its cool.
Unless you want a 3 or 4 character do... ENS name. Then it's spicy.
But, it is definitely a real use-case, so hats off to people for having a go at it!
If you want more control, you can build one of these browsers or extensions from source and audit the code yourself. So you can choose your level of challenge/paranoia.
Maybe not that many people would use it, but unlike a lot of other crypto stuff, this doesn’t require universal buy-in in order to be marginally useful to the people who do use it.
I can log in somewhere with metamask however without involving google. It's orthogonal , and that s why it can succeed
Means of contact end up being a pretty useful way of organizing identities (phone numbers have their issues) and having ways to fix mistakes. The one thing I haven't seen solved in web3 is communication to a user. Easy enough to encrypt messages in ipfs though, I suppose.
What they don't tell you is that every single operation for every dApp on Ethereum, the gas fess make using this totally useless, which mean you have no choice but to tell others to wait for 'the gas fees to go down'. Rendering it useless.
Everyone knows that every operation is so expensive, that you cannot use Ethereum to pay for your groceries; making it totally useless in general since everyone needs to eat. Not even the other L2, ZK contraptions are ready or are even optimised enough to be useful so that isn't an option despite the hype around it.
Seems more like a centralised domain registrar contract having a sub-domain on .eth (collides with Ethiopia's three letter TLD) on an expensive blockchain controlled by so-called 'trusted' key-holders.
To your point about operations in general on Ethereum, yes, they are expensive, prohibitively so for the general population.
Already law enforcement agencies are campaigning hard against ransomware, and central banks and tax agencies investigating how people are using cryptocurrencies to launder money.
It doesn't mean it doesn't have value; it's just that the real expected value can't be expected to have legitimate businesses on top.
The cables where communications pass through are protected by armies
If crypto eventually could pose a threat to those illegitimate authorities, they would give orders to cut the cables and games would be over.
they could also trace them back to your house.
> It may be marginal if the authority can stop it
Because often the response to claims like the one I made is to just hand wave it away as some kind of Armageddon situation. But it doesn't have to be. The USSR and the modern day CCP operate in an environment where certain levels of criminality are virtuous, but things are not so draconian or suppressive as the environment you state.
they would.block the crypto traffic
We’ll probably also have aircraft or satellites run by some of those regimes looking for transmitters, of course.
The cable-cut might work for a while, but it wouldn't take too long for partition tolerant crypos emerge. You don't really need global consistency for most things, given that resources tend to be local.
Wouldn’t it? This is an unsolved problem and there is nothing that implies it can ‘quickly emerge’.
One of the paradoxes about crypto is that all problems with it can be quickly solved in the future, but somehow continue to exist in the present.
The plan isn't fully fleshed out: you still need to incentivize running nodes and handle cases where bad behavior on the part of node maintainers becomes transparent so that users can revoke trust in them, but my point is that this is not some blind faith in the ability of the community to adapt, but rather something that I have diagrams on my whiteboard for.
I don't see any crypto zealot laying cables in the ocean to connect Europe and USA
do you really think the army would allow it?
but cutting cables is the nuclear option, I see much more probable that terrorists will try it in the future, because is such a fundamental weakness of the internet right now
a government would simply block crypto traffic
This is entirely personal and subjective, but I prefer the user experience of Aave and Yearn to traditional banking with e.g. Chase. I also would way rather make large purchases with crypto (e.g. down payment on a house) compared with wiring money.
Do you have a citation for this? The articles I found online suggest fees are almost universal, with only a single bank (Fidelity) offering true $0 wire transfer fees to all customers [0].
0 - https://www.nerdwallet.com/article/banking/wire-transfers-wh...
HSBC offer free wires for Premier customers. [1]
IBKR offers the first domestic wire per month free, subsequent $10. [2]
Schwab also offers 1 free per month for qualified customers. [3]
Fidelity offers free wires. [4]
FTX offers free wires ("We are not currently charging for wire deposits or withdrawals.") [5]
Chase Premier Plus and Sapphire checking do not charge wire fees. [6]
TD Bank offers 1 free wire transfer per statement cycle. [7]
Citigold accounts offer free wires. [8]
CIT Bank depending on balance. [9]
They're not always free, to be sure - most of the low-end accounts charge for them, but then, those low-end accounts charge for practically everything. That said, TD Bank, Fidelity, Schwab, IBKR all offer at least 1 free wire per month for all customers.
If you have any meaningful balances or monthly income, you shouldn't ever pay for wires. Every retail bank offers free wires for qualifying customers to the best of my knowledge.
[1] https://www.us.hsbc.com/content/dam/hsbc/us/docs/pdf/deposit... p.3
[2] https://www.interactivebrokers.com/en/index.php?f=14718
[3] https://www.schwab.com/legal/schwab-pricing-guide-for-indivi...
[4] https://www.fidelity.com/customer-service/choose-eft-or-bank...
[5] https://help.ftx.us/hc/en-us/articles/360043579273-Fees
[6] https://www.chase.com/content/dam/chase-ux/documents/persona...
[7] https://www.feeds.td.com/en/document/oao/pdf/1_fees.pdf
[8] https://online.citi.com/US/JRS/pands/detail.do?ID=WireTransf...
For arguments sake I will point out the downsides to using crypto in this case:
1. Most people don't want to manage their own wallet
2. USDC is centralized so there is some amount of risk
3. If you send it to the wrong wallet, RIP to your money
FWIW, I was just as scared of sending the wire transfer to the wrong place as I was when I send crypto. And with crypto you can quickly send a small test amount first. You can use something like DAI which is less centralized than USDC if that risk is a concern. Wallet UX will improve over time
When i bought my home in the UK six years ago, i phoned my bank, told them how much i wanted to send and to who, and they did it, with the money arriving straight away. If the amount had been less than 20k, i could have done it online rather than over the phone; the back-end payment machinery is the same, but i suppose the bank think there's less chance of a normal customer making a mistake with a large transfer if someone walks them through it. My bank is rather old-fashioned; more modern banks let you make large transfers online or through their app:
https://www.starlingbank.com/blog/high-value-payments/
That page mentions that "one of our team members may need to double check a few details before the payment can be made" - again, that's nothing to do with the machinery, that's in case you match some pattern looking for fraud or money laundering etc.
I have a US bank and I can send wires online. It's really not uncommon. I don't understand how or why the OP is banking with an outdated bank an hour away from his house when there are good options that can be accessed entirely online.
There are a lot of behind-the-times banks in the US, though. If you're stuck in one, considering switching.
You really need to switch to a modern bank that doesn't force you to go in person to do a wire. That's insanity.
Fidelity has free wire transfers, no need to go into a bank: https://www.fidelity.com/customer-service/choose-eft-or-bank...
Far easier and safer than anything crypto has to offer.
Not to mention that it’s a complete fantasy to expect all but the tiniest number of sellers to accept crypto today, so the comparison is between something that exists today and works very well, and something that is only imaginary.
After seeing the other comments I guess this wire transfer issue is specific to the US. I agree that a tiny number of sellers would accept crypto payment today, but what do you mean exactly when you say it is "only imaginary"? Transferring USDC is very real and exists today. I don't expect the average person to ever transfer USDC the way it is done today, it would be a terrible user experience. But I'm trying to figure out the disconnect between what I see as a powerful financial primitive and what you see as imaginary
Therefore the service you are comparing against is one that only exists in your imagination, and is not real today.
Which are all reasons why someone makes you drive to the nearest bank.
As others have pointed out, these issues are highly US centric, as sending money in the UK/EU can be done almost instantaneously. And so, if they can be done almost instantaneously in other countries it means the technology is not the barrier, but the politics. Thus crypto's only advantage is not a technology one, but a political/market/bureaucratic one.
One good thing about crypto is that if it does take off and becomes a legitimate threat to wire transfers, then banks will change their tune VERY quick, and then once that system is in place then we can have all of the nice things that help protect your money in a US bank accountant (FDIC insurance, access to financing, fraud protection, etc.) with the advantages of crypto.
There is a reason the Winkelvoss twins store their crypto wallet pass-phrases in bank vaults.
For the record - I have my own thoughts about how bad the US finance system is, but I think crypto advocates love to ignore why these systems exist in the first place.
I don’t participate in the community. So I’m not sure if the project maintainers have different visions than the investors or whatever.
It’s actually kinda crazy in a “voting yourself money” kinda way. Because as long as people believe that BTC should always increase in value then in the long run the returns should gravitate toward something like the weighted average worldwide inflation rate.
The downside of course is that unlike normal investments they don’t spur the real life economic growth necessary to sustain that inflation.
Wouldn't it indirectly, because people trade bitcoins for USD most of the time, and that USD you'd assume eventually goes to buy products or services?
If you cannot use Bitcoin to quickly pay for your groceries at your local supermarket then it is quite useless to use isn't it?
There are other cryptocurrencies which are more suitable to these very basic use-cases hence why Bitcoin is the easiest cryptocurrency to attack for most critics.
That makes it an official currency: low transaction rates, energy costs, and wild fluctuations relative to other national currencies aside.
It is. The moment any of those fictional tokens are used for anything other than meaningless exchanges with other fictional tokens, they are worthless. For now they are only perpetuating their perceived self-worth.
> It's like saying the stock market is worthless
Stock market is almost entirely worthless. It's the same speculation not rooted in objective reality.
Ah yes. The fictional thoughtful replies that are as rare as examples of projects where blockchains solve anything.
> or the gap between us is bigger than can be solved in this medium.
Or, perhaps, the reply wasn't as thoughtful as you thought it was. Or, perhaps, you could post it as a blogpost to narrow the gap.
But nope.
For a purchase that large, I would rather make it in person. With a check. Which is way more secure than crypto or a wire transfer.
Bad checks have other ways of being dealt with through legal means. There's no reason to doubt the check held (and handed over) isn't good.
But everybody is happy with a _cashier's check_. Admittedly you have to go physically get those, which kinda sucks. Or wire the money to the title company instead, which I personally prefer over carrying around a piece of paper worth $75k (or whatever).
It’s incredible to me that you think a piece of paper and human contact is secure.
The security comes from the capacity of the banks to hold or reverse them, and the capacity of the legal system to jail people for check fraud.
Both parties have to be present in person and sign the documents in front of a notary that also collect copies of the checks emitted directly by the bank at the moment and write down their id number on the deeds
Asking because I don't know, and because I suspect it takes longer than I'd like if I'm trying to get my payment in first to secure the item (like I have had to do when buying used cars from private parties.)
Regardless, the reversibility aspect has both positives and negatives. It does allow you to reverse transactions, but with the added complexity of the transaction not really settling until after that reversibility period passes. If I receive a crypto transfer (ex: a stablecoin), I can know that the money is actually mine within a few minutes, and can't be taken back. There are major benefits to that.
On the other hand, if a crypto transaction has any errors, the money is instantly lost forever, and nobody can help you.
There is no upside to that at all.
Irreversibly transferring funds and having complete ownership of them once they are in your possession is a huge feature.
Someone defrauded you, and you were able to recover the money.
With crypto, when you get defrauded, you will never see the money again. If you think there is no fraud in crypto, I have some things to sell you.
Your argument amounts to the same as relying on the police to return your car after it has been stolen and then declaring that as security.
Your argument amounts to claiming you have a car that is impossible to steal, and yet becomes permanently inoperable if you press the wrong button on the dashboard.
Being able to recover stolen property is a good thing, you know?
Recently purchased a home with a loan from aave polygon and it was pretty painless.
You could scale all money numbers (not durations please) by a factor if you prefer.
I'm interested to see a real-life example
There are no repayment terms per say, just interest charged on the loaned amount.
Aave has variable interest on stables that varies between 7-4% and they offer an incentive bonus of about 3% MATIC, making the effective rate 1-4%.
My loan to value rate is around 35%, which gives me a very healthy liquidation buffer in case the market gets even more volatile.
My collateral is mostly BTC and ETH, with smaller holding of MATIC and AVAX.
It’s a really nice system, I get to keep my crypto holdings and extract real world value. Paying 1% interest on a loan backed by assets that are appreciating 100% a year feels really good.
As an additional safety precaution I wrote a smart contract to liquidate some of my other positions if I am ever at risk of being liquidated by Aave to avoid the liquidation penalty.
Why would you ever sell an appreciating asset when you can borrow USD against it and wire it free of charge?
Wiring even large amount of money in EU online banking was definitely easier than anything I have seen in crypto world.
https://intercoin.org/applications
https://intercoin.org/presentation.pdf kind of explains what needs to be fixed in the space. I’d tove to get your feedback
NFTs conceptual value doesn’t map to anything that seems remotely valuable at present moment. There’s no mental model for owning this inmaterial thing that is pegged to a digital file that can be duplicated infinitely without your approval.
Almost no ‘people’ interpret NFTs this way.
> There’s no mental model for owning this inmaterial thing that is pegged to a digital file that can be duplicated infinitely without your approval.
There is no mental model because there is no ownership.
We have been dealing with this since the dawn of Napster. I'm pretty sure people understand ownership of digital creations and the ease with which they can be duplicated/pirated.
Right now, the consensus seems to be that Web 3 is decentralized/blockchain stuff - but I also hear the Metaverse concept increasingly referred to as "Web 3"
I suppose my point is that the web doesn't develop along a linear, one dimensional scale, but rather a branching and recombining tree.
Web 2.0 was also supposed to be democratizing. Blogging, user participation. A web the dissolves the user/webmaster dichotomy. Less gatekeepers, barriers to entry, etc. Walled gardens, gatekeepers, centralization and monopoly hardening happened. They were never the stated ideal.
Just like web 2.0, web 3.0's idealistic description tends to to be the opposite of whatever 2.0's shortcomings are. Just like with 2.0, reality is likely to have its own say.
> For that same reason, I think people can genuinely believe they're obsessed with web3 because of its inherent interestingness when in fact it’s because web3 has made them a lot of money very quickly.
The nature of crypto-currencies means that you are free to invest in protocols you believe will make money - either by providing value or some other less rational reason for others to purchase. It seems like bloggers writing on the subject haven't yet conceded that being confused about this fact is not an argument for or against any protocol - a healthy review will ignore the fact so sensationally stated in many writings: "people shill their investments."
Would I review a Ford Motor Vehicle by closely examining how the CEO or marketing team behave, boldly discovering they don't have an incentive to be completely honest, and then assuming they are lying? No. I would ignore all of that and evaluate the vehicle itself.
Denouncing crypto-currencies or distributed-ledger technologies has always been the cool, contrarian thing to do on HackerNews (stay poor lmao) - and there is certainly plenty to criticize which is usually missed, because blog posts like this focus on the most surface level aspects of a topic. I'm sure plenty of people really want to learn about Web3, so imagine a curious, neutral reader's disappointment when they go to learn about what many present as a technological, general protocol through the lens of what licensed NFT's the NBA is shilling.
Every valuable new movement is going to have grifters. New movements without value will have grifters. There is one good reason HackerNews doesn't have anything positive to say about crytpo, and that is that with endorsement comes advertisement and shills - I only hope this place learns to talk in generalities about technology, protocols and economics rather than only doing the opposite of what attracts grifters (which is useful).
People who can’t see or imagine use cases become sceptics.
But others who piece together enough observations to tell themselves stories of why it will work become believers.
But neither can explain why the tech will or won’t work, so we end up with technobabblers and angry sceptics.
This told me everything I need to know.
But the kind of digital universe we shape, the kind of behaviors being rewarded by the systems put in place, this seems to matter to a lot of smart people and that is quite promising.
But that's not the case we're running into here. The crypto case is that you're reading reviews from people on the car, but turns out that a lot of people own Ford stock and therefore will probably have a positive bias (conscious or unconscious) for that car. It's not a reason against the technology, but it's a reason to be extra skeptical of the use cases and motivations of people who speak positively about it.
> I only hope this place learns to talk in generalities about technology, protocols and economics
There's quite a lot of talk about the technology, protocols and economics of crypto tech in HN. The issue is that when you poke around, people haven't actually thought about the use cases they present. Even the simple question "could this be done before and, if so, why isn't it done already?" already takes down a lot of crypto use cases and discussions I see around here. Game resales, multi-game items, digital art, defi loans, federated networks, global identity, consumer-backed media... A lot of people will say crypto can solve those problems without noticing that the problem wasn't the tech.
In the end, crypto just adds "distributed and trustless" to databases. Unless the problem being attacked is about centralization and trust (and for most big consumer markets, it almost never is) crypto can't change the situation.
> cool, contrarian thing to do on HackerNews (stay poor lmao)
See, this is the problem we're having. We can't really trust we're going to have a productive technical discussion with someone that sees crypto as a vessel to "get rich quick" and says things like that.
A brief rebuttal:
- Twitter can censor any account or Tweet: yes, but Twitter is not the web, you can host your own tweets, even for free.
- Web3 tweets are better because decentralized: translations -> your thought are going to be forever visible to everybody and not even the author will be able to remove them. Of course any of those new shiny web3 logs can fail and everything can disappear with them.
- Payment services may decide to not allow payments: Web3 payments can do the same. There is nothing that forces me to accept a payment and if that was true, that would be a problem. I __do want__ to refuse payments from criminals and I do wanna know if someone is.
- servers for gig economy may go down. web3 servers can go down as well, they are made of hardware and maintained by people too. If, for example, Uber can't keep their servers running despite their profits depend on them, imagine what would happen if Uber was running on someone else's node who DGAF if they lose money or not...
Now imagine what would happen to me, a completely unknown anonymous individual, with no power.
What happens if something goes wrong and "my income is affected"?
Who is responsible?
Who can I sue in case the SLA in the agreement haven't been guaranteed?
Will "the decentralized network of 1000s of computers" reimburse me?
If you take payments on your site via crypto, I'm not sure what you mean by "not accepting payments from criminals", as this is not a service provided by Visa or MasterCard either. I have a feeling running a criminal background check on all your users might impact your conversion rate, but you are as free to do that in Web3 as in Web2. (What are you selling that you would need to be concerned with such things anyways? If I'm selling an honest product or service, I don't care who buys it.)
There is no SLA. If you need an SLA you can create a hybrid site that both stores files in a central server and also backs them up to Filecoin or Arweave or Sia or Chia or whatever file network you like. But decentralization does tend to lend itself to resiliency, for example, Ethereum has 100% uptime over the past 6 years.
As for real-world applications of this technology that couldn't be achieved prior, I'd point to Helium [1].
The most basic to me is the Automatic Market Maker system. For example Uniswap is a system with only a few (relatively speaking) lines of a code at its core and a team of a couple of dozen. The system does billions of dollars worth of trades every day. If anybody can point out to me a broker that does similar volumes that would allow me to make million-dollar trades with a few lines of code with no possibility of censorship I will happily concede that web3 is a failure.
Oh and BTW, love Helium, just started researching it a few days ago. As always all great projects are easy to dismiss until one can no longer do it. I think I'll get in line for a hotspot/miner.
> Hotspots work together to form a new global wireless network and undertake ‘Proof-of-Coverage’.
Okay that's actually quite clever. I've previously wondered why no one has tried a similar idea for wired networks, implementing "Proof of possession of IPv4 address". It may be possible for a nation state to take control of a large IP range for some short period of time, but I don't think it's plausible that even conspiring adversaries could control 51% of the internet for a week without anyone noticing.
There have been real-life experiments with local and community currencies, for example the Ithaca Hours and Boulder Bucks (and many others [1]). The point of them is to have something that accrues value and keeps it inside of a group, unlike the government issues currency which knows no bounds and can easily be extracted from a community. I see online (and local [2]) communities and DAOs that issue tokens and distribute them to a more restricted member group doing the equivalent of that. In effect you are not creating a parallel currency to the national one but creating a space where another means of representing value exists. For an example of a community with strong internal economics check out the builder collective 1hive [3]. What is actually happening here, I think, is not finance in traditional sense (although there is plenty of that, sure) but something that to me resembled anarcho-syndicalist utopias or restructuring of the capitalistic system around human relationships. In a world of a multitude of community currencies things like Uniswap's AMM provide interfaces between community microcosms.
Then there is another thing I think should be considered. Something like half of the population of the world has no access to banking. And then for the large portion of the ones who do the banking systems are terribly opaque and unstable. In Russia for example almost everybody holds their money in a single government-controlled bank because trust in the banking is super low. "Westerns", I feel, deeply under-appreciate the hardship shitty banking causes to people. (There are, btw, blockchains that specifically target the unbanked/underbanked populations that have limited access to financial instruments, and I do not mean in an exploitative way.) And even if you live in a place with a great financial system then plenty of people are restricted from harnessing it's potential. For example accredited investor laws might be seen as protective but they also prevent common folk from participating in all sorts of promising endeavors and getting a share of the wealth. So, yes, I am with you on that financialization is not all pretty, but at the moment it serves some people well and others very poorly or not at all and the latter group has much to gain from it.
[1] https://en.wikipedia.org/wiki/List_of_community_currencies_i...
And yet, no one can provide even a single one that
- doesn't already exist, and works more efficiently without blockchain, or
- doesn't require blockchain for any of the claimed properties and advantages
- isn't relying on circular references
I did. Let's see:
Me: "no one can provide even a single one that... isn't relying on circular references"
--- start quote ---
The most basic to me is the Automatic Market Maker system. For example Uniswap is a system with only a few (relatively speaking) lines of a code at its core and a team of a couple of dozen.
--- end quote ---
Oh, look. A thing that only exists to perpetuate the never ending circle of speculation and scamming using the fictional tokens, and useless for anything else. Circular references abound. But sure, it can give you an instant price between two fictional tokens. Wow. Innovation.
--- start quote ---
The system does billions of dollars worth of trades every day. If anybody can point out to me a broker that does similar volumes that would allow me to make million-dollar trades with a few lines of code
--- end quote ---
1. It does't do billions of dollars every day. It exchanges some mythical tokens for some fantasy tokens that are completely entirely useless outside their own systems of reference (a.k.a. almost entirely exclusively speculation and scams)
2. This is the description of algorithmic trading and HFT. Except, it's not high-frequency, and it's not trading.
3. The moment those "few lines of code" execute an erroneous trade (because, you know, code), these "multi-million traders" will immediately cry foul, and ask for reverts, regulations, hard forks and all that.
> As always all great projects are easy to dismiss until one can no longer do it.
There are very few great projects that are easy to dismiss, and there are many shitty ones that are all too easy to dismiss. Somehow every single crypto project views itself as the great one.
Stock trading is actually not that far removed from trading fictional coins: it's almost pure speculation that has little basis in reality.
Blockchain is a very interesting technical implementation, but there's a gigantic step between being interesting technically and being world-changing. So yes, you'll find interesting applications on the blockchain, but it's not the magical solution that will revolutionize everything. Things like Uniswap are cool, but in the end it's just a currency trader. Helium looks to me like yet another attempt at crowdsourced wireless. I remember Fon from back in 2005, promised to change the communication landscape, and last I heard about them I think they pivoted to just offering WiFi tech to companies.
Billions of dollars? Ha. Uniswap does none of this. Uniswap allows you to convert one cryptocurrency to another.
Example:
Bill creates a coin called $FOO, it has 1,000,000 tokens and I give Mary one token in exchange for $100
My friend Josh creates a new coin called $BAR, it has 1,000,000 tokens and I give Steve one token in exchange fro $100.
Josh now gives one of his $BAR tokens to Bill for one of his $FOO tokens using uniswap 1:1. In theory $100 was "traded". Was it though?
> If anybody can point out to me a broker that does similar volumes that would allow me to make million-dollar trades with a few lines of code with no possibility of censorship I will happily concede that web3 is a failure.
If you can tell me how I get the USD that comes from my paycheck into a system that uses a few lines of code I'll be happy to concede that web3 is not a failure. Bill can't use his new $BAR token and Josh can't use his $FOO token to pay for groceries. So this whole premise is entirely useless.
Something that really surprised me was the signing/metamask integration(a kind of webauthn). I would definitely use that to login into various websites instead of the invasive facebook/google login plugins we see all over the web. There is even something akin to oauth2 but without the requirement to have "developer keys".
Recently I've been working at converting an existing web business to web3 (at least my interpretation of web3), with the goal of making it all decentralized. My impression at this point is that it's mostly possible but not all that practical.
It might make more sense if I reimagine what the business is, which is part of my exploration here.
I'd much rather have the convenience of "Sign-In with X" but backed by something I have control over.
The reason is: With private key auth alone, you don’t have identity, just a non-human readable public key, and no universally known exclusive association with a particular username. With OpenID or WebAuthn or any of that, you would still need a company or org to keep a centralized database of everyone’s credentials and user info. With Blockchain you don’t: As long as the Ethereum blockchain keeps going, your info (username: “johndoe.eth” public_key: “420abc” avatar: “some HTTP or IPFS url”) will stay stored. This is the exact precise thing blockchains are unusually good at doing, and given how much people these days are hating on big tech companies managing their identities and harvesting data in the process, “SSO with no company attached” seems like a thing people actually want.
I’m still highly skeptical of art NFTs and crypto as currency and lots of other blockchain stuff, but in this one case they’ve won me over. This seems legit.
Someone else posts into the blockchain that jondoe.eth public_key "420abc..." is {this real data about the person}.
And now that identity and every login it is associated with has been doxed in a permeant, public, and unalterable way.
If someone doxes my gmail account, I can go through the process of dissociating myself with that identity and hopefully the provider were that doxing is stored could be persuaded to delete that content (yes, the internet has a long memory).
This would seem to be much harder if not impossible with an identity stored on a public blockchain (that also allows for other data to be stored).
Also it’s up to you how you use the system. You could have a number of online persona’s each with it’s own login.
This is about having a public, centralized source of identities that cannot be erased.
Yes, you can have multiple identities on it - but if an identity on that chain is doxed, it is forever doxed.
If you are maintaining one identity per application... then what is the advantage of having the identity in a place where it can be accessed by multiple applications?
I have difficulty seeing the advantage of a public, append only, identity provider compared to say... setting up your own auth server on AWS and managing your identities out of there.
OpenID gives a few organizations like Google, Okta, and Microsoft "root on the entire world." It terrifies me.
How does "wallet as resume" solve the implied competency better than a GitHub repo with signed commits?
How does the wallet-as-resume solve the "I copied a project" or "I followed the tutorial line for line?" One can create a NFT or whatever equivalent for code you wrote just as easily as code you copied (be it with cp or typing it all in yourself). Can only one person would be verify a particular implementation of FizzBuzz? If the code is copied, can the original author usurp the "I wrote this" from a pretender?
Does anyone reading resumes actually think that this is a problem that needs solving?
For example, once a reasonable digital ID system exists, we can start to build trust systems, such that your good reputation among one community can be used to bootstrap your reputation in a new community. Again, zero-knowledge proofs should be a viable mechanism for conveying trust relationships without having to reveal your social graph.
Some of this data would have to be stored off-chain, or only in encrypted form on-chain, but I don't think there are any practical limits of blockchain technology which prevent this.
https://openid.stackexchange.com/
HN could be a provider! You could be news.ycombinator.com/api, which admittedly would be a very confusing name to the casual observer.
The reason it all ended up being centralised is that almost nobody really valued it being decentralised.
If you're signing in via some other 3rd party, you can change your password.
I'm just trying to think of how "Sign in with Ethereum" would work if you're trying to get your technophobic grandma that clicks on phishing links and responds to the County Password Inspectors [0] when they call to use it.
For example, you can generate 7 tokens and only need 5 to reset your wallet keys. You can give 3 to your relatives, 1 in a safe-deposit box, etc.
Grandma’s kids can help her set it up.
Edit: Or, for people who really prefer centralization, you can give all 7 tokens to Bank of America. The point is you have a choice and can design the security system you want.
2. SIWE lets the user share a cryptographically verified shared state of the user. For example, digital asset collections, reputation in a group etc.
2. Once smart contract wallets properly gain adoption, you'll be able to do recovery (see: https://vitalik.ca/general/2021/01/11/recovery.html )
3. Lots of built-in anti-sybil techniques (eg. verifying that the address has nonzero balance is a pretty simple and effective one)
Why does ethereum need to come into the picture?
Agreed (and I agree that ENS and the SSO stuff looks interesting). The problem here is that the crypto community are the ones setting the high expectations.
Here's a much more level-headed(and detailed) analysis of what is interesting, and not-so-interesting, about "web3":
"Twitter can censor any account or tweet" (its not censorship, but that is another can of worms). vs "Web3 tweets would be uncensorable".
Why should Twitter give up control? Why would they want someone to use their platform to publish stuff they can't delete or hide (for example, a live-stream of someone shooting up a mosque)?
Why would any of the big players get in bed with web3 content? they would be turned into a bitpipe?
But blockchains require resources to operate. At great scale they will require great cost. What's to stop powerful actors from leveraging economies of scale and consolidating those resources, then ultimately using their control to manipulate the blockchains themselves?
This is exactly what happened with web servers. The web was initially very decentralized, due to economies of scale it consolidated and is hosted mostly in a few large datacenters now. The owners of those datacenters are by necessity very close partners with the government du jour, and now manipulate the content they host.
We'll see what the endgame actually is as time inexorably marches on
They're like minting a commemorative coin celebrating the asset, and only minting a single coin. The coin does not represent ownership of the asset. It's just...a coin. A token. Supposedly, the uniqueness gives it value, but if I decide to record a single fart, that fart is unique, but the uniqueness does not inherently create value.
An NFT for the Mona Lisa caries no benefits or rights, other than saying "I own the NFT for the Mona Lisa". It's inherently worthless, with a supposed value being created from absolutely nothing.
Anyone buying NFTs either doesn't know what they're actually paying for, or thinks they're going to be able to find a greater fool who will eventually be willing to pay more.
Perhaps in the future if NFTs get some sort of legal backing and therefore more enforced property rights, maybe it'll be different, however I think the analogy works well for now.
Thoughts?
It's not even “the NFT” — anyone can create a new NFT for the same image on a different blockchain or make a 1 pixel modification and create a new NFT for something visually indistinguishable. You could imagine an art museum making something potentially harder to clone but at that point it's like a donor buying a new frame or putting a bench in front of it, and they don't have a reason to give money to the blockchain grifters when the only value comes from the reputation of a single trusted party.
> Anyone buying NFTs either doesn't know what they're actually paying for, or thinks they're going to be able to find a greater fool who will eventually be willing to pay more.
My assumption is that most of it is simply an attempt to make cryptocurrency look valuable. Nobody has a requirement to use it so they need people to think that an NFT is an investment to get new marks buying Ethereum. Sell it to your buddy, make sure every reporter in the world hears the transaction price in hard currency values, and either write that off as marketing cost or quietly have your buddy transfer the tokens back later minus a commission.
They don’t ever.
You can write that text all you like, but it wouldn’t be a legal contract.
Hint: Who is do you think is signing that contract, and who is going to enforce it?
That's why it has the sentence saying that the person selling you the receipt has never owned the mona lisa.
While NFTs can be confusing, over-hyped, or even fraudulent it is clear that they give artists new power. The power to create a scarce resource, prove that they created it, and sell it for substantially more than they could could otherwise sell electronic collectibles. How much of this is due to hype and how much is due to the ability to record and validate the "deed" to the NFT on the blockchain? I think that's an open question that will be more clear over time.
The author also understates the importance of DAOs and smart contracts imo. The real power of a DAOs or smart contracts is not in replacing financial instruments, but in replacing legal ones. I think in a short amount of time it will not be unusual to see wills executed via smart contracts.
This is exactly the same fundamental oracle problem as that discussed in the article: trustlessness etc applies only within the sandbox, not to anything outside it.
* That digital decentralization is somehow equivalent to the tightly coupled blockchain architecture. In fact, if people were empowered to run their own "nodes" in a display of increasingly scarce digital self-sovereignty, there are infinite possible ways to connect devices over http (or gopher or ftp any other protocol the future may spawn). NB: The web was born decentralized. Many of those ways will arguably be much more useful in solving real problems as they do not put artificial constraints on how information flow is organized.
* That one can create artificial digital scarcity and put the genie of zero marginal cost back in the bottle. In fact already the very proliferation of thousand of cryptocurrency variants shows that digital scarcity could only ever be achieved by oppressive means. This is the very social malfunction purportedly (some) adherents of crypto are fighting against.
Why are we still talking about a set of ideas that is so distorted and orthogonal to both the true nature of the digital medium and our needs? Blame it on the self-financing juggernaut of bitcoin that triggered every possible speculative instinct out there, whether a new generation of noise day-traders, widows or orphans or professional blood-suckers.
From Vitalik https://vitalik.ca/general/2021/03/23/legitimacy.html:
"...What's going on here is a pattern of a similar type to what we saw with the not-yet-issued Bitcoin and Ethereum coin rewards: the coins were ultimately owned not by a cryptographic key, but by some kind of social contract."
"...Once again, millions of dollars of value are being controlled and allocated, not by individuals or cryptographic keys, but by social conceptions of legitimacy."
So the point is a bit moot, money is not flowing to web3 because of immutability per se. For most venture capital, mainly it is an effort to create a levelled playing field for startups –"decentralized x" etc. For retail investors, highly volatile, information symmetric (perceived) assets.
So if you think thats skins bought in games by kid gamers is better of by being owned by the gaming company than the gamer who bought it.
If you think that governments printing money at will to solve problems they created is better than having more deflatory assets available for normal citizens who cant afford a house.
If you think the current cobol and pre internet protocol based banking system is better than a more flexible system allowing for solutions which were impossible before.
If you think that the digital world should be governed using physical world tools.
If you think only accredited investors should be able to make high risk bets.
Then by all means be against Web3. But this idea that only if perfect is it worth moving forward with web3 is an absurd standard only allowed by philosophers and other academics who dont actually move the world forward.
And yes Web3 have its own set of problems, but they are much better problems to have than a world without Web3
It started as this niche academic/techno subculture thing and slowly grew over the next few years though still in relative obscurity. Then over only a few short years it exploded into the common consciousness but still most people did not use it nor have access to it. Some even ridiculed it (see Krugman & Letterman).
As we know the hype grew each year then each month and then each week. And before we knew it there were enormous amounts of money being pumped into building ludicrous businesses without a clear plan, product or use case. This was still at a time where internet access and daily usage did not exist for most people, not even in the western world.
This all came to head in the Dot Com bubble at the beginning of the new century.
And ever since we have seen mostly level headed investment and buildup of capabilities on the web. While it never went away, the type of hype cycle that was seen in the 90's never materialized to the same degree. Utility and more level headed thinking took over.
Rational (buisness) decisions have mostly been made ever since, rather than those more tending to give way to emotion and bro selling (selling a product/tech/idea without really understanding and coming to terms with the fundamentals and limitations of it).
Now, in my perspective there is some utility in crypto. I am not sure the utility is as much as has been reported, nor do I believe the nations on this planet will allow it to go as far as some believe it might simply for the fact that our societies run on taxes. And I am absolutely for any kind of restriction on any kind of crypto that relies of PoW with its enormous energy usage (we have better things to use it for).
But I do hope there will be a crash akin to the dot com bubble which will clean out the clutter a bit and leave room for the more mature and levelheaded inventors to grow out from the ashes.
It was silly to order Pizza over the Internet like it was laughable listening to a baseball radio transmission over the internet instead using a … radio. LOL
20 years later everybody‘s ordering food over the internet while watching Netflix.
The difference is that online ordering was useful: it was easier, saved time, and businesses loved that it was cheaper, reduced errors, and avoided needing to pay people in phone banks to avoid busy signals. If you built things on the web, you had clients beating down your door from all kinds of businesses because they and their customers saw immediate benefits from adopting it.
In contrast, that Bitcoin pizza buyer was going against the grain of a deflationary currency — they paid a processing fee to use a more difficult, slower process to order a pizza and the deflationary model means that they were taking a long-term loss versus holding it — and a decade later, the vast majority of people still have no benefit to using a cryptocurrency.
Is it possible that the tech and culture is deeply flawed and hypocritical, and yet the space is exploring new ground that will prove important...
I understand the attraction of writing a killer article that makes extreme claims and backs each subheading with a carefully picked strawman, but really, I'd just love to read about it all without the hot air.
It's a complex space and I want quality, balanced, open minded commentary. Suggestions welcome
This reminds me of literally years of Chainlink (scam) abstract bullshit (no wonder the guy studied abstract philosophy).
Musk was right with his cartoon tweet - this crap has no real demand. Web3 not needed.
They are. Nobody is prosecuted. The user experience is nice because the depositor is typically reimbursed quickly. Banks often do lose the actual money though. Insurance and other redundancies were added retroactively by banks who didn't want to pay for insurance, and got the state to do it, simultaneously adding enough confidence to stuff their coffers under any circumstance.
There is insurance in the DeFi space too. People that open policies are reimbursed in hacks. It is interesting that these thought pieces seem to lack any use of the products or integration in the community as the language would be pretty different, but the irony is that nobody in the community is interested in writing these thought pieces.
It eludes most people that are disillusioned or were already chronically skeptical, but the most productive approach is to talk about the future state of these systems and how they can be improved. For example, I think it is absurd that people have to manually understand that there are competing third party insurance platforms they have to use for every DeFi operation they make, so it could instead be automatic to craft the best policy alongside their transaction into another DeFi platform.
It is incredibly lucrative to make ever-so-slight improvements to this space. The people that do build here do that, the activist investors in the space push teams towards roadmaps the teams didn't originally consider. I think many people miss that they can have outsized influence, its not going away so make it better.
To oppose our new overlord - that would be unwise. So all in on crypto, even though its financially bad advise.
NFTs can prove current possession, it's not about legal ownership of the art. Colloquially this is called ownership, which is why we say ownership.
Surprising how complicated this is for people, when the user experience doesn't have any ambiguity about it at all.
Technical issues always get solved. All of this is misconceptions, poorly informed takes, or poor implementations that are true today but won’t be there tomorrow.
My take on this is that HN users are tech stack obsessed.
HN users only see an inferior tech stack, but fail to understand that an inferior tech stack might have Greater Utility for the common people.
HN users earn their living by being the best at what they do and choosing the best tech stack is a part of it, which is why they don’t understand blockchain. It’s an inferior tech stack, but it beats every other stack on game theory, which is not the usual purview of the average developer. Hence they reject it as “inefficient” because they keep looking at it through the prism of tech instead of society.
For society trustless distributed systems are better, but if you keep looking at it from a tech/throughout perspective, you’ll never get it.
The trick to this is understanding the following - nobody trusts you to hold a centralised database. Stop talking about centralised databases - centralised databases did not solve the digital art problem. NFTs did. Centralised databases mean we have to trust you - the developer - and your company or business. But we don’t. Nobody does, and neither do you if you’re completely honest with yourself. How many times has a developer changed or deleted a service you needed and you had no recourse whatsoever ? How often are services “sunsetted” alongside the entire database?
Stop looking at it as a tech stack problem, and start looking at it as a trust problem. People don’t trust you to run their services, for good reason, and they would much prefer an open source, immutable, decentralised ledger than your SQL, 10 times out of 10.
> Technical issues always get solved.
There are deeper issues with crypto than just technical. Even if it wasn't.
Crypto is like every anarchistic idea implemented in reality. In essence, they are burning the wheel, only to reinvent it again. Badly.
Also printing press didn't consume so much resources, for so little gain.
The incentives for centralised databases is to remove interop to create artificial silos and gate users from leaving your service. We’ve gotten to the point where text messaging which is trivial, has no interop.
Crypto flips this on its head. If you build a service using IPFS, ENS and crypto wallets as users, your website is merely a front end for an open source decentralised service. This is not a hypothetical, recently the HicEtNunc NFT market was nuked by its lead developer. The website was open source, the artwork was hosted in IPFS and all the ownership data (NFTs) were on Tezos blockchain, so literally NOTHING was lost. The community quite simply rebuilt the front end in 24 hours or so and everything kept going.
When was the last time you saw anything like that in web2? Never. It was impossible. HicEtNunc now has 10x front ends competing for the space with no clear leader. Web3 is about ownership and portability, things that centralised servers and databases incentivised their owners to lie and cheat about to make into fake moats.
Here is the story - https://www.coindesk.com/tech/2021/11/18/what-hic-et-nuncs-r...
Except that's literally what they do, using a combination of digital signatures and timestamp. You can have a copy of the same NFT even on a different chain but the timestamp will be higher, therefore proving it's not the original.
Plus the problem of referencing the content is solved by having all data on chain (likely on layer 2). Recurring problems in the world of art trade such as provenance, certification etc. are elegantly solved by NFTs.
> someone copied and pasted this guy’s real-life artwork, created an NFT out of it
Ironically that's exactly because the artwork was not (referenced) on chain. If that was the case any subsequent copy would not be recognized as the original because of the timestamp and wouldn't have nearly the same value. That's why a simple digital signature scheme based on something like Keybase wouldn't work.
I understand and appreciate the author's skepticism but, IMHO, he did end up looking like David Letterman in that video.
So the solution is that every artist mints every piece they create before showing it to anybody else. All because somebody decided that a "blockchain" is now what determines who created a piece of art. How convenient for the crypto holders.
Otherwise it's like dismissing NFTs and not minting your own but then getting upset someone did it on your behalf. You can't have it both ways.
Sure I can. I created the art, I own the copyright to it. If I choose not to sell prints of a piece, that doesn't give others the right to do so. Why would NFTs be any different?
And yes, somebody could copy my art and sell it on RedBubble. The difference is that nobody's claiming that a RedBubble shop is a definite proof of provenance. (But why not? "First RedBubble store" has the same level of credence as "first minted NFT," and it doesn't even require gas fees!)
Copyright is only valid in specific (sometimes geographically limited) legal frameworks and even then there are many nuances to take into account.
NFTs are just an easier way to establish ownership within the digital world, regardless of the chain (because of the timestamp I mentioned, since it can obviously be compared across chains).
> nobody's claiming that a RedBubble shop is a definite proof of provenance
RedBubble, being centralized, cannot be trusted to be a viable proof of provenance due to the possibility of corruption.
NFTs don't give anyone any right, they just make it easier to establish (and automate the process of verifying) ownership of a digital piece of content. They are not a replacement for copyright. Practically speaking you have two choices: you only claim copyright on some content, get mad when someone mints an NFT of it, try to identify and sue them (good luck with that) and waste time and money OR you mint an NFT as soon as you decide to publish your work.
There is absolutely no incentive in choosing the first option and if you do, well, that's on you.
Aside from that, the problem of distributed social media is that it ends up looking like a spam folder or like a cesspool of the worst kind of perversities, but I think this should solvable with chains of trust, like you "whitelist" / "blacklist" your friends or people you trust, and maybe anybody who has been vetoed by your friends (could go 1 or 2 levels further)
But what I fail to see is why this would need blockchain. It just seems overhead for me for this particular use case. The only benefit I see is that mentoning 'blockchain' is guaranteed to get plenty of investor money for whatever distributed app you're building.
But maybe I'm missing someting?
I'd hate to see another "crypto" happen.
Web 2.0 censors people on Twitter | VS | Web 3.0 won't do this
Web 2.0 servers can fail | VS | Web 3.0 servers won't fail
Web 2.0 reality | VS | Web 3.0 ideals
Just like today's web 3.0, the web 2.0 concept started from new technologies (ajax, xml, etc.) and it weaved an idealistic roadmap to where these would lead. The participatory, user generated web.
I think idealistic perspectives tend to fall into determinism fallacies. To pick on a cliche, Marx thought of socialism/communism as something that would happen almost inevitably. Web 2.0's technologies did not determine its outcomes. Neither will web 3.0's. It matters who will gain prominence. What their ideas are. What their interests are. What people choose. etc.
I agree that crypto, and other technologies have a lot of positive potential. Potential isn't outcomes though. A web 3.0 Zuckerberg is a scary thought, and I think it's just as likely as a positive outcome.
How do you install these apps?