Web3 is centralized
blog.wesleyac.com
blog.wesleyac.com
Cryptocurrencies are the ultimate example of this and are an absolute boon to tax collectors, forensic accountants and fraudsters. In our current economy financial transactions are recorded in millions of individual ledgers that are kept private, or in the case of cash transactions are often not recorded at all, or are not linked to an individual. There is no central ledger.
With crypto currencies however you can not only see all transactions but also trace them back to individual users as long as you can link a wallet to a person. This is a massive increase in centralisation yet discussion of whether this is a good idea seems to be entirely missing. The notion that centralising transactions in one place is somehow an example of decentralisation just seems mad.
Weird that it would be a boon for both forensic accountants and fraudsters. How do you reconcile that sentence?
The fact that something is done in public does not mean that it is centralized. There is public and decentralized, public and centralized, private and centralized, and private and decentralized.
Decentralization itself, is a spectrum and not a binary quality. Just as, I assume, public / private also falls on some sort of spectrum spanning from everyone in the world being able to see to VISA/Mastercard corporate privacy policy to national intelligence agencies to group or individual privacy.
It is completely possible to conduct transactions privately on blockchains. Monero and z-cash (using zero knowledge proofs) are the best examples of this.
The biggest blockchains choose not to either due to legacy design choices (zero knowledge systems are a recent innovation) or the benefits of openness. For example, public transaction history allows for development of an on-chain reputation for a pseudo-anonymous account. It's also quite useful for managing decentralized organizations, as the treasury and spending records is meant to be public to keep the DAO accountable to its members and prospective members.
With the recent introduction of zk rollups on Ethereum, it's now possible to have the best of both worlds, in my opinion (see https://aztec.network/index.html). Transactions that need to be private will be conducted on zero-knowledge rollups built for privacy. Mastercard is working on this with Consensys for Ethereum (https://www.coindesk.com/business/2021/12/16/consensys-colla...).
It is very common to track people by the tokens they hold and target them for theft and fraud.
One example is to airdrop a backdoored token, and when the user tries to move it they wind up authorizing movement of their other valuable tokens. Or to just use the airdrop to lead a curious user to the airdrop event's website, which is then a phishing campaign that achieves the same result.
What would you consider Solana's approach to assets? I was surprised to find that each address has another unique address for its balance and possession of any asset issued on that network.
I don't know how solana handles assets but I personally stay clear from that ecosystem. Too much VC hype for my likes and way too little decentralization of funds.
I've heard about ERC20 tokens that allowed the issuer to pull them back (that's the SoarCoin thing[2]) but not a token that allowed other tokens to be transferred.
[1] https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-998 https://eips.ethereum.org/EIPS/eip-1155 [2] https://iterative.capital/erc20-backdoor-allows-you-to-steal...
For me, its only scary if one regularly interacts with tokens they haven't bothered to look up for the source code for. People really shouldn't be interacting with contracts if their first time hearing of it is from looking at who randomly airdropped them a token with a domain name in it. But hey, people regularly do stuff in crypto that i just think "wtf arw the thinking", so w/e.
Did you respond to the right chain of comments, none of us mentioned anything related to ZK solutions (chains line mina or rollups or otherwise)?
Plenty of people don't de-compile or read the source, don't engage with random tokens credited to their address, and the ecosystem around using "smart" contracts has grown since 2015. Not my problem if people want to use/trust something else (others audits for example) without putting in any work to learn/observe themselves and engage with random stuff. That's their problem, not mine. Some learn better after going through school of hard knocks anyways.
As a society, we have expected more and more people to learn how to read and write for basic literacy over hundreds of years. Those who know how to read and write code will have a leg up for that expanding literacy set for engaging with digital things and those who don't will be left behind esp as more aspects of life are governed/mediated through code and this goes beyond the whatever is being branded as "web3".
If you don't wanna use it, you are free not to (unless in the case someone hacks your devices from across the world, you don't engage in backups, and the only way to unlock it is to buy some tokens to pay them off; then its just hard choices to make).
We have. We've also extended protections for people lagging behind, for example by putting restrictions on what kinds of contracts can legally be entered into and voiding contracts that one party could not have reasonably been expected to understand, or entered into under duress or undue influence.
None of these protections exist under "smart" contracts, which is exactly why we can't and won't allow code to govern or mediate life as web3 envisions. Your dystopian vision of "oops, you lost your retirement savings because you didn't decompile that contract before interacting with it, too bad", or "oops, you lost your retirement savings because someone beat your wife with a baseball bat until you handed over your private key, sucks to be you"--in short, the dystopia of "code is law"--flies in the face of thousands of years of jurisprudence and civilization. Once the goldrush hype wears off people will realize how heinous the fundamental idea is and dump it in the gutter of history where it belongs.
And are constantly bypassed in practice by those with more resources than others wrt engaging with the various legal systems (or corruption thereof) around the world.
> None of these protections exist under "smart" contracts
Not true, some people buy off chain legal insurance for a particular juridiction and only deal with protocols they have some legal recourse over. Some use multisig accounts with trusted parties.
> which is exactly why we can't and won't allow code to govern or mediate life as web3 envisions.
There is no shared we though, some individuals (and governments) will adapt to it, some wont, some contracts/cryptocurrencies will survive, some wont, and people will make the convenience trade-offs like they always have had as things change. If you are only willing to try to force someone else to do your dirty work of imposing on peoples freedoms, you'll be behind those who are willing to put you in the ground themselves to defend such irrespective of any particular jurisdictions laws.
> Your dystopian vision of "oops, you lost your retirement savings because you didn't decompile that contract before interacting with it, too bad", or "oops, you lost your retirement savings because someone beat your wife with a baseball bat until you handed over your private key, sucks to be you"--in short, the dystopia of "code is law"--flies in the face of thousands of years of jurisprudence and civilization.
Bad things will continue to happen to some people even with out smart contracts or cryptocurrencies (bad things which don't happen to most people in the course of their lifetime btw), but if you want to live your life in fear as an excuse to not learn and adapt in face of bad things that may happen, that's on you.
> Once the goldrush hype wears off people will realize how heinous the fundamental idea is and dump it in the gutter of history where it belongs.
Yeah, like when people stop being motivated by greed, like when central banks and governments stop debasing their currencies like they have through out history, like when large private banks and service providers stop blocking people from using their platforms, etc. Could happen, I'm not holding my breath.
Its not really a technical problem its a user got phished problem
To me it shows that the user experience for wallets doesn’t catch up
Or that the standard classes for tokens leaves more to be desired, there are competing standards
the VM never asked anyone to make token classes and it is phenomenal that people made those classes
Consumer protection can come in other parts of the stack
Do you have an example of where something like this was actually deployed? How would a user moving one token would result in another token being moved?
I can only imagine a situation where a user might be induced to install a compromised wallet, and then to give that wallet keys to the their account. But this is not an attack strategy that depends on there being a "backdoored token" of any kind.
Is there some way to code an ERC20 token that would somehow give you access to a user's other tokens?
Just embed approval methods for a predefined external token contract address into the transfer() method of the airdropped token
Then you can also chain the transfer within it or you can wait and transfer them all yourself
Doing too much in one transaction will alert more users because the gas price will be unexpectedly large
https://blocksecteam.medium.com/unlimited-approval-in-erc20-...
But is it not the case that the approve() method must be invoked directly by the sender (i.e. by the account that holds the tokens that are the target of the theft)? Wouldn’t the invocation be rejected by the ERC20 token if it is made indirectly, i.e. if the invocation were made from within another method (provided that the target ERC20 token is coded properly)?
I can’t find any real technical documentation on this system but from what I understand about ethereum, this kind of use case effectively needs to be run off the main ethereum blockchain?
I just don’t understand what the purpose of the blockchain really is when most of the interesting ways to scale add features rely on processing transactions OFF the chain.
Fundamentally the order doesn’t really matter, as long as it doesn’t change retroactively. Once you have agreement on the order, anyone can process the transactions and know they’ll get the same final result as anyone else.
I’m not sure about this specific one, but most “rollup”s use the main chain for agreement on the order, and then outsource the actual processing to someone outside the chain. Some use cryptography from verifiable computing, so the off-chain person can also submit a proof that their processing is right and there’s no possibility of fraud. (the proof can then be verified extremely quickly.)
I'm surprised so many people on Hacker News apparently still believe that you can "see all transactions" on every blockchain. It really only takes some surface level research to find working, production blockchains/cryptocurrencies that use one of several types of cryptography to hide that data, plus if you're using a pseudonymous blockchain, non-custodial ways to "break the link" between wallets.
Most have no knowledge of the state of the industry. Their opposition is based on knee jerk reactions.
Are any of those even in the top 30 cryptocurrencies by market cap? Is anyone speaking about them in the context of Web3 or is it all ETH, XRP and maybe two more?
From my blissfully uninformed mind, the only time these cryptocurrencies pop up is precisely this: as a counterargument to the popular ones, where you can see all the transactions. They're fringes even among the fringe that is cryptocurrencies.
Aztec Network, Tornado Cash, and Starkware all run on top of Ethereum... Aztec and Starkware are currently in the community spotlight because they're rollups or so-called "Layer 2s" that push the state of the art of Ethereum's tech (and the state of the art in zero knowledge cryptography, especially Starkware's CAIRO language and their EVM to zero knowledge proof circuit transpiler). Tornado Cash has over $4B in deposits, and for many is the go-to way to anonymize transactions on Ethereum.
Ernst & Young released Baseline last year, a zero-knowledge cryptography toolkit for operating private data services on the public Ethereum network.
The answer to "who cares" is basically the entire nascent industry, plus a handful of mathematicians and cryptographers - if you are paying attention.
A number of the top 10 networks will eventually (~5-10 year time frame) get privacy preserving transactions however the space is still very much in development and it's a bit easier to reason about the network and what changes to make next when you can see what the users are doing. I know at the very least, IOG (the company currently leading Cardano development) is doing privacy preserving smart contracts research with the intent that it eventually becomes part of the protocol.
There's a lot for Layer 1 protocols to accomplish as it is so the space is largely delegating privacy chain research/functionality to L2s for the time being.
Monero uses a system that at a high level is referred to as Ring Signatures (it's not too complicated but it's more than I want to get into at the moment). Zcash and other networks use zero knowledge non-interactive proofs to prove consistency/correctness.
The major drawback of privacy preserving chains is that the transactions are expensive to compute due to all the maths that goes into maintaining that consistency without publicly leaking information. This isn't prohibitive for a desktop but a mobile phone will likely take a few minutes to build and send a transaction in the current environment (can be improved by HW acceleration or general HW improvements).
A nullifier is derived deterministically from private account data, and zero-knowledge proofs are used to show that a nullifier was dervied correctly without revealing the private account data.
For more detail I think this is a good explanation: https://electriccoin.co/blog/zcash-private-transactions/
Here's a link to the Ring CT papers. The original explains the base system, 2.0 formalises the security of the system, and 3.0 describes how the original protocols had issues and how they were improved.
Original Ring CT Paper: https://eprint.iacr.org/2015/1098
Ring CT 2.0: https://eprint.iacr.org/2017/921
Ring CT 3.0: https://eprint.iacr.org/2019/508
Personally I find the Ring CT 3.0 paper to be the most enlightening of these. For a simpler/shorter explanation however, Moneropedia has some videos that are helpful in this.
https://www.getmonero.org/resources/moneropedia/ringsignatur...
https://www.getmonero.org/resources/moneropedia/ringCT.html
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The key details are these.
Monero uses a UTxO (unspent transaction outputs) accounting model. There are a number of networks that use this model, namely Bitcoin. The UTxO model doesn't strictly have a concept of accounts but rather keys and UTxO. You can think of UTxO as as atomic chunks of data/value. These UTxO are created once and used once. If you want to spend money, your inputs are UTxO, the outputs are UTxO, and the balances of all of these inputs and outputs must sum up to a net 0. Now UTxO can only be spent if a valid cryptographic signature can be produced. If your private keys can produce that signature, the value held in that UTxO can be spent by you.
This gives us our three key points. All UTxO consumed or spent in a Tx must collectively sum up to zero, UTxO can only be spent if the proof object/cryptographic signature produced is valid, and UTxO can only be spent if they haven't yet been spent.
First Ring CT has each sender derive a one time private key from their private key and a one time public key derived from the recipient's public key. These keys are used to produce a set of encrypted "coins" which essentially hold the value of the UTxOs being spent and then created. This allows the sender and recipient to know the contents of the actual meaningful transaction. Then a cryptographic proof verifies that out of all the public keys in the Tx, all the keys can spend their selection of coins included in the Tx and only one of them is the real set of coins. From there the balance is verified by doing that some clever math where the sum of the encrypted outputs is divided by the sum of the encrypted inputs must equal some constant determined by the encryption key. This is a bit of a simplification but it works out such that it is equivalent to "ins - outs = 0" in a traditional UTxO system.
The key/signature verification mentioned previously has a nifty property where the produced "key images" serve as what are effectively "hashes" of the UTxO. This means that if any key image has previously been used in a transaction, it effectively guarantees that the corresponding UTxO has already been spent. Going back and checking this is somewhat more expensive than on a traditional network however optimisations (like using a bloom filter) allow for this check to run significantly faster.
That's how Monero upholds those 3 properties that are required for consistency in a UTxO based network without leaking information about the sender, recipient, or balances. In short it's using one time PKI derivations to break information symmetry and then from there structuring the encrypted data so that you can use some clever arithmetic and signature checks to verify correctness.
Apologies if my explanation isn't terribly clear or perfectly accurate. It's my reasonably solid understanding of the system. I'm not a formally trained cryptographer or mathematician so my choice of words or explanations may be somewhat inaccurate however they give a reasonable coverage of how the system works. If you want to dive more into the meat of it, I'd seriously recommend the Ring CT 3.0 paper as it's really well put together once you can get through the terse notation and dense amount of information.
You already know they are sharding secrets into nodes with Intel encryption co-processors but if you need more detail about how you got to hit them up
This problem is larger than crypto. It seems to be related to the accessibility of trading to "retail investors" (enabled by lower fees, new technology, monetary policy, etc.).
People with money in stable economies aren't clamoring for US citizenship, some are interested in it but its just an option. The whole continent is populated by people that lost consensus wherever they came from. Like 99% of the population has a heritage that was either deemed an extremist in their "motherland" or were simply just outside of the cool kids club and had to fight for scraps, or avoiding the impending reality of both. The other 1% are basically the 1% financially and just here for play while retaining their options to do the same anywhere.
If it represents a boon to forensic accountants it cannot also be a godsend to fraudsters.
True for some of its current incarnations, but it is absolutely not a built-in limitation and therefore not a valid criticism of the entire space.
As a matter of fact, a number of existing blockchains are already entirely opaque to analysis (zcash, monero, grin, beam, etc...), and in these, the effort required to actually connect participants and transactions is typically orders of magnitude larger than the economic rewards you'd derive from the answer.
I would have thought this to be obvious, but these chains, while anonymous still have the following attributes:
- decentralized
- permissionless
- does not rely on third-party trust
I was under the impression that nearly the entire thing is based on some form of consensus. Consensus is necessarily by third parties. So if the consensus drives decisions on what gets accepted and what does not, is that not a permission? If there is a single dominant consensus, is that not centralized?
further, none of this is "obvious"
1. Not all crypto currencies are public. See monero, haven, secret network. Although that last one depends on some specific features of some Intel processors... I'm of the opinion that the pseudonymous nature of public blockchains is very beneficial to society. I would love it if I could see what companies, governments, and people near me were spending their money on. It would enable me to make better decisions.
2. "Web3" is about decentralization but it doesn't necessarily mean storing data on a blockchain. The most important aspect is that users no longer have to sign up or log in. They submit responses which are signed by a key pair, which is their identity instead of a record in a "users" table.
Have you tried to “steelman” this? Because I don’t think it will pass basic scrutiny.
The same companies and governments you want track have more incentives and resources to hide their transactions than any individual, so, either all transactions are public or they’ll be able to hide while most individuals won’t.
For it to be common and being proud of one's economic transaction history would be awesome.
In the 90s, experiments in publicity like reality TV and the Truman Show movie gave way to social media in the next decade. We are constantly finding new ways to publicize our lives because there is value in publicity.
Privacy shouldn't disappear absolutely but we've got a long ways to go towards greater publicity before reaching the limit of usefulness.
I sincerely doubt we'll ever see that. First off, Venmo has already tried to apply the social media formula to transactions. I don't know of a single person who reads their Venmo feed just for fun. Next, most transactions are boring and not worth sharing. "John bought toilet paper and Q-tips. [Like] [Retweet]".
You state that the move to hyper-publicity that we've already seen hasn't reached it's peak for usefulness and yet there are already widespread conversations about the dangers and pain that this hyper-publicity has caused.
If we reach a future where people are "proud" of their transactions and are sharing them everywhere then we've made a horrible mistake.
It is a record in a "users" table. It is just that this table is the publicly readable blockchain.
I dont get this. I mean, spend your money on the things you need, and if there's money left after that, spend it on things you want. Dont spend it on something your neighbour wants. Let them spend their money on that.
I can go to a website today and register any name I want. The main thing that can break that is IP. How does a public blockchain solve the problem of routing a request to a device? How does consolidation of all user accounts to a single public ledger offer _more_ anonymity than exists today where I can have a random distinct account on any website I use?
From completely private to completely public.
Apart from that, Web3 isn't simply crypto-currency adoption, its about using the consensus innovation core to crypto-currencies to build platforms regulated autonomously by a public group with certain guarantees for security, openness and control.
When cryptocurrencies can handle 10% of Visa’s transaction rate, somebody wake me up and I’ll start paying attention to it. Until then a lot of this stuff is pearl clutching.
Visa is only a fraction of total money transactions worldwide. To be a replacement it has to be able to go an order of magnitude higher than Visa, and last I checked it’s still three orders of magnitude below Visa. That’s a lot of orders of magnitude to overcome. Too many by most accounts. People who make those sorts of improvements started out with a prototype that was already 20-50 times faster than the status quo.
The public transaction problem is solved by bullet & zero knowledge proofs in currencies like Monero & Zcash. I trust Monero more as it seems Zcash has a on demand back door to unravel specific transactions.
Web3 is a panacea but it might take a decade to arrive as the building blocks are in place.
In reality, web3 is a marketing buzzword that cryptocurrency boosters have started promoting in an attempt to legitimize their resource intensive and otherwise useless financial speculation.
When you want to be paid up front for something which needs fundamental redesigns and many orders of magnitude improvements for scalability and performance, it’s reasonable to question your motives.
There’s also the armchair argument that this doesn’t work for ‘reasons’ which is what you also find in posts with research papers where a random commenter is lecturing on how they should have done it without actual involvement in the space.
Most of us work on things we find interesting and feel like it could work (those lucky enough at least), which as some pointed out could just be us being dumb, but at the end of the day, if anything comes out of it, and it’s useful, no one is going to care how its named except the people that don’t like it.
Listing a specific technology avoids allows claims to be discussed technically without the vagaries of marketing.
> The World Wide Web (WWW), commonly known as the Web, is an information system where documents and other web resources are identified by Uniform Resource Locators (URLs, such as https://example.com/), which may be interlinked by hyperlinks, and are accessible over the Internet.
The only one of the three you referenced that has anything like that is IPFS, and it's missing large chunks of the web experience we know. Sorry, but a crypto wallet and a data structure simply have nothing to do with the web in any sense that word has ever known.
People love the web. It has profoundly affected nearly everyone on Earth. The last time someone invented something like it was in 1440 in Germany. If you want to redefine it as something completely different, people will assume you're doing it in bad faith to co-opt goodwill for your product. If it's for your crypto wallet, they will be right.
Would the fact that ‘net’ is aiming to make content-addressing a first hand citizen give any weight into being some sort of web? (this seems to be what the paragraph you quoted seems to be mostly concerned with)
Would being able to authenticate to websites with your crypto wallet in a frictionless way give any weight into being some sort of web?
Would a data structure that allows us to content-address files and ensure content resilience give any weight into being some sort of web?
I guess the answer to all my three questions is no because these are not covered in the narrow definition of the web that you provided.
I’m not sure what people loving the web has anything to do with the fact that ‘web3’ seems to be the slug for this new stack shuffle. Do people love web1? web2? This is a non issue. People love being connected as simple as possible, they don’t love the web for using HTTP instead of IPFS…
It's not a good alternative to banks, art collections or web hosting. But Bitcoin is still worth billions, NFT are all the rage and Web3 went from new concept to "trend" in the span of what feels like a week. But even with all the success they don't seem to be convincing many they have any intrinsic value.
So here we go again a clearly horrible solution to a problem most don't care about, but I'm sure will make some early adopters rich, and inevitably end in disaster for most.
Oh, and how it disrupts the remittances industry, something extremely useful to vulnerable communities with families abroad.
I agree that Web3 is mostly a grift, but cryptocurrencies are quite useful already.
I'll even throw in a scenario that I've encountered: the card readers in a store aren't working, because there is a connection issue. Instead of using cash in my literal physical wallet, I'd like to pay with my digital wallet. Can I conduct my transaction offline with the store?
In the scenario you mention, I’d just reach for cash.
However, as a protocol for payments/value in the digital world, it’s very compelling.
https://www.statista.com/outlook/dmo/fintech/digital-payment...
And today it is "BTC is the ONLY internet Money", "Ethereum will be the ONLY way people can execute smart contracts in the future". Invest Now!
Grocery delivery is the future (or at least a huge, lucrative chunk of it) and a lot of people do buy pet products online and sometimes even in a subscription model. Chewy.com is a huge business.
I still don't know the value of public, distributed, cryptographic ledgers. They don't seem to solve real-world problems because there is no way to tie them to the real world. They preserve lies just as well as they preserve truths.
Digital money is useful, but fiar is already digital.
However, these properties are not exactly specific to "digital-native money":
* Instant: banks can transfer money instantly between accounts as long as both accounts belong to the same bank. In Europe I can name Raiffeisen and ING as two examples and I believe that Wells Fargo in the US has instant transfers as long as both accounts are opened at the same bank and probably there are more. And in most case there are no "gas" fees for those transfers.
* Verifiable: all bank transactions are verifiable (at least internally, banks are forced to have an audit department) and in all cases you receive a receipt for your transaction. If you want to verify all the transactions yourself, glossing over the severe privacy issues that a blockchain will introduce (once you know the real ID of a wallet, you'll know all the finances of a person), it's not that easy to validate crypto transactions "from anywhere in the world": Ethereum requires more than a TB of space and Solana validator requirements basically point to an expensive server running in a datacenter (at least 128GB of RAM and 300Mbit symmetrical network bandwidth). Even Bitcoin's blockchain is several GB large which is very unwieldy to sync in areas with slow or bad internet connection (yes, DSL is still a thing).
* Programmable money: I'm guessing this would be the take on "smart contracts", but this is far for being perfect because you still need to trust that the code in the smart contract triggers the right action. For example, if I were to buy a laptop from somebody using a smart contract I will still need to trust that the smart contract will trigger the entire flow of sending the correct laptop using a courier to my place. A way around it would be to have the owner send the laptop to a third-party and the third-party would have some sort of reputation for correctly implementing the outcome of smart contracts, but we're back again at trusting a central authority and the entire flow could be implemented using regular code, so what's the point of smart contracts?
* Low fees: there are a lot of fees associated with cryptocurrency transactions on top of several "blockchain fees" like Ethereum's gas. For example, the service fee for using MetaMask is 0.875% of the transaction, or if I move $1000 from one account to another using MetaMask will cost me $8.75. I currently pay $0 for moving from one account to another one as long as they are opened the same bank.
Cryptocurrencies can have some legitimate benefits in specific situations (I'd imagine that transactions between parties in areas with no or very bad/expensive Internet access can be more trustworthy using cryptocurrencies), but I doubt these cases are as frequent as many people claim they are. I'd argue that by far the most interesting use would be to use cryptocurrencies as stores of value and have them regulate as some sort of equity because this would allow Wall Street to do all kinds of funky things with them :-)
The best take I've heard was from Michael Saylor of MicroStrategy, who was explaining a couple of months ago how it's much better to invest into Bitcoin because you can easily split it and move it to another country should the tax be too high, while buying a lot of land in New York requires paying a property tax and can even be devalued based on the zoning.
Just as Chinese citizens seem to be mostly happy about the politics in their country. Maybe that is the actual problem, people not caring about issues like free speech until it is too late. (Julian Assange is still imprisoned in the UK and almost nobody cares)
That nobody cares does not imply that it doesn't matter.
I don't want to bash China specifically, it just happens to be the first example that comes to my mind. So for example nobody cares that millions of Uyghurs are being enslaved in China, but that does not imply that it is not important. (Or take the example of Assange I mentioned - nobody cares that the UK locked him away without good cause).
Also most people don't really care about economics or how money or the stock market works. They just find themselves suddenly with a devalued currency or out of a job.
This is a gross misunderstanding of both the current banking system (which is decentralized) and the degree to which using a slow database doesn’t prevent legal actions. Blockchains are very easy to monitor and censor: ideal for an authoritarian government to get a signed confession for every disapproved transaction you make, and a high-volume always-on network is trivially blocked should they care to.
With such a track record, you really think they could just "tap in" or "modify" any given crypto protocol so they could audit every transaction?
Give me a break.
Speaking of disingenuous, I feel compelled to note that the failure was built by the private sector (CGI Federal) and fixed by the government (Mikey Dickinson’s USDS team), and it’s certainly not like there aren’t plenty of failures in private industry. You can’t honestly say anything about an entire sector based on a single cherry-picked example. For example, should we look at the high level of skill shown by Stuxnet and similar government operations, compare it to Experian, and conclude that the private sector can’t operate computers securely?
> With such a track record, you really think they could just "tap in" or "modify" any given crypto protocol so they could audit every transaction?
A public transaction ledger means you’re giving them that with no work and there are blockchain analytics companies which already have government contracts even if you believe that civil servants can’t use computers.
Similarly, there’s a well documented history of governments monitoring network traffics, collecting forensics data from phones in police custody, installing malware on people’s phones or computers, etc. There’s a zero-percent chance that they would forget to check for cryptocurrency activity along with everything else.
I know that transactions on the Bitcon blockchain are public. There are approaches to fixing it and several altcoins claim to fix it. It certainly isn't the last iteration of the tech forever. And I think you can also do things to anonymize Bitcoin transactions. I haven't really dug into it yet.
The real fire test of governments attacking crypto coins has yet to happen, agreed. It won't be easy, but nothing will be easy under authoritarian control.
Banks follow laws, which is also a hard requirement for cryptocurrency businesses. Very, very few people are banned from having an account and those bans are of categories which would also prevent a cryptocurrency exchange in that country from working with them. Note also that “centralized” is only true within a governmental boundary — a bank in Zimbabwe doesn't phone someone in the U.S. to ask whether they should allow someone to open an account, which is why I described it as decentralized because it lacks a central authority.
It's true that someone can try to circumvent those measures, which is a practice dating bank centuries, but there's an important distinction between being able to make a transaction and being able to avoid punishment for doing so. Just as most censorship happens because someone is afraid of the potential consequences for speech rather than prior approval of all communications, it's both possible and a natural extension of existing practice to start demanding that people in your jurisdiction disallow any transactions linked to a particular address or to punish people for accepting a payment after it's linked to a criminal activity. You'll never get that down to zero but cryptocurrencies make it a lot easier to block than real cash payments.
This is also the problem with anonymization schemes: governments don't say “he used Monero, guess we have to give up on law enforcement” but rather “Monero does not comply with our financial laws, any business or person caught accepting it will be fined and risk jail time”. Bitcoin laundering schemes are unproven at scale from a powerful adversary but also simply using a tumbler is risky because you're publishing a durable record of using a service designed to evade legal controls — if that's ever linked back to you, you've given the police a signed confession that you knew what you were doing was illegal. Legitimate users aren't going to pay a premium to take on that risk — especially since it would open them to charges of collusion on whatever anyone else using that service was doing — and that removes legal traffic volume, making it easier for analysis and blocking.
Laws are not always just, and not everybody who is prosecuted by some government is a criminal. Governments can seize bank accounts.
You can be labeled a nazi for nothing these days, and then businesses (including banks) who do business with you will receive threats and shitstorms to make them stop doing business with you. It can happen quicker than you think. Maybe you are lucky that you live a private live and never dissent with anything. By "nothing" I mean literally nothing - my own Twitter account for example was shut down by a rampant bot that was triggered by mere keywords. Even on HN there are frequent stories about Google accounts and PayPal accounts being locked.
"governments don't say “he used Monero, guess we have to give up on law enforcement” but rather “Monero does not comply with our financial laws, any business or person caught accepting it will be fined and risk jail time”"
Sure, I worry about that kind of issue a lot, when I think about how to enable free speech in unfree countries. Should dissidents in authoritarian regimes just give up, and not use Encryption or Tor? It certainly seems dangerous, but what is the alternative? Also I suppose you could try using Monero without anybody knowing that you used it.
In any case, if the laws in your country become unbearable, you can memorize your crypto seeds and try to flee the country.
Yes, but that doesn't change the fact that there isn't a magical technological fix for that problem. Wanting something to be useful for dissidents doesn't make it so and it's irresponsible to tell them otherwise just because adoption would be personally profitable for you.
> You can be labeled a nazi for nothing these days
Do you have citations on “nothing”? The examples I've seen are all of people who were doing things most people find objectionable and they didn't get a blanket ban on banking or being online but rather a specific company chose not to associate with them. Even actual Nazis like Stormfront don't seem to stay offline for that long.
> Should dissidents in authoritarian regimes just give up, and not use Encryption or Tor? It certainly seems dangerous, but what is the alternative? Also I suppose you could try using Monero without anybody knowing that you used it.
Think about what trying Monero would mean: you'd have to be able to use a search engine to find a client, download it without triggering monitoring, hope that it's not actually a trojan left by the secret police, hope that it doesn't make identifying network traffic (always-on blockchain networks are easy to profile that way), figure out how to convert local currency into Monero and vice versa, etc. — and either do so perfectly forever or very carefully purge your history without leaving a trace.
It seems a lot less risky to avoid things with massive electronic footprints and focus on using cash and offline communications as much as possible, but really the key part is not overpromising. When sales people go around saying things which are not true about cryptocurrency, they're giving advice which is actively unsafe to follow — it'd be much better not to say anything at all rather than give a false sense of security.
Well there kind of is, at least Bitcoin is better than other things in some regards.
"Do you have citations on “nothing”? The examples I've seen are all of people who were doing things most people find objectionable and they didn't get a blanket ban on banking or being online but rather a specific company chose not to associate with them. Even actual Nazis like Stormfront don't seem to stay offline for that long."
I don't really keep score. An example that comes to mind is JK Rowling being disinvited from the anniversary celebration of the Harry Potter movies for saying "Transwomen are not women". Or Gina Carano being fired from the Mandalorian for warning about singling out people using a picture of the Holocaust. It's not a blanket ban, but the proponents of cancel culture are generally pushing for blanket bans. They will write letters to employers and business partners (including banks) of people they want to destroy and ask them to fire/stop doing business with them. Are you sure your employer and bank will double check such claims before firing you?
(Edit: here is an example of a bank cancelling the account of a feminist organisation for saying the same thing as JK Rowling - https://www.rebelnews.com/dutch_banking_service_terminates_f... )
An example for banks messing up stuff, PayPal freezing Wikileaks bank account: https://www.wired.com/2010/12/paypal-wikileaks/
Where does Stormfront hosts their servers? Parler took a long time to get back online, but maybe they wanted to overhaul their tech first.
And more and more frequently it will just be bots that brand you a nazi. As I said, I was banned from Twitter by a bot misinterpreting some keywords ("hopefully" and "die" appearing in the same tweet - at least that is the only explanation I can find, as they disallow things like "I hope you die", but that was not the content of my tweet). And the beauty of banning people from social media is that nobody can check why it happened anymore, so people will just assume that "there must have been a reason".
"Think about what trying Monero would mean"
As I said, life under authoritarian regimes won't be easy either way. I don't defend all the sales people saying stuff about crypto coins. Some of it is true, some of it is bullshit. Just because some people tell nonsense, doesn't make all of it wrong.
From the article:
> The problem here is the profit motive: people who are working on web3 generally want to get paid for it, but it's fundamentally harder to extract rent from truly decentralized systems than it is from centralized ones. Because of that, people end up building systems that are centralized at their core, with some aesthetics of decentralization smeared on top, and call it web3.
I remain curious that there are practical applications for blockchain outside digital gold style securities. But web3 feels like a land grab for the mindshare of the future. Trading off the philosophies that got us here, while subverting them with the very things the web fought against (centralisation, pay-to-play and so on).
A big red flag is the level of complexity of web3 compared to say HTTP. I rarely see practitioners of web3 talking with clarity, instead hand waving and double-speak is far more common.
Yes, sometimes the most exciting things are emergent, but it's been over a decade of the blockchain field of dreams and we're still talking in hypotheticals are what it will be good for.
Gall's law seems more prescient than ever:
> A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system.
At the network layer tcp/ip/http are relatively simple compared to blockchain. At the application layer a web server/cloud is still simpler than a dApp. At the user layer a credit/debit card is still simpler than paying with crypto.
To say nothing of the ecological impacts. You may think web3 is the future, but we cannot ignore the fact that http is greener. Yes, I know proof of stake will make crypto green but I'm not convinced it's possible [0].
[0] https://yanmaani.github.io/proof-of-stake-is-a-scam-and-the-...
Climate change being what it is, we shouldn't even be considering technologies with carbon footprints as large as existing blockchains.
In theory that problem is solvable, but in the present, it should be a deal breaker
I don’t because it’s a very weak argument. You could conceivably run all crypto on renewables and excess energy.
The fact that the main purpose of the network seems to be running ponzi schemes, even in poor countries, is much more damning IMO.
There’s a reason our current financial infrastructure is still being run on cobol: if it only took 10 years to build it would have been updated already.
Financial tech takes a very long time and with a revolutionary idea such a cryptocurrency, I’m sure it will take even longer.
Things take time, 10 years is not a long time, however I agree with the overall sentiment about web3 and crypto in general in this thread.
Cryptocurrency is less a currency and more another financial investment vehicle for people that are tech savvy enough to get into the game. Put in another way: it’s primarily being used to make money, not trade it for goods/services. Maybe one day it will be used truly as a currency, but txn fees are too high and “HODL”ing makes the person money so they’d rather not trade it.
If it's going to move forward it has to shake the sleazy image with all the scams, pump and dumps, Ponzi-schemes and market manipulation.
"cryptocurrencies are revolutionary" is a statement that needs proof, not blind belief.
I'm not for or against, because it's unclear what there is to be for or against.
Web3 is nothing but an echo chamber. A very empty echo chamber, so it echoes pretty nice. I'm back to the world wide web.
I've been designing and programming for the web and internet for a long time now, and I took one break of a couple of years in between. When I came back there suddenly was this 'cloud' thing. I kept looking for answers. What is this? What's new? And although I found snippets here and there that made sense (it was basically infrastructure based, I found), it took me years eventually to really realize it was nothing more than the internet I already knew, but then decorated with marketing speak and buzz words.
I'm not opposed to new things, not even to new names, but I can sniff a name without meaning from miles away now. It looks like when big money is ready for the internet the whole thing needs a new name, the same now with blockchain, etc.
So I find it kind of funny I guess, hearing the proponents and opponents of Web3 speak.
This is called marketing.
Entire industries depend on it or even simply exist because of it.
For a closer to home example, see Free Software (which scared businesses away because it had the word "free" in it) vs. Open Source (which made folks understand they could escape things like vendor lock-in)
Your examples miss my point. Your examples are clear enough and have an understandable meaning (once you know what it is). I stick with my comparison of 'the cloud' and 'web3', because they both were names before getting any significant meaning.
It's a pity because I'd love to hear quality thought on the space.
My personal view is that crypto and Web3 "are a thing" (Mean Girls) and will continue to be a thing. But the sector is very very new, and supercharged by capital, leading to tumerous horrors. People get burnt, robbed, and jealous, and it leads to nasty feelings.
I find the space interesting and exciting, over all. Also massively frustrating of course. But I try to judge all things not by the worst cases of them (Daniel Dennet - I.e. cars are often good, they aren't always murder boxes). Looking at good examples also gives perspective on what work still needs to be done in the rest.
Can someone recommend places to read or be involved in non partisan discussion about these topics?
I personally wouldn't know where to point you, and sadly its more likely you too will run into disillusioning use cases from your own exploration (or wind up in a cult to bolster an implementation that is going nowhere). For me, it's been more interesting to accept that no state of the these technologies is set in stone, that I can influence the future state, and that the monetary incentives to build and influence the future state are phenomenal. Better option than smugly exploiting myself at an adtech conglomerate, for less money.
There is room for more specific things to be discussed, like if you look at the frontpage right now, there is a thread about "Deserializing JSON fast" or "A comparison of Rust and Zig". There could just as easily be discussions about "Solidity vs Vyper" or a thread every time a new version of one of those languages used in Ethereum Virtual Machines is out. Or node technology and processing transactions faster. Things that can inspire, but instead we just get these broad think pieces from wannabe angel investors and some influential VCs. As this is what makes it, it shows that this isn't the community to expect a deeper discussion right now.
But the majority of people interested in crypto don’t care about the technology, they are in it to get rich. Articles talking about the new technologies underpinning crypto do exist and get submitted, it’s just that to a rough approximation nobody cares about the actual technology.
Look at the level of discussion bitcoin had when it wasn’t realistically exchangeable for USD. That’s the equivalent level of interest from a pure technology perspective.
All of the noise today (including this article) are about the societal implications of disrupting this or that or enabling some other business/grift that wasn’t possible before. The technology is almost irrelevant at this point.
So too are the majority of investors in anything there to make money; you think they care about 'The Project' past its profits for shareholders? Developers who are only in it to make money is another thing, but even that group has nuance - some of them understand that the best way to make money long term is to build something valuable, and don't expect to get rich in one month.
As I wrote, I’m acutely aware of the signals for consensus formation, it is important for other people to know what kind of conversation is possible
"But the majority of people interested in TikTok don't care about the technology, they are on it to watch people dance and laugh."
The majority of people on the planet don't care about technology except what it can do for them. Having nuanced discussions about technology usually only interesting to a small subset of people. For many other technologies, HN is a place to have that discussion. But it hasn't been for crypto.
> Look at the level of discussion bitcoin had when it wasn’t realistically exchangeable for USD.
Bitcoin's first block was January 3, 2009. 10,000 bitcoin were famously exchanged for two Papa John's pizzas on May 22, 2010. The first bitcoin exchange, Mt. Gox, was launched July 18, 2010. So you're talking about a year and a half window since it was first conceived to have such discussion, less than 12% of the entire time bitcoin has been in existence.
And considering the name of the bitcoin paper is "Bitcoin: A Peer-to-Peer Electronic Cash System", there was probably some talk about it eventually being exchanged for USD right from the start.
> nobody cares about the actual technology
Yeah that's not true. On HN that may be more or less true (although I care about the tech and I'm on HN), but there's plenty of people that care about the tech and are discussing it in other channels.
It's crazy, I've had much deeper discussions about the tech with people who can't even program on channels on Discord than I've had on HN, ever, about this space. I'm still desperately trying to play catchup, they keep dropping articles and talking about things and concepts I haven't heard of before. And intelligently, too, not just "I like the web3 makes me money go fast moon please." like it seems everyone on HN assumes these people think.
There are people legitimately trying to do new and interesting (to me anyway) things with the space, and donating their time and energy and cash to try to build it and make it happen.
It doesn’t matter. My point is that was the only time the discussion was actually dominated by people interested in the technology. It’s a reference to a point in time and the tone of discussion around then. I was in security academia at the time and discussions were level-headed about bitcoin, hash cash, and other digital currencies.
> there was probably some talk about it eventually being exchanged for USD right from the start.
There was, but that wasn’t the technology talk that dominated the discussion. There is a reason it sat around for so long until the famous pizza purchase. It was about the technology at the start.
> Yeah that's not true. On HN that may be more or less true (although I care about the tech and I'm on HN), but there's plenty of people that care about the tech and are discussing it in other channels.
To a rough approximation, it’s about 0% of the people interested in crypto though. There are maybe a few thousand actual active crypto developers (and that’s being generous). The number of people who buy crypto to invest/gamble is now in the millions. The conversations are always going to be dominated by topics surrounding the latter because it’s so controversial.
The only way to get to technical discussions is to weed out the people who don’t like it, so you basically have to stay off any general technology forums (HN, chunks of Reddit, etc).
> And intelligently, too, not just "I like the web3 makes me money go fast moon please." like it seems everyone on HN assumes these people think.
That’s a strawman of crypto detractors. It doesn’t help you to model opposing arguments that way.
> There are people legitimately trying to do new and interesting (to me anyway) things with the space, and donating their time and energy and cash to try to build it and make it happen.
Sure, but pretending to invent an entire new generation of the internet (“web3”) is overly grandiose and the better discussions happen around specific technologies.
There I disagree, my news feeds in other places are heavily populated by development discussion, and word travels fast in the crypto-sphere. So aside from noticing that HN consensus is distinctly not part of it, it would be hard for me to agree less or disagree more. But people are here, they just arent the active contributors and arent coordinated to elevate their posts and comments.
For example, I just had the realization that I could learn a new programming language to write smart contracts solely because I dont need to market myself to out-of-touch recruiters and hiring managers. Deploying stuff onchain is lucrative enough. This changes the entire incentive model of a software engineer, or even a founder’s new venture, as both would otherwise need to optimize for new and shiny web 2.0 frameworks just to attract talent or be attractive to the next company.
I’m not saying that you can’t get good RSS feeds, small communities, etc. I’m saying that any discussions about crypto are going to be completely dominated by the people that love/hate crypto fighting over the non-technical aspects.
This isn’t special to hackernews or crypto, it just happens with anything that becomes disruptive in a good and/or bad way to vocal segments of society.
The same thing happens if discussions were to come up about effective mask technology, better abortion methods, gun improvements, etc. The people actually interested and capable of discussing the technology are dwarfed by the people who have feelings they feel compelled to share.
That seems very interesting! But how does deploying stuff on-chain change the calculus? An unknown person with no Twitter following who's not a member of a Yacht Club/other NFT gang can deploy a contract, but getting people to want to use the contract seems to be a problem for a lone-wolf developer.
Or am I only seeing the tip of the iceberg for the ecosystem?
Getting people to use it is not as hard as you think, unless it’s an entirely new concept. Do more of what works and improves people’s experience, undercut fees from existing contracts. Or make a premium version for that audience segment.
AMMs
Farming
Bridges
Wrapping services
Zapping services (wrapping + amm lp + farming in one transaction)
Yield optimizers (slightly solving issue with LP farming and AMMs)
And if you create a token it advertises itself, bots watch for LPs on AMMs to interact and humans notice the interaction, but another area you can compete is based on how community minded the token is, versus obvious self enrichment
I intentionally chose not to make this a primer on all the acronyms
I also scan the blockchains for certain method signatures of previously popular, which appear when they are invoked. So I find copycat contracts this way, which helps me know about new projects and communities.
Either way to your original question: The time to market is extremely short, the funnel is nearly non-existent with crypto natives, and the overhead costs are lower if you can code - all compared to SaaS deployment or being employed by a SaaS service
very curious.
Question: does being old enough to have lost money* - and having done so** - back in the .com bubble correlate with whether you're positive or negative about Web3 ?
"This Time Is Different" has been said by sales types since at least the year 1637
* Full disclosure: yes, I am
** Full disclosure: yes, I did .. not enough to have mattered, but enough to [still] remember
Investments happen because people want to make money, end of story. Not to help other people, because that is called charity.
BUT, that doesn't mean that investing is all about scamming people. It is clear at this point that the best investments are the ones that provide actual value to a lot of people.
To conclude: most things are about money, but that doesn't invalidate the value behind it.
And just like the OP, I agree that on HN these discussions always end up nowhere.
"It's all about money, not technology", and when you talk about technology: "It's technology looking for a problem", and then you talk about use-cases: "A centralized system is more efficient".
But this technology does enable something novel. Digital self-custody of scarce assets is a new thing. A thing that nobody could do before this stuff. And if that has utility, then the infrastructure for trading, lending, and all the rest related to those things has value.
Even if you don't personally find it valuable, it should be clear that it is a thing that people could, in principle, legitimately prefer to traditional systems.
That being said, a huge percentage of what's happening in the space is bullshit, an outright scam or an "essentially scam" project. All those things deserve heaps of scorn and criticism. Investigate Tether, regulate ICOs, do all the things. But don't go so far as to deny that there's anything there, or say ridiculous things like "Web3 is more centralized". Even if it's true that web3 is more centralized than the internet, that isn't the basis of comparison here. Web3 isn't competing with the internet, it's competing with traditional finance. And there should be no question that Web3 is substantially more decentralized than that.
Yet, only in the cryptocurrency debate do defenders have to offer up a disclaimer about all the scams, hype, vaporware, fraud, waste, hacks, speculation, crime and other insanity before proceeding to make an appeal to the nebulous hope of future possibilities, as if cryptocurrency isn't older than instagram....
This might sound far-fetched to outsiders, but not so far-fetched to those who have worked inside the industry and seen the waste. I've seen obvious shitcoins repeatedly succeed while legitimate tokens never get any attention. In this industry, you can feel the unlimited currency coming straight off the money printers. It's just like Wall Street Bets in reverse except it's worth over a $ trillion and they're going after regular people instead of big hedge funds.
But in general, a shitcoin is a poorly designed project (or just a clone of an existing project) where the founder sells a lot of their tokens and quits immediately after the initial ITO/ICO sale.
In my country, this also describes the day to day situation. You can't trust doctors because they make up diagnoses, people pay taxes but it never shows up in infrastructure, schools or anywhere; daily alerts by banks warning against some new clever form of fraud, until recently there was a fair chance new banks would vanish with customer money (I still only trust a few reputable banks), actual family destroying pyramid schemes, ransoms attached to child kidnappings not data, politicians stealing from their constituents, police not trusted because of lack of transparency and corruption, bribes as a defacto tax.
The combination of high levels of poverty and lack of regulation is what leads to the proliferation of scams and dishonest behaviors. Poverty lowers the threshold of criminality, lack of regulation and lack of an enforced justice system enables its flourishing. Poverty also catalyzes more susceptible victims of such crimes.
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> only in the cryptocurrency debate do defenders have to offer up a disclaimer
Financial activity in crypto lacks regulation, which attracts predators, who create scams that attract the poor who are not necessarily gullible, just gambles from desperation.
> Android or iPhone
In Android vs iPhone or Windows vs Mac, people do argue about vulnerability to malware and the merits and demerits of locked down platforms.
I'd also argue your examples are not appropriate, they're more clashes of belief systems and less people freely interacting in market like scenarios. Consider that kickstarter is rife with vaporware, hype and scams. Scams, fraud and hacks in Roblox and Entropia. Crime, speculation and hacks in Habbo Hotel. Western financial systems discriminate against certain professions and citizens of entire countries due to some cost benefit calculations related to fraud.
If you have a system where money can exchange hands, you'll find psychopaths preying on the poor and careless. Oh and this isn't just poor countries and virtual markets, psychopaths preying on the poor and desperate also occurs for developed countries too (you just give them fancy names like debt bubbles and mortgage crises).
It's a bit goofy to make the comparison you made - I mean you didn't even finish your thought, you just painted a vague yet intense picture you expect people finish for you with the worst possible outlook. You aren't getting rid of crypto, so you'd do more to actually find out what's wrong with it and offer solutions rather than winging about it and praying for authoritarianism.
But what really are the "scarce assets" that Web3 is enabling self-custody for? A token on a blockchain that has metadata pointing to a digital file that anyone can view and reproduce? By definition, every NFT is scarce in that each one is non-fungible. But this scarcity doesn't mean there's any meaningful value. An NFT alone doesn't inherently give you ownership of or rights to anything except the token itself.
The minute you want to attach some meaningful rights to an NFT, like legal ownership of the digital or physical asset the NFT points to, or the rights to an income stream produced by such, you have to enter the world of our traditional legal and financial systems.
There’s a “mind-virus” doing the rounds on the crypto space, the idea that scarce = valuable.
These unique tokens almost always point to digital files that are accessible to everyone and anyone, and that can be viewed, downloaded and reproduced by everyone and anyone.
To the extent that a person might consider these files are "assets" at all, the bigger issue is that ownership of a non-fungible token is still just ownership of a non-fungible token. It doesn't on its own convey any ownership of or economic interest in the "asset" it points to. If you want the token to convey ownership or economic rights, you're back to the traditional legal and financial worlds Web3 is supposed to be supplanting.
To the extent that a person might consider the NFT itself to be an "asset", the question is where the value is derived if the NFT is merely a pointer to a digital file that you don't have ownership of or an economic interest in.
And that is orthogonal to whether the content is mutable or not. It just means that mutation is deliberate and obvious.
So while these digital deeds don't seem to have much connection to the analog world, they may not need to, if digital governance comes about.
That being said, I wonder if the main challenge with digital governance is not so much the digital part but the cross-border part. In other words, governments have jurisdiction over physical land and digital interactions transcend those boundaries. I wonder if many of the things people are trying to solve with crypto would be solved if we had more global governance. Global property deeds (right now, typically at most nation-state level, but also can be very local to city level), global currency (de facto USD right now but no official one), global company registration (at most nation-state level, but also lower as well), and global governance (the UN is there and many other standards bodies, but governance of many things still at most at nation-state level).
So, it says to me there's a desire for more global (read: physical borderless) ways to interact, own, and regulate all of that and that much of crypto seems to be the skirting of nation-state laws and almost reinventing governance from scratch.
However, theoretically, you could tokenize other assets, like real estate, or intellectual property, and then trade them in a more liquid, global manner than is currently possible. The NFT ecosystem is one of the least developed parts of crypto, though.
If you want an example of tokenized value, just look at stablecoins. Stablecoins are literally tokenized dollars. They allow you to self-custody large amounts of, what is effectively digital cash. That is something you couldn't do before. If you didn't trust banks, you either had to store physical dollars in your home, which is extremely dangerous for a number of reasons, or you had to suck it up and trust them anyway. Crypto gives you a third option.
Possession of a token itself doesn't create legal ownership of a separate asset unless there is a legally-binding instrument that conveys ownership of that asset through possession of the token. To turn tokens into legally-binding instruments of ownership, you're back into the real world of laws, lawyers, financial regulations, etc.
> However, theoretically, you could tokenize other assets, like real estate, or intellectual property, and then trade them in a more liquid, global manner than is currently possible.
This simply isn't true though. Tons of real estate assets are securitized and traded in liquid, global markets. Even average investors can access these markets through REITs.
More esoteric assets, such as music royalty rights, have exchanges like Royalty Exchange[1].
You could of course use the blockchain for these types of things, but just using tokens doesn't absolve you from having to comply with securities regulations. Unfortunately, from what I see, a lot of the people trying to create crypto-based solutions seem to believe that the use of tokens is a "get out of regulation jail free" card.
> If you want an example of tokenized value, just look at stablecoins. Stablecoins are literally tokenized dollars. They allow you to self-custody large amounts of, what is effectively digital cash. That is something you couldn't do before. If you didn't trust banks, you either had to store physical dollars in your home, which is extremely dangerous for a number of reasons, or you had to suck it up and trust them anyway.
Stablecoins claim to allow self-custody of large amounts of basically digital cash. But there are a lot of red flags with stablecoins and I'd humbly suggest that anyone who doesn't trust banks but is willing to trust stablecoins is missing the plot.
Either way, your cash, in whatever form it takes, is at greatest risk because of central bank policy, not how and where your cash is stored. If the USD loses its reserve status, you're going to feel the effects whether you're holding physical dollars or Tether.
I see it more as retaining ownership some of the content we produce and happily give to twitter, youtube, facebook etc to monetise and have some more control over it
Things as being able to:
* remove access to site to display my content but still be published somewhere else if I wish to do so
* be able to serve my content to people that prefer to use another tools without relying on twitter to have a public API as long as I granted them access
* get the person getting hits and making money of ads to share some of that with me, or maybe pay my gas fees
* not be shut down because a given site or state decides my content is not worthy of it, they are still allowed to do this, but I could still continue via another "frontend" and people can choose
There are more use cases around this, and there are many gaps yet around the economics of it to make it accessible/free, make it desirable, legality, liability etc which I believe remain to be solved
Now the relationship is the reverse, I give content to some org and they can do as they wish with it; I'm surrending it for them to use in exchange of them allowing me to use their platform for free.
e.g. from Twitter's terms of use:
> By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods now known or later developed (for clarity, these rights include, for example, curating, transforming, and translating).
If the content was hosted somewhere else and then displayed on twitter instead, this would not be the case or I could revoke it in the future but still be able to distribute such content via other means
Now, if I want to use another site then I need to duplicate the content myself.
Since all that they really offer is the userbase/community, its very hard for competitors to come into play and offer better terms or capabilities. In fact, they can change these terms at anypoint and I can do very little about it aside of deleting my account (if they even allow you to do that!)
And you are right twitter can still have that clause, and they can cause they have somethign to offer (i.e. a userbase) but if the content of everyone would be somewhere else other competiors would be able to offer it and then competiion for users would tend to make those terms more accessible to those that care enough to read them.
* you can by doing it as in an event sourcing system. After all blockchains+smart contracts are similar to a giant state machine
This seems incompatible with the goal of control: instead of giving Twitter free rein to reproduce your content however, you’re giving everyone on the internet the ability to do what they want with it, completely unrestricted.
(Yes, you could DMCA then but then the blockchain is useless)
Unless whatever service accessed the tweet/image/text/whatever made a local copy and is displaying that once the "blockchain service" no longer allows access.
An NFT doesn't confer access control. Its a certificate of ownership, the asset itself is infinitely reproducible.
if you are not aware of how something like what I described could work maybe have a read around on some simple smart contracts where there is hidden state (like guess the answer or contracts that implement role access/control for certain features)
Right now buying IP rights is a bespoke process involving lawyers. It has very high transaction costs in the Coasean sense. Tokenizing and standardizing these things, and standardizing the way revenue across directly to the rights holder in a way that is agnostic to who the owner is.
This is the value of the decentralized economy. It has the ability to shrink the domain of responsibility for the traditional legal system, and standardize things in a way that simplifies entry for entities that are less legally fluent.
I think an appropriate analogy here would be between the private and public markets. Buying stocks on the public market is easy and simple, because the process is standardized. You don't have to read complex legal agreements or study cap tables. You just click buy. The token economy has similar properties, although all the details of what the best ways to standardize, and what should and shouldn't be standardized, are not yet flushed out.
... It gives you a receipt.
A digital receipt. That points to a URL that may or may not exist in 10 years?
Not like a hash would be much better, as changing one pixel would give you a different hash, but at least it would represent a specific version of an image, a URL could change to anything tomorrow.
Proof of provenance is valuable in many, many applications. But anyways, that isn't the point. The type of digital self custody i'm referring to is for things like stablecoins. Stablecoins allow you to self-custody dollars in a way that was not possible before cryptocurrency.
That, doesn't seem very decentralized if it has to pinned to something controlled by one entity?
Ok, so self-custody is that you've not got an account with a bank (a "vault" to keep all your money in) that they ultimately control, you're walking around with a wallet, one with a very secure clasp.
That argument kind of makes sense? But a central authority can still squeeze on you just as much, by targeting who you would trade with though, right? The ledger is public, they know who you traded with, they can make life difficult for them until you're not a customer.
> Why is everyone here so focused on NFTs?
Because that's all we here of {$coinname}Coin and blockchain currently, it is the cultural zeitgeist and the face of the tech to the broad public.
Noone's giving a simple explanation that makes sense and gives the killer app features. It's all marketing hype or five dollar words. It took me a good while to realize that "Stablecoins allow you to self-custody dollars" means "bank can't lock me out of my account"
Ya, it doesn't make you totally immune from squeezing. It just changes the dynamics of how that squeezing works. Essentially, it becomes much less feasible to squeeze people in a scalable way for centralized entities.
> Noone's giving a simple explanation that makes sense and gives the killer app features. It's all marketing hype or five dollar words. It took me a good while to realize that "Stablecoins allow you to self-custody dollars" means "bank can't lock me out of my account"
Ya, I certainly admit the hype and everything else that goes with it around all this stuff is terrible. Crypto is nowhere near as useful as its boosters will tell you. But I do think there is a kernel of something very cool and interesting there.
Self executing and self-enforcing contracts and self custody is a real innovation, especially for people that live under less than stable governments, or have less than stable currencies. People that say this stuff is going to replace the legal system are idiots. It can never do that. But it can take a few superficial legal structures that are currently expensive and messy, and make them a little cleaner, more transparent, and fairer, I think.
If that’s even possible, is it to a single organization with 1:1 reserves in US treasury paper?
If so, how is that more “self-custody” than a bank?
How so?
This is how "web1" operated all the time: People have a cool idea and fire up a webserver to host it. Self-Custody in its purest form.
Sure, others could copy it, but they can also do that with whatever someone generates an NFT for "digital assets" (the certificate cannot be copied, the thing it certifies ownership for can).
As for "scarcity": Digital assets are either shared or scarce, there is no in-between. Distributed Ledgers allowing NFTs make the certificate of ownership scarce, not the asset itself.
Web1 assets are not scarce, that's the difference.
> Sure, others could copy it, but they can also do that with whatever someone generates an NFT for "digital assets" (the certificate cannot be copied, the thing it certifies ownership for can).
Forget NFTs. Go print yourself $1000 USDC and try to exchange it for dollars. The thing that prevents you from doing that - that's decentralized digital scarcity. There is no equivalent on web1.
Of course there is. If the service offered is not just access to some data, but things like computational power, access to a game server, food delivered, etc. I put up a payment system, and unless its used there is no access to the asset.
What form that payment system has, and what tokens it accepts USD, EUR, BTC, Seashells or Sliced Bread, is completely irrelevant.
And someone, somewhere, has the root pwd for that server. There is still a central authority.
That someone decides if the server is up, what code it runs, and how it interacts with voting, contracts, tokens, etc. on the ledger. The only thing in such an environment that is "dezentralized", is the public ledger (aka. the "Blockchain"), where the current state of the tokens, settings, etc. are stored.
If the people running the service decide that whatever is written in that ledger no longer applies to them, it no longer applies, period.
I realise there are hypothetical advantages to NFTs over in-game items, but I am not yet sure they will be worth it in the long term.
It's unfortunately also pretty much pointless. Digital assets aren't scarce, and physical assets mean leaving the system and losing the properties of it.
That said, the hype seems a little bit overblown. When people are so focused on "overthrowing Big Tech" as to why web3 will be the next wave, it just seems like hype over substance.
I forgot what the name of it was, but I tried to sign up to some web3 social media site. In order to even post, you had to drop $80 on the relevant crypto to post on the site. I understand the justification but that made me immediately just lost interest in the web3 space. Seems kinda like a pyramid scheme. The people who are already in get richer while the newcomers just get magic beans.
Exciting for who though?
The only party who benefits from resale royalties is the creator of the NFT and/or the beneficiaries they designate. But what value do they offer the buyer and seller to earn this? In almost all cases, the creators of the NFTs aren't conveying any rights beyond ownership of the token itself. They're not even selling ownership of or rights to the digital assets (GIF, etc.) their tokens point to.
When you buy and sell an asset, you might very well pay a fee to a party who facilitates the transaction, like a broker. The fee is to compensate the broker for the value they provided in facilitating a deal. These middlemen are often maligned for the fees they charge even when the facilitation they provide seems minimal but that doesn't mean that giving creators of an asset a perpetual royalty every time the asset is resold is any better.
To me NFT resale royalties are actually one of those things that look worse than traditional finance. Imagine if a company sold stock to the public and as part of the deal, stipulated that each time a share was sold, it would receive a royalty of 10% of the new share price. Would buyers and sellers see that as a benefit or predation? And at least in the case of company stock, your share would give you actual ownership of a piece of the company and rights that come along with ownership.
With NFTs, you just get a token with a pointer to a digital asset that isn't yours. And for that, you might get to pay the NFT creator a "royalty". I haven't seen any articulation of why this is a good thing.
If you go further, the content doesn't need to be a simple url, it could be data of any type. People get stuck on "who needs to pay for url, when I can copy the contents freely", but you're not buying simple url, you're buying a multidimensional point in the current manifestation of what we think as web3/metaverse. This point is the intersection of your private key, Blockchain used and the content(url). This is valuable because none can claim the same point, and it is guaranteed not to change.
But this is useless. The video is available with or without the blockchain. If you have DRM on the video, then you don't even need the blockchain. The blockchain can't actually do anything outside itself, and if you are trusting Metaverse.inc to enforce ownership, why can't you trust them to store it too?
I’d start there.
The latest buzz, like Ethereum is on NFTs. Not a fan myself. I hold hbars, but wanted to share one example.
https://medium.com/hashgraph/formal-methods-the-importance-o...
My two favorites are:
helium where they build IoT global network, I use a helium GPS-alternative tracker for my moto which costs 10 times less than GPS tracker.
scPrime (although there are other storage alternatives) which build global S3-compatible storage using available disk space on HDs. There is a lot of real estate that is sitting right now that can be harvested for money easily with networks like this.
It essentially operates as a unregistered and unregulated ISP and that isn’t something to be taken lightly. It does that by pushing all legal and regulatory liability to operators. There’s also a lot of scams with operators faking their signal etc.
Running a node also likely violates your ISPs ToS - can you contractually resell bandwidth?, so it has similar concerns as what AirBnB etc for the housing market.
There’s nothing stopping something large ISPs from blocking Helium traffic and/or suspending customers for running a node. Alternatively, if this gets big enough, you’ll see ISPs offer LORA hotspots of their own.
Ultimately, it is a very much VC-funded company running regulatory arbitrage on a global scale by using crypto instead. It’s the same if Uber decided to pay drivers in UberBucks a decade ago - that doesn’t change the offering, it just makes it easier to scale while pushing off any regulatory liabilities (including taxation).
As far as I can see there are currently 19 approved device manufacturers [0].
> It essentially operates as a unregistered and unregulated ISP and that isn’t something to be taken lightly. It does that by pushing all legal and regulatory liability to operators. There’s also a lot of scams with operators faking their signal etc.
Scams faking their signal will only help improve the robustness of the network on the long run as these are fixable issues.
Regulation seems to be spurring on every web3 conversation. I believe regulation is lagging behind user adoption and is a pending conversation. As for the exact scenario (LORA network) what kind of regulation do we __want__ the network to have? I don't think blocking user traffic is something we want to have, as an example you mentioned with current ISPs.
This isn’t about Web3 though - Starlink for eg started accepted beta signups in India without a ISP license and was forced to go back on that. This is exactly kind of regulatory questions that Uber brought with it and it deserves the same level of scrutiny. Uber for eg, was forced to get a Taxi license in various jurisdictions.
Nice to see that they have more manufacturers though.
When there is just so much on a flawed concept, you cannot expect discussion to keep rehearsing the same old "Web3 is a scam" talk, and seeing its promoters discourages further from any healthy discussion.
He says blockchain is logically centralized, which is what this post here is essentially talking about.
https://medium.com/@VitalikButerin/the-meaning-of-decentrali...
Plus all NFTs are a hilarious game of what marketplace it is published on. Give it 6 months, there will be massive fragmentation of the marketplaces and you'll see "NFT Artists" listing the "Original" on 50 marketplaces at the same time.
That kind of proves that there is no substance behind Web3, other than a hype train, saying that the technology will be useful someday. "get in now before it is too late."
I don't want a "pro-crypto" echo chamber, but I also don't want what hn devolves into whenever these topics are brought up.
If you manage to find this reasonable place, please, please post it here as reply to your comment. I've favorited your comment and will check any replies to it for a month or two.
What a pity :(
To your question, I like https://www.rekt.news/
Personally I have to fight my own rising blood temperature to even discuss it as being “a thing”, because people have such fundamentally different views on what that thing is, and I believe the argument is made in bad faith (not by you or your comment by the way, just in general).
Adherents would have you believe that the current price, whatever it is at a given point, must mean some variant of “can all these people really be wrong? That’s ridiculous”. It’s not a reasonable starting point for a discussion, and then it immediately breaks down again.
The tldr of it is that to have a discussion we’d need to agree a common set of facts as a starting point.
To me, it’s a collection of distributed ponzi schemes based on signed linked lists, but it seems the whole world wants to agree that regardless of whether or not cryptocurrency is the future of money, blockchain is a really transformative and revolutionary breakthrough without any evidence to support that claim.
Also stop trying to make fetch happen.
But it is reasonable to dismiss the whole field because you think it's a scam? Please read what you write before you post, as this is meaningless and illogical.
What I wrote is absolutely logical as best I can tell. I didn’t say it’s a scam (although that community is riddled with those too). I said it’s a collection of ponzi schemes (for which there is far more evidence to support than it being a financial revolution).
Charles Ponzi genuinely believed he had revolutionised finance, too.
All you’ve essentially said here is “Lots of people hyping on social media, therefore no scam, shut up fool”.
I do not believe the majority of people in the cryptocurrency space are attempting to harm anyone.
The ethereum developers mailing list or something, I'd expect? I agree with your sentiment, I find the cutoff is "programming crypto stuff" vs "not doing that".
Actually I find the same is true of AI, if you don't know how to train a classifier or what a vector space is, your comment about AI is probably dumb.
Everyone's got opinions I guess, I just find builders have more varied, interesting things to say.
When there is literal money involved with <insert any topic> I think it's basically impossible to have a forum that is unbiased. Good luck.
If crypto is a thing, then I'm really wondering what happened in 2018 - 2020.
When it went from 20 k to 4,5k.
Everyone always seems to be forgetting this.
It took a pandemic to get crypto interest back up.
https://trends.google.com/trends/explore?date=today%205-y&q=...
Ps. With crypto, i just think we are in a loop where the end result is failure. And the news flow/discussions are literally the same as in 2017 but with more buzzwords that even techies don't understand it anymore without spending ( significant) time investigating it. The average population doesn't really care and i need more arguments than "i think it's a thing".
Just like in 2017, one of the main problems is that the people vested in crypto want to convince people that don't care. And because of their money involved, they can't let it go.
Eg. The surreal spectacle of a president 'fixing' his country by shouting: "bought the dip" on Twitter every month.
Also for the web 3, i don't really see a reason for it. They claim decentralization, but if you look at eg. OpenSea, the power is not with the "people" and it's really expensive to "mint".
People that don't have money to lose have massive FOMO.
Thus, two very split sides.
But yet the money continues to flow in. People who know nothing about technology in general are now investing in companies specializing in this technology. Why? Clearly, there's something there. Or maybe there really isn't. And this is the biggest grift ever seen. All led by ridiculous marketing.
I really do think this is all going to collapse. There's no way this clown car just continues endlessly without some repercussions.
On the other side yeah, most of the goals of decentralization could be achieved by looking at things like the Bittorrent / Pirate / Scihub projects which have been delivering content consistently in a distributed way for decades.
A blockchain is only necessary if you need an immutable history for some reason for a specific part of a process that you want to implement, but every other part of the process can live apart and work without any blockchain tech.
That said, the reason tokens are tied to so many of these projects is to act as incentive and to quantify participation. There is no reason for people to, say, seed torrents aside from feeling good about sharing with other people.
Financializing this process brings an incentive to participate in decentralized projects that otherwise would have no way to exist. Sure, most of the projects will fail and perhaps only existed in the first place to enrich the founders, but isn't that true of the startup space as well?
The projects that succeed will succeed big, but I estimate we are still years away from an example that will be overwhelmingly convincing. By then most the profit will have been made and there will still be people on HN saying the whole cryptocurrency space is a scam. It is my opinion they are wrong, let history be the judge.
Would be great if we could incentive via tokens people to run mastodon instances where people can log in with their address (and multiple chains tokens are recognized) because I personally have no desire for onchain social media like i do for onchain derivatives and exchange functionality.
By that measure, parent comment is right, IP isn’t decentralized either because we agreed on it?
- more centralized
- more controlled by VCs
- less performant / reliable / secure than web2
These are probably all true for now.
They failed to see the key features web3:
1. the possibility (but not guarantee) to operate in a hostile government / regulatory environment
2. the possibility (but not guarantee) to operate without a legal entity without shareholders / boards
Web3 is not a guarantee of decentralization or security or anything else that people often mistakenly attribute to it. Web3 has one superpower in that it can say a huge FU to gov and FU to big tech. Web2 can't.
That's it.
It's ok to be disappointed by this superpower. But after reading "the Sovereign Individual", I am a believer in this superpower as being incredibly meaningful and impactful in the longer span of human civilization.
That's certainly better than bitcoin, but it's still worse than using cash or gold. In which case you may have no traces of transactions left behind.
If I was living under an oppressive regime, I'd be weary of using crypto instead of cash. However, the advantage that crypto has is to reduce control that democratic governments have over the economy. But it could actually be an asset in combating tax evasion. You'd be able to get a lot more with subpoenas and warrants.
I would be very hesitant to recommend that to anyone who lives under an authoritarian regime rather than casually giving you plausible deniability for buying weird porn. Large scale analysis of the entire network will see through noise and I would especially question that being at all effective in an environment where clients are frequently compromised. If you have to worry about serious consequences cash is a lot less risky if for no reason other than that there’s no possible way to retroactively trace an old transaction.
Could elaborate on that ? I am curious.
True enough although cash does not move by itself, you have to meet up and you can be caught with an unsual amount of cash with you.
There are some people who’ll say their personal opsec is so good they’ll never fall prey to that but even if that was true it’s also everyone you transact with. If you’re living in a repressive regime, you have to worry about everyone you interact with as well, and that’s deadly for a currency network. It’s especially so for one nobody needs to use — if the police stop you and you have the equivalent of Venmo/PayPal on your phone, that’s not risky because millions of people use it and they follow local laws but if some cryptocurrency did successfully allow you to avoid government oversight simply having a wallet app installed would attract attention you don’t want. People who aren't trying to hide their activities won't want to risk that, which means that there'll be less volume in which to hide your transactions.
Im really entertained by other nerds making wild claims like this. It's like the internet is jumping the shark. We just don't know what to do with all this anymore. Problems are being created so we can come up with solutions nobody asked for.
for one, blockchains still use the "regular" internet infrastructure at the bottom. If said nefarious government wants to shut down the usage of a web3 service they don't care about the "decentralised" nature, they just cut it on infrastructure level.
as for the legal entity, this is a boon as much as it is a threat to running a service. The dominant stakeholders or miners in your network hold executive power here, the main difference is that you'll have no legal resort if things go south.
in short, i might give you a _possibility_ to evade bad actors outside your system. But it cuts away any regulatory recourse you'd had against bad actors _within_ your system.
For example, when someone makes a deposit (say of ERC20 USDC to earn interest, around 3.0% currently) on https://compound.finance, that data is freely available and the "receipt" becomes another token (the ERC20 USDC cToken). [1]
This token can now be used for other things, on any other protocol, without the involvement of compound itself. For example, there is a "compound" pool on https://curve.fi that allows users to deposit cTokens so that they can earn interest on their stablecoins while also providing liquidity for stablecoin swaps and earning swap fees as well on top. [2] In fact, with this pool, the user can deposit/withdrawal just pure ERC20 USDC instead and curve will deposit/withdrawal that into/from compound on behalf of the user, again, with no involvement of compound at all. (other than interacting with its "immutable" smart contract)
This deposit then gives the user back another ERC20 token "cCrv" that can then be used in other DeFi protocols without the involvement or authorization of curve.
At this point people are talking past each other because "centralization" can be used to refer to many things. The author's analogy is arguing about the direction/standardization of the technology, and the proponents of the technology are talking about the user data.
If I buy a house, I can take a credit on that house.
If I bought some stock, banks will let me take a loan on them afaik.
I can also borrow some money and choose something expensive that I own for a collateral.
Maybe crypto makes the last one easier, but then it will lead to a lot of fraud, because veryifing that the item I set as collateral is the difficult and expensive part.
Other companies like mint and byallaccounts largely did the same thing and were aquired at $170 per account and $33 per account respectively. So obviously someone is making money on keeping your data gatekept.
Maybe they don't offer the information in the specific way that you want, but that can also happen in web3(Propertery API, OAUTH2 which means you have to have static ip server for authentification,etc.).
You pay for the convenience of having your data aggregated in the specified format.
That aside, banks in the EU are forced to offer api services, as specified in the PSD2 standard.
I just don't see how doing everything in a web3 solves anything better than regulations.
Maybe - but then, good luck getting every single country in the world, to agree on identical, completely open regulations way, way more advanced than PSD2. This is what ""web3"" (or more accurately, open and composable finance primitives such as Ethereum/alt-L1s and the surrounding ecosystem) achieves.
The reason you wouldn't be able to simply start a website offering people loans would be because of laws, I see no argument that if you somehow use a different technology it is suddenly legal.
I can participate/play in my democracy with little to no cost. Unless you are arguing time (~20 minutes/year) commitments to vote?
Sybil attack is the fundamental problem of the internet. (And proof of work was actually designed as a way to mitigate it)
The interesting thing about governance is that it existed before the term: In Bitcoin the community governs the direction of the protocol by directing their hash power, perceived value, and simple use of the network towards their desired fork. You can't do this with contract tokens unless you want to fork the entire Ethereum Blockchain for the sake of one DAO.
Despite this limitation, if DAO pay to vote schemes could be combined with 'vote with your feet' you could have the clean, efficient governance of a DAO with the fully actionable emergency escape (a fork) in case foul play is sniffed out.
Mirror (https://mirror.xyz/) is an interesting Web3 alternative to Medium. I think they have gotten a lot of the elements right. Blog posts are backed up to Arweave perma-storage and they have easy point and click integration for crypto donations (with automatic splitting for multiple authors), NFT auctions, and crowdfunding.
At any rate, I think decentralized social networks are still nascent and we haven't yet seen a break out success on the level of Discord or Twitter or Facebook, but I remain optimistic that it will come.
Proof of stake means the largest stakeholders can unilaterally reject transactions. Technically the chain could fork. Practically, convincing everyone to move to a new chain seems about as difficult as everyone moving off Facebook because a few people get banned.
Proof of work means the richest people can afford more miners and completely control the chain.
So where is the decentralization? The only realistic decentralization I can make out is that its possible to build alternative chains, but that very thing is possible today. Its possible to build an alternate payment processor or social network if Visa bans your business, the really hard part is building it and getting the entire ecosystem to actually use it.
> Proof of stake means the largest stakeholders can unilaterally reject transactions. Technically the chain could fork. Practically, convincing everyone to move to a new chain seems about as difficult as everyone moving off Facebook because a few people get banned.
> Proof of work means the richest people can afford more miners and completely control the chain.
> So where is the decentralization? The only realistic decentralization I can make out is that its possible to build alternative chains, but that very thing is possible today. Its possible to build an alternate payment processor or social network if Visa bans your business, the really hard part is building it and getting the entire ecosystem to actually use it.
On a POW system such as Bitcoin or ETH1, you'd need 51% or more of the hash power on the network, which is more than a hundred Google datacenters worth of hashpower, and you'd have to spend a vast amount of energy in order to execute the attack, and at the end of it all, the community would mount a fork and initiate a change that left your attack out of history. It is quite difficult to coordinate a vast amount of people to fork a major chain and have that fork be recognized as the New Bitcoin or the New Ethereum. That is where the decentralization comes in and where the guarantees of execution comes in. Blockchains are protected by cryptography and economics (game theory) as well as social consensus.
From V. Buterin: "Theoretically, a majority collusion of validators may take over a proof of stake chain, and start acting maliciously. However, (i) through clever protocol design, their ability to earn extra profits through such manipulation can be limited as much as possible, and more importantly (ii) if they try to prevent new validators from joining, or execute 51% attacks, then the community can simply coordinate a hard fork and delete the offending validators’ deposits. A successful attack may cost $50 million, but the process of cleaning up the consequences will not be that much more onerous than the geth/parity consensus failure of 2016.11.25. Two days later, the blockchain and community are back on track, attackers are $50 million poorer, and the rest of the community is likely richer since the attack will have caused the value of the token to go up due to the ensuing supply crunch. That’s attack/defense asymmetry for you. [1]"
[1] https://medium.com/@VitalikButerin/a-proof-of-stake-design-p...
Other NFTs are fully on-chain, buy those.
This is such a weird argument to make.
We’re already seeing the same thing happen in web3. OpenSea can (and does) remove NFTs from its marketplace if it wants to. Like the web, there are other markets you can use, and you could even permissionlessly start your own, but you’d be giving up the attention that comes from using an established platform.
We already have all of that in the existing web infrastructure, and have had it since the very beginning.
I can spin up a HTTP server on a raspberry pi running in my basement right now and anyone on the internet can access it for free and without any hinderence.
With web3 there is gatekeeping and centralisation as I cannot spin up my own server any more without buying crypto and then paying someone on a centralised database just so that I can do everything I could do before for free on my own.
Web3 includes all of the previous web technologies and adds optional layers on top. It is a superset of all web tech. You can totally setup an HTTP server on a Raspberry Pi, that's totally still Web3, but good luck building a truly scalable multi-million user application and competing with AWS on that.
If your app is such that it relies on user-generated content, it wouldn't be Web3 for you to host it exclusively on your Pi, because the users generating the content would not own it, or have guarantees that the data on the Pi was not being manipulated or misused by you. The key idea of Web3 is user ownership and community ownership.
> With web3 there is gatekeeping and centralisation as I cannot spin up my own server any more without buying crypto and then paying someone on a centralised database just so that I can do everything I could do before for free on my own.
You can set up your stack however you like. You don't even have to be using cryptocurrency for payments to be "Web3". You could, for example, allow someone to login with their Ethereum wallet and use their ENS domain name as a username in your chat app rather than adding Google Auth. That doesn't even require a transaction on the blockchain, it's just verifying a cryptographic signature.
You're basically describing OpenID, which predates cryptocurrency by several years.
That being said, I think EVM-compatible wallet login will be stickier and have broader network effects as there are exclusive services you cannot access without it (unlike OpenId, which is merely an alternative to other logins).
There is also a major economic incentive to build user-friendly wallet experiences (such as Rainbow, Argent, and Dharma mobile apps) as well as browser plug-ins (Metamask, Coinbase Wallet, etc) and hardware devices (Ledger, GridPlus, etc) and I think that ecosystem of competition is going to produce some big UX wins that OpenId will never really be able to compete with.
Websites intentionally switched to passwords because it was easier for users to understand. Web3 offers no breakthroughs here.
An Ethereum wallet linked with an ENS domain name is: 1) human readable 2) has an on-chain history that is verifiable and reviewable (important for establishing reputation in social applications) 3) benefits from UX improvements in Ethereum wallets, such as Argent's social recovery feature (https://www.argent.xyz/blog/argent-secure-decentralised-ethe...) as well as secure hardware wallets (which address the concern about losing a cert) 4) builds on the network effects of EVM-compatible wallets which makes the experience more familiar to more users 5) can integrate other features such as ENS-linked profile pictures, NFT verification, payments, crypto-based crowdfunding and donations seamlessly 6) user-owned
Can also drop the ENS altogether and embrace anonymity if the user or application desires. Still benefits from most of the above.
Aren't most NFT assets hosted on cloud platforms? OpenSea on GCP for example
OpenSea uses GCP for hosting. But OpenSea does not own your NFTs nor choose where NFTs are hosted. OpenSea does use GCP as a caching layer for NFTs, since it's not scalable to fetch from thousands of different sources at load time.
An NFT is created by deploying a smart contract, and the creator of that contract is free to choose how that asset is hosted. Some NFTs are made entirely of on-chain (typically SVG) assets. Some choose IPFS and post the verifiable hash of the file on the blockchain (much smaller footprint and particularly important for large files). IPFS content must be pinned or hosted in order to guarantee availability and a lot of projects will rely on Filecoin or Arweave for decentralized archival of these assets. They may also host a pinning service on one of the big 3 cloud platforms for additional availability and responsiveness. In that case, even if the content was booted from the cloud co's site, the community could easily fall back on Filecoin or Arweave pin and move their content to another caching layer, with users having guarantee that the data matches the IPFS hash. And then again, some NFT projects do centrally host the content and metadata, and do so intentionally so that they can add interactivity or upgrades. For some NFTs, that's perfectly fine. It really depends on the goals of the creator. Not everything has to be perfectly pure. It's a spectrum of choice and optionality for users and makers. If you only want to purchase decentralized NFTs, then check the baseURI and contractURI of the contract (https://etherscan.io/token/0x1CB1A5e65610AEFF2551A50f76a87a7... as an example).
Well, right up until their ISP blocks your website. Or the DNS root removes your record.
No, web3 has "make as much money as possible" at its core - any of those other tertiary values are expendable in the name of getting rich. The trillion dollar companies also only care about getting rich, but they at least produce useful products, unlike the cryptocurrency ecosystem which is overwhelmingly made up of scams and vaporware.
> I am openly ignorant of recent innovations and make statements demonstrating I believe they don't exist.
Never change, HN.
You could say that Web3 is WebBourgeoisie.
I can't justify an internet that hinders the free flow of information.
That's quite a feat, but I somehow doubt you'll get upvoted much.
You don't need VC money to boot up your own HTTPS server on a traditional stack. There are lots of ways in which traditional stacks are not very censorship-resistant, and there are many ways to improve it. But at least anyone can participate on their own terms without having to either write a pitch deck and get funded, or accede to majority rule over some really important parameters of how their network operates. VC money alone is a much more pernicious influence on what will be acceptable behaviour than installing Nginx. The money required is just as heavy censorship as having to go through Visa to accept payments.
If you think "but what about email? Isn't it prohibitively expensive to run your own email server securely?", then you have fully understood the point about blockchains actually facing the same pattern of centralisation that the rest of the web does, but worse, because the alternative (your own big enough, secure enough chain) is comparatively even more difficult to adopt than the mainstream (Eth). You don't need ten million dollars and your own cryptographers and formal verification specialists to write or run an HTTP server, IMAP server, or IP network. Each of which you can do exactly as you please, essentially nobody else dictating how you do it and with costs at the bare minimum, and all of these interoperate with other people's just fine.
If you want an example of a "web3" technology that's not subject to these arguments, just look at IPFS. It's just a bunch of 20-year old ideas combined (bittorrent-esque peer discovery, mixnet routing, content-addressed blob hashes in git). None of the above problems are any worse than they are in Web 2.0, and it is leaps and bounds more censorship-resistant. You could plug in a permanent node or two today, subscribe it to a stream of authenticated tree hashes, and use it as your personal dropbox. If more people used it, you could just publish web pages there, by dragging and dropping a folder. If you have another technology that you think is a Web3 candidate, please compare it to that.
For the sake of simplicity we stick to the authors main claim. That Ethereum is centralized.
> while anyone can join the Ethereum or Bitcoin network, you can only join if you agree to follow the same protocol
In which other protocol is this not the case? Can you communicate with a web page without using the protocol that it required? Furthermore, as blockchain protocols are all open source, they allow their network rules and data to be easily forked and run. This is not at all dissimilar to an example provided further that explains that anyone can run their own web network.
> Ethereum is only decentralized in the way that doesn't matter — you're free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
The opposite in fact. The author misses that Ethereum allows anyone to encode their own protocol into the network. Blockchain nodes, simply enforce that those rules are being adhered to by the participants. This is perhaps the only way that matters for what etheruem wants to do. Blockchains are not websites, their purpose is not to serve you data. The purpose is, given a pre existing set of rules - which anyone can code permanently into the blockchain, clients understand exactly in what way those states can transition, and are capable of executing the state transaction as equally as all other peers.
Let's take a practical example. Say you want to publish torrent links. I hope I don't need to explain why dencetralisation matters and what propoerties you are looking for. If someone encodes a smart contract on Ethereum that allows anyone to submit a name, along with a torrent link but not able to delete it. In the Ethereum world, this protocol lives forever more. On the traditional web world, you will:
- Have ISP, hosting provider take your website down
- The web owner may decide to arbitrarily take down specific torrents or the application as a whole
This is where decentralisation matters and what it means.
A node operator serving any copyright content (irrespective of it being served over HTTP or a DLT) is liable. What happens when Disney starts suing node operators? Your ISP still gets a notice right?
The economist Paul Krugman said that the cryptocurrencies had some of the same ballistics as gold, and gold does well when real interest rates are low, as people lack profitable investment opportunities and so they must seek increasingly aggressive and risky investments.
The cryptocurrencies have the advantage over gold that they can claim to not be gold, nor any known thing, they can claim to be something completely new, with unknown dynamics. This allows for a certain amount of hype that simply wouldn't be possible for gold.
And of course, in terms of ease of moving it around the planet, cryptocurrencies have some real advantages over gold, and therefore are probably stealing a lot of the risk taking that might have otherwise gone to gold.
I'm seeing people in tech who are way smarter and more knowledgeable than I'll ever be, scratching their heads around web3 trying to figure out if there's anything of value. If they don't get it, I'm not going to get it, which either means I'm not smart enough to invest time and money in it wisely (as per Buffet) or it's all smoke and mirrors around a giant MLM or Ponzi scheme to relieve lesser fools of their money.
What is the web3 version?
https://www.oreilly.com/pub/a/web2/archive/what-is-web-20.ht...
I think I agree with you. I'm not sure I agree with "organically", though - it happened almost instantly[0] when IE delivered XMLHttpRequest. It was irresistible because it was so useful.
[0] By "almost instantly", I mean over about 6 months. By the time Firefox delivered XMLHttpRequest, AJAX was already everywhere.
I guess the big difference is that none of them got there by yelling from the rooftops, "Look at us, we're Web 2.0".
Maybe the author is thinking of federation?
Why would people want to start a "private ledger"? What's the use case?
And how would it be meaningfully different from spinning up a private SQL database?
I've said it before, and it needs repeating: we >need< hardware solutions for creating decentralized networks: mesh-networks, fog networks, etc. So far the solutions realistically are null: there has to be a way for the average person to buy the hardware, create the network or join one, and then use it.Software-wise there are some promising protocols but obviously you >can't< be sure how good they are until they're put to the test.And we don't even need protocols that work 100%, given that nowadays one can theoretically use software that adapts to whatever the conditions of the hardware are.I refrain myself to use buzzwords here, but the software is more accessible and you don't even need 100% compatibility between all the protocols out there, as long as you get that respective data correctly between A and B.
But there will not be any progress to any decentralized internet unless we get solutions to the average joe, the consumer, to do this.Obviously this is not in the interest of corporations, governments, and other entities that have control, but in the case of a disaster or collapse of a society, a change of regime towards a totalitarian state, what other viable solutions are besides hoping those in power will "bide by their principles"[assuming they exist]?
That's why frankly any decentralization software-wise is good but quite useless at the same time, including web 3.0, including anything running on IP protocol or through an ISP that is governed by a state.You literally have to cut <=5 "internet cables" worldwide and you got rid of the internet to the vast majority of the planet.Yes Starlink exists but how many people use it and how resilient is it?
The main problem is that unlicensed spectrum has limited range and most places don't have enough density to make it work when only <1% of the population is on the network. So it works in places like New York City. It requires a high enough density of people inclined to do this sort of thing. It could work elsewhere but it's kind of chicken and egg.
For longer range there is still Ham Radio. Check if they give the ham radio exam at your local hackerspace.
Also if I recall there are some interesting projects like Helium but those are not necessarily about creating the networks but providing access and "getting the coin" by providing internet access to others.It's interesting but not that much, considering it's somewhat reliant on "the current internet" itself,the hardware is realistically somewhat expensive, and also given that the incentive is to "mine the coin" by providing access to a centralized service, there can be ulterior motives to it.
As for the laws & licenses for certain spectrums and allowed bands, I think ultimately people will not really care when "sh*t hits the fan".It's good right now to keep things tidy and not get chaotic, but i think the important thing is the availability of the devices themselves.
What does crypto add to "web3"?
To answer your question, 'crypto' adds the ability to store valuable data trustlessly. This means any data for which there is profit in manipulating, user accounts, key-stores, accounting (obviously). In practice most of web3 should take place off chain - 'crypto' or blockchains are suited for the most important data. Its much like the difference between the foundation of the building and the interior - it may be easy to take for granted what you don't often see or interact with.
I get the advantage of blockchains and such for trading virtual currencies, but I'm still not sure why you'd need a public ledger to accomplish anything new that a standard PGP signature wouldn't already accomplish.
Is the idea of web3 to put the entire internet on some kind of blockchain to replace HTTP? Wouldn't that be crazy inefficient?
It's necessary for the most basic of blockchain functions; you cannot transact and have a coherent model of accounts without identifying users on chain, even if its done confidentially. Unless owning coins on a blockchain is illegal in Europe, you'll have to clarify.
The extension of blockchain to store information other than account balance of the native chain is natural - so long as that information has comparable value to coins on the chain and you can justify it having all those properties. It's already massively useful for wrapped assets. If you can figure out how to make a crypto that only requires PGP keys then you've solved a massive problem about storing account balances or other information you would like to take on the properties of data on chain - congratulations.
> Is the idea of web3 to put the entire internet on some kind of blockchain to replace HTTP? Wouldn't that be crazy inefficient?
This comes up a lot. No. No serious, competent person in crypto has ever entertained putting the whole internet on the blockchain despite the being what many a skeptic retort. As I said earlier, as much should be off chain as possible, meaning either web2 or peer to peer access. When blockchains people use are a factor better at scaling this will include more and more data and uses. With current scaling and capital allocation (mostly in the slow, expensive Eth) the only businesses that can justify their existence on chain must offer some sort of monetary interest to their users.
I'm sure you have a lot more questions and well reasoned doubts that many in the crypto space have realized and are working on, I enjoy chatting about this stuff but am going to cut myself off before I go too long. If you wanna chat more you can always DM me.
It will be interesting to see where blockchain technology ends up after the gold rush is over.
Then WE- are web 3.
Its only centralized if we ALL do not stay true and totally redesign!--usually for profit.
Should we judge the chess board before we play?
Believing decentralization promises are gone again then, Jojo?
Dont believe scared billionaire news. They want you banking on CBDCs --and they cant get that until all of the threats (programmers contributing to HN) are full of disillussionment and quit dissenting and creating well designed decentralized blockchains.
Get away from sold out Bitcoin and ETH and coinbase and the like.
Node up with projects that are Designed for and Maintain Decentralizarion. My fav is Polkadot.
Doing Our part by never working for or supporting sold out protocols is centralizations' threat.
When CBDCs come around its free coins and those are going to be like zombie manna. Dont eat zombie manna.
So node up. We still write the rules!
Until its MUSK Web3, its still open game for us to make it-- ours.
What are you here for anyway?
Node up. Just pick an independent project thats adhereing to regulations.
Below is proof of my argument. (view all for full effect)
coindesk.com/markets/2016/01/30/how-to-save-bitcoins-node-network-from-centralization/
protocol.com/fintech/polkadot-ethereum-gavin-wood
"Whether a blockchain is centralized or decentralized simply refers to the rights of participants on the ledger, and is therefore a question of design."
It's a powerful idea but it doesn't make sense to try write every app as a dapp. For example, there's probably no benefits to putting cat pics as a dapp and making them sharable in perpetuality. But a decentralized exchange could be useful.
I’ve long fantasized that machines should “evolve” the network protocols they use to communicate. Parts of packet protocols they never use to communicate might gradually be dropped while common higher level portions always needing to be used might migrate lower. Of course more “formal” protocol specification would still be used when communicating with strangers.
In this it would be like the specialized jargon interest groups adopt.
Without consensus, you have the risk of party A saying something, and party B interprets it in a different way than intent.
This approach would be handy for extremely bandwidth- and power-constrained environments, i.e. actual IoT.
Also, I keep seeing the "yeah but you can just run a centralized database/private ledger though", but how about I DON'T NEED TO run a centralized database/ledger and just use the public decentralized one?
i think the argument that many are trying to make is that perhaps you could see more openness built upon these singletons. whether or not that is true remains to be seen.
Network effects would inevitably concentrate most activity to few hubs (which is how we ended with facebook, reddit, and twitter consuming the old internet of phpbb forums). Except instead of posts, now the new powers-that-be would have absolute control over people's wealth. What he in effect, unintentionally, proposes, is to give the equivalent of facebook absolute control over people's wealth.
In fact facebook itself tried exactly that with Libra - but fortunately got shut down by governments.
Honestly, I would prefer a state-run blockchain over the inevitable final form of his proposal. At least it would be regulated by actual laws instead of T&C that give the company near absolute power.
There were crypto experiments of this type, most notably EOS. They had their own 'court' that ended up blacklisting dozens of addresses based on weak claims of theft. Eventually all DPoS networks are going to decay to something like that - because with just few publicly known validators escaping legal liability for not enforcing confiscation and freeze orders from real world courts is impossible.
The scalability argument is true in isolation - everyone agrees it's currently a problem, but has nothing to do with centralization or not.
How is global consensus not centralisation though?
Humans are notorious for disagreeing on everything. Having one global arbiter of truth/consensus seems implausible at best.
Anything that could provide global consensus will need to be backed by something formed from a human brain. And our brains are not perfect. We keep updating code because we miss things. Who would maintain the system for global consensus? And how would they not just be our new rulers?
As a perfect example you mention ownership as a feature of global consensus. What do you own with an NFT? Who enforces that ownership? What stops someone pirating an NFT image?
Ultimately this screams of solving a people problem with a technical one. That never works. Not without strong co-operation of the people involved, and even then technology plays a very small role in the solution.
> The scalability argument is true in isolation - everyone agrees it's currently a problem, but has nothing to do with centralization or not.
It does in that a truly decentralised system inherently cannot suffer from the scaling problems cryptocurrencies have.
In the same way reality itself is 'centralized'.
Global consensus is meant to add a digital layer to reality. Reality is objective by definition. What's subjective is trying to measure it - but this problem doesn't exist for digital systems.
>Who would maintain the system for global consensus?
The practical implementation has to ensure that
(1) consensus is maintained by a diverse set of potentially anonymous participants. Ideally, this would mean literally all humans, but that's of course impossible. The set should be large and diverse enough so that even powerful actors (especially governments) have no ability to force them to do something.
DPoS, PoA fail here from the start. PoW is vulnerable over medium term: it has infinite economies of scale which leads to centralization and taking it over externally is always possible (because 'stake' in PoW is external and potentially infinite - mining hardware).
(2) the most profitable course of action is for every validator to follow the protocol honestly. In ethereum's PoS that's achieved by slashing maliciously misbehaving validators.
PoW has an orders of magnitude weaker punishment here (just mining rewards for the time spent on mining a minority chain). Most DPoS systems rely on the assumption that a majority is always honest, even if it makes financial sense to not be - eg. Cardano's Ouroboros.
>Who would maintain the system for global consensus? And how would they not just be our new rulers?
In the early period updates are necessary as system evolves - but eventually it has to be frozen, with the possible exception of scaling parameters (like block size, number of shards) which could be determined by a vote from validators.
>What do you own with an NFT? Who enforces that ownership?
There's no difference to real life here. "Owning" a house actually means there exists a publicly verifiable promise from an entity capable of wielding some form pf violence to enforce that property right. Therefore, an NFT that's connected to any external asset can only a different form of such a record.
In the case of image NFTs, it's an improvement on physical art. The point of buying physical art is to either signal wealth, or to use it for money laundering. Image NFTs are infinitely superior for the first - because they are globally visible (as opposed to a physical piece of art) and fake NFTs are impossible (so you can't buy a cheap replica and pretend you spent a fortune on the original). They are much better for money laundering because they are inherently global (no transport issues) and evade identity checks in the banking system.
Exactly like physical art, if you just like it and want to look at it - you can save a copy. A replica of physical art is free in the same way - you can save a photo of it. If you want a physical replica, in both cases you can print it. An actual replica of physical art would be more expensive, but in many cases orders of magnitude cheaper than the original.
Therefore, nobody buys expensive existing art just because they like it, which leaves two reasons I mentioned.
>Ultimately this screams of solving a people problem with a technical one.
Yes. The entire history of human civilization consists of solving social problems with technology.
This was always going to get philosophical fast, but I don't think reality is strictly objective. At least not the representation of it we humans create to understand it. Look at the constant evolution of our understanding of the universe (and those who inhabit it). If we were to describe that as objective truth, it would be unquestionable. Instead the scientific method asks us to consider it as the best answer we have currently, until new evidence emerges.
I agree measuring reality is subjective, but thats the only way we can interpret it. Our eyes even lie to us to make up for deficiencies, for example your blind spot.
The key point here is underlying our shared reality is a shared truth. But neither of these are shared by everyone, and it's almost always too nuanced to pick one side and declare that the objective truth. Epistemology is centered around this challenge.
> (1) consensus is maintained by a diverse set of potentially anonymous participants. Ideally, this would mean literally all humans, but that's of course impossible. The set should be large and diverse enough so that even powerful actors (especially governments) have no ability to force them to do something.
An anonymous direct democracy? Even representative democracies are struggling to have a fully informed and engaged electorate. I love the ideal here, but practically I don't see it happening. In particular becuase governments have enough power to manufacture fake people to take over a system like that, particularly if it's anonymous.
> (2) the most profitable course of action is for every validator to follow the protocol honestly. In ethereum's PoS that's achieved by slashing maliciously misbehaving validators.
> PoW has an orders of magnitude weaker punishment here (just mining rewards for the time spent on mining a minority chain). Most DPoS systems rely on the assumption that a majority is always honest, even if it makes financial sense to not be - eg. Cardano's Ouroboros.
We have law enforcement and justice systems to account for when people do not act honestly. History proves time and again when the conditions are right, people will not act according the time's concept of honesty.
Blockchain was meant to solve the Byzantine Generals Problem right? That describes the need to communicate when not all actors are reliable.
Humans are not always reliable, sometimes maliciously so.
The bigger problem is that honesty is a question of morality, not logic. How can you encode that into a smart contract? Doesn't this mean we're swapping a judicial system for an unelected one?
> In the case of image NFTs, it's an improvement on physical art. The point of buying physical art is to either signal wealth, or to use it for money laundering. Image NFTs are infinitely superior for the first - because they are globally visible (as opposed to a physical piece of art) and fake NFTs are impossible (so you can't buy a cheap replica and pretend you spent a fortune on the original). They are much better for money laundering because they are inherently global (no transport issues) and evade identity checks in the banking system.
I mean I'm glad you said the quiet part out loud, because outside of money laundering it's hard to describe the NFT craze as anything but a bit suss.
Some of us buy physical art for the beauty and intrigue of it. Though not from Sotheby's.
NFT's as a record/marketplace for a physical asset backed by a means to legally enforce the ownership is something I can see happening.
But NFT's that record a log of ownership over a JPEG?
What's stopping me from making my own chain, and selling the same JPEG NFT there?
And then, how do we prevent the wash trading that's artificially inflating prices?
> Therefore, nobody buys expensive existing art just because they like it, which leaves two reasons I mentioned.
Ha agreed, though if they do they'd usually loan it to a museum. There are collectors who do it for the love of the art though, they exist.
> Yes. The entire history of human civilization consists of solving social problems with technology.
Fundamentally disagree here. At macro and micro scales social problems are solved with social solutions. I've seen this at enterprise levels and startups. If you try to tackle a social problem with a technical solution you alienate people and make the problem worse.
Technical solutions to social problems lack the humanity required for a meaningful fix.
A hilarious example is the type of solution that led to Goodhart's Law[0].
When a measure becomes a target, it ceases to be a good measure.
> In India while it was a British Colony, the Colonial Rulers wanted to reduce the number of snakes. So they offered to pay for dead snakes brought to them. Goodhart’s Law: Enterprising Indians began to breed and farm snakes to kill and get their reward, which was much easier than killing wild snakes, actually increasing the total snake population.
[0] https://en.wikipedia.org/wiki/Goodhart's_law [1] https://www.ideatovalue.com/lead/nickskillicorn/2021/08/good...
Also the only platforms that can exist at this point are JPEG “trading” platforms like OpenSea simply because speculation is the only thing that's profitable, and because there isn’t yet any legal precedent allowing real assets to be traded using ERC721. I mean, yeah someone can try to put their deed on IPFS but what happens when something like this hits a snag and has to head to court? The fact that no one can convincingly say a judge would side with the ledger is a huge, and the reason NFT use cases are stuck in casino mode.
> while anyone can join the Ethereum or Bitcoin network, you can only join if you agree to follow the same protocol that all the other nodes use.
Just reiterated definition of the protocol. Absolutely irrelevant to decentralization topic.
> The way this protocol is decided on is not exactly centralized, but it's not exactly decentralized either.
Decentralization is not "I do whatever I want". It's "other people can't force their arbitrary will on me".
> The entire blockchain world is focused on building systems for global consensus, but global consensus is a goal that is fundamentally at odds with the goal of decentralization.
Once again complete confusion of terms. Global consensus is on question of property. Property is by definition a right to thing that excludes everyone else's rights to the thing. This you can't have two different opinions about ownership and be able to cooperate effectively. Thus - global consensus.
This critique reminds me "blockchain + X" dynamic. You don't need blockchain if you are not talking about global consensus. You don't need blockchain for the use-case where HTTP is enough.
> Ethereum is only decentralized in the way that doesn't matter — you're free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
No! This way of decentralization matters a lot, since it deals with money. Go and read about people who got cut off the banking system as a result of political censorship.
> I care about decentralization is primarily to avoid global failures
Ethereum competes with banking system (global and local) and with great amount of other chains. Author problem is with notion of owneship / property, not with Ethereum.
> If you're trying to run a DAO, why build it on Ethereum... ?
Ethereum is a part of web3, not whole of web3. If you build your DAO on other chain, you will not have this problem.
> It's much more damning to me that the fundamental technology these people choose — Ethereum and similar blockchains — is more centralized than the web.
Author provides this claim while providing no evidence. And they even agree that blockchains are censorship resistant elsewhere in the text.
I see no point in continuing. This article is a critique by a person who got a wind of some buzzwords and now think that they can contribute an insightful opinion.
It is quite ironic that author is basically explains the concept of a hard fork [1] while never even mentioning those. Most likely because he is not familiar with basic blockchain concepts. Or, to put it more bluntly, has no idea what he is talking about.
No - that's not a "little confusion". It is almost total lack of knowledge of the subject at hand. So many concrete examples by the author are not valid. Changes and forks in blockchain protocols happen all the time. You can start your own local blockchain in your own private IP subnet or whatever. You can create your own private ledger on the global net in less than a minute [1].
This whole article starts by missunderstanding logical and operational decentralization. Blockchain tech succeeds in allowing developers that don't know each other come to a consensus about how a financial system should work (logical centralization) and then operate an instance of that in a completely trust less, participatory environment (complete operational decentralization).
This is "works as intended" and explicitly good. It shows that consensus on what is right can be achieved over an anonymous internet.
Based on that, I'd say improbable that anything insightfull remains inside this article.
There are a lot of dumb thoughts about web3 on HN; this is a valid criticism and it doesn't so obtusely assume that because web3 is new, it has grifters, and it has broken promises, that every issue arising from it is somehow unsolvable.
In all seriousness, I do get a wiff of traditionalists complaining about an emerging change that isn’t a straightforward understanding. Take Tesla short sellers for example: they just can’t contain their frustration for all the billions they lost over the past years and love to tell everyone about it and the haters come out in droves with theory of X and Y but no real theory is proven without s proper set of experiments.
We’ll be playing the crypto experiment for decades.
But take this example: Web3 is less censorable. Once something is committed, it cannot be removed, unless a hard-fork event occurs, and even then there can be a portion of the network that decides that the old chain is the correct one (see ETH vs ETC). This still validates the decentralization aspect overall, so the comparison in the article, in my view, lacks of some additional perspective cases.
Internet is an architecture issue. It was promised but not in real life. Due to isp and mobile intraf, like it or not, so easy to be firewall by national totalitarian country.
Web is originally decentralised as long as the people want to. There is nothing controlled you you must go through Facebook. That can change say if Facebook sent data to china as of now.
Frankly internet and web is still young. But we hope humanity can be free not bounded.
Prometheus please.
I would rather have a decentralized root zone on a blockchain than a centralized root zone controlled by ICANN.
This fixes a lot of problems, including no need to trust certificate authorities.
Others may not agree and would rather it be centralized and controlled by ICANN. But you can't deny that it is more decentralized to have the root zone on the Handshake blockchain.
I also don't understand the jab at gcp for honoring DMCA. You're always reliant on an ISP on some level, there's no real self hosting from the bottom up without having to play nice with other parties, in this example, honor DMCA.
Could you show my grandmother how to see the transactions on the block chain easily for any crypto?
IMHO Web3 is more of an idea people are using to profit than a real thing to create equality.
It's not necessarily about "centralized" vs "decentralized".
Think China every time you do any human work. Be free and not be bound. Totalitarian does not pay for humanity.
There are some projects that try to address this. For payments that is (famously) Monero and ZCash. There is nothing in production for smart-contract-like capability ATM. But there are attempts to build such capability on top of ZEXE [0] paper and there is Aleph-Zero [1], which is unlikely to succeed (they bought DAG idea, and they will fail), but their research/code is likely to spawn better variants.
[0]: https://ieeexplore.ieee.org/abstract/document/9152634/ [1]: https://alephzero.org/
Found an overview that shows non-blockchain projects. Not sure whether or not it's an accurate comparison of features, but it's the best of list I've found of alternative crypto technologies. https://i.postimg.cc/05RJqbYB/SN-Comparative-Analysis-v4-1-I...
I remember when startups and making lots of money was cheered on HN. A decade ago people would have been looking at the positives of this tech, figuring out how they could get involved and how they could make money and try to make it succeed. There was a much more optimistic atmosphere. It now seems that people making lots of money are reviled. It gels with the anti/post capitalism memes that are quite prevalent.
I’m not judging this view (I often find myself swinging between capitalist views and socialist views and try not to strongly subscribe to either) but I think it explains the cynicism in these “crypto” threads.
Just because you claim it was ‘solved decades ago’ doesn’t mean it’s easier for the average joe.
I find that wallet login is much easier, no fumbling around with ‘certificates’ required, and I even hate crypto.
The fundamental problem with all crypto"currencies" is as follows: the world uses real currencies and there is only one way this enters into the world of crypto"currencies": by someone selling a coin to someone else. Thus, regardless of what crypto"currency" we are talking about, it would be a zero sum game if not for transaction fees. However, with transaction fees it becomes a scam because there's a set of players who are guaranteed to win and there's another set of players who, en masse, are guaranteed to lose. It utterly doesn't matter what you do with your crypto"currency", this is the underpinning scam of it.
And once you entered the game, the only way for you to not lose money is to find a greater fool who will take over your crypto"currency", everyone who owns some becomes a proponent of it. It's an ingenious scam.
And no, nothing in the real world is like this. In the real world, the amount of currency increases when a bank extends a loan which then creates more value by such things as being using as capital, allowing you to enjoy a home now instead of decades later and so forth. Also, stocks are not a zero sum game -- companies actually create value and so forth.
Ideal for malware ransom payments.
I can send $1000 USD to someone in France who wants EUR for $7 with Western Union.
How does Bitcoin or Ethereum let me do this for less?
Yes, that's the current pension system.
1. There's no set of players who are guaranteed to win
2. There's no set of players who are guaranteed to lose
3. No one is set to gain by advocating for the "current pension system".
Pension fund managers are guaranteed to win, and they win more as life expectancy goes down.
> 2. There's no set of players who are guaranteed to lose
Literally everybody else loses, as inflation eats away at the buying power of older peoples' ongoing or soon-to-start pension payments, and young people pay in to a system that there is now no guarantee they will earn from in 40 years time.
> 3. No one is set to gain by advocating for the "current pension system".
Plenty of people stand to gain, see above, as well as politicians interested in protecting the status quo and electability above all else.
Maybe the current US pension is set up like this, maybe not, that's debatable perhaps. But it's not an inherent feature of the systems everywhere unlike the problem with crypto"currencies".
If benefits-defined pensions are any indicator then both are unsustainable, and certainly not the future.
Speculators can generate a lot of noise but it also creates a toxic atmosphere where anyone spending feels like they’re the sucker for not holding it instead. That’s how after a decade there are a tiny number of non-Bitcoin businesses which would notice if Bitcoin disappeared tomorrow.
I thought even Bitcoin maximalists have given up on this nonsense by now? Fiat money is legal tender backed by the taxation power of a nation state and ultimately, the monopoly on violence. This is why I always write crypto"currency" -- even naming so, crypto shills have pulled an ingenious move pretending their scam is a currency which it utterly is not.
This is why I described it as a very weak one because it doesn’t even have the commitment of a bank behind it and the extremely highly operating costs means there’s a real long-term risk of not being able to find a buyer.
They’re the same old running on different infrastructure: assets, shares of ownership in a business/protocol, certificate of ownership of a digital item, and yes occasionally, currencies
You can have much lower transaction fees than in Visa / Mastercard (which sometimes you can't even legally charge customer with) so there's a bigger scam by your definition.
One has to find someone willing to trade to get goods -_- because dollars instantly turn into chicken soup when you're hungry.
For fractional banking you need a trusted system, this is outside of cryptocurrency scope but you can do it atop of cryptocurrecnies just fine, look at exchanges.
I do not. I am talking of the only way money enters this system. If there would be no money in the system no one would care. At the end of the day, in this time and place, our society decided money is the ultimate goal. I don't like it but it's what it is.
> You can have much lower transaction fees than in Visa / Mastercard
First of all: it's nonsensical to compare money to ... money? the problem with crypto"currency" is that it's not money and it's crossing that barrier which makes players lose money. Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant.
To highlight this, Americans are grappling with Zelle (which is just rolled out) and ACH while their neighbors to the north have Interac running relatively seamlessly and Europeans have SEPA and even some countries have local feeless/reasonably priced quick transfer systems like Swish/iDeal, and discussing how Asians handle their transfer and payments would just shake heads on why those systems aren't available stateside (I'll pick India's UPI and the (mainland) Chinese system as representatives, but that doesn't mean similar systems aren't available elsewhere).
Ultimately, someone needs to eat the cost of that. For barter, you need to eat the cost of wrongly-advertised products. For paper money, you need to eat the cost of either actively rejecting fake paper money or accept that from time to time you will have fake and unredeemable paper money. For coins, same thing, you need to verify that the weight is indeed what's expected or accept that some fake coins will end up in your coffers. For electronic systems (regardless of the form), someone needs to run the computers that verifies that transaction A did indeed happen.
Some pretend that only centralised electronic systems are the only ones having costs, while in fact it's far from the truth. Ironically, the credit card game in the US where they jack up the merchant fees way, way up is a counterexample that capitalism is fostering a pro-consumer market (I'm not saying that capitalism per se is broken, it's just the fact that capitalist policies in this area doesn't work out great). In Europe where they implemented caps, "rewards" type credit cards have gone down, but regular credit card and debit card usage have gone up. This is because the "rewards" system isn't pro-consumer, it looks like pro-consumer but instead it actually benefits only those who massively use them to the detriment of others. Unlike "rewards" type credit cards, regular credit cards acts more like a tool that can make or break finances who uses them not correlated to the frequency of use, and debit cards are essentially plastic wallets.
Brazil has one [0]: instant transfers to any account, 24/7, zero fees (at least for now). You can buy pizza, taxi rides and pay your rent with it.
[0]: https://en.wikipedia.org/wiki/Pix_(electronic_payment_system...
For the ultimate goal, I'd say that's wealth / power.
If I am a private financial institution, I’m having a grand old time converting the first 1% of dollars to crypto. I can still spend all of that money on salaries and construction and mega yachts. But when we are at 50%? You have half the dollars in the world. You can’t possibly spend them. This isn’t income any longer, it’s a liability. The only way to get to 90% is if you trigger hyperinflation.
Eventually to beat fiat currency you actually have to win the government over. They collected gold coins and issues dollars, because it’s fiat currency and you can do that. How do you collect all of the silver and not issue fiat currency? How do you collect all the dollars and not do the same?
Magic thinking. It’s all magic thinking, and I’m too old for this shit.
Honestly I've stepped back from the entire crypto space for a while now, the whole space pisses me off, it's all hype and no progress. Or rather, the work that was needed to be done has now been done (feeless, near instantaneous, anonymous, and consensus based transfers of money) is now possible, and yet I still hear the screams about bitcoin daily. It's an outdated technology. A paradigm shift for software for sure, but a now long outdated one.
I'm sure bitcoin maximalists will reply in rage, but I can't convince you to see the truth through your speculative emotions, so I won't even try.
You clearly misunderstood the OP. They’re talking about the fees to convert fiat to XYZ crypto. Where can you buy NANO with fiat & zero overhead?
rather the transaction fees.
The question is: whose value is being lost, and do they care enough to take action?
Or the central bank decides to flip a switch and create trillions of dollars in money with the stoke of a key and distributes it to parties it feels needs them (mostly banks and other financial parties [0]).
This is also a very short term limited view of money. A stable currency is not the norm for most of history. Even today's relatively stable system in western democracies is very short.
If you take a longer, broader view of currency and monetary policy you'll see that the system is not sustainable an there is value in an alternative money supply thats based on rules and not reliant on the wisdom of central bankers appointed by politicians. Whether crypto is the answer is different question. But to think that somehow western central bankers are beyond approach and figured it all out in the last 50 years is naive.
Retail FOREX is pretty similar. It's a zero sum game with broker's fees, plus you're playing the game with a lot of very experienced, very well funded institutional investors.
I think crypto has basically eaten any interest in retail FOREX, but a few years back it was gaining some traction and I was amazed at how many people were playing a (typically highly leveraged) game that was clearly not in their advantage.
Cash: Not backed by anything but literal 'trust' in the government. It's fiat, and has been since 1971.
Government Bonds: similar to cash, also relies on the trust and "too big to fail" ethos.
Houses: Greater fool theory. People realized they can simply ban building them to make theirs worth more, as the remaining home supplies are in far-off, economically irrelevant (undesirable) areas.
Stocks: Over 90% are owned by the top 10%. Someone had to make it to sell it to someone else, just like crypto.
Maybe he missed how Amazon switched off Parler's servers, or Google and Apple started censoring Mastodon clients that did not exclude gab.ai? If you want to do anything that may be disliked by current authorities, it may not be that easy to spin up your own network.
https://medium.com/@VitalikButerin/the-meaning-of-decentrali...
>>Ethereum is only decentralized in the way that doesn't matter — you're free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
This is centralization of logic, that establishes uniformity of the protocol, but it is a decentralized configuration of power, where every party is subject to the same rules for accessing the blockchain.
Fees are a limiting factor, but all data is treated the same with respect to fee calculation, irrespective of who submits it for inclusion in the blockchain.
The future has always belonged to bold creators. Not pessimistic, static-lens detractors.
Web3 = We print money more easily
1) Giving more $$ and ownership to media creator than curator (platform).
2) Faster and efficient financial transactions.
3) Improving online identity.
These can be, and will be improved on incrementally from web2. If FB decides to pay more $$ to content creators and toggles the switch to better detect original content and give due credit, what is the business case for an equivalent web3 clone?
The opportunity for new so-called web3 applications will be because of inertia on part of existing platforms.
web3 is more open source than current centralised web, all contracts on blockchain can be read and forked, all coins are open source. forking coins, contracts, communities are all happening, new leaders emerge and consensus build, but new use case emerge where people and their motivations differs, the cycle of forking starts again.
NFT content storage is not completely sorted out, many are now using IPFS, we need couple of more distributed alternatives.
As the article describes at a protocol level web3 is definitively not more open, it's more centralised as opens you to noisy neighbours.
At the application level it may enable finance to be decentralised, but that's only a small part of the web.
Also arweave is looking interesting.
Really don't know why I bothered when there is the Andeersen Horowitz logo at the bottom of the page which tells you all you need to know, these guys would never fund anything that does not involve thinly disguised theft.