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Comment by Barrera | Hacker News Reader

This is the kind of pain that comes from trusting scammers and nincompoops about unworkable blockchain "scalability" fixes.

Here's the sequence. Those dumb enough to ignore it are doomed to repeat the pattern. I'm probably getting some details wrong in this Rube Goldberg scheme, so feel free to correct.

1. Citing "Ethereum network congestion," Axie Infinity announces an ethereum side chain, Ronin.[1]

2. Ronin was a centralized server (therefore fast and cheap) authorized to make Ethereum Mainnet transactions. The server was a hot wallet in other words.

3. The Ronin team tried to make it look like they were "decentralized" by splitting signing authority among 9 "validator nodes." (the article)

4. An attacker obtained 5 of 9 keys, which is the signing threshold.

5. With the required threshold of keys, the attacker signed the transitions moving assets off the Ronin servers.

None of this is new. The Bitcoin "block size war" was fought over this very point. Unworkable scaling schemes are going to end in disaster with no fallback, and no recourse for those who lose money. You end up with nothing, and will be sad.

And it's sad that the same lessons keep getting replayed over and over. It's really simple. Can your "blockchain" be validated with regular hardware? Does it use a secure consensus algorithm? Is there a secure side channel through which low-value transactions can flow? If not, you're going to have a bad time when the shenanigans start happening.

Now, is that side channel effectively a single server? Handling hundreds of millions of dollars of value? Have they rolled their own crypto? If yes to any of these, get out and stay out.

[1] https://medium.com/axie-infinity/introducing-ronin-axie-infi...

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This is exactly why crypto is such a disaster. Every week there is yet another scam where people losing their money. The feedback from crypto enthusiasts is well look at those idiots for putting their money into some scheme <insert unintelligible jargon filled insanity statement here> or you are not smart enough use this thing. Look "nobody" understands what you are talking about. These financial systems are inscrutable and the problem is getting worse. You are building systems that are ruining peoples lives and making things worse for everyone. Please think about what you are doing and create system of value and meaning which improves humankind.

> You are building systems that are ruining peoples lives and making things worse for everyone.

Don't invest more than you can afford to lose, it's the basis of any investment strategy. If someone puts enough money into highly risky, speculative assets such as these that it would ruin their life, then they only have themselves to blame if you ask me... People have to take responsibility for their own choices.

Edit: -4 that's a new record for me, thanks guys!

Hideous victim blaming mentality here.

I'm not blaming someone for getting scammed, that's on the scammer. But I am blaming someone for ruining their own life if they put more money into a speculative, highly risky asset than they can lose. This isn't confined to crypto, it can also be regular stocks or other investments. I mean this in a general sense. I don't mean people taking advantage of people that aren't in the right state of mind (for whatever reason) to be clear, of course I don't put the blame on those people.

Not sure why you got such a negative reaction. This is basic 101 holding a investment portfolio (I hope I have it right [1]), the more all in the upper right (higher std dev) of this graph, the higher risk, the more bananas you'll lose in your basket if things go, proverbially, tits up. Diversifying is a tool/shield against this by minimizing risk against reward.

[1] https://youtu.be/8TJQhQ2GZ0Y?t=1640

Crypto is a touchy subject here, so if I am a bit harsh on the people that ruined their lives by putting all their eggs in one crypto basket... I was prepared for it not to go well. Although I think some misunderstood my comment as blaming the victim, which was not what I meant. But that's ok, I'll try to phrase it better next time.

When we raise concerns about crypto’s riskyness, people like you show up and say “investment involves risk” and frame crypto as a speculative investment. Then when you’re gone someone else will show up hyping Bitcoin/Ethereum as a currency that will change the world, which implies that it is or will be stable enough to use to pay for goods and services (as opposed to being a vehicle for speculation).

Our frustration stems from our inability to get both of you in the same room to duke it out once and for all.

> Our frustration stems from our inability to get both of you in the same room to duke it out once and for all.

If only the world were such a simple place where there is only one right and one wrong answer.

If folks are making the argument that risky speculative investments can be used as currency for day-to-day purchases, that’s an argument I’d hear out, but I feel like it would be a difficult argument to make.

And for the record, the argument I’m perceiving from you (“crypto is a speculative investment, invest carefully, enjoy it if you win”) is the closest to reality of all of these arguments IMO. But I do also believe that highly speculative things like this make for bad day-to-day currencies, and have not yet been convinced otherwise.

I am torn. If someone is holding a "ruining peoples lives" chunk in their portfolio, it's not a diversified one -- and it leads to a good life lesson. And if ones all in the stock market and it crashes -- surely you should not victim blame, because there is a road to redemption (just weather the storm), and it's really not their fault. Nobody can predict wether the number goes up or down reliably in the short term, yada yada. However given the nature of crypto landscape wrt. scams, attacks, takeovers, thefts, I can't help but say "buyer beware" and "it's a wild wild west out here".

I mean, you must agree it is good advice in hindsight to not hold all your eggs in one basket in this case. I do.

Its not really supposed to be an 'investment' - anymore than the dollar is an investment?

If crypto wants to replace dollars, they are going to have to do better than this.

Would you tell someone who's dollars are stolen 'don't have more dollars than you can afford to lose'?

I think Axie Infinity is some sort of NFT game? How is that going to replace the dollar?

The article covers that it was Ethereum that was stolen. On the surface it appears none of the Axie Infinity based tokens were touched.

Because ETH has much more intrinsic value than AXS and the other tokens created by Axie Infinity. Why would they bother with pennies when they can take 100 dollar bills?

AXS's value is derived from a pseudo-feudalistic share cropping model called 'play to earn'. People in low income countries put up their real assets to borrow AXS tokens and NFT's to play the game to earn an income and farm items to sell to western players who can't spend all day grinding. Imagine if Blizzard designed WoW's monetization around exploiting all the Gold farmers?

Your response assumes the only victims are the people holding the bags, but its key feature is that it facilitates organised crime more effectively than anything in history.

Now with that said, someone may respond to mention that it’s key feature is actually [a store of value/decentralised digital money/new gold etc] and that person will be wrong.

> The majority of cryptocurrency is not used for criminal activity. According to an excerpt from Chainalysis’ 2021 report, in 2019, criminal activity represented 2.1% of all cryptocurrency transaction volume (roughly $21.4 billion worth of transfers). In 2020, the criminal share of all cryptocurrency activity fell to just 0.34% ($10.0 billion in transaction volume).

https://www.forbes.com/sites/haileylennon/2021/01/19/the-fal...

Sorry you're getting so downvoted. Not surprising on HN. Somehow super-anti crypto, even though people here seemingly understand technology.

Has it occurred to you that this might be not "even though people here seemingly understand technology", but because people here understand the technology?

You are neglecting to mention the great upsides in crypto currency.

* Giving criminals and scammers the ability to exchange goods and services anonymously.

* Providing a source of funding North Korea's nuclear weapons program

* Allowing nation states to engage in global commerce despite sanctions because they won't stop killing innocent people

* Convincing older and gullible people to give their money to someone they don't know and a technology they can't explain

* It's the future!!

EDIT: Couple more

* Transactions are so energy intensive that the currency eclipses the carbon footprint of many countries

* Those transactions are also incredibly slow!

* Matt Damon!

I think there is a use for blockchain, but as a technology for everything from buying groceries to countries using it as a currency, no.

>* Giving criminals and scammers the ability to exchange goods and services anonymously.

I don't see how this is any different than the bog standard "encryption lets criminals and scammers the ability to exchange goods and services anonymously.". Should money/txns be fundamentally track-able/examinable/un-encrypted but your private data/messages not?

Surely this contention is something you also consider -- care to expand?

>* Convincing older and gullible people to give their money to someone they don't know and a technology they can't explain

I am surprised. My initial viewpoint was why would scammers bother to fish for bitcoin when bank transfers/gift cards are a lower barrier -- but seems you are right [1], the cat and mouse chase continues...

[1] https://www.youtube.com/results?search_query=kitboga+bitcoin

> I don't see how this is any different than the bog standard "encryption lets criminals and scammers the ability to exchange goods and services anonymously."

The obvious difference is that encryption has many, many actually useful and productive applications.

>encryption has many, many actually useful and productive applications

So does crypto but likewise opponents of encryption disregard the positives and focus on the negatives to align with their preformed ideas. The only way out of this trap is to have an open mind and internalize the fact that all technologies can be used for good and evil and thus are relatively neutral overall. Humanity must take the good and bad and see where the path goes in order to advance as a species.

> So does crypto

It doesn't. Everyone who claims otherwise can't come up with a single credible example.

Buying a subscription to gay.com from Syria. Your on the clock..

>> It doesn't. Everyone who claims otherwise can't come up with a single credible example.

> Buying a subscription to gay.com from Syria.

That is not a credible example. Here are some reasons:

1) Paying for porn? Paying for porn when the implication is that it's illegal and could get you in trouble? Who would do that?

2) Cryptocurrency isn't anonymous, and is usually highly traceable.

3) And even if it was anonymous, what good will it do when your DNS lookups will divulge you're looking at gay porn?

4) Oh, so now someone's supposed to be using some elaborate TOR/VPN setup in a repressive country, just so they can pay for porn?

5) What, exactly is the process for converting Syrian Pounds into cryptocurrency again?

6) etc.

> Your on the clock..

Why were you so confident in your non-credible example?

Who would pay for porn? Someone who wants to see what's behind that paywall.

Crytocurrency is difficult and costly to trace and exchange identifying not available to Syria.

VPNs would be used

Same process for other currencies on Binance and other exchanges.

When did Binance start to accept the Syrian Pound? This is just the usual hand-waving that ignores all the inconvenient details.

You might be surprised:

https://www.fxempire.com/crypto/exchange/binance/review

I'm confused by your link. Nowhere on that page does it mention them accepting the Syrian Pound...?

If the person has VPN access them there are better options available. The crypto transaction makes information available to attackers that wouldn't be available by any other method.

That's objectively worse.

The addition of cryptocurrency to the process adds no value (and in this case adds unnecessary risk). You might as well suggest using cryptocurrency to buy a Big Mac at McDonalds. Here's how you do it:

1. Deposit your money in a bank. Wire it to Binance. Buy Bitcoin.

2. Go to a McDonald's.

3. Hire a gig worker through an app, pay them in cryptocurrency to buy a Big Mac with fiat and give it to you.

4. Eat your $55 Big Mac, and wonder at the amazing real-world utility of cryptocurrency.

Or order a pizza with cryto to a vacant property.

The other poster is probably very confident because gay.com redirects to https://lalgbtcenter.org, which is an LGBT advocacy group in Los Angeles.

>>> Buying a subscription to gay.com from Syria.

>> Why were you so confident in your non-credible example?

> The other poster is probably very confident because gay.com redirects to https://lalgbtcenter.org, which is an LGBT advocacy group in Los Angeles.

I doubt they knew that. It's inconsistent with their thought of "buying a subscription to gay.com," and it raises the question of why someone in Syria would even be interested in a LA-focused advocacy group. Plus in their reply indicated they thought of it as a porn site. What kind of advocacy group has a paywall that someone would want to see behind?

You need to spend more time thinking about this. You’ll end up realising that the value lies in self sovereign, permissionless money. Tech like Monero. The debt ceiling grows every day.

> You need to spend more time thinking about this. You’ll end up realising that the value lies in self sovereign, permissionless money. Tech like Monero.

I have. However you illustrate an important point about cryptocurrency: it's an exercise in political ideology without practicality.

> The debt ceiling grows every day.

If you're that worried about inflation, shiny gold seems like a better option.

Shiny gold also has the benefit of being something you can stuff in a sock and hit clobber cryptobros with ;-)

Try that trick with some digital currency :-)

I'm not particularly anti-crypto but this is probably the worst example ever.

By using crypto the person now has written a public record of that payment. An attacker now can use correlation attacks to try to identify the user.

It's worse in almost every way for that user.

I'm still stuck at the part where we're paying for porn...

I assumed it was a dating site?

You’ll understand when you’re older.

I'm fairly old already, and so far age is... not linearly correlated, but at least definitely a dampening function on porn consumption :)

Haha, ok well you got me there. :) when i get right down to it, I've only paid for my porn out of a sense of patronage, not necessity. Shame about that dampening factor, but its also allowed me to appreciate more niche and interesting erotica, akin to adults who can eat interesting food dishes compared to kids who prefer hamburgers and macaroni.

Worse than a credit card? How?

Public record that Syria cannot easily track with bitcoin or no trail with Monero.

I'll give you a bitcoin wallet address can you tell me who owns it?

> I'll give you a bitcoin wallet address can you tell me who owns it?

It depends on the address. But assuming the person is using the same address for multiple transactions then the attacker only has to be able to correlate one address with a person (or a person's device if they have access to it).

This could be a completely innocuous transaction, including something as seemingly innocent as signing into a Dapp.

Compare that to a non-blockchain transaction, where if the attacker hacked an random ecommerce site (say a supermarket) that doesn't automatically allow them to tie all records to transactions on the site that is a problem.

> Worse than a credit card? How?

If I buy something at my supermarket with my credit card, even with home delivery AND even if the supermarket kept the credit card number there is nothing tying that transaction to gay.com.

- not having a central payment processor know everything about you

- buying drugs/porn/VPNs/etc in a country that has a backwards stance on them

- anonymous donations

- purchasing services (eg commissioned art) without revealing your identity

- sending money to friends and family during hyperinflation/freedom from government (mis)management of currencies

Freedom of speech (eg cryptography) is not worth much without the ability to actually use said freedom to drive a change (e.g. requiring work, thus requiring money.)

So…

- Not having anyone watch out for you

- Buying slaves/child porn/weapons in countries with a “backwards stance” on them

- You don’t need crypto for that. A lawyer could do it for you.

- See above

- Use any other currency that’s not undergoing hyper inflation

Seems like you can use the same arguments for encryption.

- Not having anyone "watch out" for your communications

- the ability to pirate or download content illegally

- can have a lawyer handle secure communications

- just use a different messaging service

Clearly we value the freedom and privacy provided by encryption to ignore these arguments.

I believe in string encryption. The difference is usefulness. I’ve seen others express this in this post’s comments.

Encryption is EXTREMELY useful, as history has proved. It has a great many beneficial uses, or at least benign. Yes it can be used by criminals, but that’s hardly its only use.

Cryptocurrency doesn’t seem to provide anything but something to speculate on, a way to sell hardware, and an unfathomable waste of resources. When people point out things it’s “better” at they always seem kind of sketchy, of require you to old the same values (independence from central government above all else). I see no inherent good after 14 years, just massive problems.

So no, I don’t think they’re comparable myself. I don’t find them similar at all for the purposes of the point I’m trying to make.

You don't find crypto useful or worthwhile because you're privileged enough to:

- Be banked;

- Live in a country with a somewhat stable currency, in which exchanging to another currency is legal;

- Live under a regime that does not impose authoritarian censorship on whom you can exchange value with;

- Use payment processors that only abuse your privacy when you aren't looking.

These conditions are not the case for everyone, everywhere. Is it so difficult for you to imagine that:

- Crypto, once matured, could enable the ~2 billion people that are unbanked to own their own money?

- Someone living in a country with a hyperinflationary currency, that bans currency conversions and precious metals, would like to use crypto to preserve their life's savings?

- Someone might want to donate to an entity opposing an authoritarian, human-rights abusing government, without painting a target on their back? (And no, we both know lawyers are not viable for this.)

Throughout human history, there has not been a single government that has not egregiously failed its people or abused/destroyed the wealth of its citizens.

You seem to think that we have arrived at some special time where this will never happen again. That is not the case. Encryption protects your speech, and cryptocurrency protects your wealth, from governments that will inevitably fail you as surely as the sun will rise.

* Evacuating money from war or authocratic leadership in a brain wallet, without running into the risk of getting it stolen at checkpoints. Of course that works best for those who already have crypto before that door closes.

* Paying for VPN anonymously with Monero.

* Sending money for living to relatives that reside in countries that are sanctioned. What's more important? Knowing that your family is not hungry or following your government's doctrine?

* Hide money from abusive relatives.

In summary: Doing transactions without having to ask your principal for permission or having to reveal them. Seems quite empowering to me, but apparently not everyone thinks that being empowered is valuable.

In a democratic society, with an elected principal, it's not only not valuable, but anti-democratic and antisocial.

We all agreed on the rules as a society, if somebody wants to empower themselves above them than that's not cool imo.

Of course, in authoritarian governments your point stands, but then the trade-off is undermining democracies as collateral damage.

> We all agreed on the rules as a society

Actually we didn't. None of us chose to be here. None of us has a choice over when or where we're born. We all arrive and grow up in societies structured and governed in ways that we've had no say over, and over which very few of us will have meaningful influence during our lifetimes. Some of this is OK, some of it isn't. Some places are more or less OK than others. But don't act like we should all simply accept everything about systems we've had no agency in building purely because we might live in a democracy.

I've moved countries four times in my life. You might not have chosen to be here, but others have. Speak for yourself.

But did you do so in order to enjoy different political systems, or more because of unrelated things like work, family, studies, ..., while the political system was something that just was in place and acceptable enough for you? I think that is what GP is aiming at.

What if you cannot find an existing system that is open for you and acceptable enough?

> to enjoy different political systems, or more because of unrelated things like work, family, studies

Ah, pretending that "work, family, studies" don't depend on political systems is peak HN.

> What if you cannot find an existing system that is open for you and acceptable enough?

Life is a series of compromises

> "work, family, studies" don't depend on political systems

Not strictly. Especially not if you switch four times.

> Life is a series of compromises

Of course it is. That's why living in a democracy and fiat system while also using crypto is totally fine.

> Not strictly. Especially not if you switch four times.

It's splitting hairs now. Your original claim was, and I quote, "did you do so in order to enjoy different political systems, or more because of unrelated things like work, family, studies"

- Work is a spectrum between "you're forced to work at the collective farm and you don't even have documents to travel anywhere" (e.g., USSR, until about 1960s) and "move to whatever place you want and start your own company" (most of the modern world).

- Family is a spectrum between "divorce is fully forbidden, punishable, or fined" (most countries with heavy religious influences, even today) to "you're free people, do what you want". And not to mention things like child care and support, rigths of husbands and wives, rights of children etc. etc. etc.

- Studies is a spectrum between "women and/or non-believers and/or non-priviledged classes have no access to education" (really most countries until modern times, some countries even now) to "yeah, go ahead and study whatever you want" (most of the modern world).

And so on. To pretend that major things in life are not affected by politics is disingenuous at best. There's literally, right now, a huge ongoing debate in the US about healthcare (affects family) and student debt (affects studies).

I don't disagree with any of that and you are right with that it is not "unrelated" as I worded it, but my initial point was that moving is not necessarily motivated by political preferences.

Many people move, because they are following opportunities (and of course these are also affected by politics). Some people move from A to B and back to A. Sometimes from democracies to dictatorships. It does not automatically mean that they do so, because they prefer one or the other system. Some people accept a political downgrade when they move.

> moving is not necessarily motivated by political preferences.

"I'm moving to A because my kids can go to school there without incurring heavy debt" is influenced by politics even if it's not explicitly acknowledged. Or even if the person doesn't think it's influenced by politics.

> Some people accept a political downgrade when they move.

Yes, they do. Because the reasons may be [1] "I don't want my kids to be subjected to gay propaganda, I'm going back to the country that upholds traditional values", and this is again is influenced by politics even if it's not explicitly stated and the person doesn't understand that.

[1] I know of some people who moved back to Russia for this stated reason.

> I know of some people who moved back to Russia for this stated reason

Horrible

All my examples are defensive. Defending the freedoms that are guaranteed by the underlying social contracts (but commonly ignored by those in power, even in the most democratic societies that exist) is not antisocial at all. Unlike violence, crypto specifically is not empowerment above others, but personal empowerment for everyone. Everyone can be empowered at the same time.

>> encryption has many, many actually useful and productive applications

> So does crypto [...]

I'd wager that this is a lie. Please name one.

These systems are self referential. Great if all to do is speculate with value changes inside the system.

Other use cases? In short: no one has come up with any solution to the oracle problem.

As soon as you want to exchange anything crypto with anything but crypto (e.g. USD or a physical asset like a loaf of bread) you need trust.[1]

[1] https://youtu.be/MiLnDe_bX6Y

I don't have much invested in crypto, and I find PoW hideous. I think crypto is most useful for illegal things and tradecraft, but illegal doesn't mean immoral, and useful to criminals is still useful.

* Buying VPN relays anonymously, for connecting to through Tor, VPSes etc.

* Buying drugs.

* Donating to causes sanctioned by your country.

* Paying informants.

* Allowing you to prove you're the author of something, or knew a secret, later on.

* "Dead hand" schemes which release information if your wallet activity stops for more than a couple weeks. This keeps people from killing you to keep something from getting out.

* Online gambling.

* Evading financial controls to send money to your family abroad.

Some of this doesn't require any trust (e.g. proving you knew something before some date), most of the rest requires trust, but what makes crypto useful for these cases isn't lack of trust but auditability, anonymity and/or lack of control by authorities.

I have worked in (used personally or done professionally) pre-crypto versions of these, excluding the dead hand scheme- and although some were a little complex and had some risk, I would argue that the new version has the same complexity and risk, only it seems to be hidden by crypto buzz-words. Also reminds me why I don't do those things any more.

Indeed. I've come across a dead letter application that has been around for ages and I'm pretty sure it doesn't use crypto.

Honestly, using crypto for something like seems a bit nuts, like using a jackhammer to destroy a cardboard box.

None of these require crypto. This is a fallacy.

Which is closely tied to the fallacy that using crypto(currencies) gives you anonymity.

Cash gives you better anonymity than any crypto currency currently in wide circulation for the applications you listed.

>> So does crypto [...]

> I'd wager that this is a lie. Please name one.

Alibaba ran a Foreign Exchange service on top of crypto. I don't know if it is still running or not. It functioned like Western Union. Customers sent local currency to Alibaba, Alibaba bought crypto with that local currency and in another country sold that crypto for foreign currency and then deposited it into the foreign currency account.

So, they replicated Western Union only less efficiently?

As a consumer, I don't mind if they are less efficient. Just as long as they are the cheapest option.

The crypto part adds nothing to this process. There are already very efficient systems for exchanging one fiat currency for another without going through crypto.

The crypto part obviates the need for using international wire transfers and the powerful correspondent banks that make it possible.

Alibaba could already avoid that need for individual transactions by just holding balances in the different currencies, like e.g. Wise and many other retail forex providers do. They only need to deal with correspondent banks for balancing out those accounts in case more money flows in one direction than the other, and those transactions are large so the costs are not as much of a concern.

In any case, your argument presumes some desire to get rid of the correspondent banks. Most people don't have that desire, they just want the money to go from A-B reasonably cheaply, and there are existing great solutions for that except at the fringes — like criminals, avoiding sanctions, avoiding capital controls, etc — which is why crypto stays on those fringes.

>>Most people don't have that desire, they just want the money to go from A-B reasonably cheaply, and there are existing great solutions for that except at the fringes

Yes, it is for the fringes. One day Alibaba could find itself on the fringes, as collateral damage in some geopolitical dispute that locks it out of the centralized global financial system, as a result of which country it is based in.

I have no idea if this concern motivated Alibaba's reliance on crypto though.

Alibaba is under more threat from its own government than any outside force

Could an alternate means of settlement be used? Runescape gold or hawala?

Potentially the involvement of those banks is a feature and provides value?

Things to ponder...

Those alternate means are not very durable.

Gold isn't durable? It will still be valuable long after crypto currencies are a footnote in history.

I didn't realize you suggested gold. I thought you meant "runescape gold". Yes gold is durable.

I suspect cryptocurrency will be a store of value far further into the future than gold. Gold becomes plentiful once extracting resources from asteroids becomes economically viable.

https://www.parity.io/blog/un-world-food-programme-uses-pari...

The UN saved more than 40,000 USD per month in bank transfer costs by using blockchain.

This article is basically an ad for Parity, and doesn't contain any details on how those savings were actually achieved, any way to verify that the number is genuine, or any way to know whether the same savings could have been achieved with improved processes with or without blockchain (which is very likely).

> I'd wager that this is a lie. Please name one.

They are currencies. I've gotten paid for services in XMR.

That doesn't mean anything. You could have been paid in potatoes for those exact same services - doesn't make potatoes a currency.

Crypto has tons of awesome use cases. Here's a list of 77 use cases.

https://blog.chain.link/44-ways-to-enhance-your-smart-contra...

> . My initial viewpoint was why would scammers bother to fish for bitcoin when bank transfers/gift cards are a lower barrier

Because bank transfers at least are inherently traceable. It just requires a sufficiently motivated government agency or prosecutor to go after them. On Gift cards, there's a lot publicity regarding scams and stores are increasingly flagging scams.

Crypto for now at least is far safer from a scmer POV as it requires far higher level of investment and expertise to trace and unmask, so only the ultra big fish seem to get chased

The difference is crypto(graphy) is "old" and established, while crypto(currencies) and blockchain are new and trendy. It's like what happened with the JS frameworks, which have stabilized now a bit. Everyone wanted to create a new amazing project, everyone was lured into using X or Y framework because Z. But not many know a lot about them. Same with crypto, people see it's trendy and go in even if they lack all the technical knowledge around it. Thus, scams and hacks are everywhere.

> * Giving criminals and scammers the ability to exchange goods and services anonymously.

Doesn't cash do the same thing?

Cash doesn't scale, doesn't work remotely and, in any case, cash is actually useful for legitimate purposes, like snorting cocaine.

How was Escobar able to build a multi million dollar empire if cash does not scale?

Escobar sold drugs. The margins on that stuff are rather large, allowing for a few inefficiencies.

But I should have really said: cash doesn’t scale down. Escobar can put people with briefcase on planes to pay his suppliers on all continents. But any smaller outfit would struggle with those logistics.

> Cash doesn't scale

I refer the learned gentleman to, er, the global economy. How much more scaled up would you like?

Meanwhile crypto transactions have to go through a single common blockchain with pitiful throughput. Even the enhancements like lightning are laughably slow compared to the global banking system.

Pretty sure the orignal post is a joke, but I think crypto is a bit like a VPN in this way. Sure your bank can see the initial spend. But after that it's harder to see where the money goes. And you have some of the benefits of normal banking systems. Much harder to buy things from far away with cash.

> Giving criminals and scammers the ability to exchange goods and services anonymously.

Plenty of scams happen right there in the open. With all the traceability that fiat currencies provide, gift card, advance-fee and other scams are still plentiful and the victims are very unlikely to ever see their money back. In the UK, even when reported by the financial institution to the National Crime Agency, they often do nothing and the institution is forced to return the money even in cases where it's very obvious it is part of a scam. A lot of people I know are still getting constant scam calls trying to get them to send fiat money to them under various excuses so clearly these people are able to launder that money and evade the law just fine, and I doubt they're using crypto for that.

> criminals

The other problem with considering every "criminal" as bad is that the definition of "crime" depends on who's currently in power. Beyond the obvious violent crimes that the majority of people will agree are bad and should be prevented/punished, there's also a huge "grey area" - Russians who disagree with the war (or even call it a war instead of a "special military operation" as is the official party line) are now considered "criminals" by their government. Do you agree with their assessment that those people are bad and should be punished?

> Providing a source of funding North Korea's nuclear weapons program

The fact that there are people working (or rather, being exploited) on the ground in Poland and Russia: https://www.youtube.com/watch?v=SPjKs8NuY4s and https://www.youtube.com/watch?v=awQDLoOnkdI suggests that moving money is not the issue when they seem to be able to transport people just fine.

> Allowing nation states to engage in global commerce despite sanctions because they won't stop killing innocent people

I disagree with punishing average people and making their life hell because their government, over which they have no power over is doing something stupid. The vast majority of these people don't intend to hurt anyone and were just unlucky to be born at the wrong time and in the wrong place. If your solution to stupid governments is to make the life of their citizens impossible, may as well just nuke said country and be done with it?

I'm no crypto fanatic. I don't believe in Web3 and call BS on whatever new crypto project comes out (and so far I have been right the vast majority of the time - every time as far as I know, but leaving the benefit of the doubt). I don't want crypto to take over the world because it's inefficient compared to competing solutions. But cryptocurrencies are a useful tool in certain situations just like end-to-end-encrypted messaging or anonymity tools such as Tor, and their benefits outweigh the cons even if they can be used to facilitate "bad" things.

Having access to basic finance and the ability of storing money safely, should be a right.

There are place in the world where these things don't exist because society doesn't get along.

Should decentralized and anonymous communication, like TOR tries to be, exist? Should a decentralized currency exist? Should and open, free and decentralized internet exist?

For some of us the answer is clear but complex. Between black and white there are many shades of grey

Here we go again. While these things have been enabled by cryptocurrency, especially ransomware, all these human activities predate it. For those of us old enough to remember the drama of the crypto wars, it all sounds eerily familiar.

> In fact, it's the proponents of widespread unbreakable encryption who want to create a brave new world, one in which all of us – crooks included – have a guarantee that the government can't tap our phones. Yet these proponents have done nothing to show us that the new world they seek will really be a better one.

> In fact, even a civil libertarian might prefer a world where wiretaps are possible. If we want to catch and convict the leaders of criminal organizations, there are usually only two good ways to do it. We can "turn" a gang member – get him to testify against his leaders. Or we can wiretap the leaders as they plan the crime.

> ...

> If unescrowed encryption becomes ubiquitous, there will be many more stories like this. We can't afford as a society to protect pedophiles and criminals today just to keep alive the far-fetched notion that some future tyrant will be brought down by guerrillas wearing bandoleers and pocket protectors and sending PGP-encrypted messages to each other across cyberspace.

> ...

> As encryption technology gets cheaper and more common, though, we face the real prospect that the federal government's own research, its own standards, its own purchases will help create the future I described earlier – one in which criminals use ubiquitous encryption to hide their activities. How can anyone expect the standard-setting arms of government to use their power to destroy the capabilities of law enforcement – especially at a time when the threat of crime and terror seems to be rising dramatically?

https://www.wired.com/1994/06/nsa-clipper/

My take on it as an outsider is that these are bridging technologies that will probably die off once the rest of the world moves to a secure private digital currency system analogous to cash, since we will no longer need these "wildcat cryptocurrencies" any longer. Like how modern banking progressively evolved from distributed roots.

The ransomware actually wouldn't exist at all without cryptocurrencies making the scheme viable.

The first ransomware attack was in 1989.

PLEASE elaborate, I'm intrigued.

> In the late 1980s, criminals were already holding encrypted files hostage in exchange for cash sent via the postal service. One of the first ransomware attacks ever documented was the AIDS trojan (PC Cyborg Virus) that was released via floppy disk in 1989. Victims needed to send $189 to a P.O. box in Panama to restore access to their systems, even though it was a simple virus that utilized symmetric cryptography.

https://www.crowdstrike.com/cybersecurity-101/ransomware/his...

Note that in 1989 Panama was a narco-state, so running a scheme like this via there made some sense.

I still haven’t seen anyone actually buy anything with a cryptocurrency yet.

You must be against end-to-end encryption for chat messages too. Think about how the terrorists and pedophiles can take advantage of that!

More importantly, private citizens have essentially no need to use end to end encryption. Nor has society a reason to allow its citizens to hide data on encrypted devices from the state.

It is all entirely benefiting criminals. /s

Surprisingly (?) no! Only against a wasteful, overly complicated system, that's proven itself to be a haven of fraud and crime.

Sounds like you should here to China, where the CCP controls all the money and every action is logged and checked by the CCP. Wanna play games? You need that cleared by the CCP first and you are only allowed a quota. All your problems are solved over there. As for me in HK, its time to get out.

The last six months proved that governments are willing to debank their own citizens and entire countries without due process. Thank god for crypto.

Precisely. Not sure why the pseudo intellectuals of HN don’t get it.

Ukraine raised $100 million in crypto donations. It's going to be offering an NFT series on Ethereum to raise yet more funds:

https://qz.com/2147694/ukraine-is-selling-nfts-like-war-bond...

Beyond the state's fundraising efforts, many in Ukraine were only able to take their wealth with them when they fled the country because they had it in the form of crypto.

>>* Giving criminals and scammers the ability to exchange goods and services anonymously.

And encrypted chat applications give criminals and scammers the ability to coordinate their scams anonymously.

Centralization via mass-surveillance (Total Information Awareness) is not a solution to social problems. It's putting all of society's eggs in one basket, and hoping the basket doesn't fall into corruption.

>>* Allowing nation states to engage in global commerce despite sanctions because they won't stop killing innocent people

And according to this pro-centralization philosophy, a million people dying in Iraq due to sanctions is "worth it".

So are all the people who "starve" due to this philosophy's AML mass-surveillance laws:

https://finance.yahoo.com/news/money-reimagined-starve-ugly-...

As always with crypto, this “use case” falls apart on even the tiniest inspection.

Ukraine was not cut off from the global financial system and had no issue receiving donations in fiat currency—I myself sent them some fiat. It was quick and it was easy and the Ukrainians lost a hell of a lot less of my donation to transaction fees than they did of the ETH.

Donating to Ukraine in ETH is a higher-fee way to do something you can already do (this is typical of purported blockchain “use cases”). If you actually care about the recipient of the donation, you should want as little of the donation to be siphoned off as transaction fees as possible.

>>Ukraine was not cut off from the global financial system and had no issue receiving donations in fiat currency—I myself sent them some fiat.

It is far easier to donate from your browser, using your MetaMask wallet, than by visiting your bank branch to effect an international wire transfer. It can potentially also be safer, in letting you not have your identity recorded anywhere in association with a donation to a party to a conflict.

Visiting a bank branch? What is this, 1998? Use an app or a website like a normal human.

Who said anything about a bank branch? I did it on the Central Bank of Ukraine’s website in about 30 seconds. I don’t know how much I can emphasize what a solved problem this is.

That's a fair point about the existence of payment options that are more convenient than wire transfer, but not every one has a credit card or lives in a country where international e-wallets like PayPal operate.

And the problem of identity being linked to payments, and the risks this can engender, is not a solved problem in traditional finance.

There is an advantage to Ukraine though: This might get them more donations from the crowd that has fully bought into all the crypto junk and will happily throw money at everything with the right buzzwords.

I suppose you can consider the transaction fees marketing budget.

> Ukraine raised $100 million in crypto donations.

Ah yes. Because those "$100 million in crypto" can be definitely used to buy gas, food, water, transportation etc. in the country...

I don't know if people are victims of misinformation campaigns or something but the way people blame blockchain for everything is just so ridiculous.

Like as if it's the reason North Korea has a nuclear missile program, give me a break?

I guess there is no point trying to convince you?

The most important technology since the internet.

Changes the foundation of trust, governance, economy, incentives.

New operating system for humanity.

(and there is no way to stop it, countries who will ban it will go into dark ages while other will prosper)

I mean, you could replace "crypto" with "internet", "computers" or "collectible sidechain NFTs" depending on how big the tribe you want to attack is. Or for example

> This is exactly why the cloud is such a disaster. Every week there is yet another scam where people losing their money. The feedback from cloud hosting enthusiasts is well look at those idiots for putting their money into some scheme <insert unintelligible jargon filled insanity statement here> or you are not smart enough use this thing. Look "nobody" understands what you are talking about. These technical systems are inscrutable and the problem is getting worse. You are building systems that are ruining peoples lives and making things worse for everyone. Please think about what you are doing and create system of value and meaning which improves humankind.

----

This line of reasoning is what may very well lead to a ban on end-to-end encryption and public access to non-backdoored general computing.

Almost every criticism above could be applied to the current mainstream financial system too.

But the current financial system is quicker and more energy efficient. With everything else being equal, why are we doing this again?

Because the creator of crypto concept never understood why there are centralized institutions in the first place. It was so naive to think the problem was the correctness of the records and thus everyone should keep a copy of the global ledger!! I hardly if not never heard of any fraud that actually altered records held by the authority institutions and in fact, in all the fraud cases I know the records held by the authority institutions indeed correctly reflects what happened. So the problem was never about records but rather how to ensure the transaction happen as expected without having to know or trust the counter party. Of course in most of the cases the parties in a transaction don't know or trust each other and neither should they. So here come the neutral authority institutions which provides the instruments to allow the transactions to complete. So you can see that cryto is actually barking at the wrong tree and thus we again see authority institutions, exchanges or in this Ronin, emerged. Traditional institutions are heavily regulated and there is almost nothing for those so called exchanges.

People have been cooking the books forever. WorldCom or Tyco being examples.

But that isn't solved by the blockchain.

These scandals were found out by using the very books they had. There's no such thing as an uncookable book. As long as I can lie about information going in, I can manipulate it. Even in the crypto space, you have wash trading and the like.

Makes it easier to track with more then one copy of the ledger and immutability of entries (lies or not). Probably would not take three years to find the fraud as in the case of WorldCom. Though this is all spec as not been tested in real life.

> Makes it easier to track with more then one copy of the ledger and immutability of entries

Yup. As all the scams have proven, it's easy to track and get the money back.

And that's before we get into nuggets like this [1]:

--- start quote ---

A clever operator found a vault containing five Bored Ape NFTs, which had unclaimed $APE associated with them since they were locked up in the vault. They used a flash loan to purchase a large amount of the vault's token, redeem the five BAYC NFTs, claim the airdropped tokens, return the BAYC NFTs, sell back the tokens, and repay the loan, all in one transaction that cost them nothing but netted them 60,564 $APE, which they then swapped for 399 ETH ($1.1 million).

People were somewhat split on whether this could be classed as a vulnerability in the $APE airdrop, since (as with many crypto hacks and scams) the person was operating completely within the rules set out in code.

--- end quote ---

[1] https://web3isgoinggreat.com/?id=2022-03-18-1

Reminds me of the guy who bought a pass for unlimited flights for $250,000 and cost the airline millions in losses[1]. This is not a vulnerability, and not a crypto problem either, just a poorly designed giveaway

[1]: https://en.wikipedia.org/wiki/AAirpass#Profitability_investi...

>> Because the creator of crypto concept never understood why there are centralized institutions in the first place.

You are totally missing the point. Having to rely upon central banks was the fundamental problem being solved.

> The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.

-Satoshi Nakamoto [0]

Getting central banks out of the picture is original philosophical motivation for developing a digital currency. All of the "cashless society" convenience aspects are secondary features. Everything that follows, regarding ledgers/records/blockchain/double-spending/trust-less is what's needed to make a digital currency work without a centralized authorities that mint money and validate transactions.

> A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system.

-Satoshi Nakamoto [1]

Next up, the irreversibility of transactions is a feature, not a bug.

> For many purposes, reversal and arbitration is highly desirable, but there is no way anyone can compete with the arbitration provided by Visa and Mastercard, for they have network effects on their side, and they do a really good job of arbitration, at which they have vast experience, accumulated skills, wisdom, and good repute. So any new networked transaction system has to target the demand for final and irreversible transactions. [2]

[0] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...

[1] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...

[2] https://satoshi.nakamotoinstitute.org/emails/cryptography/th...

Replace "bank" with "cryptocurrency exchange" and the quote still applies verbatim.

You can pay people in crypto without going through an exchange/bank, and without meeting in person (like with cash)

I think there is a misapprehension in the original bitcoin design about the "root problem." is the root problem debt? is the root problem globalization? is the root problem capitalism? is the root problem fractional reserve banking? is the root problem mechanisms of governance? is the root problem human neurological wiring and our inability to find stable cooperative regimes that are not disrupted periodically by anti-social violence?

I identify many more pressing problems than than central banks, and trying to eliminate trust as a requirement is a naive and anti-social approach.

despite the fundamental conceptual limitations of bitcoin, its genius is its memetic tendency to coopt human social dynamics and create a whirlwind of FOMO and greed. It actually highlights what our actual problems as a global society are, and less trust is not the answer.

I personally would start from a different point of view. Given that privacy is impossible, and it is futile to try to support the illusion that the world is a limitless and open system, we should double down on trust, and create systems that make it easier to discriminate between actors as more or less trusted, and which improve our ability to reach consensus and maintain it. Systems which make trust more secure.

unfortunately these solutions are unlikely to be embedded in computer networks, but in my opinion will arise from genetic engineering.

«This is exactly why crypto is such a disaster.»

Correction: this is exactly why MONEY is such a disaster.

There has always been scams involving money since, well, since money was invented. You guys portray crypto as being particularly terrible, but the truth is there are hundred times (or more) more money being lost to scams involving the US dollar or the Euro. Crypto is no better or no worse in this regard. Some people will always make dumb mistakes with their money. For example just in the US alone, last year, $5.8 billion was lost to fraud: https://www.cnbc.com/2022/02/22/consumers-lost-5point8-billi... that's excluding 7.6 billion people outside of America, or money lost to causes other than fraud (eg. theft), etc, etc

Percentage wise, crypto is obviously the scam king.

Crypto is far worse. You need to normalize the amount-looted by the amount of transactions conducted.

Very clearly 'traditional' finance is far safer. There's a reason financial institutions are annoying and stodgy -- they have centuries of hard-lessons-learned. Crypto 'disruption' is mostly throwing away that painful experience.

Bitcoin alone, excluding other cryptos, transacts 1500 billion USD per year. How much is lost to fraud yearly? 2 billions? That's 0.13%. Does fiat lose less than 0.13% to fraud?

Right now they're immature, but I'm hopeful that advancements in ZK-tech will allow practical ZK-rollups. ZKSync already has a zk-evm testnet running (which I believe is based on zk-llvm), so we're close. Currently all the big rollups have master keys which can be used to steal all the money deposited by them, but there's no reason in principle they have to have this. Polygon has permissionless rollups, so I'm quite hopeful that they'll be a viable trustless permissionless scaling solution soon.

For those who don't follow blockchain tech, like me, here's a primer on ZK-rollups: https://learn.bybit.com/blockchain/zk-rollups-eth-scalabilit...

The nice thing about zkrollups is that users have a cryptographic guarantee of being able to withdraw their money. The rolled-up transactions are posted on chain in compressed form, and a contract on chain verifies a concise proof that all the rules were followed, including that all transactions had valid signatures.

So if this is done correctly, any master keys shouldn't be able to steal user funds. The key holders would be the ones authorized to post the data, but the worst they could do is censor transactions.

Right. It's possible to conceive of a rollup, particularly a zk-rollup, without anything like a master key. But current rollups do have those keys. ZK-sync for example has two, one used mostly used for upgrading the smart contract that has a 14-day withdrawal delay (or something like that) and one for use in case of emergency that has no withdrawal delay. If the second were compromised, it would lead to all the money stored in the rollup being stolen. But there's no reason in principle that either of these are necessary.

ZK-rollups are awesome because they don't introduce any trust assumptions (except for the master key issue, which is just an implementation detail). The only risk is current zk-rollup designs is that they could censor certain transactions by never including them in a "batch" (the rollup equivalent of a block), but with unpermissioned rollups like the one I think Polygon has even this issue is mitigated

>done correctly

This has been the difficult bit for the ecosystem, and I think grasps at what GP is saying. For every competent dev/cryptographer in the space, there are 10(0) who are not because there’s so much money floating around. Those 10(0) may implement zk-class protocols incorrectly and end up in the same situation we see today. There is promise in but a ton of validation/maturation to do for zkrollups in the wild.

The crypto(graphy) is rarely the weakness in these situations, so declaring faith in (insert new tech buzzword here) is almost certainly not going to be the answer. It comes down to operational and human factors, like poorly written code. (new tech buzzword) will involve lots of new code, and why do people think this time the new code will be error-free?

In this case, the weakness was that the keys that controlled the bridge were somehow stored insecurely. When attackers gained access to the keys, they were able to steal from the bridge. In a properly-implemented rollup, there are no keys to secure, so this attack vector is ruled out.

But more broadly, there is really nothing else with the same security properties as a smart-contract-enabled cryptocurrency. Paypal will delete your account any time they want, Visa and Mastercard will blacklist whatever industries they feel like blacklisting, etc. If you want a system that's decentralized and where these attacks aren't possible, you have no alternative. The problem is that current blockchain-based systems can only handle a certain number of operations/second while remaining decentralized. The appeal of scaling solutions like ZK-rollups is that they give us the same security properties as the main chain without any security compromises (relative to the main chain). That's all conditional on their code being correct, but given that there's such a large payout to hacking e.g. bitcoin or ethereum or zksync and it still hasn't happened, we can guess that the coders have done their jobs well and such problems are at least very difficult to find.

You are misinformed. With most cryptocurrencies (except Monero) it is very easy to blacklist wallets, and since tx history is public you can't just move your coins to a new address to get around it either. You don't actually even need decentralized systems for private transactions, digicash with blind signatures would be private and vastly more efficient.

I think "very easy" is relative. How do you get the whole world to agree to participate in the blacklist (or even to be aware of it)? If you don't, then obviously it will remain possible to tumble/launder the coins.

By comparison, if PayPal decides to freeze your account, that's it, the end, those funds are frozen unless and until you successfully run the corporate supplication gauntlet.

You don't need the whole world, just the exchanges. And and some ERC20 tokens can have addresses frozen by a central authority (ex. USDC and Circle, USDT and Tether, etc) which is why the attacker immediately sold the USDC for ETH on 1inch and Uniswap.

> You don't need the whole world, just the exchanges.

Then you just tumble the coins and head to an exchange.

> You don't need the whole world, just the exchanges.

But there are a whole world of exchanges. Anyone can make an exchange. Any one can also trade in person.

I think what gp means is to tell all the exchanges (and maybe merchants) to blacklist your wallet. Not as simple and bullet proof as PayPal freezing your account but similar.

On Ethereum you can you decentralized tumblers like Tornado Cash

What you are saying applies equally to "the internet" and "computers".

> Right now they're immature

It's 14 years old.

The community has had a fix for all of these problems just over the horizon for a decade. It just isn't coming.

The real issue is that most of the crypto being held is held by people who don't care about using it as currency or for anonymity, they're using it as an "investment". That's why when coins that work better as cash or privacy or whatever come out, nobody cares, they just keep trucking on with bitcoin. All they care about is that the value of bitcoin goes up.

ZK rollups are not anywhere near 14 years old

Anyone can make anything which supposedly “works better as cash”.

How will they create confidence in the money, though?

In addition, please bear in mind aluminium and copper are more _generally useful_ than gold.

We cannot state, therefore, a money’s usefulness is more important than the hardness of the money: i.e. its scarcity and resistance to fundamental change.

This is likely why most competing currencies these days claim to be “decentralized”. It’s really just their way of claiming hardness without openly admitting to such.

1. Can your "blockchain" be validated with regular hardware?

2. Does it use a secure consensus algorithm?

3. Is there a secure side channel through which low-value transactions can flow?

The only blockchain with 3 yes is Bitcoin lol.

Indeed. This is why Bitcoin maximalists tend to be set aside as "religious zealots" while their conviction is a direct result of these three answers.

Actually it's Chia.

Bitcoin requires custom hardware. Chia does not - you can use an ordinary hard drive and run a full node on a Raspberry Pi.

the only reason chia doesn't have specialized hardware that crowds out all commodity hardware is because no one cares about chia. the reason that bitcoin has highly specialized asics is because it is the progenitor and center of the entire cryptocurrency ecosystem and has been for over a decade. also proof of space is no better than proof of work at scale. it will ultimately have very similar consequences.

There is no such thing as specialized hardware for Chia farming. If you manage to pull that off then congratulations, you have created a bigger hard drive.

the history of cryptocurrency is a history of projects making that exact claim and being proven wrong over and over again, but surely this time is different.

I have in fact not heard that specific claim much. There was the whole "ASIC-resitance" trend and the projects that did care about it (like Monero) tend to be right in their claims. Ethereum is still to a large extent mined on consumer-grade GPUs.

There is not even any consensus on if this is desirable for PoW chains.

Bitcoin MINING is only feasible with special purpose hardware, but that's not what was stated:

> 1. Can your "blockchain" be validated with regular hardware?

Bitcoin can be VALIDATED on practically any low end consumer computer, including an early Raspberry Pi.

> Bitcoin requires custom hardware.

No, it doesn't. We're talking about validating network consensus, that's what validator node do, not the mining nodes.

>None of this is new. The Bitcoin "block size war" was fought over this very point. Unworkable scaling schemes are going to end in disaster with no fallback, and no recourse for those who lose money. You end up with nothing, and will be sad.

I don't see the parallel to 'the Bitcoin "block size war"', though? The solution on either side (bigger blocks, lightning network) doesn't require trusting some party to handle transactions.

I think their point is that at some block size, it's no longer feasible for most people to run their own node to verify the blockchain, and you start relying on a client-server model instead of a peer to peer model.

Yes, interestingly with Ethereum it's not the individual block size that's holding it back (they're around 80kb), it's the protected size of all blocks for people running validator nodes. You don't want to require node operators to have 100TB in SSD storage because your blocks all pile up too quickly (this is one of the main concerns about Avalanche scaling).

Part of it IS the individual block size though. Individual blocks might seem small, but there's a lot more of them. Ethereum dApps store a LOT of state directly on the base chain. The other scalability disaster is making every node validate every instruction of a Turing-complete scripting language, which results in insane "gas fees" (or loss of fees when you didn't supply quite enough for the script to fully execute).

> (or loss of fees when you didn't supply quite enough for the script to fully execute).

Are they planning to address this in any of the updates on their timeline? This turned me off from ETH completely, just feels like a house-always-wins situation skimming money from users.

No idea, Ethereum was an intriguing experiment for the first few years, but it’s seemed like a dead end for a while now

Since it's deterministic, you can get a good estimate (in fact exact as long as you are not front-run) by simulating the execution locally before submitting it. All major wallets do this.

In addition to what 3np said, you can use Flashbots as your RPC node, and your transaction won't be submitted if it's going to fail.

Minor note, the reason for charging for failed transactions is to prevent abuse of network resources, don't want someone submitting millions of bogus transactions to DOS the network.

That's a good reason, still need people to pay for scarce resources, just a shame that there's no mechanism to pick up where you left off.

Thanks for the tip about flashbots, never heard of it

With larger blocks, you can still hold your own private keys. As long as ONE of the blockchain explorers you rely on is honest, you also cannot be scammed. Given the blockchain data is public domain, and freely exchanged, the idea that you won't be able to find a single honest information purveyor seems farfetched.

Is bitcoin's lighting network any different? Just curious

Yes, LN is different. The Lightning Network consists of channels with funds held in a 2-of-2 multisig, so the only way one participant can have a quorum of signatures is if they already own both ends of the channel. There are Bitcoin sidechains that have a similar federation of validators, such as Liquid.

> 4. An attacker obtained 5 of 9 keys, which is the signing threshold.

How?

Exactly. Sounded like the obtained four keys and then used an open backdoor RPC call to obtain the fifth.

> The attacker used hacked private keys in order to forge fake withdrawals.

> The attacker managed to get control over Sky Mavis’s four Ronin Validators and a third-party validator run by Axie DAO.

Easiest explanation: at least one Sky Mavis employee and one Axie Infinity employee who have access to those private keys got together and took all the funds. Perhaps it was only one employee; it's not clear to me what the difference between Axie Infinity and Sky Mavis is (there isn't actually an Axie DAO, there's just a web page where they say they plan to be a DAO in 2023).

> Easiest explanation: at least one Sky Mavis employee and one Axie Infinity employee who have access to those private keys got together and took all the funds

Easier explanation: they were all in a Dropbox or something stupid like that.

Is there a chance they were all loaded into application memory?

They shouldn't even all be on the same computer. Ideally they would be engraved in titanium and inside people's safe deposit boxes

Most likely that

I was thinking that Sky Mavis owns Axie Infinity. Is that wrong?

The current address holding the funds: https://etherscan.io/address/0x098b716b8aaf21512996dc57eb061...

curious - “can your blockchain be validated with regular hardware” - why is this a point you call out?

is it that specialized equipment is not easily accessible and thus not truly decentralized?

Exactly. If validating the ledger requires millions of dollars worth of hardware, only a few people will know what it actually says, and they can collude to impose whatever rules they want (basically like what happened in the article).

Yes. Bitcoin can be validated with with regular hardware, thus full nodes are cheap and ubiquitous and results in a system that's highly decentralized. Even if a 51% were to hypothetically happen with miners, the full nodes will stop it.

Ethereum and many others with massive blocks cannot be validated with regular hardware as there's too much computational power/storage involved. The majority of Ethereum nodes are by 3rd party services which use cloud services such as AWS. Additionally, essential services such as Infura which the majority of apps rely on are basically entirely centralized.

You can sync a full ethereum node (all blocks with all transactions and fully verified current state) on a rasberry pi with a 1TB ssd. With 3TB of ssd space, you can even have an archival node (the above, but with all the state history changes cleanly indexed by account, which is only really needed if you want to run a block explorer).

The issue for ethereum flat out isn't the hardware requirements, its laziness. Infura, Alchemy, et al make a very convenient shortcut for impatient folks and that is why they get used. The good news is that there is a ton of real development going into light clients that can trustlessly get and interact with with the current state of the chain within a few minutes of launching and can even run within a web browser.

the beatings will continue until the geniuses running ethereum say uncle.

https://biblehub.com/proverbs/26-3.htm

Which crypto meet all those criteria?

That's exactly the situation in Bitcoin second layer now. There are a few centralized servers (lnbig etc) handling almost all transactions. Get out and stay out.

Bitcoin second layer as-in the "Lightning" network? That's worrying. I thought Lightning was supposed to solve Bitcoin's scaling issues.

No, that person doesn't know what they're talking about, see my response to them.

It's not at all. The worst thing a centralized server can do in Lightning is refuse to route your transactions. Their peers have the keys and the pre-signed transactions necessary to unilaterally withdraw their funds from the channel.

> The worst thing a centralized server can do in Lightning is refuse to route your transactions.

This is called censorship, the very thing Bitcoin was created to circumvent.

It's an especially big problem given the fact that the vast majority of lightning payments are routed through lightning nodes operated by centralized cryptocurrency exchanges. Most of the remaining nodes on the lightning network are unreliable due to shortcomings in the lightning protocol surrounding state management, node connectivity, and inbound/outbound liquidity. That's not even getting into the abysmal incentive structure node operators face.

It is certainly not a general instance of censorship if certain node operators or miners choose to exclude transactions meeting certain criteria.

This isn't comparable to e.g. a hard coded blacklist.

they can't censor you. this is incorrect. all they can do is inconvenience you. ultimately you can close the channel with them at any time if you conclude they are a bad actor.

Beyond that, LN transactions use onion routing, which means you define the exact route for your payment to take through the network. You can actively avoid ever routing through a particular node if that's your desire.

>It's an especially big problem given the fact that the vast majority of lightning payments are routed through lightning nodes operated by centralized cryptocurrency exchanges.

I'd love to know how you came to believe this. Due to Lightning's design, there is no way to know how payments are routed, so it seems clear that you're either misinformed or lying.

> That's not even getting into the abysmal incentive structure node operators face.

Such as... getting paid for your capital by routing payments? Oh no, so abysmal!

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