Ethereum Has Issues
blog.dshr.org
blog.dshr.org
As someone who knows and has worked with all the people involved with the write-ups referenced in this blog post, I can pretty confidently say that the author is way way behind here. There have been some insane advancements in recent years that would blow his mind.
MEV harvesting is actually an insanely fascinating field of study, and it comes down to consensus in a world where information can only move as fast as the speed of light.
Front-running is a general problem where, if you can find out that someone wants to buy something, and can buy it first and sell it to the person who actually want it at a premium. This gets really interesting in the blockchain space, because Miners (Validators) decide the order of transactions, and in some cases validators can be incentivized/coerced to move around transactions in a way that might be beneficial for certain users. This is what is referred to as "Miner Extractable Value".
Yes it's a problem, yes there are mitigations, yes there are fun and weird ways around those mitigations, etc.
This is what happens when people are incentivized to take a really good hard look at what global consensus really means. At a high level, most users don't really need to know or care about any of it, but it exists as a parasitic force constantly extracting value from the network. Still, IMO the parasites that feed off MEV are at a significant disadvantage compared with those who feed of legacy financial networks (for more on that, you can read the actual Flash Boys book https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...).
To be fair, there isn't a ton of information widely available, because talking about Flashbots in public is considered "alpha leakage". You see glimpses on Twitter, Discord, Twitch, etc though. Every once in a while someone will dump their finder code to burn alpha when they get squeezed out of some opportunity set.
People have spent years fine tuning bots looking for MEV opportunities, and they have gotten really really good. It also plays a ton into cross-bridge arbitrage, taking advantage of quirks in the interchain ecosystem to squeeze out opportunities.
Like I said, the author has dipped their big toe into the MEV rabbit hole, but it goes so, so much deeper.
So, both you and GP are saying that MEV is a bigger problem than this article says?
Yes and no. On the one hand, one does have to accept that "MEV" in the "_Maximum_ extractable value" is always going to be potentially present on a public blockchain - but often times, this is a good thing. Liquidity pool arbitrage is also "MEV", but is MEV that is absolutely vital to efficient markets, and the more advanced the players in that game get, the more everybody gets to enjoy liquid and efficient markets. On the other hand, more and more DeFi projects take in to consideration possible MEV extraction vectors when designing applications, and some even use "MEV protection" as a USP (such as CoWswap)
To answer that I would invite anyone to try using a blockchain under heavy load without any way for users to prioritize transactions. What you will find is the network becomes vulnerable to transaction spamming; possibly to point of breaking consensus making it so nobody can transact at all.
MEV is a consequence of a design decision to address this. And that's not to say Ethereum has everything figured out and a better FIFO model can't solve this, but afaik this is the current state of things.
The blockchain is essentially solving the ordering problem, one big timestamp machine. The solution you propose would require a timestamp machine in the first place lol.
A similar problem appears to emerge when Bitcoin’s block reward disappears, as high volatility in block rewards would cause rational miners to behave in suboptimal ways.
Looks like they link a lot of stuff from the past month.
Examples of links in the article from within the last month:
1. https://arxiv.org/abs/2203.15930
2. https://davidgerard.co.uk/blockchain/2022/04/04/if-you-want-...
3. https://datafinnovation.medium.com/the-consequences-of-scala...
4. https://web3isgoinggreat.com/?id=2022-04-05-0
5. https://ethresear.ch/t/np-completeness-of-a-strong-form-of-s...
Yes and now you're circling back around to the usual problems with algorithmic high-frequency trading talked about in Flash Boys, which has nothing to do with blockchains or cryptocurrency. Unless you can cite some "insane advancement" in consensus algorithms that solves these problems everywhere then I doubt there is much more that can be said here. Because AFAICT everything you're talking about is just piling more mitigations and edge cases on top of an existing consensus algorithm. That work is important and it needs to happen on any distributed system. It's not some kind of world-changing thing, it's just necessary maintenance (and cost) to keep the system going.
>This is what happens when people are incentivized to take a really good hard look at what global consensus really means.
They were already incentivized to do that without blockchains. This sentence could be more accurately stated: This is what happens when people deploy an experimental solution that claims to solve global consensus, but as we find out from experience that it actually doesn't, in some ways it actually makes it worse, and generally speaking those problems are still just as hard as ever.
I suspect there's a disconnect between people talking about democratization of access, and people pointing out crypto doesn't actually make things fair.
Crypto doesn't make things fair for the little guy.
It does add additional transparency to financial markets though, as well as things like open, verifiable, non-custodial, programmable financial contracts (as long as all the inputs can be verified reliably on-chain)
This gives people equal access (with some limitations on what that means)
No, not really. This comment is more crypto myth-building. There's nothing technical about blockchains that adds transparency. Any company that wants to publish all its financial statements publicly can technically already do so and could always do so. They don't for many reasons, the most important ones being that customers overwhelmingly want financial privacy, and financial companies are required by law to provide a certain level of privacy for customers.
>open, verifiable, non-custodial, programmable financial contracts
No, smart contracts are technically not "contracts" in the legal sense and are also not "non-custodial" because they require middlemen to run the blockchain. There is also nothing more open or verifiable about smart contracts compared to any other program. They're just programs. I absolutely hate that they used the name "smart contract" for this because it's so misleading.
>as long as all the inputs can be verified reliably on-chain
This will never happen because the only reason they're useful is because they take inputs from off the chain. The marketing is that users will be able to actually use these things to perform services. Of course that is self-contradictory because of the previous reason.
>This gives people equal access
No it doesn't, because only a small fraction of people are going to become smart contract programmers or are going to become skilled in auditing smart contracts. You might as well say all finance gives people equal access because anyone can become a CPA.
False. On a public chain like Ethereum, every single historical operation and its outcome events and state can be traced and verified. If the source code is published, the running bytecode can be verified to match the source code.
> smart contracts are [...] not "non-custodial" because they require middlemen to run the blockchain
Also false - miners/validators have no opportunity to seize or freeze assets
> There is also nothing more open or verifiable about smart contracts compared to any other program
See above. You can verify what code was running when and with what input.
For one, accounts on it are pseudonymous. If by "transparency", you mean "every activity can be traced back to a meatspace individual or institution as recognized by a national government and/or law enforcement", that is a different level of "transparency".
It's not being compared to wire transfers but to server-side software (including those responsible for executing legacy wire transfers).
No it's not false. Ethereum doesn't matter, there are a ton of sidechains and mixers that obfuscate transactions and you can't stop people from using them, you also can't guarantee they will provide source code or provide any means to verify their own smart contracts which they don't have to build on top of Ethereum's platform. And many of them don't anyway, specifically because of deficiencies in Ethereum.
>Also false - miners/validators have no opportunity to seize or freeze assets
Actually they do, if they all decide they don't like you then they can blacklist your wallet address. For practical purposes it's the same as a frozen asset. The inability to seize assets is actually a bad thing because it means the network operators have no effective way to confiscate stolen money.
>See above. You can verify what code was running when and with what input.
And you can also do that with literally any other program regardless of whether it's on a blockchain or not.
What, in PDF? and store them on a website or FTP server? Totally discoverable and analysable?
And if two different companies publish statements (inevitsbly in slightly dofferent formats) you need a team of analysts working for 6 months to match up the transactions?
2. Miners and block verifiers are not middle men. They have negligible control where as a middle man has full control.
3. The verifiably of smart contracts is not exceptional for its own sake, but for the fact that it prevents cheating in a system where cheating is heavily incentivized.
4. Auditing smart contracts will generally be much easier than auditing EVM bytecode. Ethereum isn’t the only game in town and the most sophisticated layer 1 smart contract languages converge toward functional, locked down languages which lend themselves to automated and manual auditing. The same way open source increases user security even though 99% percent of users won’t build or read its code.
You are so off base on all of your point I seriously doubt you don’t have an emotional stake in your position. Perhaps the classic “I’m a smart tech person yet I missed out, so really it’s always been bad and I’ll be proven right someday,” syndrome. You know other people that missed out simply developed some grace, and others still that identified problems went to work on them rather than pretending they were unsolvable.
The dogmatic crypto skeptic is as bad as the crypto shill.
That's not what I was saying, at all.
>Not only that but the off topic declaration where you imply privacy is impossible on blockchain is incorrect.
Please do not argue straw men. I never implied privacy is impossible. I know about things like privacycoins. Some have even been mentioned in this comment chain. My actual implication here is that blockchains cannot promise either privacy or transparency. Those who want to use mixers and privacycoins will do so and you won't have any transparency into their activities. Those who want to insist you use KYC exchanges and traceable coins will do so and you won't be able to have privacy there if you want to transact with them. So basically, an ordinary person has no control over how much transparency or privacy there actually is on the network. Unless you have an outsized level of control on the network (and therefore the network is not decentralized) then you're completely dependent on the other more powerful party. So basically blockchains are providing nothing of value here compared to an ordinary financial service.
>2. Miners and block verifiers are not middle men. They have negligible control where as a middle man has full control.
No, they have full control. Like actual full control over the network. Individually they don't, but as a whole they do, that's literally how the network functions.
>3. The verifiably of smart contracts is not exceptional for its own sake, but for the fact that it prevents cheating in a system where cheating is heavily incentivized.
No, this is wrong. Verifying a smart contract does not prevent cheating. Even if you verify that the smart contract technically has no bugs, it could still do the wrong thing, or the other party could just commit good old-fashioned normal fraud and never hold up their end of the bargain. Smart contracts are not actually smart not are they contracts.
>4. Auditing smart contracts will generally be much easier than auditing EVM bytecode. Ethereum isn’t the only game in town and the most sophisticated layer 1 smart contract languages converge toward functional, locked down languages which lend themselves to automated and manual auditing. The same way open source increases user security even though 99% percent of users won’t build or read its code.
This whole paragraph is based on a falsehood. Open source does not increase user security, go look at the recent log4j disaster. What actually increases security is having security engineers being paid to look for and fix security issues, the cost of which is not significantly different between open or closed source. I have seen no reason to believe it's any different in smart contracts. Functional languages can be good for proving certain types of code with fixed requirement, but the same thing also applies to any of that category of software, financial or otherwise. It's again not related to blockchains at all.
>I seriously doubt you don’t have an emotional stake in your position. Perhaps the classic “I’m a smart tech person yet I missed out, so really it’s always been bad and I’ll be proven right someday,” syndrome.
This is a totally wrong, nonsensical and completely rude comment, please never say anything like this again. Never even let the words cross your mind. Your intelligence is capable of much better things.
>and others still that identified problems went to work on them rather than pretending they were unsolvable
This also makes no sense. I've been looking at this for 10 years. The problems aren't unsolvable. There are plenty of problems to solve, the reason why you shouldn't bother solving them is because all of those problems are intentionally caused by the bad design of blockchains. Our work is hard enough without purposefully making it harder, but that's the only thing blockchains do.
>The dogmatic crypto skeptic is as bad as the crypto shill.
I'm not a "crypto skeptic" and I don't care to discuss dogma. This is about the facts. Please avoid making these ridiculous accusations, please stop trying to psychoanalyze me, and just stick to the facts. That will help both of us.
1) It lacks the sophisticated financial tools and derivatives that have been developed over the past century
2) It does not have enough volume to keep up with the new sources of arbitrage that come with every new DeFi product (looking at you DEX’s and synthetic stocks!).
Every time a crypto asset “solves” one of those two problems (almost always incompletely) the crypto verse acts like they’ve proven p=np.
I think the race to put order books on blockchain is misguided. Constant-product DEXes can offer way less gameable best-execution by simply trading more cautiously for the swapper.
Problem is, on Ethereum, gas makes it too expensive _not to trade_ once you get to the blockchain. MEV is a problem that can be managed effectively if the blockchain is scalable (thus avoiding gas problems).
If that's true, then you're right. Assuming an effective decentralized dark pool, that is not vulnerable to side-channel attacks, is possible, it is preferrable to the centralized variety that traditional finance uses.
>>Constant-product DEXes
What is a constant-product DEX?
Citation needed :) . Seriously, crypto needs to do better than just assert that ownerless decentralization is instantly better. Traditional dark pools work just fine once you accept that with the right model, a single fill can tell you loads about the order book.
> What is a constant-product DEX?
That's the model used by Uniswap and almost every other major swap-based DEX. MEV as described in the TFA is preying largely on these DEXes and people conclude that it's the fault of the constant product model, or of being transparent. It's not: it's the fault of gas making it impossibly expensive to use the most basic tool in execution, splitting your order into smaller trades and applying logic to when you choose to trade.
I'm actually kind of a constant-product maximalist because it shows you CAN have a public, transparent market, which is something genuinely new to finance. IMO the last thing the world needs are old-fashioned order books and dark pools on blockchain.
>>It's not: it's the fault of gas making it impossibly expensive to use the most basic tool in execution, splitting your order into smaller trades and applying logic to when you choose to trade.
Yes that makes sense.
No, this blog post is "Look, here, several papers from last month showing there are still massive problems (that were presaged accurately in papers from three years ago)."
(and it's not literally that, of course. Why do people use "literally" to mean not literally?)
> Still, IMO the parasites that feed off MEV are at a significant disadvantage compared with those who feed of legacy financial networks.
Well, fortunately one can regulate these financial networks, right? Well, the legacy ones at least.
Literally whataboutism.
Traders use exchanges. I always thought *coin transactions are too slow to execute at trading speeds, so exchanges somehow buffer transactions using their own pools without ever sending your request to the network at large.
> This is in addition to the long-standing concentration of Ethereum mining power, with normally three and sometimes only two mining pools controlling over 50% of the mining power.
There is further hand-waving about how Proof-of-Stake (over Proof-of-Waste) will magically fix these problems. But it's actually this PoW computing power that makes the network more resilient to hostile takeover.
I've heard it described that the attraction of Crypto is the essence of the American Dream: by getting rich by doing nothing while lauding how smart you are over other people. So much of Crytpo can be explained by Bitcoin FOMO. Everyone just jumps on the latest shitcoin or NFT because "I'm not missing out this time".
Ultimately something has to create value or it will come crashing down. The only use case we really have is illegal activity. Some of that is justified on ethics grounds (eg bypassing capital controls in Venezuela). A lot of it is just shady.
There's a ton of talk about the "potential". So far the offshots (eg NFTs, Web3) are just ludicrous boondoggles in finding problems for a solution. I have doubts this will ever create value for the masses.
The main issue with insurance is actually assessment. All smart contracts do is replace execution, which was never a hassle to begin with.
For insurance I don't agree. Something basic like weather insurance (widely used in agriculture) is already possible. The hardest part is getting the weather information onchain in a way that's trusted by the buyers and sellers of the insurance. Weather oracles do exist though.
Algorithmic lending has been a thing for decades though. What do you think a credit score is for if not a tool to let computers decide whether to give you credit or not?
DeFi is unlocking the value of an asset, making it liquid and allowing me to participate in other investment opportunities without an APR.
One example is on Kaurura. I have KSM, Stake that KSM for a 19% APR Rate. Throw that LKSM into a vault and mint AUSD as long as i have 160% collatoral ratio. I can then use that aUSD i printed, buy other assets and participate in liquidity pools, which are giving anywhere from 50% to 300% APR.
It's a new era of finance. Play around in the space before you say it's worthless.
I'm sorry, but this sounds ridiculous.
Now it's "$X but with crypto!". Only with crypto there's a constantly evolving set of jargon that obfuscates the fact that yeah, traditional finance does it already To be fair, the dotcom era had it's fair share of obfuscating jargon too. Maybe crypto just seems worse because the dotcom boom was so far back in my memory.
I think there might be some actual valuable use cases for crypto. I just wish all the people reinventing the wheel and thinking it's new would get out of the way. Then at least we can find out if crypto actually has something interesting it can do.
1.) Amplified losses if the securities in your account decline in value
2.) Margin calls or liquidation of securities
3.) Losses greater than the original investment are possible
- Not possible due to constant access via oracles to the underlying asset. The Protocol may experience more loss in very rare instances, but as an individual i never will.
And due to 3.) is why you have an 'interest rate'. I have no rate of interest on my margin loan. The protocol generates money from trade fees, more liquidity is and leverage increases TVL.
I have no experience with crypto, but this I don't understand.
> DeFi is unlocking the value of an asset, making it liquid...
Like a mortgage or a bond issuance (bonds are secured against assets of the corporation)?
> Credit is loaning you money and providing an interest rate. Usually something insane like 15%.
Average rate for a 30-year fixed mortgage in the US is about 4%[1]. Average Aaa corporate bond yield is 3.43%[2]. I guess that you are talking about interest rate on credit cards? I think that credit card debt is pretty small compared to the size of the mortgage or bond markets.
> One example is on Kaurura...
I'm not sure I follow you here, but it sounds like you get a loan at 19% APR against some collateral. Then you use the loan as capital for some other investment at a higher rate of return.
My question: how is this any different, for example, from a company issuing bonds at 4% coupon rate and using the proceeds to fund operations when the company's profit margin is, say, 50%?
Let's say it's a matter of scale; I, as a person, can't issue bonds to trade on a public market. But I can get a mortgage and invest in other stuff hopefully at a return higher than the rate on the loan.
As I said, I don't understand how this is a "new era of finance".
[1] https://www.valuepenguin.com/mortgages/average-mortgage-rate....
>how is this any different, for example, from a company issuing bonds at 4% coupon rate and using the proceeds to fund operations when the company's profit margin is, say, 50%?
It's nothing like that. Because A.) It's not getting people to loan me money. Company issuing bonds at 4% has to pay that 4% to get access to their assets because it's 'Risky'. In the blockchain there is no risk because they have constant oracle access to the price of the underlying asset so i can do it for free, with no counter party. Simple a piece of code collectively floating on thousands of nodes running around the world.
So the hardest part is trust, the very thing that blockchains supposedly make unnecessary?
Anyway, I'm obviously not claiming this can work without input from humans off chain. My point is that the infrastructure needed to get clean and honest weather data on to the chain (which requires human inputs) is much smaller than the entire infrastructure needed to administer weather insurance (which other than the previous part, can be done autonomously).
No, because it's still impossible to do that at scale without solving the oracle problem. Putting some arbitrary data on a chain doesn't mean the data is reliable.
> My point is that the infrastructure needed to get clean and honest weather data on to the chain (which requires human inputs) is much smaller than the entire infrastructure needed to administer weather insurance
Is "much smaller" infrastructure on a different dimension than the "hardest part" of the problem? If so, what dimensions are those?
If not, how can the trust/agreement part be both "much smaller" and also the "hardest", especially given that it requires human inputs, especially human driven systems for routinely validating the process (AKA audits), and adjudicating inevitable claims of breaches of the agreement (AKA the courts).
I still find it pretty mind blowing that you can make a Turing complete language with nothing but S and K combinators. Good luck finding a real world application for that, though.
Sometimes the crypto space (the part that isn't just FOMO coin buyers at least) strikes me as folks who have been looking at something technically interesting for the first time in their lives, under the initial lure of money, and haven't figured out yet that "technically interesting" does not necessarily translate into real world applicability.
Go to Amazon, put some items in your cart, and click the (almost always present) banner about opening an Amazon credit card. Enter your relevant information, wait about 3 seconds, and BOOM! An algorithm just loaned you money.
The truly innovative people are those who add the proper constraints and work within them to solve the problems where blockchains actually fit best.
Instead you might a bunch of people with zero actuarial experience gambling on policies. I agree, the concept is interesting, no regulation makes everything a crapshoot.
https://protos.com/tether-papers-crypto-stablecoin-usdt-inve...
If only you knew...
Doing it with a smart contract is as feasible as dating a smart contract.
You can only really “insure” against globally agreed on data, for example the price of wheat. That is an options/futures market not insurance though.
There's no reason this couldn't be expanded for other use cases, including home, car, etc. It really isn't limited to just smart contract data as you suggested.
Well, it’s quite telling that the majority of big crypto hacks are uninsured. And they like to play tricks just like normal insurance companies (1). And the CEO got hacked like any random person would’ve (2).
(1) https://thedefiant.io/badgerdao-hack-insurance-payout/
(2) https://www.coindesk.com/markets/2020/12/14/ceo-of-defi-insu...
That's just a traditional insurance company.
No it isn't. I've been hearing this for years and I still haven't seen any reason anyone would actually want this, beyond the novelty factor. It's strictly worse than any other equivalent insurance or loan for a number of reasons, the worst one being that there's no human you can talk to when something goes wrong. If you think it's bad enough now when your bank has terrible customer service or your insurance company is fighting your claims, blockchains are like taking that a step further by making it technically impossible to provide any kind of customer service.
>It could seriously bring down insurance margins if you no longer have drones of people administering policies.
This sentence also makes zero sense. You don't need blockchains to replace insurance actuaries with an algorithm, insurance companies could already do that. Over the long-term they can't rely on this because the whole point of insurance is you constantly readjust your models based on risk which cannot be predicted. Once again I'm reading a cryptocurrency thread where everything is wrong and nothing makes any sense.
But people are using it, and (in the protocols I've seen) claims are handled jointly between an advisory board and community assessors, with a framework for appeals and community voting.
I think that's pretty interesting.
So you mean like a company with a board of directors, shareholders and voting shares. I'm sorry I just I don't think that's very interesting, because companies already existed without blockchains and DAOs and smart contracts.
Although with my insurance company I at least know the assessor is qualified enough to look at pictures from a car accident and determine the sequence of events and who was probably at fault.
Without this option, I would have to either finance myself at a criminal rate, or accept a job I wasn't ready for. I feel I'm much better off personally from having this option available.
Outside the personal anecdote, I don't understand how it's difficult to see the utility in having digital goods of value. It allows all sorts of use cases, and using them as collateral for loans is just one. I have a harder time accepting that goods of value simply cannot be digital. If I look at the past 30 years of history, literally everything is turning digital; our consumption of entertainment, our work, our communication, social connections. What is the argument for having all things of value be either be a physical thing, or something controlled by some central authority? It seems like a "because that's how things have always been" sort of position.
> try going to a bank and taking out a loan because you're broke and unemployed), but because I had digital assets to pawn
"Broke" means you have no assets, thus you have nothing to pawn, therefore the loan would be unsecured. You COULD NOT have obtained such a loan via defi, and while you could have obtained one in the traditional finance system (which is strictly an advantage over defi...), it would be have been, yes, very expensive.
But you weren't broke! You had assets! The traditional finance system loves to lend money secured by liquid assets, does so all the time, and at lower interest rates!
> I don't understand how it's difficult to see the utility in having digital goods of value
...digital goods of value. Otherwise known as a number on a ledger somewhere, otherwise known as a bank account? Nothing in your story in any way depended on crypto/defi; every part of it is a normal, traditional part of the financial system. All crypto added here was higher costs and a worse UI.
I had plenty of things of value, like a trading card collection, a personal computer, a phone. But no bank would ever accept any of these things as a collateral for a loan.
I could have sold things I owned, but I didn't want to lose any of the things I had collected over the years. Having access to digital things of value made it possible to take out a loan without having to sell anything.
You say crypto added higher costs and worse UI, but do you have any evidence for this? I was able to get a few months income on my bank account in less than an hour of work, at a rate that is more favorable than any mortgage rate currently offered by banks (with mortgage rates almost at an all-time low).
Digital value does not have to be limited to bank accounts, just like physical value does not have to be limited to cash. If I have other physical things of value (like collectible trading cards) I can trade these with other people directly or use them as collateral for cash loans with any third party. Why are digital things of value limited to bank accounts? If other digital things of value exist, and we have standardised interfaces for digital valuables, that enables incredible amounts of flexibility in financial transactions, such as using things I have as collateral for loans, without requirements for appraisal, risk assessment, fraud protections, etc.
If I had traditional financial assets I could have used those and use the traditional financial system to get credit, but I didn't have any of those. I had other things of value, and because they are digital, with standard interfaces, I was able to get credit, which I otherwise wouldn't be able to get.
I'm only offering some kind of anecdotal evidence here that some people do in fact get some utility from these things. To me personally, it was very convenient to have this option at the time. If I get into a similar situation in the future, I would use it again.
If you'd had a couple hundred $k of index funds in a brokerage account, you could have quickly and easily borrowed a significant amount of money secured by the shares at a very low interest rate. And yes, significantly cheaper than a mortgage. I think Interactive Brokers is charging well under 2% for a margin loan these days? (And under 1% if you have enough assets...)
> some people do in fact get some utility from these things
But strictly less utility than if you'd just bought non-crypto assets. Right?
I'm sorry I don't understand what you're talking about, this makes no sense. The judicial system also requires humans who are tasked with resolving the problems who you can talk to, that's literally the whole point of it.
>Removing human decision making from a process makes it a game where everyone plays by the same rules.
First of all, no it doesn't because that presumes the machine is always going to be working correctly. Computers don't do this. Second of all, somebody always has to build and maintain the computers, so there is no situation where you can remove all human decision making from the process. I hear executives making these kind of comments all the time as an excuse for cost cutting but that's all it is. You can't make a tech company that isn't paying IT staff in some way.
>You ignored his point
No, you're wrong. His point was also wrong. I actually agree you can indeed reduce administrative expenses by using computer modeling, and most insurance companies already do that. My point is this has nothing to do with blockchains. You don't need blockchains to do that, and attempting to do that on blockchains only increases cost. We're getting into an area where everything is wrong again, please stop with this because I would rather not.
>If you keep making up your own bad arguments
Except this is not my argument. The parent comment just made it and I've heard it probably hundreds of other times. It's the same kind of comment as "maybe we can put the deed to my house on the blockchain" which is equally nonsensical and I've probably heard that hundreds of times too.
Blockchains create a completely transparent, decentralized ledger. If you don't see any novelty or potential value in that, then that's fine. As far as life is concerned, one's opinion on blockchains should probably fall pretty low on the priority list. I suspect we at least agree on that.
Yes, you're right that by itself it doesn't invalidate the proposed solution. Aside from that, blockchains are still useless and that's what invalidates it. They don't do anything meaningful. Any blockchain-based solution is useful in spite of the blockchain, not because of it. I've never seen any use of blockchains to disprove this.
>Blockchains create a completely transparent, decentralized ledger.
No they don't, in theory they could do that if everything was perfect and if we didn't have to deal with the other side effects of open trade and capitalism, but in practice they don't. Every blockchain I've seen is heavily manipulated by private interests and has serious problems with centralized control. And those are just the big L1 chains. It only gets worse when you consider side chains, a lot of those have no attempt at providing transparency or decentralization at all and it's evident they're privately controlled by one company or group.
>If you don't see any novelty or potential value in that, then that's fine.
I agree there's novelty in it, but that's about it. There's no practical value whatsoever, current or potential. They're useless. I've been pretty consistent about this for the last year. Personally I humored crypto enthusiasts for the last 10 years before this and I listened to as many of their pitches as I could, I tried to look high and low for the good in it, but it's just not there. Enough is enough. It's all bad and nothing meaningful has been accomplished. There's no practical uses of this technology. However it is a very big lightning rod for scammers and fraud.
I am not suggesting that this isn't ethically fraught -- of course it is. But one can imagine uses. I personally have known a couple people who fled Syria during the civil war, and bitcoin was a useful way to pull money out of the country, and much less dangerous than carrying a suitcase of cash.
IF that is the summary conclusion to crypto (which I'm currently holding), then this is pretty close to "no practical value whatsoever", isn't it?
Yup.
> And ... saying that publicly _and_ supporting the implementation tends to go very badly. (As it should imo, but that's a different story).
Good. (I don't support the implementation.)
> IF that is the summary conclusion to crypto (which I'm currently holding), then this is pretty close to "no practical value whatsoever", isn't it?
For ordinary people who don't need such services, yes.
No it isn't. You don't need blockchains to create illegal banks and exchanges or to launder money. All of that was around for a long time before blockchains. You could even create those things "as a service" without blockchains, it would be just as shady and illegal. I'm serious here, there is absolutely no practical value to blockchains whatsoever.
The worst part is that for a DeFi loan, you need something like 200% to 300% collateral (look it up, it varies but is usually around that amount). This makes it less than useless for just about all reasons people now get loans. The whole point of a loan is that you're willing to pay extra over time in order to have access to more funds at the present. With DeFi loans, you pay extra over time and have less access to funds than you would have had without the loan.
It only really makes sense for crypto gamblers, who are hoping that their collateral has insane appreciation that will offset the downsides. If anything, DeFi loans are less like actual loans and more like crypto gambling partnerships where one partner takes a position with lower risks and rewards and the other takes a position of higher risks and rewards.
No, that's not the point of these loans at all. They are the equivalent of remortgaging your home to get cash. If need money for renovation and you have a lot of equity in your house you can borrow against it. They are doing the same thing with crypto. They don't want to sell their crypto because they want to speculate on it and they need money so they use it as collateral.
I personably think it's a very stupid idea to invest in something like crypto on credit. Lending your crypto to these morons looks like a pretty good idea if you can trust that the smart contracts doesn't have bugs. You get a stable and guaranteed >5% without all the risks of the stock market.
It's actually the opposite of remortgaging a home to get cash. Remortgaging a home to get cash is paying a premium to increase the amount of liquid assets available to you; this is the point of most loans. A DeFi loan is paying a premium and _decreasing_ the amount of liquid assets available to you. As you said, it's useful for juicing speculation, worthless for anything else.
> You get a stable and guaranteed >5% without all the risks of the stock market.
I think the long-term risks are actually greater than something like an index fund, since your collateral is all in crypto. The returns are also less than historical index fund returns.
No, because from their point of view the crypto they put as collateral is NOT liquid. the entire point is do not sell them but somehow get cash from it.
This goes both ways. I may not want a smart contract for my life insurance, but I can perfectly imagine myself taking a lot of very small, very short insurances on mundane things because of the very low fee and hassle of smart contracts versus actually signing contracts and paying for the humans that will support it.
Think flight insurance, etc
Let me explain: you can have a smart contract where you get 5-20% of the value whenevder it's sold and that'll work and be guaranteed (assuming the network isn't compromised eg 51% attack). That is wholly continaed with the blockchain.
But what if someone wants to sell that for cash? Now you've introduced the exact same trust issues that exist in every transaction in the traditional finance system: trust in the institutions involved and the potential needs for courts to enforce contracts.
So what exactly have you gained? Nothing. Literally nothing.
That seems like an issue with cash (no way to enforce you giving me the thing I paid for, and no way for you to enforce me giving you the cash for the item you gave me).
Yes using cash gets rid of the guarantee that the transfer of goods is fully atomic that crypto generally offers. Buying tomatoes at the store has the exact same problem.
Why would any rational actor provide a loan denominated upon an insanely volatile "currency" like bitcoin or ethereum? The lender could loan 100 ethereum bux only to lose big time because the price of ethereum went up 10x in a week making the amount repaid worthless. Or it could go down, in which case the borrower would wind up defaulting because who would want to pay back 10x more than they were lent?
Lending requires a pretty stable currency...
People borrow to avoid triggering capital gains, or to gain leverage or to short.
You can take out a loan in crypto that's fully secured against some other crypto. It's turtles all the way down, and has zero relevance to what most people think about when they talk about taking out a loan.
If you have initial assets its an easy way to borrow against those assets. e.g. My bank wouldn't give me a loan against my eth as they don\t value the asset, instead I just open a maker vault and borrow against it in dai ($ stablecoin), and then sell that for € and deposit to my bank. problem solved.
I could be missing something, but it seems you're lending $50 worth of eth, rather than borrowing. Your net debt position is <0.
So, say you own 5 BTC and don't want to sell it because it's going "to the moon". You stake it as 200% collateral on a DeFi loan and get 2.5 BTC of liquidity you can use to buy some ETH.
What's interesting about this is that it allows the demand for coins (and therefore their value) to increase without introducing new (fiat) money into the system. I haven't done the research, but I'd be curious to know what portion of crypto trading is funded by these kinds of DeFi loans as opposed to "new" money.
In some 'we own you and command you to pay tribute to mighty rulers from what you produce' regimes, the loan avoids a sale and the resulting tax event. In my experience, the loan can be converted to fiat money.
Realistically, this requires more Data-as-a-Service startups, so there's a bit of chicken-or-the-egg difficulty here.
it would be like if google is your insurance provider. If something goes wrong (it eventually will) there would be no recourse, no one to talk to ... all hail our algorithmic overlords.
This is exactly how I envision the dream of old world wealth you see on Downton Abbey or similar.
Get born into a minor lordship somewhere in England and spend your days educating yourself (maybe leisurely publishing a book or two) and raking in tax revenue from the commoners.
Then you misunderstand ...
That world you're envisioning is what happens after the "getting rich".
In the case of feudalism - and its remnants - the "getting rich" involved murderous expropriation of the lands and property of anyone that got in the way by sociopaths who hoarded and coveted everything that entered their awareness.
I think it was pretty hard work, actually ...
The dream is to inherit that wealth and be born into the upper-crust. Nobody wants get their hands dirty with the murdering and exploiting!
This 200%
Put another way: Andys are indistinguishable from each other apart from one defining characteristic. And those Andys with that characteristic are likewise indistinguishable and interchangeable.
Basically someone else does the creation, and you become an Andy by trying to get involved without really adding much value.
That isn't what the term Andy means in the Twitch world. It's just a way to refer to the style of content that someone makes on Twitch. For example, a "React Andy" is someone who makes reactionary content, a "1k Andy" is someone that is stuck at 1k average viewership, a "Crypto Andy" is someone who is obsessed with crypto.
But isn't that enough? If we refuse to get rich from investing in ransom futures we have no-one to blame than ourselves.
At least that's how I read those typical victory lap posts by crypto winners. Or by proclaimed crypto winners desperately trying to extend the pyramid. Yes, I'll happily skip out on ransom future wealth.
NFTs, smart contracts in general, gaming, defi/lending/staking, DEX, DAO, Filecoin/IPFS, and a few more in itself are not illegal. You may consider them to be useless, but that's not the same thing as illegal.
Even if you scrap all that, there's the remaining core use case of speculation. Which in itself is also not illegal and an incredibly important use case, if not THE use case.
You may be frown upon speculation, look down on it, judge it anyway you please, but it does not change the fact that 100M+ people with an exponential growth rate are into it. I guess growing your money is popular, who would figure that.
The point I would like to get across is that instead of judging, you should have a deeper look at the WHY. Many people think that these risk takers are plain dumb, selfish, irresponsible. If only regulation would protect them against themselves.
That's not the situation at all. They're fully self-aware. They are young people born into an economy that is plain broken to them. Burdened by student debt, stagnant/unlivable wages, unaffordable housing, zero or negative interest rates, high inflation, no job security, unaffordable healthcare.
They barely get by and have no outlook of ever getting ahead, owning any asset or wealth, and the very simple goal of a basic middle class life has become unattainable.
In a backdrop that cruel, why not throw the little money you have into a shitcoin? It might do a 10x. It might also go to zero. Who cares? You didn't have any meaningful wealth to begin with.
And that is the appeal of crypto. It's not fueled by greed for the sake of greed, it's fueled by desperation. Nothing to lose, everything to win. Crypto is an asymmetrical bet, and the only one available to everyone.
This is extremely insulting statement to make to them (who believe for real) and to us(who do not).
They are not. If you want to gamble go buy TQQQ and SOXL.
Many young crypto proponents call themselves "degens" or "ape investors". Self-deprecating terms that give insight into their psyche: they know exactly what they're doing.
Further, getting rich at somebody's expense is business as usual for any asset, be they stocks, housing, metals, anything. It's a false morality to think that this is a behavior that "good" people widely reject. Absolutely everybody in a position to do so, will. Have you ever met a home owner that gives a social discount to his inflated house when selling? I don't think so.
No, see, that's the point I am trying to make and that you are not getting. Housing and the economy as a whole are constructive activities that create value. Crypto is not, as far as I can tell.
When I own a home worth 200K, and 5 years later sell it for 400K, I have 200K in profit. Do explain which "value" was created for that 200K?
But… how is /everyone/ getting rich?
Crypto is provably negative sum. Someone has to lose money for you to make money. And miners, exchanges, etc are all middle layers that extract large %s of fees. Where is the extra value generated to be able to make everyone a profit?
What a dramatic post. Do you get paid to write dystopian sci fi?
> the essence of the American Dream: by getting rich by doing nothing while lauding how smart you are over other people
Thanks for sharing it.
I’d argue no - our aspiration is that we’re farmer cowboys, our rich all the more so. Our reality is more complicated, but (for its many flaws) different than alleged here.
You could also look at American pyramid scheme pioneers like Amway and Herbalife, both of which I consider scams. Or our huge manipulation culture of the sort potrayed in Glengarry Glen Ross or Mad Men. Or the way that scammer/marketing energy merged with Protestantism to create both the tent revival and now the megachurch.
Bitcoin as a settlement layer is useful. The idea that it needs to do anything more than securely manage a trillion dollar market cap digitally with no hacks, and no avenues for a profitable hack in the medium term is just common ignorance of what’s valuable.
Time bandit attacks go away once proof of stake finality arrives. Also, trading ought to be done in Layer 2s. Does MEV work on L2s?
Re: certain token drops wasting lots of gas, it's up to the token authors to use an implementation that avoids gas wars.
Once you go into claiming equivalences with P = NP, you've lost me. Theoretical optimums are an academic game, in reality you can get 95% of the way there with heuristics.
> Because Ethereum transactions are programs, the halting problem means that it isn't possible to accurately predict the resources needed to execute them.
Ah, more appeals to theory. They're programs with a low ceiling on the number of steps and possible codepaths. They barely even have loops half the time. Estimating isn't that hard in practice.
Which it hasn't, despite being six months away for years now.
You cannot handwave away problems by promising you'll fix them with X in Y months, when you consistently fail to deliver X.
Bitcoin grows popular and its proof of work burns increasing amounts of electricity. Ethereum devs do not want to see Eth go the same way, and prioritize Proof of Stake, which will not require any more waste. The devs sketch out new roadmaps, do research, and make slow but steady progress; software always takes longer than you think.
Meanwhile, Bitcoin has completely fossilized for political reasons and basically cannot be improved at this point. Bitcoin maximalists (diehards) recognize Eth as an existential threat and start pushing this meme of PoS being always 6 months away, despite the actual Eth devs never promising such things.
I've been passively following this scene for years and read/watched tons of content about it, but I still wouldn't know how to pay my friend across the room, especially not without an internet connection.
That's what people are complaining about they are years behind on what they promised.
https://hackmd.io/@benjaminion/eth2_news
From the current edition:
Go/no-go decision on doing the Merge or postponing the difficulty bomb to be discussed on the 29th of April [2022] ACD call.
If it’s "go" then start merging the existing testnets at 2 week intervals with a view to doing the real thing in July [2022].
https://github.com/ethereum/pm/blob/master/AllCoreDevs-Meeti...
It seems you've given a long answer which can be simplified to "No"
Technical pitfalls and project stewardship can reasonably explain some delay — but years and years of it? And more than one statement that it’s just “months away?” The whole process has a fetid cloud hanging over it.
that it has literally just been postponed again https://twitter.com/TimBeiko/status/1514010098145759232
I've not had time to pay attention much over the past months, but to me that June date was always a silly rumor. Correct me if I'm wrong. End of year is what I heard, but even that isn't set in stone of course and I wouldn't be surprised if it doesn't happen till then.
In true "decentralised fashion" the devs spread their info thin over multiple veues so it's hard to hunt down their statements.
But we could take to ethereum.org which previously stated [1]
--- start quote ---
When's it shipping?
~Q2 2022
This upgrade represents the official switch to proof-of-stake consensus. This eliminates the need for energy-intensive mining, and instead secures the network using staked ether. A truly exciting step in realizing the Ethereum vision – more scalability, security, and sustainability.
--- end quote ---
Same is still on Consensys: https://consensys.net/knowledge-base/ethereum-2/faq/
[1] http://web.archive.org/web/20220202044446/https://ethereum.o...
Most people just learn from their environment.
See my previous comment above.
The decision was no-go, and pushed back to an estimated "autumn", so, literally "6months away", as usual.
You are free to reject such appeals to your patience and choose to use other products and services. Yet, people are also free to ignore your opinion that "blockchain is bad because of X" when they believe they are able to solve X.
Arguments about when/if Ethereum will switch to PoS are different, because neither you are I can do anything about it either way; it comes an argument merely about predicting the future.
If you are talking with your elected presentative who wants to vote against a PoW ban who is holding out for a switch, then that is a different story.
That's true in the sense that it's not why ETH is broken. ETH as a whole is broken because it's cryptocurrency. The whole idea of smart contracts is never going to work as advertised, it's impossible to make a more complex contract without running into any number of these flaws and spending an inordinate amount of your time and energy trying to mitigate and workaround them. But at the same time these are the types of contracts that drive developers to ETH. It's a lose-lose situation, at best it's equivalent to a payment API that's extremely unpredictable and insecure and will never have those issues fixed because they're part of the design. These flaws aren't inherent in making online transactions, they only pop up when you insist on using blockchains for everything, when there's no real reason to do that.
>Also, trading ought to be done in Layer 2s.
It's really baffling to me how L2 chains have become a serious thing. If you ask me those are just workarounds for flaws in the design of the L1 chains, nobody actually wants to use L2 chains but they're forced to because ETH (and other L1 chains) are so poorly designed that it can't accommodate most things people actually want to do.
>They're programs with a low ceiling on the number of steps and possible codepaths. They barely even have loops half the time. Estimating isn't that hard in practice.
Ok but why should anybody have to estimate in the first place? There's no reason for it with a trivial transaction, requiring this is just bad design.
Ethereum is going deflationary. Not disinflationary like Bitcoin, but actually deflationary, with token burn. Whether you think deflationary money is bad or good is not germane to the problem I'm about to explain, as I see it.
Ethereum makes a claim at decentralization. However, by moving to a Proof of Stake system, they have set a fixed amount to be staked (32 ETH in this case, though the number itself does not matter). With the token going deflationary, that means that the opportunity cost to stake will always be increasing, mathematically, in ETH terms. The staking requirement does not adjust to changing token supply.
For argument's sake, if there are 100 ETH on the network, and you stake 1 ETH, you effectively need to lock away 1/100 of all wealth on the network. However, if 10 tokens get burned, now you lock away 1/90 wealth on the network. Staking that 1 ETH just got 10% more expensive because the opportunity cost of staking that ETH increased relative to spending it.
Economically, this means that the system is going to drive out marginal stakers, by design. The only response I have gotten from ETH holders is about staking pools, but staking pools don't fix the underlying economic incentive brought about by deflation: increasingly holders will find it less worthwhile to stake their ETH.
It seems to me that ETH is headed right for some kind of centralization death spiral, as only increasingly wealthier holders will be able to justify staking.
Ethereum will still be printing ETH in perpetuity; it only becomes deflationary whenever more is burned than printed.
This doesn't change the economics of what I said, which are about opportunity cost of staking vs. spending.
> Ethereum will still be printing ETH in perpetuity; it only becomes deflationary whenever more is burned than printed.
I understand this. But what I've been hearing from ETH holders forever now, is that ETH will be going deflationary. As in, burning more ETH than printing is something will definitely be happening. It's the bedrock of the flipping narrative.
I don't really get it. It's more expensive because you're making more money? Why wouldn't everyone just stake until they feel like spending? How does this drive out marginal stakers?
> But what I've been hearing from ETH holders forever
These are just people pumping their bags. No one actually knows how it's going down. Anyone who holds such alpha isn't posting it on Twitter.
I personally know two people running test stake nodes. They've spent the time setting them up, documenting, and really getting to know all the ins and outs of it because they find it interesting. They will run production nodes. You only need some X amount of people to do the same to avoid overt centralization. Then it just comes down to an argument of what is the minimum number for X where things feel properly decentralized.
I still think crypto is high priced poop people currently view as valuable. But I don't see how your point goes anywhere to prove it.
It's also worth keeping in mind that the levers needed may not exist within the system. ETH is still a massively ambitious and risky experiment. Anyone who says otherwise is naive or trying to sell you something. That being said, ETH is absolutely the most interesting thing happening in both tech and finance. I hope it works out.
It's very likely to stay a power of 2, so just a single reduction down to 16 ETH would make up for 34 years of deflation at 2%.
2. I'd like to distinguish an increase of the money supply from inflation. They're not the same. You're talking about a decrease in the supply of ETH, here, not deflation.
3. Related: While the supply of BTC is currently growing around 1.7% p.a., I wonder how much is lost to lost keys. Has that been estimated somewhere?
It's possible there's some recent development I'm not aware of so please fill in any gap here, but my understanding: Token burn is already in place since EIP1559 (base gas fees get burned now, instead of getting paid out to miners/validators. There is a separate priority fee for incentivizing inclusion in times of congestion). It will work similarly on ETH2. As laid out in EIP1559, this means that the ETH supply may be inflationary or deflationary at different times, depending on if total base fees are greater or smaller than miner/validator rewards. So it's not a given. However I could agree that given continued growth of Ethereum adoption, the deflationary hypothesis is not unlikely.
> Staking that 1 ETH just got 10% more expensive because the opportunity cost of staking that ETH increased relative to spending it.
Can you explain how this follows?
Shouldn't it be the opposite; as long as you don't require the immediate liquidity, deflation should mean that it's actually preferable to hodl, and staking rewards compound with that.
Aside from that, due to MEV, being a validator means you get reserved slots where you can [extract MEV yourself/safely submit transactions of your own without being front-run]. This is something that is today primarily taken advantage of by bigger or more proficient actors - meaning yes, this is a force towards validator consolidation. On the other hand I believe the "flashbots market" will likely become more efficient and accessible to the point where commonly used validator clients will have built-in interfaces to exploit this through an open market for privately broadcasted transactions (as mentioned in references this already is the case for ETH1). This means that over time the playing field gets leveled as getting a cut from MEV gets accessible for smaller non-professional stakers as well.
Looking at the current direction, I would agree in the sense that we're on the track for consolidation of staking power and resulting compounding centralization of ETH wealth, but not for the reasons you're stating, and I would not agree that smaller stakers are driven out by design - it works out that way despite the small-staker-incentive situation, not because of it.
Future EIPs may change the dynamics further in either direction. I don't think it seems obvious either way.
Bitcoin's supply is better described as deflationary since it's capped and Bitcoin experiences ongoing losses. Eventually there will be fewer and fewer bitcoin in circulation. This will happen way before Bitcoin emission ends in 2140, since in 2061 for instance, only 320 BTC will be mined, and yearly losses will easily exceed that.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988
Really deflation is the tip of the iceberg. When lending is competitive to staking network security will suffer, and deflation makes it worse.
Show me a marketplace without regulation and I will show you a marketplace best avoided if possible.
It's kind of like saying "show me a market without corruption". Obviously all markets have some amount of shady behavior, but it hardly means every market is equally corrupt.
Surely the answer is in "just the right amount" of regulation. Getting to this sweet spot is a process, but one human societies have been approaching for some time. We would be foolish to throw out all that effort because it couldn't be perfect.
Everyone knows that Wall Street got bailed out in 2008 by the very same regulators you say are for our own good. Everyone knows Wall Street and Black Rock got the biggest squeeze from the Covid stimulus. In return we got $1400, 10% inflation, and a drop in real income. And front-running still happens. Hell the whole business model for Robinhood, the app, which charges zero trading fees, is to package up their retail users trades and sell the orders to high frequency traders who will squeeze out profits from front running or sandwiching the orders.
Also, everyone knows that Congress does insider trading and the speaker of the House is the worst offender. Everyone knows that the revolving door that moves between regulators and the financial sector is incestuous.
The regulations you praise are written by the lobbyists and companies who benefit the most. And I'm not in that club. Maybe you are and that's why you defend it. But it ain't me.
I buy all of my vegetables from the roadside stands that are completely unregulated, and often set up in proximity to other stands with other offerings. I get a higher quality at a lower price - works out great.
Nope... industrial waste.
‘Forever chemicals’ upended a Maine farm — and point to larger problem -- https://wapo.st/3OeHPEf
I find it is useful to try to disprove your own beliefs before confidently claiming something to be true. The resources are out there and not terribly difficult to locate if you put a modicum of effort into it.
But that's not what he's talking about.
You can't put your produce stand in the middle of a public roadway.
You can't lie about what kind of produce you're selling, and you can't lie about its grading.
You can't doctor the scales.
You can't charge a higher sales tax than is levied by the locality and pocket the difference.
Are you sure? A lot of these are "the hippies ripping off the yuppies".
In my area, they often sell the same stuff as the grocery stores --- just priced differently. A little basket of 4 tomatoes (usually about 2 lbs) is $5. The grocery store price is $1.49/lb (or less if you shop at Lidl or Aldi).
The price isn't regulated but there are lots of other regulations involved along with legal liability if they poison customers.
Try to steal from them and the cops will come after you, plus the risk to your physical integrity.
Sorry but thats a failed argument
Darknet markets are the best example of self regulating markets. Its truly amazing and it doesn't get enough credit
Of course most are run or acquired by intelligence agencies eventually....
So what if they do? They have to start again from 0 (usually).Its also very easy to avoid them...
Some people value steady profits much more than a one time scam.
How do you know they do --- have you done a survey?
Some people value steady profits much more than a one time scam.
Why do some people become criminals instead of getting a nice steady job? Maybe because it is more profitable and requires minimal effort. And lots of scams aren't "one time".
Because where there is demand there is supply.
Pot sellers were criminals once now they are businessman
You think buying from a well known anonymous user with months/years of reviews will result in a "scam"?
What do you do if you're scammed on the darknet? Let me guess --- nothing because you can't identify who you're dealing with or where they are located.
Everything gets continually tested by a lot of people. Entire forums dedicated to weed out bad sellers and identity good products ..
Yeah, sellers are usually super responsive and will normally fix any issue if you are polite and abide by the rules.
Ummm what exactly do you do if you are scammed in real life? Go to the police and file a complaint that will never go anywhere? Lol
Or you mean if in the real world you get scammed by a company? Can YOU really start a lawsuit? What amount of money are we talking about? 10k,100k, 1m?
Zero. Lot of lawyers searching for clients with a legitimate legal case. They get a portion of what they win.
Lets say you bought a phone from Craigslist and its a fake one, what do you do?
You sent a guy a wire for a collectors item and he sends you a box of rocks? What do you do?
There's so many ways that you can get scammed in the real world without recourse.
What's happening here is that you have a preconceived notion of "darknets markets bad"
I have bought and sold on Craigslist. This is not how it works --- unless you're stupid.
What's happening here is that you have a preconceived notion of "darknets markets bad"
Yes. People choose to operate on the darknet instead of craigslist for a reason --- usually because they are doing something illegal. And scamming people is one of these illegal things.
Escrows, vendor reputation, feedback, etc?
Something illegal depending on the jurisdiction
Legal =/= ethical
I hope this becomes more common knowledge! All mining calculators are wrong as they predict earnings that are upwards of 80% lower than reality, for some people. There have been extended periods of time (weeks, months) where this has been true.
This is also one of the promises of the blockchain concept, in the Satoshi paper for Bitcoin, the idea is for transaction fees to exceed the block reward subsidy, in Bitcoin the hope is that it occurs before the year 2140, in Ethereum it has been occurring for several years, which is a great big deal. But it doesnt mean the outcome is good, we just dont have to wait to see how it plays out.
Zk-rollups are fundamentally superior to direct scaling because they move execution and proof generation cost to only one node (entity, could be a server farm) that only has to do it once, while ensuring correctness is verifiable by anyone cheaply forever. No more scalable solution exists from a purely theoretical level. This in theory allows even running complicated multiplayer games on a blockchain (turn based directly, realtime by dropping state snapshots).
In principle, this should be implemented directly - but it's so early that a solution that can last for decades simply doesn't exist. In addition, decentralizing zkrollup implementations to third party teams allows for much faster innovation.
Optimistic rollups are more questionable.
In regards to the negative aspects of it, there's a lot that individuals can do to avoid their trades from being exploited. Flashbots has also done a lot to mitigate the MEV related problems on Eth (some other chains are in way worse shape). Finally, there's some amount of common decency to not fuck up the network. If you break Eth to the point where everyone decides to leave, you've broken your toy so to speak.
What legitimate use apart from creation of infinite, meaningless tokens has Ethereum provided?
Ethereum introduced the concept of decentralized compute resources, in which it was also a first mover. Judging Ethereum in its current state feels like judging the internet in the 1980's and saying it's not a value provider.
https://en.wikipedia.org/wiki/Tether_(cryptocurrency)#Histor...
I don’t, but people who have specialized in those specific disciplines and spent their time thinking about how these things work have lead to usable cars and usable/better operating systems as a result. USB is a spec that I don’t care how it works, just that it does.
I think crypto concepts like BFT, MEV, consensus, etc are advanced concepts for specialists in the crypto space who are building these same sorts of layers of abstraction that people will generally be using in the future. I don’t need to know how a spark plug works to drive my car, and the average person doesn’t need to understand how a physical device triggers hardware interrupts in the Linux kernel to use a keyboard.
People also don’t need to understand DNS or BGP to use the internet, because some clever folks built RFCs and open protocols that were adopted and bundled together to create web browsers, routers, and the general internet. Things were also rough around the edges in the early days there too, but have now evolved to be a critical part of today’s world. Traditional mail is still a thing but the obvious winds are blowing more and more to use e-mail for things, not because it’s a fad or has a lot of hype, but because it’s demonstrably better.
People here like to throw shade on crypto but there are already useful things (like multisig smart contracts) that are not only unique to crypto and useful today, but imply that there are other new and useful building blocks that need to be realized and developed to unlock more interesting and complex use cases (you can’t have Netflix or e-commerce without DNS and BGP for example, even if the vast majority of users have no idea how it works).
People excited about the space (disclaimer: I am excited about the space) see the possibilities based on the building blocks that exist today, not to mention the very real spike in practical cryptographic research that’s being done (zero knowledge proofs as a field of study has been massively accelerated by the cryptocurrency space). People also struggled to see secure real time video calls or online banking as a result of the DNS protocol being developed or the RSA algorithm being created, but some did see the implications and got very excited about that future.
Ethereum is an experiment and has never not been in development. You saying that crypto can never work or that it’s transparency is pointless because an experimental project has an issue you don’t understand is extreme cherry picking combined with unrealistic expectations on a developing space. Progress is being made all the time and Ethereum is far from the only game in town. I do not understand why those ignorant, even those like yourself who admit just how ignorant you are, attempt to make poignant decelerations about the state of crypto.
Sure, it's technically cool, but it's not the currency it pretends to be.
What do you mean by that? I thought ChainLink solved that pretty well
Aren't they precisely solving the issue?
I’m not sure they ever even outright state that this particular network resolves the oracle problem. Are you sure that’s the article you wanted to share?
If the "source of truth" is distributed, what stops somebody from running a worldwide botnet which pretends to be "anonymous chainlink nodes/contributors" and feed false information to the blockchain? Even if there is a price for each node to participate in the consensus mechanism, then you just set up a price which is required before you are allowed to defraud the oracle. How much are you willing to bet on this possibly defraudable oracle?
Secondly, this is an informal discussion on a mainstream forum - one which is pretty strongly against crypto. So forgive me for not being super keen on writing PhD-level responses
The current white paper mentions that for a briber with at most `$d*(n^2 + n)/2`, where n is the number of oracle nodes, there exists a subgame perfect equilibrium for bribers to not issue the bribe and nodes to behave honestly. I can't seem to find a formal proof though.
If you bother to check the listed examples in the white paper, my hand-wavey "trillions of dollars" estimate wouldn't be even that far off, assuming wider adoption of Chainlink.
Eth has serious problems, as do all proof of work/stake platforms attempting to move around large amounts of data, but it’s not entirely useless in its current state. You seem to have a god critical eye for crypto (as opposed to wholly for or against, or tied to a single project), I’d be interested to hear your thoughts on Saito providing you took the time to grok it.
It's not really feasible anymore due to high gas fees, but there is a real use case for you.
It is in the nature of markets to move money from the many to the few.
All that's happening in crypto is the same exploitative games/vehicles that happened in other markets before regulation protected the least informed and least Machiavellian players from the worst outcomes. There's no real innovation in that respect.
This effort is effectively dead, for what it's worth. We've moved beyond this, it was going to over-complicate things and Layer 2 is a much better scaling solution that is already starting to work in production.
Execution sharding is also still planned, though right now it is in the hazy distant future
It's fairly obvious in hindsight but the idea that everyone running a general purpose computer wouldn't recognize enough value to try and take over the network. Running your own node would be more realistic and the "user" and the "miner" would be on a much more equal footing (and likely one in the same).
Arbitrage and all of the boiler room tricks of the stock market were applied instantly. Add this the centralized power of mining farms increasing incentives and the race for lightning chains creating these black box dark pools and we are just getting up to speed with similar problems we face today in public markets.
The biggest difference is that we can dig into the details in a very convenient way which is the constant balancing act of getting people to care enough to look.
Front-running on a consensus based system where transactions are public... almost like they took a look at every system to date and picked the low hanging fruit for exploitation.
What do you mean by this? Miners are not needed on the PoS chain, and the PoS chain cannot be attacked with PoW resources.
The end users (people transacting in ETH and launching smart contracts) will decide which chain is valuable and which isn't.
"difficulty bomb"
Who wants to vote in a little less difficulty so we can continue mining?
https://www.investopedia.com/news/what-ethereums-difficulty-...
> Their starting point was the observation that Ethereum "smart contract" execution is order-dependent within a block, unlike transaction execution in Bitcoin and similar systems: ...
First, Bitcoin runs smart contracts [1]. The lie to the contrary has seeped into almost every discussion of Bitcoin vs. Ethereum, and this author appears to have taken the bait.
Second, Bitcoin transactions are order-dependent within a block. The entire point of the Bitcoin network is to impose a global, unique order on all transactions and the only way to do that is if order within blocks matters.
I'm not sure about the rest of this article, but the failure on these two points does not inspire confidence to continue.
[1] https://wiki.bitcoinsv.io/index.php/Opcodes_used_in_Bitcoin_...
Bitcoin does have smart contracts, and op codes. Thats correct, regardless of your disagreements with the source.
Sorry I can't be bothered to look up the actual quotes but they're similarly incoherent. He pretends to have them but not to want to use them, even to prove his claims.
In conclusion, if he is unable to prove he is Satoshi, he therefore cannot claim to say he is Satoshi, unless he can prove otherwise; but so far he has not.
So hence the above unless proven, he is not Satoshi.
QED.
(The 'almost completely' there refers to operations that do literally nothing and are reserved for future extensions).
That's a little confused. Yes, bitcoin transactions are order dependent but only in the extremely narrow sense that a transactions can't double spend the same inputs and can't spend an output that hasn't been created yet.
Significant care has gone into assuring that bitcoin's script language remains a pure function of the transaction itself, so that all script validation can be performed once for a given transaction, can be performed with total parallelism with all other transactions, and isn't changed by adding/removing/reordering transactions. This means that any dependency between transactions must be explicit, by having the transactions consume outputs (which can be zero value) from the transactions they depend on.
Reordering transactions might change their validity due to input conflicts (which can be resolved very quickly using a hash table), but not due to the expensive-to-validate scripts in the transactions.
In ethereum contracts have fairly promiscuous access to shared data, including arbitrarily computed on the fly addresses. To discover a transactions dependencies you must execute it. One could imagine an implementation that executed all transactions eagerly in parallel, recorded a transcript of the data they touched, performed a union-find to cluster them, accepted one transaction from each disjoint cluster, then sequentially executed every remaining transaction (you can't execute the clusters in parallel, because their dependencies will change on re-execution with different state). ... but since dependencies are extremely common (people love to think sequentially, and the system makes that the easiest way to program) I expect that this would actually be a lot slower in practice in spite of the initial parallelism.
Aside, please don't link "bitcoinsv" -- it's a scam site setup by a conman that pretends to be Bitcoin's creator and uses billion dollar lawsuits to silence people who call out his fraud.
No, Bitcoin does not have smart contracts. It has a limited scripting environment that you can't do much with other than colored coins, and we've all seen how that's played out.
Turing completeness is a complete red-hearing in this application space.
They both have ridiculous issues that have made them both unsuitable for any form of serious application when scaled up to the tens of millions or even hundreds of millions. Even the very least of all use-cases: Extremely cheap, fast and scalable on-chain payment systems using a blockchain for regular users to use.
> The entire point of the Bitcoin network is to impose a global, unique order on all transactions and the only way to do that is if order within blocks matters.
Yes. The whole point of Bitcoin is to be a peer-to-peer electronic cash system using a transparent ledger where everyone can see the transactions on-chain. Not a 'store of value' or 'digital gold'.
Everyone knows on-chain payments with Bitcoin are too slow for realistically accepting payments in the real world and places like supermarkets, restaurants, etc unless you want to wait hours in the queue for it to settle or fail. Given it's even slower than VisaNet, you might as well go to the ATM and withdraw cash using card to pay; even that is quicker.
By that time, Bitcoin's volatility would already have caused the recipient to have a fluctuating price on the paid-for product, causing the sender to at worst under-pay for the value of their goods regardless. Using the Lightning Network also defeats the purpose of what Bitcoin was supposed to be as that is centralized by design and the transactions are off-chain without a trace anywhere to find it [0].
The whole point of Ethereum is to be the 'world's computer' and a smart contract platform with utility. Instead, it has turned into a digital slot machine with its problematic high fees when usage skyrockets and regular users that aren't millionaires can't use it at all, unless they'd like to spend $1000 to send $10. The network also can't even scale either so admittedly, users have to use duck-taped layer 2 systems that confuse them to even bother using them to save on fees.
Waiting years for ETH on PoS (ETH2) to launch isn't an option, as that was promised in 2016 to release by then, yet here we are 6 years later it's delayed once again. [1] No-one would tell users or even merchants to wait half a decade for a single product with years of known issues to get better in order to just use it. They will just look elsewhere instead.
The reality is, both of them have failed and deviated from their intended purpose and are not designed to scale for on-chain activities and both of them require 'layer 2' contraptions which at most are centralized themselves and highly complicate the usage for many users to even bother using it.
What a shame and a total proof of waste.
[0] https://iopscience.iop.org/article/10.1088/1367-2630/aba062
Another perspective is that of investing or trading. Ignoring the practical use cases of coins and buying low and selling high. That's why I'm working on TradeCast: https://tradecast.carrd.co/
It strikes me that the author is employing deliberately excessive verbiage and appeal to authority to mask the confused nature of his core conjecture.
All of that math to prove such an inconsequential point.
In practice, scalability limitations of blockchains don't come from the limitations of a single node's processing power, they come from the overhead of the current naive methods of maintaining consensus over contract state and execution. By lifting the execution overhead using optimistic fraud proofs or zero knowledge proofs, and lifting the state overhead using state sharding and state/history expiry, you end up with a protocol that can come to consensus on arbitrarily complex computations with little more overhead than the computation's resulting state change.
In simple terms, the quoted author misses the forest for the trees. They hold that blockchain protocols can't scale further than the processing power of a single node, but miss that when contract transaction execution verification requirements are reduced by proof schemes to mere state changes, one node could crank through as many transactions as their state changes could saturate a modern CPU/memory/disk pipeline, which it's safe to say is easily upwards of tens of thousands per second - plenty enough to satisfy global demand and enough to stand shoulder to shoulder with the traditional payment processors.
Cardano fixes this with deterministic execution and fees.
b) is it possible to make all the transactions in a block go "at once"? ie if any tx have some sequential interdependence, kick one and make it wait for the next block?
a public registry of txns is sweet
(Sorry, couldn't resist)
By the way, my point is not that they will contribute to crypto, but rather that their integration into the Internet ecosystem will require new technologies, new platforms, and new solutions to social problems so far divorced from what SV is used to dealing with... that there will be a market and a need for platforms and technology in those regions/demographics. To ignore that is to ignore billions, potentially trillions, of dollars of value.