What in the Ethereum application ecosystem excites me
vitalik.ca
vitalik.ca
It comes from a techno-optimist perspective that attempts should still be made to see if it could be solved in the first place. The binary alternative is a nihilistic "don't ever try" mindset, wherein the Nikola Tesla, Marie Curie, & Joseph Fourier shouldn't ever try to solve existing problems, and that they should just toil in misery like the rest of us.
There definitely exists gradients in between the two, but it's worrying that HN, a supposed place of hackers/experimentalists, is adopting a more "this'll never work" stance over time. The Dropbox negativity was the popular start of this downtrend, & I fear it's getting worse.
What I am wondering, however, is if this scamming/pumping money will eventually make a legitimate industry. Many industries/technologies have started out of that (Military, Gambling, Sex, etc...)
It's like there is some sort of "I tried that and it didn't work, so no one should ever try it again and if you do I'll warn you and then ridicule you for wasting your time" attitude that permeates all of some people's contributions to the discussion. This attitude isn't just at the individual level but also at the team, company, societal levels.
This doesn't feel like a hacker mindset to me at all. It feels increasing defeatist.
While I can't point to HN glory days (I wasn't here), I imagine that HN is devolving from hacker news to defeatist expert news.
But maybe it's society as a whole? I don't know...
What I can say is that the real hackers (eg builders, not speculators) in the web3 communities seem to be more optimistic than the average interaction I see here.
My experience from discussions both with technical experts and non-technical layman views suggest a very low co-relation with views expressed on HN. Try it yourself, discuss some top HN posts with experts and non-experts and compare.
So i look at HN as a lopsided subset. This has 2 outcomes, on one hand, it is depressing to spend more than a few minutes a week here, and on the other hand, the real world has parts which are less so.
https://news.ycombinator.com/item?id=3754664
Another one of my favorites is the multiple times 4Chan has made fun of HN. An example of that:
Sure you can be "anonymous" when using your wallet etc, but as we all know it is usually trivial to de-anonymize large data sets. Likewise, being anonymous when using a wallet then removes a lot of the perceived value of using it for identity verification (e.g. sign-ins, proof of humanity etc).
Basically you can make transactions anonymous using much the same kind of protection as you have between public and private keys. There is a proof the transaction is valid but that is basically all you can see.
- If it's successful in providing anonymous transactions to everyone: Regulated to death due to laws aimed at combating money laundering and organized crimes. Even cryptocurrencies that aren't perfectly anonymous will probably eventually be regulated to death for not providing good enough guarantees about the identity of the wallet holders. - If it threatens the Eurodollar as a world reserve currency: regulated to death at least in USA and probably Europe.
In what scenario can cryptocurrencies actually achieve its goals without risking being regulated to death?
And yes, I know you can't effectively ban all trade of cryptocurrencies. But trade will always be a niche if most people can't use it in the real world.
Essentially, zkEVMs map EVM bytecode to equivalent zero-knowledge circuits (containing the logic of what is and isn't valid, i.e. double-spending) so that the entire execution can generate a proof. It is a lot of math.
My original confusion was more about how consistency of state can be maintained across completely opaque commitments of transaction validity.
Now that I think of it, it seems that my original concern was a matter more trivially dismissed than what you've explained - my doubts were more about how state could possibly be consistently yet opaquely maintained, but the blockchain state machine, and I gather the ZK commitments, are simply not opaque with respect to the VM state - the opaqueness provided by ZK commitments is opaqueness in the intermediate transaction state (essentially irrelevant information - perfect candidate to be optimised away). The problem of double-spending is never relevant within a single chain of block commitments, as any second-spending of resources is simply an invalid transaction and is rejected, given the (necessarily public) hitherto state reached by consensus (- the problem of which, is precisely what the blockchain mechanism was designed to solve).
Disclaimer: I have no idea what I'm talking about with respect to ZK, and may be completely wrong.
I have the same confusion as you, and I'm not sure I understood your last paragraph. The prover (person submitting a new transaction) can provide a ZKP that the transaction he is making is valid, and the blockchain will adopt it if indeed it's a valid proof. So then the onus of preventing the double-spend here effectively on the prover: he can only provide a valid ZKP for a valid transaction, and a double-spend would not be a valid transaction.
But then at the end of the day, seems like the underlying balance needs to be accessed somehow (otherwise how would the prover even know if he has enough funds avaliable?). I guess the prover (and only the prover) can do this because he presumably has access to the right private keys?
It's like the Zcash shielded pool, but as an Ethereum L2.
Some Monero developers have created a new project which tries to solve those issues, and add zero knowledge proof to the mix: https://pirate.black
Monero already uses zero knowledge proofs, but in a different way than eg ZCash.
You can prove that you have the keys to sign. Without having to produce the key.
Or something of that effect. Cryptocurrencies are bunker. Zero Knowledge is a big deal.
My second reply would be a hybrid system. I've been tossing around this idea in my head for what I call a decentralized PBM. At first I struggled with the privacy idea. Then I had the realization that it was unnecessary to bring PHI on chain. I could accomplish all the stuff that would benefit from a chain without it.
You can realize a lot of value from blockchains even if you're not purely decentralized.
https://docs.zama.ai/concrete/getting-started/quick_start
This is a rust based Fully Homomorphic Encryption (FHE) example.
That is to say, you can encrypt two numbers, do a mathematical calculation on them without decrypting them, and then, only the person with the private key can decrypt the result to get the value.
If you add something like FHE to blockchains (it's coming) then you can get anonymous transactions on the blockchain directly.
By the way, Zero knowledge proofs are not what is needed to get anonymous transactions. When you use ZK, you are issuing the proof AND have knowledge of the inputs. The prover needs to know the inputs, but does not need to reveal them to the verifier (which happens on chain). This means the transaction can assert that the mathematical operation occurred without doubt, but when you need to get at the numbers, you are back to a transparent value on the chain.
For the record, no clue how true that assertion is, but seems like now that the calculations are possible, Moore's law will solve that problem one way or another.
FHE is going to make things interesting and it seems like it is only a matter of time before they are workable on existing blockchains.
Plus, these types of calculations are not susceptible to side-chain attacks, since no private keys are used in the calculations.
There are quite a few people working on this problem from both the hardware and software side of things. Source: I've talked to a large number of them. It is still early days, but given the level of interest out there to do this, I believe strongly that it will happen.
Can you elaborate more on this? What is this a ZKP proof for? That the transaction is valid?
Also from all the ZKP examples I've seen in crypto[graphy] class, soundness relies on the ability to repeat the process again and again. How does this work for the blockchain case where it seems like there's only one round of communication between prover/verifier?
They are named so because they are an implementation of what is called ZK proofs, but they leverage them to be able to prove a succession of modifications of the state (i.e. the accounts and their money) in a quick & easy way to check. As a simplification, you may think of them as a hash of transactions & smart contract executions that are a tad expensive to compute, but trivial to check. The end goal typically being to multiplex multiple level-2 transactions onto a single Ethereum transaction to enhance bandwidth and reduce fees.
However, they are not ZK in the applied sense of it; e.g. they do not even try to mask the operations; anyone could rebuild them themselves with a bit of effort.
Backup video link: https://www.youtube.com/watch?v=zWTx1iQOCDM
Original paper: https://arxiv.org/abs/1909.00938
Clearly money and DeFi are already real and well-established things, whether they're "going great" is in the eye of the beholder. DAOs have been around for a while, and the main examples Vitalik lists are basically DeFi apps that call themselves DAOs. General-purpose DAOs that have real-world influence remain questionable things, mostly because they have too many human and legal dependencies. On-chain identity might be exciting. NFTs might eventually prove to have exciting real applications beyond apes. Blockchain voting remains an old idea that doesn't have much real benefit outside of DeFi project governance.
I think Vitalik even said once that the only reason for small fish to buy governance tokens is in expectation of the price going up, and hoping they can be sold later to a larger fish, where the actual network is governed by a few. I don't see how "proof of humanity" is any different than this, since nothing stops collusion or other vectors for "vote buying". Centralization infects the very roots of decentralization. This is not an easy problem, and Bitcoin doesn't solve it, and no token out there currently solves it. There might not be any solution in the real world, where humans can communicate freely.
> I think Vitalik even said once that the only reason for small fish to buy governance tokens is in expectation of the price going up, and hoping they can be sold later to a larger fish, where the actual network is governed by a few. I don't see how "proof of humanity" is any different than this, since nothing stops collusion or other vectors for "vote buying". Centralization infects the very roots of decentralization. This is not an easy problem, and Bitcoin doesn't solve it, and no token out there currently solves it. There might not be any solution in the real world, where humans can communicate freely.
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> Decentralization is super hard to achieve in anything other than a toy universe.
> Power will always tend to centralization when money exists.
> It's obvious when the decentralization key is computing power, as money buys more computers and results in centralized control.
> Nothing stops one person from purchasing the voting power of another person.
> Centralization infects the very roots of decentralization.
> This is not an easy problem, and Bitcoin doesn't solve it, and no token out there currently solves it.
> There might not be any solution in the real world, where humans can communicate freely.
The parent comment is likely right, but it's engaging in a "it's not 100% perfect, so it's useless" fallacy: Just because we can't get 100% of the way there doesn't mean that the effort shouldn't be done in the first place.
The Bittorrent protocol is a good example of this, as the protocol's not perfect either, relying on centralized trackers for fast peering. Still, that didn't mean that the protocol couldn't improve, with Mainline DHT eventually being developed for the protocol. Even though it's still slower than a centralized tracker, it does its assigned job well & to great success.
Were such a viewpoint to be transplanted towards the Bittorrent protocol before DHT's creation, the parent would've likely viewed trackers to be "un-decentralizable" & therefore a waste of time. Attempts at decentralizing trackers would've been seen as a futile effort, as "they'll never be as efficient as centralized trackers".
In general, no working system is ever 100% perfect, so why is such an attitude still being projected upon all open-source projects?
It's likely that 100% decentralization will never be achieved, but that doesn't mean that we shouldn't aim for at least 50%. The alternative is a nihilistic "we'll always need centralization" dystopia, & that fundamentally doesn't sit well with me all.
Ethereum no longer uses proof of work (computing power). Also, neither BTC nor ETH have a governance token.
The hard reality though is that ASICs are coming back to ETH (Vitalik has hinted at it in his own posts [0]) and at the end of the day, ETH needs compute.
Maybe in the end ASICs will be required, maybe they will be used as an intermediary solution, but there is no inescapable requirement on the long term for them yet. By this, I mean that the current use of compute power is not seen as a feature, but as a regrettable side-effect of current algorithms, that is being worked on to reduce as much as can be.
> there are a lot more than 3 main contenders in the ring
There are. However, if you focus on clost to fully Ethereum-compatible L2 rollups, there are very few of them.
The product is an NFT which gives you legal ownership of an underlying physical object when you buy it. An individually numbered bar of gold in a vault. A scarce collectible. Real estate.
The real estate thing is interesting: transfer time goes down from around 4 months in the UK to a couple of days. The only delay is the KYCAMLCTFPEPOFACT checking: if that's done as a pre-clearing step the transfer of real estate will be instantaneous. It took several years to build this capability.
The blockchain is not done. http://mattereum.com/land
Disclosure: I have known @leashless since way before Ethereum.
(Of course, huge generalization there. For example the UK has done better on open data in the government than the Swedes have done, so in this case the whole thing is reversed. )
Yes! The key here is the failover to English Common Law: if something breaks the failover is binding arbitration with a technically sophisticated arbitrator who will come in, figure out who owns what, make the awards, job done. Obviously that's minimal protection if (for example) somebody has their cryptocurrency stolen and it's just gone - but ownership of the physical property isn't subject to those kinds of misfortunes. It's 100% under law, as you would expect!
2. Why does this need a blockchain?
Also there's no other way of doing an e-commerce style purchase for something which is too expensive to pay for using a credit card. You can't buy land using Apple Pay.
1. See the above answer about somebody dying and leaving the NFT behind. Basically the NFT is stripped of its legal meaning, and then a clean NFT is reissued. You need a legal dispute raised before this can be ordered by a court, and that's the only situation under which it occurs.
2. Atomicity is a common property of database transactions, not something unique to Ethereum, so I'm not sure I follow the blockchain requirement for this.
You mention e-commerce style purchases but the legal side of things seem to imply that it's still more complicated than buying something on Amazon: the NFT only has the meaning you're willing to give it; if someone sends me an NFT you issued, I still need to check that you didn't revoke it and that it represents what the seller says.
Your website also mentions a "Mattereum Asset Passport" which indicates that the NFT doesn't stand on its own. Overall I find it hard to see what the NFT actually brings, especially given your other comment mentioning legal disputes (https://news.ycombinator.com/item?id=33879695).
I don't see why you couldn't replace all of that with:
* a database you control
* certificates you issue yourself, signed with your own key
* provide an interface (web or API) facilitating the transaction of these certificates between users
[0]: public blockchain as defined there: https://www.schneier.com/essays/archives/2019/02/theres_no_g...
But if you actually try to implement a system that does what we do, you'll pretty quickly discover why we do it this way.
A lot of your questions here seem to make fundamental assumptions which aren't true: if you're interested in how our tech works, see http://mattereum.com/lp which is a paper from a few years ago which outlines the legal/technical strategy in a bit more detail.
With that noted:
(1) the NFT is a faster, cheaper, easier way of doing the transaction.
(2) executing legal contracts in an atomic way is harder than updating databases in an atomic way. Believe me on this.
The NFT purchase triggers a set of legal contracts to be executed, and identifies the buyer. Without the legals the NFT does nothing. But with the legals alone you're looking at months of legal paperwork to transfer a property, rather than a single purchase on a site like OpenSea.
There's a lot more to transacting property than title - condition of the place, planning permission, 50 other factors. All of that is being represented as claims, and liability if those claims are inaccurate.
Does that make it clearer?
I believe you, but Ethereum doesn't help you for the legal part, it can only help you with the database part, so it's still unclear why you're using it if you're talking about some legal atomicity, whatever that means.
> The NFT purchase triggers a set of legal contracts to be executed, and identifies the buyer. Without the legals the NFT does nothing. But with the legals alone you're looking at months of legal paperwork to transfer a property, rather than a single purchase on a site like OpenSea.
If the NFT purchase only "triggers" these legal contracts, what prevents you from triggering it anywhere else?
I don't understand how "triggering" these legal contracts the traditional way requires months of paperwork but "triggering" from an NFT wouldn't.
If it does that, the directors are in Deep Shit.
The transactional architecture is basically: paperwork is prepared as a set of legal warranties. NFT purchase also pays for all of those warranties giving a very strong set of legal protections to the NFT purchaser.
The key is simultaneous execution of all the contracts as a single atomic transaction without any chance of mis execution or somebody changing their mind half way through.
Think of it as a vending machine for legal obligations. Automated obligation.
Smart contract.
Everything is a Turing machine in the end. Everything can be done on paper. All that really changes is defect rate and transaction cost.
> * a database you control
> * certificates you issue yourself, signed with your own key
> * provide an interface (web or API) facilitating the transaction of these certificates between users
To me this is like saying 'why do we need a network and a browser? you could just get them to send you a disk with the file you want to look at and install it on your local machine.'
You absolutely could do this on a database with a single trusted owner, but the real value is in the ecosystem. A blockchain allows you to atomically transact across multiple instruments and parties. This is not something that can reasonably be done on tradfi, which is why there are products like flashloans that don't exist outside of these systems.
I think we disagree of the relative complexity: operating smart contracts is way harder and less proven than what I described, I think the smart contract vulnerabilities described on https://web3isgoinggreat.com/ show that well enough.
> A blockchain allows you to atomically transact across multiple instruments and parties. This is not something that can reasonably be done on tradfi
I've mostly heard of flash-loans to exploit arbitrage opportunities that shouldn't be there (e.g. oracle bug) or scale up attacks (instead of emptying an address using several transactions, one could be enough). Are you sure there's no equivalent in HFT?
It's not really about the complexity, it's about the fact that finance is about ecosystems. How things integrate. Just like it might not seem that hooking computers together is going to get you that much, in fact it does.
By the way, the majority of crypto horror stories at the moment are straightforward fraud and corruption, of exactly the kind of thing that goes on in tradfi the whole time. There are very few that are genuinely about bugs in smart contracts.
Flash loans are zero counterparty risk, zero credit risk for the lender - because if the transaction succeeds then the loan was returned, if it wasn't returned then the transaction didn't happen. This would be possible in a closed ecosystem (but much less valuable - limiting what you could do with the borrowed money), but the number of institutions you'd have to get to agree to support a cross institutional transactional API means that it's not practically possible for tradfi to offer an equivalent kind of product.
That's focusing too much on the recent FTX stories, you can filter the stories there (select 'bug'), there have been plenty of vulnerabilities this year still.
The comparison with traditional finance is also misleading: the proportion of fraud seems to be way higher in the blockchain space relative to "normal" (let's say intended) usage.
> it's not practically possible for tradfi to offer an equivalent kind of product.
Assuming it would be possible, do you think people would use it? What for?
Flash loans are "useful" because they allow anyone to exploit a smart contract without having the required funds, or because they allow one to do arbitrage between decentralized platforms, but do you have such gaping deficiencies in traditional finance for them to be relevant there?
A lot of blockchain projects seem to make sense within a blockchain context, but fall apart as soon as you try to link them to the real world. A decentralized exchange sounds fancy, but it's only as interesting as the tokens it allows users to trade. Flash loans look like an innovation until you realize you're still stuck within this context, making concrete comparisons with the real world inadequate.
I think perhaps you're only hearing about blockchains in news stories, where of course the shadier aspects are emphasised.
As for "stuck within this context", that's actually one of the areas that I think blockchains have a huge advantage over traditional finance. Of course, at the moment there's a lot more traditional finance than there is finance on blockchains, but hooking together different financial institutions and their products is a massive pain, with data sharing (frequently it's just csvs periodically uploaded to an ftp site), and reconcilation taking up lots of time and effort with each hop. Blockchains have the potential to make this much more efficient, standard, secure and transactionally interoperable.
My point is that traditional finance doesn't need this because there's enough cash available to arbitrageurs already, so if you somehow made flash loans, they wouldn't be used anyway. It's also unclear what legal framework would accompany them, which is again something that Ethereum can ignore.
Your last paragraph is an oft-repeated myth that using Ethereum forces transparency and interoperability between systems. But that's not true, it doesn't enforce that, I've seen my share of code trying to implement ERC20 and failing in subtle ways, and that's code trying to follow a common interface. Interoperability is hard, and you don't get by using $MAGIC_PLATFORM.
Some projects also restrict access to their smart contract because legally it's really hard to make it fully open, or put a tiny part of their system there mostly for PR reasons ("we're on the blockchain").
Reasons why data sharing etc. are a massive pain include:
* no incentive from financial institutions to improve that
* legal reasons making it hard and costly to do anyway
Ethereum is not solving these problems.
In particular:
> efficient, standard, secure
* So far it's failing at "efficient", and it can only be more efficient by getting rid of the legal aspects of financial transaction, the tech is not the problem.
* It's also failing at "secure" as evidenced by the link above.
Another counterargument to the potential of this tech is, if indeed it brought such benefits, we'd have seen more than toy projects developed in traditional finance by now, but we're mostly seeing institutions like the ASX scaling down on such experiments.
If we can't figure out how to prevent this for a given asset, we don't touch that asset.
But part one can be done many times before part two has to be done.
The NFT owner can then, at their option, pull the land out of the SPV (and the NFT is burned in the process!) to take ownership via the land register being updated.
The NFT purchase is still the transfer of the interest in the land, and the point where stamp duty is paid to the UK government. That's where the value transfer happens.
In other countries this could be similar to signing a contract to purchase land which creates interest and tax liability prior to entry in registry, but final source of who owns it in the end is a registry.
But yes: you have the token, you have the right to the thing, and the supporting legals implement consequences in the real world or on chain via escrows if that right is not met.
https://medium.com/union-finance-updates-ideas/union-partner... for example.
Are you saying that in the UK it takes 4 months to transfer ownership of a gold bar or a collectible item? Do real estate transactions really take 4 months in the UK? Do you know if there are many other countries where ownership transfer is similarly cumbersome?
Its not a fast system, basically the seller and the buyers lawyers have to mutually verify the sale is legal etc etc (that the seller actually can sell the property, that its not encumbered by a mortgage or such, etc). Buyer needs proof of funds, etc.
Pre-clearing the property and potential buyers can cut this time to days or hours.
Having a very hard proof of title on a gold bar, which is automatically updated if there's any change of circumstances, opens up a lot of useful functionality for gold owners.
Interestingly, most gold I've seen above an ounce come with a cert and a serial number.
NFTs are worthless, unless you have official ownership of the thing. And if that's the case, then why the hell would I use an NFT ?
The blockchain is being used as a transactional technology here, not as a jurisdiction!
- Large sums of money. Ok? Standard-issue transactional databases can transact in large numbers just fine. No problem there...
- Atomic transactions of some complexity. How does blockchain help here? It doesn't. There are other systems doing some checks, after which a transaction is committed. That very same system could just as easily use a centralized transactional database
The only advantage a blockchain has is allowing arbitrary untrusted writers to the database. Exceedingly few situations require this, and you pay a very hefty price for that feature. Acknowledging that there's an authority in your system (the legal system) means you do not need this feature of blockchains.
It sounds to me like you haven’t understood the way we are using an atomic transaction to execute multiple legal contracts in a single event?
Anyway, we built it, it works. If you are confident a centralised database is better, you could always build a service to do this thing that we do without all these blockchain overheads.
Have fun!
And as it is said possession is 9/10 of the law, practically that right is backed up by possession of the account key and the existence of a variety of exchanges who accept ETH.
You can of course execute multi-party transactions without a trustless distributed ledger, but in practice then you have to trust a particular intermediary with your assets. I.e. they can run away with them mid-transaction and you have things like costly legal battles, lengthy timescales and stressful burdens of proof, to recover your assets despite them being yours.
Though legal frameworks can be created to minimise the risks associated with intermediaries, legal rights in principle are a different experience from rights backed by possession of things like cash, bank balances, title deeds etc.
Possession of ETH and the property NFT in accounts you exclusively hold keys for, as well as a conveyance-encoding transaction on a widely agreed public ledger as evidence to back them up, are in a similar category to posession of bank balances and title deeds on paper or in a land registry. The common factors are their meaning is widely recognised, they are in your control already, and they behave in recognised ways. ETH you can use immediately with an ecosystem of exchanges. The property NFT along with the legalese and history that gave it meaning prior to the transaction are convincing evidence to future parties who need to know you have legal title to the property. As with all property in the real world, someone can always challenge your ownership by the courts or by fraud, but a well established NFT gives you favourable evidence, so they are unlikely to succeed and less likely to try.
At what part do I need a blockchain to prove that I did, indeed sign the contract that we both have a copy of and that will be the only thing that matters in case of a legal disagreement ?
Have a read, I think it will clarify the matter for you.
I've got no idea what the fuck they are doing in the UK, but when I bought a house in the US my deed transfer was processed by the county in about six hours.
What takes the time is lawyers talking to each other about god knows what, for months on end, for no apparent reason. My last house sale in the UK took about 4 months to go through. I am glad I don’t live there any more.
Whether the seller actually owns the property or lease, if there are other people who would have a valid claim on the land/building (or historical covenants that would prevent the construction of the building there etc). For leasehold, verify how long is remaining and so on.
Environmental information (whether the property is built on land that regularly floods, whether the site has a history of subsidence that could cause a significant risk to the building etc).
Also, if you're buying with a mortgage, the mortgage company are going to want to have a look at the property to know that they're going to get their money back if you default on the mortgage and they have to sell it themselves.
Say you have the NFT that claims ownership of a house. Now the local court allocates half of the house to your ex-husband whom you’ve just divorced. How is this (exemplary) case handled on the chain? How is any repossession through local legal system? Who gets to own the house should the private key be lost?
The answer to most of these questions is usually (I do not know your solution) some centralized entity that is introduced somewhere in the chain.
This may have come of as an attack, but be assured that I am genuinely curious whether a solution has been found that I am not aware of.
7. The blockchain is now at a stage in its development equivalent to where the internet was in or around 1995. The internet was unstoppable in 1995 and blockchain technology is unstoppable now. It will become ubiquitous in all major industrial and financial sectors, simply because it allows for the immutable recording of data, thereby reducing friction in commercial and consumer transactions and obliterating the scope for dispute as to what has occurred.
8. As the Master of the Rolls and Head of Civil Justice in England and Wales, I hold an office that pre-dates modern trade in derivatives and reinsurance, even steam engines, powered flight, and certainly the internet. I am particularly and obviously concerned about the reputation and development of English law and the jurisdiction of England and Wales.
9. Many people do not realise that English law governs trading in €600 trillion of OTC derivatives annually, in €11.6 trillion in metals trading, in £250 billion in M&A deals, and in £80 billion in insurance contracts every year – just to take a few examples. My hope is that English law will prove to be the law of choice for borderless blockchain technology as its take up grows exponentially in the months and years to come.
(quote ends)
Point being none of this is happening outside of the framework of law: transfer of ownership is the objective of the system. If you're legal owner of the house and a court takes half of it off you, the legal package around the NFT kicks in, breaks the tie between the NFT and the land (yes, there's an authoritative way of indicating this) and you then figure out what to do with the remaining property rights.
When dealing with land, the legal system is always primary.
This is "Code is Law" in the real world. That's why it works.
There's a liability framework in place to make sure they do, and stamp duty etc. are paid when the NFT is transferred: that's where the interest is transferred.
You might be able to get away to comapring it to p2p file sharing services like napster but not the internet
There are other benefits too but that's the biggie.
They explain exactly how the transfer is effected, and how and when the government land register is updated.
Anybody familiar with UK real estate law will find the mechanisms reasonably familiar from any property deal involving SPVs. (Special purpose vehicles)
The docs are all there for the reading.
As I understand it, there is a legal vehicle which performs the actual transfer and the NFT transfer acts as a signal of interest for both parties. In that case, I see the benefit that neither party is bound to a certain platform/software to initiate the transfer. But overall, I admit that I still do not see why this requires zero trust and decentralization as primitives in the solution, which come with hefty caveats each.
I also share your confusion: if a central body is trusted in this scenario, then why can't the atomic transactions be equivalently performed on a public Merkel tree with a centralized source of truth?
Disclaimer: I am not a lawyer and the previous post is my understanding of the described as a layman. I am pretty firm on the technical concepts surrounding blockchain solutions, though.
Compliance with present and future privacy laws could easily become an issue, though, unless those laws contain specific carve-outs.
(I'm also no lawyer, I've just been interested in the cryptography surrounding the big blockchain projects. Much of it looks like it could be surprisingly useful outside the trustless, decentralized contexts everyone likes to talk about.)
What would happen if somebody used any kind of exploit to obtain the NFT? Could I as the new owner of the NFT just go to the local police, show the NFT in my wallet, and demand for the previous owner to be removed from it?
What happens if the person who owns the NFT dies without passing on the access to their wallet to anybody? Is the idea that this chunk of land is now eternally owned by a dead person? Would you expect the local law to comply with that?
You bring a case under those terms: "I am the legal owner of this land and I want the NFT which was owned by the deceased to be reissued to me". The legal binding on the original NFT is broken, and a new NFT is issued.
There's also provision under the UK Jurisdiction Taskforce digital dispute resolution rules https://lawtechuk.io/explore/ukjt-digital-disputes-rules to have an arbitrator use a judicial back door in the NFT contract to transfer ownership of the NFT if the contract has those affordances.
We feel that's very powerful.
oooooooof. Centralization removes what modest benefits there were in the first place.
For us, the critical features of the blockchain are:
1) simultaneous execution of a substantial number of legal contracts between different counter-parties as a single atomic transaction
2) non-repudiatable payments going to all of those contract counter-parties
3) single source of truth on a publicly visible resource so all parties can see what's going on at all times
4) "litigation-ready" record keeping about who did what when
And so on: it's a better way of doing certain legal processes not some kind of magic pixie dust.
That's a pretty different take from the general blockchain rhetoric, but this represents the UK legal consensus on the blockchain. It's a tool, not a jurisdiction.
A blockchain adds nothing to this, as it is merely an extremely stupid and expensive database.
The point is to cash in on crypto hype.
Terms of what service? Who's providing it? Why would anybody downstream from the first buyer be held to them?
What if a third party uses an exploit to transfer the NFT from the original owner to me, a randomly picked and non-participating address? How can I be bound to any terms of service or contract by just receiving a random NFT?
> You bring a case under those terms: "I am the legal owner of this land and I want the NFT which was owned by the deceased to be reissued to me". The legal binding on the original NFT is broken, and a new NFT is issued.
What if the issuer no longer exists?
> We feel that's very powerful.
I take this message is an implicit "No, it hasn't been tested legally". You might hope it works, but who in their right mind would spent more than a million to find out for sure?
If the issuer no longer exists you wind up in court claiming title to the land by virtue of having paid for it - and you'd be dealing (likely) with receivers or other people involved in bankruptcy proceedings. These are anticipated contingencies in the contracts we use.
Tested only occurs when a litigation happens. If the system is smooth and reliable, we could see 200 transactions before litigation. However, good lawyers read the contracts, make a risk assessment, and decide whether or not to proceed.
The contracts we use do pass review with good lawyers. These systems are fit for purpose, and a close legal review will satisfy most prospective purchasers of that fact.
"The NFT is listed on the NFT marketplace OpenSea for offers over £1.9M"
That piece of land was last sold for £7000 on 20th October 2021.
https://search-property-information.service.gov.uk/search/su...
I know inflation is bad, but £7000 to £1.9M is an impressive increase in value, for a piece of scrubby beach that looks impossible to get planning permission for.
Either the land price was misreported in order to evade taxes or you're lying. Given there's a website showing that the land was for sale for £7,000 1 year ago, I'm going with you're lying -- although either option is bad!
https://www.cliveemson.co.uk/properties/228/71/
I guess the third option is that you've been taken for a fool by whoever owns the land. Do you have an independent valuation showing the land is worth more than £7k?
You can also look up the supposed seller and see that their assets are worth... well, nowhere near a million: https://find-and-update.company-information.service.gov.uk/c...
If you can show that land is worth more than £1,000,000 I will happily buy any bridges you have for sale!
Edit: staying more factual
Like… any idea?
You can’t buy a parking space in this country for £7000.
For example, a quick Google search will show that you can buy coastal land with houses on it for less than £1.7m so £1.7m for land that you cannot develop is an absurd suggestion. You can buy a 4 bedroom apartment moments from your piece of land... for £650k: https://www.rightmove.co.uk/properties/127693028
You're being intentionally evasive, given you've been shown both land registry records (which, fyi, if are wrong, then the seller has avoided hundreds of thousands of pounds in stamp duty and HMRC will not look kindly on that when they receive my email) and an auction website where the land was sold (for the same price listed with the land registry).
I will literally buy that piece of land from you, right now, for the list price, if you can show any evidence it is worth that amount. You can buy parking spaces all over the UK for £7k, you can even buy houses in the north of England for ~£7k! The idea that a small piece of beach the size of my house that cannot be built on is worth more a parking space in London is ridiculous -- let alone worth more than a mansion down the road from the beach. You could buy 1.72 acres in London for less than £1.7m.
As noted in the other comment, we do have an independent valuation on file.
The deal is legitimate. If you feel like following through, do feel free to drop me an email.
If you are visiting it, I can highly recommend Verveine, a really good fish restaurant about half a mile away, on the High Street. A great tasting menu - 8 courses with matched wines, for £130 - much cheaper than London, just like the land prices. Excellent desserts.
We have an independent valuation on file at >1M.
Please show some common sense here. You can’t just purchase chunks of English coastline for 7000. If you could, half of the middle class people in London would own their own stretch of beach!
I’m shocked at how badly people want to twist the facts to suit their own prejudices.
Stop mucking around.
Land that you can’t build on or realize economic value from rents isn’t worth much, in the UK or anywhere else for that matter, even if it’s oceanfront land.
They have an empty cookie cutter website https://westlondoncitylets.co.uk/our-work.html and its owner has an empty linkedin https://www.linkedin.com/in/idris-anjary-24000b171/
The same guy owns Tokenized Properties Ltd which is an empty husk of a company https://find-and-update.company-information.service.gov.uk/o... and shares its address with West London City Lets Ltd
However, they do have another cookie cutter website selling that "development opportunity" https://tokenized-properties.com/ and repeating the $1.25m price tag
According to the title (and corroborated by the entry on mattereum) the only land in it is the one I marked in red https://imgur.com/a/5h6c8Zi — it's literally a cliff, plus the title talks about right of way on the paths marked there for the next twenty years, so it's impossible to build on
This right here just perfectly encapsulates everything wrong with the crypto industry, I'm very disappointed to see Vinay openly defending this sham
2) we have an independent valuation on file for the land at >1M. I wanted to reconfirm this with a member of my team before replying with specifics here, which you read as “he’s being evasive.” I was waiting for data.
The full documentation stack for the land is in the Asset Passport linked from the OpenSea listing.
If you want access to the documents email me and I’ll see about getting you an NDA and putting you in touch with the seller - they may or may not choose to satisfy your curiosity.
Thank you for your diligence.
The land registry does not list "transaction fees" and neither do auction houses. If the land was indeed purchased for a large amount of money, the buyer (who is now the seller) would need to have purchased it... either in cash, or with a mortgage. There's no mortgages outstanding for the company (per companies house) and the company has no money.
I'll be charitable and assume you're just a fool: you've been played by your property agency partners, and the "member of your team" is of course, I'm sure, the person who provided the valuation from their "independent" valuer (because they're the property expert after all).
You can go on rightmove or an auction website right now and see comparable land available for <£100k. The basis of your defence was that of course the land is worth a lot because land in the UK is worth a lot but that's just not true, the only place where parking spaces sell for more than £7,000 is in London: in 75%+ of the country, you could buy 1 acre of land for £7,000.
The value of unused land for sale is a function of the amount of realisable value, for example, if there is a piece of land with planning permission for a 5 bedroom house in an area where a 5 bedroom house sells for £1,000,000, the price of the land would be something like £1m - (cost of building a house) - (some adjustment for the risk borne by the builder which becomes their profit), e.g: £500k.
If your 1.72 acres of beach front land is worth close to £2,000,000 that would mean there is much more than £2,000,000 realisable value for an owner of the land. Please, think through how you could conceivably realise millions of pounds of value from a piece of land that you are unable to build on.
Land in the UK is plentiful, the reason that a small proportion of land here is expensive is because only a small proportion of land is suitable for development and has permission for development. You could buy acres and acres of land anywhere in the UK for the price of 1 months rent in London... because the land is undevelopable, because you'll never get permission to develop.
The idea that an acre of beachfront is worth millions, when it has much less than a million worth of realisable value, is absurd. You're a business man, write a business case for this land.
If £7,000 was a "transaction fee" then is this other auction, with a listed sold price of £130,750, a transaction fee of £130k for this piece of land? And if so, is this land worth (130,750 / 7000) * 1,900,000 = £35 million?
But you’re out of your depth and making very week assertions to cover the gaps in your data.
If you want to NDA and talk directly to the sellers of the land about the commercials of the deal, that can probably be arranged. But your speculation is based on weak data not access to the facts, and is not really going to replace things like an independent valuation and the opinions of the experienced real estate lawyers who papered this deal.
Yes, it’s a novel way to buy land, but the underlying deal mechanics are pretty conservative. There is nothing up anybody’s sleeves, and we encourage full diligence from any prospective buyers - they’re going to need to bring their own legal counsel to assess the purchase mechanisms and the NFT binding arrangements anyway.
This is not some deal to retail: we expect the sale to be to a real estate developer.
I don’t think there’s anything else I can do to convince you of your error.
Thanks for your interest in our work.
And that’s valued at 130,000?
I’m just sayin’ 7000 does not buy very much land in the UK. Not anywhere.
I'd also suggest you re-read my comment: land has value when it has planning permission. The £130,000 piece of land is valuable because it has planning permission that would allow a developer to sell a house for ~>£250k on it. The size and location of land is immaterial to the value of land unless the size and location increase the amount of money that can be extracted from the land -- typically through development. The entire point of my comment is that the desirability of land is not based on how cute it is (a slice of beach) but rather what it can be used for (even if it's in the middle of a housing estate).
I'll stop commenting now because I'm just beating a dead horse (...or donkey, I guess your land could be used to offer beach front donkey rides, so that's something...). I wish you luck, it's clear you've been taken advantage of and that's unfortunate: if you come to your senses, there's lots of land all over the UK that is actually valuable, and once you cut off your current partners and partner with some legitimate property industry people instead, I am sure you can make a much better go of NFT property sales :) Good luck!
As for the rest of this: land gets planning permission when plans are presented - which is what property developers do for a living.
I would not expect somebody to plank down >1m on an asset they had no idea how to utilise: the expectation is the land will sell to a developer who is ready to go through that process.
What else would anybody do with it?
"Title absolute 1 (28.02.2022) PROPRIETOR: WEST LONDON CITY LETS LIMITED (Co. Regn. No. 09214284) of 68 High Worple, Harrow HA2 9SZ. 2 (28.02.2022) The price stated to have been paid on 20 October 2021 was £7,000. 3 (28.02.2022) The Transfer to the proprietor contains a covenant to observe and perform the covenants contained within the registers of the..."
If you're going to lie, at least make sure your own website doesn't betray you :) Or, going back to the original point about stamp duty, the alternative is that your partners engaged in fraudulent reporting to evade stamp duty and your comments here are exposing them.
And the 7000 was part of a more complex transaction.
You simply don’t know what you’re talking about. You cannot buy a chunk of English coastline for 7000!
That’s just batshit. On your bike mate.
Unfortunately, you’ve said I would have to sign an NDA to get more info from the seller which would make the whole exercise pointless. I will make an alternate offer: I will pay £10,000 to the charity of your choice if you show documentation that proves the land has been independently valued at more than £1m (by someone accredited) and that the land was purchased for more than the amount shown on the land registry.
I am sure, in the cold light of day, tomorrow, you’ll realise you’ve been had and you’ll have to have an awkward conversation with West London Lets where they reveal that actually it was purchased for £7k and actually they’ve valued it at £1.9m based on the assumption it can get planning permission and then you quietly remove all the posts about it from your website and pretend this never happened. I won’t hold it against you, but do implore you to reconsider your approach to who you work with. With partners like West London Lets, who needs competitors?
If they indeed ordered a valuation for the whole plot as they did with the environmental assessment, it explains both the "£1M+ independent valuation", the £7k sale, and what the actual piece of land is.
I'm very eager to hear what leashless has to say.
I have a valuation report, and I have details of the prior transaction.
I'm 100% sure that you have no intention of actually parting with your ten grand, but allow me to repeat myself here: actual real estate lawyers put this thing together, the land has a solid set of documentation including a valuation, and you're just trolling because you don't like blockchains and want to pretend you have expertise that you plainly do not.
So if you actually want to put ten grand into a charity, feel free to email me and we can arrange the details. We'll do a nice press release about your generous gesture and everything!
We're a serious team: mostly middle aged, mostly backgrounds doing pretty serious life-or-death work for the State. My MD worked on TB and HIV epidemiology in prisons preventing spread in prisons and to the community. I was a disaster planner working on worst case scenarios at the Pentagon and for a UK military think tank headed by a former UK Minister of Defense. Our CCO was commercial director of the UK home office for many years. Not a bunch of hicks, and not some fly-by-night operation.
Seriously people who do serious work.
Do email us about that ten grand. I think there are a couple of groups we would like to make a large donation to this Christmas.
Appreciate your engagement, but we do have the documents, and your plain desire for us to be amateurs and idiots is your problem, not mine.
Are we taking your money, or are you slinking back into a hole?
So we're clear on the terms in public:
1. The land we are discussing is the piece of land highlighted in red here: https://web.archive.org/web/20221006130517/https://passport....
2. You will present an independent valuation from a member of the Royal Institution of Chartered Surveyors showing a value of >=£1m for the same piece of land (1.72 acres) where "independent" means they're not a related party (e.g: a valuation produced by West London Lets is not acceptable)
2a. If I have concerns about the independence of the source of the valuation, I can, at my cost, instruct a member of RICS from the local area to value the land
3. You share "...details of the prior transaction..." which includes an explanation of the £7k "transaction fee" which demonstrates that the land in question was not purchased for £7k through the auction
4. I will not sign an NDA, I will return to this thread to either confirm I was wrong and correct myself, or confirm I was correct, the outcome must be shared
5. You donate £10k to my charity of choice if you're unable to satisfy the above conditions (A local homeless charity, The Crossings, charity number 1175115)
Deal?
Please tell me you didn't get a valuation for the whole plot HP123436 instead of the sliver that is actually in that title and is described on the page! Because while the text on the page says HP123436 and the reports were ordered for it, you are not selling the whole patch, you're selling a tiny piece of it, otherwise you'd include a bunch of other properties like [2] that are indeed worth way more
Edit: or maybe that's by design, the "complex deal" you are talking about actually does include those other properties, and the matterium page is designed to make a sale of a much larger property look like a sale of a £7k property to avoid SDLT and a bunch of other complications, while going through a shell company that clearly doesn't have nearly enough money for the whole thing. Surely you aren't doing that?
[1]: https://passport.mattereum.com/West.London.Lets.01/01_Identi...
[2]: https://search-property-information.service.gov.uk/search/su...
I can’t reconcile how it never twigged for him that a little bit of beach would be worth so much money and how he is so committed to the belief in the face of so much evidence, but I guess there’s some time required to swallow this big of a mistake — hopefully he’ll get an apology from West London Lets, and maybe do some due diligence in future…
Reading through a sibling subthread with phphphphp, I just can't understand how you can tell that with a straight face. What "complex deal"? What "transaction fee"? The title literally says "last sold for", so unless you're saying the transaction involved elaborate tax evasion designed to hide the real price that's what it was sold for.
Then there is the other party in this $1m+ transaction that's supposed to be serious. Someone called Idris Anjary, whose only claim to fame on internet is a bunch of press releases for this deal, before that they're just a normal self employed person helping people get planning permissions for minor renovations [1] and building sheds [2] while operating from an office over an off licence [3]. All their companies together never saw more than one hundredth of the money you're saying that deal is worth.
Come on, let's be serious for a second. Either it's a sham, or the actual purchase and the person and the company doing it are just fronts, which is not exactly confidence inspiring.
Edit: btw, your environmental survey is off, the mini map on page 3 makes it clear the report is about the larger plot of land, not the part of it included in the sale. The Southern Water report is very likely wrong too, it says there's a public sewer there but the only connection on the map is from the larger plot.
[1]: https://planning.islington.gov.uk/NorthgatePublicDocs/004225...
[2]: https://www.activearchitecture.co.uk/portfolio/outbuilding-o...
[3]: https://goo.gl/maps/NDdM5og2Sh6EvXK68
[4]: https://passport.mattereum.com/West.London.Lets.01/01_Identi...
Source: experience buying houses and I worked on one of the systems for a year at the Land Registry (years ago, before Ethereum was a thing).
Fees are very low too.
It's a pretty impressive system overall: https://www.elra.eu/enriching-the-data-from-the-cadastre-and... and in jurisdictions with this kind of sophistication obviously there's less need for alternative solutions.
But on the other, there’s a lot of due diligence that is appropriate to carry out as a purchaser that doesn’t seem covered and it’s unclear that the NFT or blockchain adds anything to the picture - the value-add here is in having done the searches ahead of time.
It's actually a pretty good use case for the blockchain. It solves real problems here. Obviously it's not as sophisticated as systems that have been in use for 10 years, but it's a lot better than some of the archaic systems which still cleave to norms which have been in place for centuries.
What happens in your system if the NFT key is lost or stolen?
If the answer is "We can fix that", then you have your authority, you have a 'real' part in the background and the NFT part is really just for show. And if the answer is "well that breaks everything" then it's a pretty bad system for property!
Also by the looks of the info here - https://passport.mattereum.com/West.London.Lets.01/ - the NFT is not really equivalent to full legal title, mattereum the company appears to act as a sort of ownership proxy which will transfer the title to the NFT holder on demand. So honestly it doesn't feel like cutting the UK property purchase bureaucracy so much as putting a legal structure in front of ownership so that you don't really complete a purchase at all.
As the other user pointed out too, well, good luck getting a million bucks for that little stretch of gravel in the middle of nowhere!
So. The delay is still there, you still need KYC and other checks. The speed up is due to transfering paper records to a digital system, and has nothing to do with blockchain.
But sure. "NFTs and Blockchain" something something.
Good grief. In a backwards country of Moldova (where I'm from) property transfers (and other transfers like changing car ownership etc.) are instantaneous and don't need NFTs, blockchains or Ethereum. Go figure, must be happening by magic.
Easily.
It's going to take a while.
The turning circle of these entities is much larger than that of Moldova.
Yes. And blockchains, NFTs snd other useless crap have nothing to do with it.
Disclaimer: I hold ETH.
Today one coin will buy a coffee while tomorrow one coin will buy a PS5. There's no incentive to transact with crypto if there's any assumption the value of that crypto will go up tomorrow.
For a seller they can get wiped out if they accepted payment for coffee in crypto and then the value of that coin tanks.
Knowing the crypto price is immaterial. You can never know what the value of the item will be. It's like paying for everything with lottery tickets.
Ethereum is deflationary ONLY if there's high economic activity. If there's lack of activity then it's inflationary. You can think of it as self regulated easing and tightening without the need for a central authority like the FED.
That said, you can also use a stablecoin to make payments.
Transferring stablecoins is already a better experience than SWIFT though.
The Ethereum foundation has been focusing on technical problems since its inception, and your conclusion has always been the official motto: once we solve the "technical problems", users will come. But there will always be technical problems, and as each year passes with still no meaningful democratization of this tech, it's becoming doubtful that these limitations are the real issue.
Applications such as decentralized finance are only as interesting as the tokens they allow users to trade, but in turn these tokens are either shady (the world of FTT, USDT, etc.) or legal (requiring KYC, AML, etc.) so just like traditional finance. Once the former have fallen enough in disgrace, it's unclear what benefit there is to trade the latter (centralized tokens) on decentralized platforms.
It's easy to stack layers of abstractions, thinking the next one will be the one gathering users, and focusing on what we think is the last technical hurdle before mass adoption. After the 3rd or 4th iteration, one could start asking: what makes you think it'll make a difference this time?
Not much has changed since ICOs: same kind of ambitious claims with very little to show for it years after.
Another example of something that has changed for ethereum is Proof Of Stake. Some years ago, I worked for a large financial organisation, and we had a use case that would have saved a lot of internal work to move onto a public blockchain. Given the organisations eco aspirations, using a POW based system was never going to be acceptable. Now that ethereum is on Proof Of Stake, it's actually conceivable that these kinds of applications could be deployed by large financial institutions.
If anything, large financial institutions have by now realized that they're not interested in public blockchains[0], one notable example as of late being the Australian Securities Exchange[1].
These technical improvements are a bit as if a salesman reduced the price of a product, on top of free delivery. That's nice, sure, but that doesn't mean you need the product any more than before. There are more fundamental reasons why smart contracts are not widely used, and they're not addressed by these technical improvements.
[0]: as defined in https://www.schneier.com/essays/archives/2019/02/theres_no_g... [1]: https://www.reuters.com/technology/australian-securities-exc...
That's what I'm doubting. Ecological concerns etc. are a problem, but in my experience public blockchain solutions fail earlier, at the stage where one asks "would there be any benefit" before asking what the costs might be.
Take the use case of global stablecoin transfers. The ability to send cash point-to-point anywhere in the world is obviously valuable and novel.
But for global stablecoin transfers to be generally useful 1) everybody needs crypto wallets, 2) crypto wallets need to be increasingly safe and easy to use, 3) transaction fees need to be sufficiently low, 4) stablecoin on/off-ramps to integration with the traditional financial system must be widely available, and 5) stablecoins in a variety of popular global currencies must be available and liquid.
The industry has made progress in all five of the above areas in the past few years, and so good progress has been made on the greater goal of generally available point-to-point global cash transfers. Saying crypto "has no use cases" is lazy, uncurious, and intellectually bankrupt.
You're not sending "cash" though, you're most likely sending USDT or some other centralized stablecoin backed by a shady company ("stablecoin" is a very misleading term in this context given the counterparty risk). That's one point about trust being moved instead of removed, you need to trust the issuer to some extent. To this day I still haven't heard of a centralized stablecoin being fully audited, you merely get attestations, meaning that you can't treat them as "cash", you have a big risk just holding them.
Transferring / converting currencies from most countries to most other countries is easy and way cheaper via centralized means, e.g. https://en.wikipedia.org/wiki/Wise_(company) has been around for 11 years and was probably not first, and the fees are lower than what a blockchain transaction on BTC/ETH would cost. This is not even an apple to apple comparison, since in most cases you still need to convert your USDT back to USD to actually use them, incurring more fees in the process.
What ETH does allow you to do which you can't do with Wise and others is sending USDT without censorship. That's probably the best way to bypass US regulations if you want to send USD where the US government doesn't want you to. And some people suggest that this is how things should be, which is an interesting point. Whether you agree or disagree about the morals of it, it'll remain marginal compared with the amounts transferred via centralized entities for reasons listed above. In particular, this is incompatible with your 4.:
> 4) stablecoin on/off-ramps to integration with the traditional financial system must be widely available, and 5) stablecoins in a variety of popular global currencies must be available and liquid.
As soon as you integrate with the traditional financial system, you have the same legal requirements. But as explained above, skirting regulations is actually the only one thing that you could do more easily with Ethereum. Once you've accepted to deal with the law, you're better off using centralized platforms all the way. If I have EUR and want to send you USD legally, why would I go through USDT or whatever blockchain token and pay higher fees?
In this space, there's still very little in terms of products with actual impact, to the point that it's hard to tell what will be left once (if ever) the noise from the blockchain-related scams disappears.
I was debating these points 5 years ago already. The fundamental problems I'm mentioning now were already there (the decentralization of a blockchain-based system breaking at its boundaries with the real-world, the oracle problem). The hype has evolved, but retains the same fundamental flaws.
Friends in Turkey were turning their savings into USDC and DAI to save themselves from their country’s near 100% inflation.
Crypto critiques need to take off the first-world Goggles.
I think it's pretty easy to see that each transaction costing a few bucks (or tens of bucks at it's peak) is a huge issue if you want more adoption.
The move to PoS is now complete and rollups are under active development.
For a lot of use cases scaling is a prerequisite and that's coming soon, likely 2-3 years of progressive improvements.
Transactions on rollups are as low as 2 cents and EIP 4488 is expected to bring that down about 100x.
You should really take a look at the roadmap: https://notes.ethereum.org/@domothy/roadmap
This is false. If I go out on a date and my date sends me money on chain, I now know their public key and can look up every past and future transaction they make.
If they send me cash there’s no way the cash will help me do that.
Heck, even Venmo has protections against that.
however like any anonymous system, once your identity has been associated externally, you lose the privacy garnered by it.
The argument would be then to create many burner wallets but that’s also not exactly scalable unless you’re transferring between them off the chain to avoid gas fees.
zCash and similar cryptocurrencies take a different stand where transactions can be "shielded" and anonymous.
Money laundering is trying to hide the source or nature of illegal activities. Privacy in itself is not illegal nor money laundering.
That's why a limited amount of privacy is all that governments with these kind of laws could possibly accept. That is: privacy from other private individual and organizations, and from the government as long as they don't have a court order to look into your transaction.
It might be possibly to design a cryptocurrency that satisfies government requirements, and maintains a balance between privacy and ability to investigate economic crimes, but I don't think most blockchain developers is interested in that.
I'm actually working on making private payments on public blockchain with zk right now, and it's nowhere impossible, just technically complex. Should be live on peanut.to in early Jan.
Venmo is a centralized provider that doesn't _work_ in non US countries. That's not good.
No, you're just uneducated on the matter, private transactions exist bu using zero knowledge proofs.
https://github.com/EYBlockchain/nightfall_3
> Heck, even Venmo has protections against that.
One is an open system where public transactions need much more sophisticated cryptography to be private while remaining auditable. The other is a proprietary closed system. They are not the same.
Not with Monero.
Another leader but an order of magnitude less known is Andre Cronje from Fantom. It worths a read (so much transparency in a crypto company is unusual): https://andrecronje.medium.com/fantom-an-inside-financial-pe...
Vitalik and the Ethereum Foundation are a dangerous point of centralization that at least expose it to risk of harsher regulation in the near future for years operating as an unregistered security. The SEC has already hinted at this, while the CFTC has indicated that only bitcoin is likely to be regulated as a commodity.
Beyond the governmental risk of Ethereum having a clear head with a throat to choke, there's the simple "hit by a bus" risk. Vitalik is just a single human, and his unexpected death could lead to a massive collapse of confidence from both investors and developers who have other options. It wouldn't completely die with him, but it would be a major setback, because the cult of Vitalik is a not insignificant part of Ethereum.
I think any token that gains enough prominence in the market is going to eventually fall under government purview. Why? Because when financial crime happens, victims want the government to go after the criminals and recover their lost funds. Crypto fans can't have it both ways: if their goal is to create a financial system that lives entirely outside of government control, then they shouldn't reasonably rely on the government to go after the criminals bringing the entire crypto space down.
The reason that the government winds up stepping in is because the chaos and instability created by this completely unregulated side-chain financial system winds up threatening the Federally backed system as well. Market contagion is real and collapses in one sector or market often reverberate across the entire system.
We're seeing it happen in banking right now: a bunch of banks made small business loans to miners that are now underwater because the price of crypto tanked and the GPU market cooled, so their revenue and equipment value has tanked at the same time.
Also, the CFTC chair actually indicated that both BTC and ETH are commodities: https://cryptopotato.com/cftc-chair-reiterates-bitcoin-and-e...
That spec is drafted online in the open and discussed in weekly calls. The Ethereum Foundation is similar to the W3C in that they help co-ordinate the development of it.
We've digitized almost everything, doing so with currency makes sense.
But the benefits of digitization are normally that it offers something better, generally higher scale, lower cost, easier use, less hassle, faster, better analytics, or other benefits over it's analog version.
The truth is, crypto hasn't done so yet, so the tech just isn't there quite yet.
There are some benefits over analog, mostly anonymity and lesser scrutiny. And I guess you could include investment bubble as a weird benefit right now. Maybe also easy to use for scams and Ponzi schemes.
The thing is, those on their own aren't able to attract a large user base, it'll attract people who specifically want these properties, which is not most people.
Eventually, I hope the tech improves, and when that happens and digital currency is truly cheaper and more convenient to use, while retaining all the benefit of analog currencies, like decentralization, point to point transactions, anonymity, etc. And also maybe adding a global non government tied currency to the mix. That's when I think it'll truly be impactful and you'll see crypto adopted by everyone.
> The truth is, crypto hasn't done so yet, so the tech just isn't there quite yet.
How do you know this BTW? What are your criterias? If you're considering integration of money, the way your bank issues you a debit/credit card, and allows you to pay at point of sale throughout the world, you're talking about something else: integration. This takes a lot of time and money.
If you're talking about running a central bank that's covering the entire world, is easy to interoperate with (anyone can connect to the network and use it), is easy to build on top with (via smart contracts), and costs an infinitely smaller percentage of what it costs to run the financial world today to run? Then I would say that Ethereum and other state-of-the-art blockchains are already winning.
The issue is that if someone doesn't work in the financial world, their metrics are not good to understand how to judge and compare different financial backbones.
1) Privacy preserving
2) Scaleable (to billions of transactions per second)
3) Permissionless (global and free from government interference)
4) Stable (can function as a unit of account, not an investment vehicle)
The last one seems like the hardest because it's not just an engineering problem, it's also a political problem.
Amazing, they are an OG of the first wave of ICO token..good to see them still operating.
I've stayed out of it the last few years and just maintained a high view of the market.
It seemed obvious to me this was all going to blow up, sad about BlockFi but once I saw them ink the FTX deal I knew they were done.
Too soon for that play... The story of Crypto!
the divergence between investment and expectation and reality is exactly as great as critics assert,
and that it is indeed entirely the energy and momentum of greed and grift that keeps this from collapsing back to its natural state,
one I was close to prior to the grift, when the technological challenges and approaches were collectively known as "the decentralized internet" and there was not dirty, funny, fake, and stolen money fueling a narcissistic crime carnival.
[1] https://techcrunch.com/2022/09/15/ethereum-switches-to-proof...
Definitely a big leap forward in terms of reducing energy use.
[1] https://eips.ethereum.org/EIPS/eip-4895
[2] https://fortune.com/crypto/2022/12/01/when-will-ethereum-sta...
https://cointelegraph.com/news/ether-staking-withdrawal-sche...
Perhaps I'm wrong and it's all been sorted out now. As a die-hard crypto sceptic I'm not always the best informed, but I am happy that the energy usage has been addressed.
https://web-assets.bcg.com/1e/a2/5b5f2b7e42dfad2cb3113a29122...
Recognition of on-chain tokenization by monetary authorities: The Monetary Authority of Singapore (MAS)22 recently launched Project Guardian, a blockchain-based asset tokenization pilot, in collaboration with financial institutions like JP Morgan Chase, DBS Bank and Marketnode (SGX joint venture for bonds). The project will involve MAS investigating DeFi applications in wholesale funding markets by creating a liquidity pool of tokenized bonds and deposits to execute borrowing and lending on a public blockchain- based network. In wholesale banking activities, DBS and JP Morgan have both developed digital assets and blockchain technology. Lessons from this project would serve as foundation for informing policy markets on the regulatory guardrails required to use DeFi while also limiting its risks.
(quote ends)
https://medium.com/humanizing-the-singularity/at-the-turning...
Money is also the thing that will continue to be problematic for Ethereum going forward. Two technical problems drive this:
1. Scalability issues related to a very large block chain size and the associated difficulty in bringing up and running a full node.
2. The transition from proof-of-work to proof-of-stake is driving the convergence of validators and exchanges.
(1) drives individuals increasingly into the arms of gatekeepers to tell them what's "on the block chain" rather than directly participating on the network. (2) degrades what little censorship resistance Ethereum may have once had.
This is a problem of 2 parts: Transaction scalability & Storage scalability.
Transaction scalability's currently being resolved with various optimistic & zk-based rollup solutions, with the latter rolling out next year (zkSync 2.0, Scroll, & Polygon Zero & Miden) and the former already being improved upon & decentralized (Optimism & Arbitrum). There are still guardrails in place, as they're still being developed/improved on.
https://l2beat.com/scaling/risk
Storage scalability's a different issue that's also being worked on via data availability (DA) sampling, whereby the use of erasure codes & random sampling allows for data to be split into chunks & distributed amongst the network. With this system, every node doesn't need to hold onto all of the data: The whole network only needs to provide at least 51-99% (depending on the erasure code used) of the chunks to reconstruct the block, verify, & republish the block for everyone else.
By doing so, the average case for a node is reduced from "store all data" to "store 1/n of all data", with N being the number of data shards for the entire network.
Another way that's being worked on is the creation of Validium rollups, wherein the data is stored off-chain but it can still be proven via proofs published on-chain. It's not as secure as a fully on-chain rollup, but in return, the rollup consumes significantly less gas.
https://twitter.com/VitalikButerin/status/158866978247136870...
https://pbs.twimg.com/media/FgwVhUjaAAEx_Bb?format=jpg&name=...
This removes one major objection people have to crypto (it doesn't necessarily bake the planet anymore) but still leaves a network that performs like a "TRS-80 with a coin slot attached".
None of the things he has worked on are any good so far. Objectively nobody actually uses this stuff. My definition: nobody would choose this stuff at arms length from a financial interest in pretending it is the correct technological + business choice.
Spoken with a privilege of a first-country citizen with a working banking system. I personally know dozens of people who use crypto for their main purpose: to transact. Without it, they wouldn't have been able to earn their living or have any access to their money.
Your first approach should be a Wise multi-currency account.
Where Wise doesn't work the only thing that makes any sense are stablecoins from a proper issuer, like USDC (definitely not USDT). These are of course issued and controlled by centralized entities, making them antithetical to the very principles of crypto. They may as well be private scrip CBDCs.
Any decentralized/floating-rate coins are utter garbage for folks without access to meaningful banking systems in so-called third-world countries due to the volatility, embedded systemic leverage, high fees and potential long transaction times. These folks are the least able to stomach the 90% drawdowns (and 100% rug-pulls) we've seen market-wide. Frankly, I think the Turkish Lira has outperformed every major cryptocurrency for the last year.
What these people need are actual privacy-preserving CBDCs, of which there are exactly zero in the market.
Please put away the faux privilege defense. Folks of any level of privilege are able to comment meaningfully on the fitness of a technical system for purpose. Allow their arguments to stand on their own merits.
> Your first approach should be a Wise multi-currency account.
Excellent example; Wise is not available for account setup in the vast majority of developing countries, so if that's your solution it's already a failure. But why? For the most part it seems to come down to banking and currency regulations, which is exactly what cryptocurrency (at least Bitcoin) was designed to circumvent. I'm not even talking about countries that are essentially kleptocracies and have moulded their regulations to fit that structure, or remittances that have become such a large industry they practically power the GDP of a number of extremely poor countries.
> Any decentralized/floating-rate coins are utter garbage for folks without access to meaningful banking systems in so-called third-world countries due to the volatility, embedded systemic leverage, high fees and potential long transaction times.
I'm not sure this argument still holds with all the defi options today, but if this is an improvement on the status quo I guarantee people in third world countries will use it in spite of its deficiencies. A central bank that throttles access to alternative currency options will practically shut down the use of existing banking infrastructure, whether it's good or not.
Do you have a source for this? The closest thing I can find is this list of countries where it isn't allowed [0], which includes several developing countries but certainly not the vast majority of them.
[0] https://wise.com/help/articles/2978049/which-countries-can-i...
I was ranking options from worst to best. Best would be something like Wise. Second-best would be a stable coin from an issuer that isn't an outright fraud. And last would be any floating-rate coin.
Last year Bitcoin literally hit transaction fees of 20% of the GDP per capita of the worst-off countries and then fell 75% in value. I wouldn't wish a system like that on my worst enemies let alone of people I claim to be trying to help. It was massively outperformed by the Lira. I can't even find one that wasn't outperformed by the Lira. It may have been designed to meet this need but it utterly failed by any measure.
USDC is a strictly better option. And better than that would be a USDC like system that preserves privacy issued by a central bank.
> I'm not sure this argument still holds with all the defi options today.
Literally 10% of the entire TVL of DeFi was lost last year to hacks and shows somehow no sign of slowing down.
The real privilege is believing that poor folks are as risk tolerant as you are in a first-world country and that this is somehow a better solution than a nice home-grown payment network like M-PESA.
It’s like a cocaine-powered ruined fresco of the financial system.
How much has crypto grown in Nigeria? Is it possible that the migration to crypto / loss of faith in the local currency in lieu of USD is what’s actually behind the collapse vs government policies themselves?
I've worked with contractors based in Brazil, Turkey, and other countries likely categorized as "developing" and the payment process doesn't look any different than when I work with international contractors in places like Germany.
Many of them use Wise (formerly TransferWise) and looking at the pricing for Nigeria it looks completely reasonable - sending money has a 0.41% fee and receiving it is free. This fee includes reasonable things like a website non-crypto enthusiasts can actually use, customer support, fraud protections, etc. For countries with unstable currencies, massive inflation, etc Wise allows you to hold it in over 50 fiat currencies (including USD).
Given that I've had an interest in crypto for many years at this point I've seen online descriptions like yours so I've asked the contractors I've worked with "Why not crypto?". They all tell the same story - that services like Wise are perfectly usable and with extremely reasonable pricing all things considered. Wise even provides the sending of invoices that I (as the client) receive via e-mail and can pay in a few clicks. The most important thing to people is actually getting paid and it's a well known fact that reducing friction around payments is the best thing you can do (I've been a contractor as well).
Note this is technical/development contract work. I can't imagine people in non-technical fields getting an invoice asking for payment in crypto stablecoin and them spending the time, energy, and resources to wander through that maze to pay a contractor, service, etc instead of running their business. Frankly I'd use a different contractor and I'm very crypto literate.
As you pointed out, not many employers are willing to pay directly in crypto, that's why a lot of contractors - myself included - are willing to use platforms like Payoneer, Wise, even Paypal if there is no other option.
The missing part of the story here is how contractors in a developing country with currency controls, high inflation, poor banking infrastructure get the money -out- of those platforms. Most of the time you just cannot do it legally, so you end up "selling" your Wise/Payoneer/Paypal balance for the equivalent in the local currency. This is usually against their ToS and which can result in your account getting banned, losing access to your money (that's why it's advised to -not- leave any significant amount of money on these kind of platforms).
With crypto I also need to deal with black markets (which are always growing down here) and some business are starting to accept crypto directly (mostly tech-related busines). But, unlike these platforms, I actually have control over my money (it cannot be "confiscated" by my wallet unlike my Wise balance), fees are usually lower (ex. Payoneer results in a ~3.5% fee, Paypal ~10%, Wise ~1%, while in crypto - lets say BUSD - fees are mostly flat at around 1/2 USD at most), and market liquidity is higher (it's -a lot- easier to sell USDT/USDC/BUSD/DAI than your Paypal balance).
Today if you Google the ‘official’ exchange rate for the dollar to Naira, you’ll see a ~445 Naira to 1 USD. As an individual there isn’t anywhere I can buy dollar at this rate, because it is exclusive to banks, select licensed money operators & politically connected high-net worth individuals. However money services like Wise convert my dollar at this official rate. Considering that the parallel market rate today is 745 naira to 1USD, I will be losing a huge amount of money by receiving money with Wise. The only workaround will be to get a virtual account on Wise & send USD to a local money merchant, who then exchanged at this parallel rate. But such virtual accounts aren’t accessible to people in Nigeria, due to regulation. [1] For context, the Central bank of Nigeria released a circular a while back explicitly stating Wise as a non-licensed entity.
There are other options apart from Wise. But the trade off is loss of money, as compared to what’s available on the parallel/black market.
[1] https://www.reuters.com/article/nigeria-money-idAFL1N2IX1BM
Genuinely curious.
Because these crypto exchanges are P2P based (e.g. Binance P2P), I can exchange my USDC for Naira that's deposited directly to my account. Because these are individuals, it's hard for the government to isolate bank transfers that are made for the purpose of crypto. For caution, people making such transfers tell each other not to add a description with a crypto-related word to these transactions.
Adoption for real day-to-day payments in low-volumes (like paying for groceries at a shop) is quite low, but high among high-volume merchants who import/export goods and are in dire need of USD liquidity and ease of payment across countries. Tough Central Bank policies give them an incentive to find the best rates & transact with lesser barriers. There are no official figures/solid data, because all that activity happens in informal channels (like P2P).
1. Are you actually transacting with others directly in USDC/USDT? I.e. are there shops where you actually buy things through your crypto wallet, or are you converting to USD/Naira and using that?
2. Are you self-hosting that wallet, or is it actually an account on some exchange?
Either way, I doubt that working remotely as an employee of US companies is a very common way of life in your country, so I don't think this supports the GP's point as much as it appears.
2. I use an exchange to receive USDC, which mean I don’t need to worry about gas fees while self hosting
To get Naira, I convert from the exchange in a P2P marketplace where I can get competitive black market rates from other individuals.
Why did you use the word objectively here? It seems like people objectively do use this stuff, though you possibly don't think that they're actually getting value out of it. Ethereum likely has more users than anything either of us will ever build.
It would be a high bar for a currency whose purpose is to facilitate dark or illicit transactions, though.
Unfortunately the valuations seem to have been predicated on the former use case, not the latter
Stay tuned for major central banks deploying CDBCs on ethereum. Swiss, EU and Singapore are launching a pilot program.
Objectively this is trivial to disprove.
https://decrypt.co/114665/uniswap-overtakes-coinbase-second-...
1. This is an outdated article citing a single point in time
2. The source tweet is comparing Uniswap's volume on all x:ETH pairs against only ETHUSDT volume on centralized exchanges. [0]
3. The date of comparison is an outlier day - when FTX's "hacker" decided to move huge sums of tokens uneconomically on chain.
4. Volume across CEXs have collapsed, a sign of the ecosystem's weakness, not strength.
5. Even then, Uniswap doesn't hold a candle to Binance. ($600m volume vs $10b volume, past 24 hours on spot pairs)
6. Liquidity is horrible right now. If you try to execute a trade of reasonable size on a non-major coin you will face a lot of slippage.
[0]: The tweeter, Alex Svanevik is the founder of Nansen, a chain analytics company. It doesn't make sense that he would make such a simple mistake unless he was deliberately trying to bullpost.
See for yourself:
https://www.coingecko.com/en/exchanges/uniswap#statistics
Reason I ask is comments like this are objectively wrong yet continue to be the norm here.
I actually don't know of any robust alternatives in the US.
SNS / ENS etc aren't identity, they're naming. Much like DNS, many names correspond to someone different than what most people would associate with that name.
Disclaimer: I work in the identity so may be biased.
The same can happen with nailer.eth (you authenticate via signing a message).
> When I log on to Blockscan chat, I sign in with Ethereum. This means that I am immediately visible as vitalik.eth (my ENS name) to anyone I chat with. In the future, to fight spam, Blockscan chat could "verify" accounts by looking at on-chain activity or POAPs.
Imagine that same idea, but with traditional domains and support on major platforms. I've wanted domain validated/verified identities for as long as I can remember. Imagine being able to use your domain name as a handle, with instant reputation/recognition, on all major platforms:
twitter.com/@example.net
youtube.com/@example.net
Yeah, no. Literally none of these benefit from blockchains. Moreover, blockchains make many of these things worse. This was already described eloquently, and with examples, 4 years ago: https://medium.com/@kaistinchcombe/decentralized-and-trustle... Why are these crypto maximalists still pretending it's a thing?
Because they don't agree with those conclusions.
Trusting software is better than trusting humans because if the software is immutable you only have to trust it once! I don't know why so many people don't get this. When you trust human systems you have to keep trusting them forever, because humans are fickle and could decide to screw you at any time.
Like most crypto-maximalists you've missed the point, the article, the trees, the forest, and the entire planet Earth
> Trusting software is better than trusting humans because if the software is immutable you only have to trust it once!
No. You don't trust it only once. You trust it every time you use it. And software doesn't magically appear, or grow on trees. It's created by the people who "are fickle and decide to screw you at any time".
It is very clearly described in the article that you missed. Technology does not make human systems obsolete.
What I have noticed is, when crypto has one of its periodic disasters (e.g. collapse of FTX) the comments are generally highly sceptical of the technology, in keeping with the general tone of HN. But occasionally 'good news' articles like this one get boosted and then the top comments are of notably different tone. For example, comments praising Vitalik, a presumed billionaire with unknown motives, dubious achievements and a unspeakably enormous environmental toll against his name, would be very unusual in any other thread.
But I upvote what I find interesting, much like you or any other user would upvote what you find interesting. Obviously, there are many people on HN who don't find crypto-related topics interesting (or who only enjoy submissions about crypto-related businesses and projects blowing up, of which there is no shortage).
I don't think there is a conspiracy here; if anything, I think you underestimate the number of developers who are primarily interested in the technical aspects of blockchain tech.
Also, the things Vitalik posts about are often interesting even to people who generally dislike or aren't interested in cryptocurrency.
BTC = security, decentralization
ETH PoW = security, decentralization
ETH PoS = security, performance
It also applies to real world tech. For example, Visa is performance and security.
This means if Bitcoin or ETH ever wants to process as many transactions as Visa, it'll slowly morph into a centralized Oracle database.
For instance, with LN you have to be online to secure your funds, otherwise you might lose them.
L2 only inherits the security of L1 when it settles, which by definition is not that often (that's the whole point!).
The "whole point" of L2 is to reduce the amount of resources used to settle its transactions on L1. Some L2s, like Lightning Network, achieve this by settling infrequently. But other L2s, like roll-ups, achieve it by batching transactions in clever ways so that less L1 resources are used on a per-transaction basis.
It could write to L1 immediately, but your writes can still not be trusted or right.
https://www.paradigm.xyz/2021/01/almost-everything-you-need-...
Look into Optimism and Arbitrum for current technology, or zkSync, Starknet, Polygon zkEVM for next gen L2's coming soon. There's a big list of all the current L2's and their tradeoffs at https://l2beat.com
I don't understand what we've gained here.
Besides that, your breakdown has other problems:
- None of these three criteria you presented are binary attributes. How decentralized and secure are BTC vs ETH? How performant is ETH vs BTC?
- One could easily argue that PoS is more decentralized than BTC ever will. The capital and resources to start a viable node on Ethereum is a lot lower than it is to get a sustaninable/profitable BTC miner.
ETH is centralized — power lies with the large coin holders.
That is not true. This shows a terrible misunderstanding of how PoS works.
Stakers are only rewarded in proportion to their stake. "Power" in PoS comes from being a validator node, which requires the minimum stake of 32 ETH. Having more ETH on a node does not give them any power. Yeah, whales could try to create many nodes, but they would need 66% of the nodes to even consider the possibility of blocking a transaction or making a double spend.
Because that would be news to me and if so I would be misunderstanding things.
But my bet is that you are dismissing the threat of whales splitting their holdings to maximize their influence. Don’t know why though.
Yes, that's exactly what I am saying. Not because of "crypto-magic", but because that is not how PoS works. Stakers have no control over the protocol. Their stake only gives them the benefit of validating and producing blocks and collecting rewards for it.
> But my bet is that you are dismissing the threat of whales splitting their holdings to maximize their influence. Don’t know why though.
You mean "joining their holdings", in order to achieve 2/3 of the staked capital?
If so, the threat is possible but incredibly stupid. There is more than 10M Ether locked in the staking contract. This means that they would have to control two-thirds of the tokens (that they do not have, which means that they will have to go to the market and shoot the price up). And even if they did get to collectively have that much, they would be willing to risk losing it all on an attack that (a) could be easily detected (b) would have to entail a single profitable operation that is more profitable than the current stake they are holding and (c) would lead to people losing faith in the ecosystem and consequently plunging the value of the token they have at stake and, worst of all, (d) if needed be, could still be remedied with an irregular state change like the DAO hack was.
IOW, even though such an attack is theoretically possible, in practice "malicious whales" could do nothing but bring a major inconvenience to the thousands of the developers, and they would have to spend ~$7B for it.
It costs currently over $10B to pull off this attack, and the rest of the network can do a fork and burn all your tokens as soon as they notice. So game theory wise it makes no sense.
Not forever.
> They can’t block certain protocol updates by continuing to use old/custom clients?
They could try, but if that was clearly against the interests of the rest of the community, the minority could counteract by adopting a client that forked the chain to a state where the majority holders are slashed.
> because the stake amount remained stable while validator count increased, it improved to 27 in Q2 and 31 in Q3. The improvement continues to put Solana above the industry average compared to other L1 networks.
https://messari.io/report/state-of-solana-q3-2022
Way more at:
https://youtu.be/5NDs3Il2J3Q?t=303
Re: Visa, Sol's hit peaks above Visa's global average of 7,500 TPS recently too.
Not boosting Sol, but if you're going to build, you should seriously consider it.
I’m happy to discuss reliability but it doesn’t appear we’re having a conversation.
> On 30 April and 1 May, 2022, Solana experienced major outages due to being taken offline by bots.[18] On 1 June, 2022 Solana reportedly[19] suffered another outage due to a bug in how the blockchain processes offline transactions. On 1 October, 2022, the Solana network went down for 6 hours due to a single misconfigured node.
In a properly decentralized system, how does 1 misconfigured node take down the entire system? That looks like a single point of failure to me, something decentralized systems aren’t supposed to have. Can you elaborate how your distinguishing reliability and centralization in the context of single node failures?
[1]: https://en.m.wikipedia.org/wiki/Solana_(blockchain_platform)
https://solana.com/news/09-30-22-solana-mainnet-beta-outage-...
And the fix: https://github.com/solana-labs/solana/pull/28172
That’s how software works. Things break. They particularly break at scale. Nobody’s done this before. If Eth was as busy it would break too.
A network falling over because of high usage or (in this case) one validator had a misconfigured node is extremely bad.
In reality, Solana is a highly centralized blockchain. Solana has zero protocol specs (the code is the spec), one production client, one main development organization (Solana Labs), limited exposure to the academic research community, and the entire network only runs in data centers due to extreme hardware & bandwidth requirements.
If we wanted to boil down decentralization into a narrow metric (we shouldn't want this, but if we did), that metric might be "how many guns to how many heads to force an invalid state transition?" And Solana scores very poorly on this metric.
From a certain angle, it could almost look as if said VCs were trying to add legitimacy to their portfolio investments by colluding to make Solana seem busier and safer than it really is...
> BTC = security, decentralization
The brilliant thing is that you can stack. In other words, why would I want every transaction to be on the blockchain? I could just as easily use one of the more than 50 2nd-layer "Lightning" wallets and seldom touch the layer 1 blockchain.
So with very little risk you get:
BTC = security, performance, decentralization.
I think some of the recent events around FTX and similar are exactly why you would want on-chain records, fees or not. Actors in this space are (imo) not fully trustworthy.
How does the second layer handle this?
Layer 2 = security, performance
Layer 1 = security, decentralization
Just because you added a horse to a cart doesn't make the cart neigh nor the horse to have wheels.
It doesn't have that much of a performance advantage over PoW, but that's what rollups and danksharding are for. Combined, they should support 100K tx/sec, while inheriting base-layer security properties.
The current crypto market proves one thing --- decentralization is a fantasy, a myth that has yet to be successfully implemented.
Remember the golden rule: Whoever has the gold makes the rules. In the crypto market, the rulers are the *centralized* exchanges.
Centralized exchanges (CEX) have tremendous influence and control over the crypto market just like a central bank. They achieve this by the sheer weight of their trading volume --- and their unrestricted ability to mint stable coins and use them to manipulate the market as they see fit --- just like a central bank with one big difference --- without any transparency or oversight.
The more things change, the more they stay the same. In real world practice, even so-called decentralized peer to peer exchanges still follow the trading prices set by the centralized exchanges.
Don't take my word for it --- just try buying or selling coins on a DEX for a price that differs significantly from the current CEX rate. It may be possible in theory but in reality, it's highly unlikely. Most reasonable people won't surrender value just for the sake of decentralization.
By going all crypto, you're rejecting fiat central bankers with some transparency and oversight in favor of crypto central bankers who have none.
That's the idea but follow along with me now --- what if one of these "people" trading is the CEX itself. And unlike most "people", what if they have an unlimited supply of money (stable coins they can just mint at will) to trade with.
This would be like combining the NY Stock Exchange with the Federal Reserve --- no real conflict of interest there, right?
As you still convinced the CEXs aren't setting or manipulating or influencing the price that you pay?
Really? What will stop it? Regulation maybe?
Remember --- they have an *unlimited* supply of money --- they just print/mint the stuff at will. Nothing currently in place to stop them.
Over the course of 8 years, Tether has gone from $0 to over $65 trillion --- all minted out of recycled electrons. $65 trillion is a lot of marketplace influence --- and there is plenty more where that came from.
And Tether doesn't have an unlimited supply of money. Tether allows USDT to be redeemed for USD. If Tether was minting unbacked USDT, then Tether would eventually be shown to be insolvent.
Second, if you're manipulating the price upward, it becomes more and more expensive to maintain the price. Like let's say Tether issued USDT to pump the price of BTC. If they wanted to maintain that long-term, they'd need to print more and more USDT to maintain the price, which gets us back to insolvency.
Third, the CEX would need a reason to pump the price. Usually, people pump prices to execute a "pump and dump" where low-value assets are dumped on unsuspecting consumers at a high price. It's possible, of course, but executing a pump and dump scheme is a lot of work and very risky for very little reward with such expensive, highly traded asset like BTC.
Tether's has been shown to be technically insolvent every time they've been forced to open their books.
> Second, if you're manipulating the price upward, it becomes more and more expensive to maintain the price. Like let's say Tether issued USDT to pump the price of BTC. If they wanted to maintain that long-term, they'd need to print more and more USDT to maintain the price, which gets us back to insolvency.
This is literally what they seemed to have done though. Tether's market cap hovered around a few billion for a few years and then suddenly shot up to almost 80B.
It is only allowed for verified customers --- those with $100,000 or more to redeem. This severely limits any exposure to a bank run.
If Tether was minting unbacked USDT, then Tether would eventually be shown to be insolvent.
By whom? Lots of people think it's always been insolvent. Can you prove it's not?
executing a pump and dump scheme is a lot of work and very risky for very little reward with such expensive, highly traded asset like BTC.
When you have control and influence over both the pump and the dump, it's easy. And price is pretty irrelevant when you can just mint money and "loan" it to select others (aka "whales") so they can participate.
https://www.wsj.com/articles/rising-tether-loans-add-risk-to...
The company behind the tether stablecoin has increasingly been lending its
own coins to customers rather than selling them for hard currency upfront.Whether or not Tether is a fraud has nothing to do with the price match on a CEX and DEX. The price on CEXs and DEXs will always match due to arbitrage.
(This isn't a statement on whether or not Tether is a fraud. I'm just pointing out that the price on a CEX and DEX will always match with sufficient liquidity in the market).
Agreed.
The point is --- any market manipulation will affect DEX the same as CEX. People often erroneously point to DEX as a way to avoid CEX influence and control. It's not.
It'll get really expensive, and you'll be paying a lot to the arbitragers
No they wouldn't.
All they would have to do is "loan" tethers to their "whale" friends with the understanding that they will invest it in bitcoin and hold until they are told to sell. See article from wsj referenced below.
It's easy to time the market when you're manipulating the timing.
you'll be paying a lot to the arbitragers
Exchanges don't pay arbitragers anything. People who sell their crypto too cheap do.
What stable coins do Coinbase or Kraken mint?
Kraken doesn't have one that I am aware of.
Is this supposed to make them immune to external market manipulation and influence?
Does Kraken ever "front run" customer orders? How can we verify your answer?
I don't know him personally but from what I have seen - Vitalik has a lot of great qualities as a person (even outside of crypto, he makes good points on society), and when he does share his thoughts on crypto, it comes off as non-invasive, just ideas and plans that make sense and could be implemented in a way that doesn't push people around.
Who else in crypto does this?
In the land of the blind, the one-eyed man is King
Has this got better with PoS - I don't know but would be interested in hearing?
Also, even as someone who’s dabbled in the space and found it lacking in many areas, I can’t say with any degree of certainty that there’s no future in his particular flavor of the blockchain technology.
But your point stands: he may well go on to do much better things.
If you think I’m trying to hide Elon Musk’s failures, I’m disappointed.
There are numerous message boards where Musk is presented as either an unassailable genius whose every word is gold, or an evil Apartheid profiteer who lucked and bullied his way into any success.
I expect slightly more nuanced takes from this board. You evidently do not.
- geolocation (GPS, GLONASS, etc.) - communications (Starlink, Iridium, etc.) - earth sensing (weather, climate, etc.)
All of these are multibillion $ activities that benefit from lowered launch costs.
1. It has been useful so far as a challenge for technological development that finds other uses on the ground, and this is certainly not about to change;
2. It has been useful so far, in direct applications, and there are still direct uses to be covered (dangerous asteroid avoidance, as an example);
3. It tackles the SPOF we have as a species: living on a single planet;
But the more important one, for me, is one that is contestable. Space faring provides humans with an aspirational goal. Without a long term goal, we are reduced to either an hedonist life, or a never-ending struggle against entropy. We are better, as individuals and as a society, when there is something to long for in the horizon.
20 Inventions We Wouldn't Have Without Space Travel (actual post from NASA themselves): https://www.jpl.nasa.gov/infographics/20-inventions-we-would...
The self-evidence of such is unknown to me.
Do you think it's more likely that Vitalik is mistaken that crypto is obviously useful for humanity, or that he knows it isn't and doesn't care, or that your assessment of crypto being useless is incorrect?
Go back through HN threads on the countless crypto failures and frauds and count how many times some variation of “I don’t understand, they were so smart!” comes up. Or the threads leading up to those failures where the defenders invariably trot out “there are a lot of smart people involved in this, you seriously think you know better?”
Vitalik has demonstrated an exhaustively thoughtful approach to building technology, is exceptionally humble, and seems to deeply contemplate the fifth-order implications of decisions being made.
It seems absurd to me that people think someone like this has not sufficiently thought through the societal value of their life's work.
Is this a friend of yours? Because you have more confidence in him than I have with people I know personally. Sounds parasocial.
If only! Given you've tied your identity to pessimism, which I assume implied you see it as a virtue, I think you might be somewhat more inclined to misanthropy than me. And that's ok. :)
I’m guessing there’s an intentional link with https://en.m.wikipedia.org/wiki/Pessary (from Latin Pessarium) as well as the computing term pessimal (same root as pessimism, from French pessimisme, from Latin pessimus “worst”) and optimizer.
He has a dangerous combination of self-delusion + intelligence
But in any case, there’s a difference between good judgement and intellect, and a difference between an idea and its execution. If he’s truly puzzled through Ethereum’s usefulness, he hasn’t offered an argument that’s convincing enough to me. However, I can still admire the thought and skill that went into its implementation.
It is of course entirely possible that I’m thoroughly mistaken.
I find it funny that you think this is an answerable or useful question, rather than an appeal to authority.
As the sibling comment says it, succinctly: "“I am smart in one area so I am therefore smart in everything” is the original sin of crypto"
Vitalik is very superficially smart in many areas. Refuting his oftentimes pseudo intellectual takes on what's happening takes too much time because "but he sounds so smart".
In this latest one the most obvious one is the entire "Hybrid applications" section. Which never worked, doesn't work and will never work the way he pretends blockchains will enable them to work. His statement "Voting is an excellent example" is patently, provably bullshit [1], but "he's smart so he's right" is hard to beat. Same goes for everything else he throws in there.
[1] To quote, not in full:
--- start quote ---
the purported advantages for a voting system in a weakly-governed country. “Keep your voting records in a tamper-proof repository not owned by anyone” sounds right — yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted? Or will he rely on the mobile app of a trusted third party...
...Instead of relying on trust or regulation, in the blockchain world, individuals are on-purpose responsible for their own security precautions. And if the software they use is malicious or buggy, they should have read the software more carefully.
...
Blockchain systems do not magically make the data in them accurate or the people entering the data trustworthy, they merely enable you to audit whether it has been tampered with. A person who sprayed pesticides on a mango can still enter onto a blockchain system that the mangoes were organic. A corrupt government can create a blockchain system to count the votes and just allocate an extra million addresses to their cronies.
https://medium.com/@kaistinchcombe/decentralized-and-trustle...
--- end quote ---
For government registries see this discussion about land registries from two years ago: https://news.ycombinator.com/item?id=27212564
And so on.
Andreas Antonopoulos, Polynya, Erik Voorhees, Chris Burniske, Kevin Owocki, Chris Dixon
https://en.wikipedia.org/wiki/Privatization_in_Russia#Vouche...
To say he is more interested in decentralized technology than money is laughable given his complete inability to engage in any sort of healthy discussion about it. He is bad for the space.
In case the above doesn't work: https://www.youtube.com/watch?v=lMHaQGB1Wdc
I posted a youtube.com link as well.
They are the same picture.
By May 2017, the nonprofit organization (Enterprise Ethereum Alliance) had 116 enterprise members, including ConsenSys, CME Group, Cornell University's research group, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada. By July 2017, there were over 150 members in the alliance, including MasterCard, Cisco Systems, Sberbank, and Scotiabank.
(Personally though I don't see anything wrong with corporations using the technology.)
I can make a “Linux Enterprise Alliance” with those companies and it wouldn’t necessarily have any influence on Linux or Linus.
I hope everyone else also shares this belief, this is how we create belief systems that outlive their subjects and may go on to float freely among platonic solids and spherical cows in vacuum, forever.
And ethereum is very much new. While I personally think it will exist for a little longer, because there is now real money behind it, I think you are right on that generic point ( if I understood your argument correctly ).
It's apt that you bring up another leader, whose ostensible independence from big-money-driven agendas went up in smoke with his initial refusal, then embarrassed acceptance of the CoC that was peremptorily imposed on the Linux project.
Ethereum and the crypto space are at a crossroads for sure. You have chains like Monero on the one side, many in the Ethereum community walking a tight rope trying to balance grassroots free software development with mass adoption, and on the opposite end of the spectrum you get stuff like Solana, the venture capital bro chain.
> I don't follow crypto almost at all
Well, that would explain it :).
There are tons of brilliant people working in the space. It is the most exciting frontier in tech with the greatest potential to positively impact humanity, imo.
That's a bold claim. So far, I haven't seen much sign of anything even remotely like "positive impact".
Here's one possible example: https://docs.klimadao.finance/blogs/carbon-faq
A few things:
- Contemplate why I made my rebuttal in the first place.
- Look up how many open source contributions either of these guys have made in the last 7 years.
- And when you're done, ask yourself, "What does code have to do with the argument at hand that I am being challenged with but incapable of comprehending?".
You can feel free to clearly express yourself at any point during this conversation. consider that insisting that people read your mind is why you are having this issue right now.
>- Look up how many open source contributions either of these guys have made in the last 7 years.
who cares? what does it have to do with anything. that was the question... you insist it is relevant but apparently cannot express why
>- And when you're done, ask yourself, "What does code have to do with the argument at hand that I am being challenged with but incapable of comprehending?".
You are hands-down the worst conversant I've chatted with here.
Mostly Everyone else is indeed some level of full of shit.
Ironically one common criticism Bitcoin hardcore fanatics have is that Antonopoulos is not a Bitcoin maximalist, he's Ethereum friendlyand wrote an entire book on that together with Gavin Wood.
1. Money. Post-merge transactions are now faster. bigger push towards on-chain transactions thanks to FTX. 3 types of stablecoins: centralized, DAO-governed, and governance-minimized.
2. DEFI: success today in prediction markets like Augur, Metaculus, Polymarket. Synthetic assets like replicating stocks. Glue layer to trade between assets.
3. The identity ecosystem: ENS, SIWE (Sign in With Ethereum), PoH (Proof of Humanity), POAPs (Proof of Attendance Protocol), SBTs. 3 main uses: Basic Auth, Attestations, Proof of personhood. Privacy is the biggest challenge.
4. DAOs. Broad term today referring to both governance structure (protecting against inside attacks) and implementation (protecting against outside attacks). Decentralization is for robustness, efficiency, interoperability. New governance mechanisms like quadratic voting, futarchy, liquid democracy can be valuable for both robustness and efficiency.
5. Hybrid apps: voting, govt registries, corporate accounting, supply chain apps, tracking access auth.
In conclusion: many new applications have limited use today due to limitations in tech. Blockchains don't scale and transactions are slow. Privacy issues will remain a hurdle. All solvable problems. Most important apps will be non-financial and not have a token which will make them slow to grow - but will bring lasting value to users.
Let us know when they have been solved.
Having been on the web since it went public, there has always been a disproportionate amount of prophetic messaging and discourse, not to mention advertising, focused on computers. More often than not, the predictions are wrong.
Of course, sometimes, perhaps most of the time, the discussion is "hype" and serves a commercial purpose. One can expect those spreading computer hype will keep trying even when it has a low success rate. The www is an inexpensive medium for advertising and spreading hype.
People in the rich, developed world don't need crypto - you won't find as many synthetic drugs at an insurance agents office, because the people there don't need them in their daily lives.
All this blockchain stuff didn’t solve any actual problem, we are still paying fees to a duopoly for basically all global payments
We really need something better, in Italy for example the gov removed sanctions for people not accepting credit cards, one reason being Visa fees, if there was an actual alternative we would use it
I wonder, though, if there’s an inevitable tradeoff between efficiency and decentralization? The credit card companies are highly centralized, but their services are so efficient and reliable that they’re practically invisible.
What I'm getting at here is the reality of the real world - fraud. Visa, MC, etc have had zero liability for fraudulent transactions since forever at this point. I understand that chargebacks can be an issue for sellers but the fact remains that most of the fraud in the space is by sellers, stolen cards/credentials, etc. Consumer fraud liability was initially legislated by the US and capped at $50 (max) way back in 1978. Consumers (who have significantly more exposure, numbers, political capital, sway, etc) have benefited from these protections for decades and they simply won't accept going back to the days of "sorry the merchant ripped you off, sorry your card/credentials/etc were stolen, etc - you're SOL, your money is gone, and you have no recourse". On twitter, crypto forums, etc (the only place to go when these realities hit with crypto) these victims get a very helpful "hope you learned your lesson"!
These costs are baked in to the merchant fees, transaction fees, etc. For merchants, the occasional chargeback (valid or not) is also baked into the "cost of doing business" just like all other forms of shrinkage (employee theft/fraud, shoplifting at physical locations, etc). Many of them (like Amazon, I believe) have terms that essentially say "Ok we're bound by law/Visa/MC/etc and you can do a chargeback but we have an internal process for these kinds of things and if you bring the hammer of a chargeback we'll ban you from our marketplace". The (potential) issues surrounding that approach are left for another discussion...
I'm not advocating for Visa, MC, etc and there absolutely are very real problems with them. However, this goes back to an observed issue with crypto - that the crypto ecosystem is running towards replacing our current imperfect system with one (that appears) to be even worse right out of the gates.
There are of course other issues that would still need to be addressed, like merchants sending fraudulent goods, but if we could build stuff to handle that on top of a foundation that's actually secure, we might be better off.
1. https://medium.com/bitcoinerrorlog/vitaliks-quantum-quest-9e...
2. https://twitter.com/adam3us/status/1273353652447608834
3. YT video: https://www.youtube.com/watch?v=DkUpZkeqhF4