Coinbase Launches Base
base.org
base.org
And each time, I've continued to wonder more or less indefinitely as... pretty much nothing useful comes out of it. Lots of scams, speculation, and investor money, but nothing I'd actually want to use.
The one I'm still most hopeful for is smart contracts. Maybe the only thing preventing people from building useful things on them has been high costs. Maybe all they really need is a widely-used, cheaper smart contract system like Base!
That said, I'm not terribly hopeful at this point.
BCH, the original version of Bitcoin is a Peer-to-Peer Digital Cash network, a replacement of government "fiat" currency.
There are two problems though:
1. For long-duration contracts, tying up that much capital is considered capital-inefficient by traditional financial system standards. It's tied up for a duration it could be making interest elsewhere, even if just the risk-free rate with T-bills or LIBOR. Conversely, it is very redundant and guarantees counterparty performance, there's no chance of a breach of contract.
2. Smart contracts that are settled by real-world data or events are subject to the oracle problem - you must trust both the data source, and its transmission onto the blockchain. If the oracle performing that function provides incorrect data, either accidentally or maliciously, it will cause the smart contract to settle incorrectly, and there's no recourse or claw back possible.
So smart contracts are not without their challenges, but they don't depend on real world law enforcement to guarantee settlement.
>it will cause the smart contract to settle incorrectly, and there's no recourse or claw back possible.
"Smart" contracts are subject to applicable contract law, and are susceptible to all normal causes for invalidating or reverting a contract under such law. Try telling a judge in a contract dispute case that code is law and they have no authority to rule on the contract, maybe they'll thank you for the laugh.
>but they don't depend on real world law enforcement to guarantee settlement.
You're missing the parent's point: smart contracts can't teleport objects to you, or compel people to perform services for you. If you pay for a good or service and it's not delivered or performed, or you believe it wasn't adequately delivered or performed in accordance with the contract terms, you would go to court to enforce the contract as with any other.
I will never understand why people believe these things have magic powers to alter the real world.
Smart contracts are by default anonymous. Good luck taking an anonymous counterparty to court. That's the reason why smart contracts must be fully- or over-collateralized, because you can't rely on courts and contract law to back you up. Even if it's legally applicable, the actual ability to apply it may be difficult or impossible.
> You're missing the parent's point: smart contracts can't teleport objects to you, or compel people to perform services for you. If you pay for a good or service and it's not delivered or performed, or you believe it wasn't adequately delivered or performed in accordance with the contract terms, you would go to court to enforce the contract as with any other.
No I'm not, that's why I included discussion of the oracle problem. If you don't understand how oracles coordinate real-world delivery of a good or service to on-chain payment, then you need to go read up on this stuff some more. (I'm not advocating for oracles, I'm generally a skeptic, but any discussion of blockchain DvP must include them)
Yes, you did. You're doing what blockchain enthusiasts always do, speak in abstract terms about how things should theoretically work, not how things actually operate in the real world. You lack even the most basic understanding of what contracts are or how they work.
This is just the latest iteration of the oddly-pervasive belief that the online world is another universe disconnected from normal reality, and therefore not subject to real-world law or power. People are always shocked to find that it isn't true.
There are certain things that can be more easily audited, verified or enforced on-chain. For example, payments could be automated (potentially based on verifiable data), or secured lending could happen programmatically.
At the end of the day, yes, you still want to have legal enforcement, i.e., if someone defrauds you on chain, that's still a crime and should be enforced, or if someone fails to deliver, you should still have a contract claim against them.
financial services is one is the largest industries in the country and world
it is a use case purely because there is insatiable demand of people with finances to service, which has extended to blockchains and smart contract platforms
Ideology over the consensus mechanism of transaction settlement isnt a factor for those making revenue by providing financial services
there are plenty of services without a token that work just fine, not everyone building things that are susceptible to arguments about ponzi schemes
I learned programming and love it to this day because it was something I could explore and learn for no money at all, only my shitty chromebook I figured out how to get linux on, and a lot of patience.
Even if everything else they say is true about it, it seems to be built around the assumption of having not-insignificant capital. It's a very strange "revolution" to me in this sense, much like the "OpenAI token fees are now our overlord" revolution that people are hyped about as well.
It seems as though products geared around some kind of digital asset would expect users to be buying and selling and therefore already prepared to have some kind of money.
Have you looked at IPFS pinning hosting costs? It's usually a multiple (between storage and bandwidth) of what you'd pay on S3 or similar. Even running your own node comes with so many operational challenges and consumes an INSANE amount of bandwidth and resources self-hosting for anything beyond a toy personal project gets prohibitive very quickly. The same cheap VPS that can do at least 1k TPS for static files with Nginx (or whatever) probably can't even launch go-ipfs (kubo).
So now not only are you (or your users) paying for every database transaction (on chain) your fundamental cost basis is a multiple of what it is today.
Just crossing my fingers that Web4's utopian innovation is the opposite of this: everything is free, "transactions" are obsolete, we can just share for fun, not profit. I'd be the annoying proselytizer for that internet at the drop of a hat.
[I assume you meant SPOFs]
Tongue-in-cheek, but unfortunately true.
OTOH, how are you going to remain trustless and scale to users who barely know the difference between an app, a file and a website?
Granting that category of users access to crypto markets has always been the keystone of Coinbase's business model.
More correctly, it would be *either efficient or trustless. The existence of a layer2 does not make layer 1 unusable. It provides options with tradeoffs.
Same exact point as with building coinbase: making the tech accessible to non-tech users.
99% of people on the planet wouldn't have known how to buy (even much less hold) BTC before the likes of Coinbase, Bitstamp, etc...
My gut feeling that for L2 ETH based-stuff, we drop to down to four nines.
https://en.wikipedia.org/wiki/High_availability#Percentage_c...
99% of people wouldn’t know how to buy BTC without coinbase.
99.99% of people wouldn’t know how to use L2 etherium without coinbase.
Example:
6% of urban adults don’t use the internet regularly. When we expand that to urban AND rural adults, that drops down to 10% who don’t use it.
Coinbase will support the Base chain in their exchange, thereby giving it some utility out of the gate.
One “transaction” on the ETH blockchain costs $X.
Therefore they are batching up 10 “transactions” at a time and executing them together as a single “transaction”. This way it only costs $(X*0.1) for each “transaction”.
Optimism has open-sourced their optimistic rollup stack which allows anyone to fork Optimism and create their own rollup. This is what Coinbase has done. So Coinbase will now have a rollup of their own where they will be responsible for the sequencer (batching transactions) and anyone can deploy EVM compatible applications, like all of the other Layer 2 rollups currently in production. So Uniswap for example may deploy to Base, which will allow Coinbase users to easily use cheap defi.
Coinbase will run a network which developers can use for storing game state (think in-game items), and the transactions that this network runs are regularly sent to Ethereum a snapshot and anyone can provide cryptographic proof if they see that Coinbase submitted invalid data and force the network to not accept that bad data (though that process probably not implemented yet and its unclear how the economics would work if Coinbase can't be financially punished for fraud like typical layer 2 validators).
This provides good security at the cost of decentralization, but you aren't held hostage by the centralized actor (Coinbase) like you'd be in a traditional centralized system.
This might mean that these games will have the ability to use each other's state and have any level of interoperability that each developer chooses, and we don't have to fully trust that Coinbase isn't cheating the users or devs.
Because this is a network that's secured by Ethereum, assets can also be moved from this network to the main Ethereum network if users want.
It's like riding the city bus when your you don't want to pay for gas for your car.
They have all the same middleman/trust/centralization issues as tradfi banks and anyone who tells you otherwise is lying.
Rolling up transactions makes the money movement on Ethereum cheaper.
They highlight 7 use cases to build on Base:
* dexs, nfts, bridges, stablecoins, anything
that sounds like more crypto for the sake of crypto, so not too terribly interesting to me personally yet.
* games
Nicely summarized by PretzelPirate: exchange things between games and cash out into ethereum or whatever
https://news.ycombinator.com/item?id=34913311
* lending
What is the use case for lending? Borrowing against "things" that you have on the blockchain?
I thought that business-wise Coinbase was kinda in the shitter.
Base is an optimistic rollup built on top of Ethereum. An optimistic rollup batches and compresses transactions and general computation. In an analogous manner that .zip or .tar.gz batch and compress files. The rollup executes transactions or general computation (Ethereum is a general purpose blockchain with a Turing complete programming language, so it can execute anything you code), computes a cryptographic proof of its correct execution and posting that to Ethereum. Which then verifies its correct execution.
Why do this?
Because blockchains don't scale. By don't scale I mean that there is a very explicit trade-off between vertical scalability (beefier nodes) vs. decentralization (barriers for anyone to participate in the consensus) and horizontal scalability (parallelization) vs. security (cost of attack). So Ethereum's approach to solving scalability is to accept head-on this limitation and instead of compromising on decentralization or security find ways around it.
With rollups you place the costly execution outside the blockchain and let the blockchain act as verifier and settlement layer of cryptographic proofs of computation. The blockchain verifies proofs, which are much cheaper, while the actual execution is done outside where you can scale vertically and horizontally.
With this approach Ethereum has settled over 600 bitcoin-equivalent transactions per second in the last hour (this is the actual figure, I just checked https://ethtps.info/ ). Remember when 1.5 years ago it was 15? Well... Now it's over 600. And plans to keep scaling until it reaches 1M-10M transactions per second by 2030.
So what?
Well, Coinbase is an exchange. A centralized exchange, for that matter. When you execute a transaction on Coinbase (or any other centralized exchange... NYSE, Nasdaq, Deutsche Bourse...) what knowledge do you have that the transaction was executed? That the stock the UI says you own is actually there. How do you know shorted stocks are actually lent and exist? This fixes it. You can see the code and be sure that it's executed correctly.
When CBDCs happen, and they are going to happen. The same kind of statements could be made for your money.
But hey, some crypto bro said you can get rich!
If you (optimistically) assume that each of these nodes consumes 10w of power (that's an extremely low estimate - not every node is a Raspberry Pi) that's 55,0000 watts - or 55 kilowatts, all for a network that can process a maximum of 30 transactions per second and is used by a tiny portion of the population.
That's still absolutely abysmal efficiency. Nowhere near the estimated 150 terawatt hours of power consumed by PoW bitcoin but still completely unacceptable and ridiculous for a network where the ATH for daily active addresses was roughly 1.5m and the daily average hovers more around 500k.
481,000 kWh per year and again, looking at node stats the vast majority are amd64 so the real number is at least 5-10x this.
A lot more than 500k daily users interacting with smart contracts or updating a ledger at 30 tps...
The old version of the Netflix OpenConnect Appliance uses 650 watts of peak power to store 360TB of content and stream at 96 Gbps[0].
Assuming an average bitstream of 4 mbit/s (relatively high) that's 24,000 video streams on 650 watts. Over 2m people STREAMING VIDEO inside of 55 kW.
The new version is 190Gbps on 400 watts - at least 5-6m people streaming video inside of 55 kW.
I get that you don't see the value, but plenty of other people do.
With > 5 billion internet users as a TAM overall adoption for crypto other than trading on exchanges (which is almost completely off chain and essentially has nothing to do with blockchain, really) is miniscule. Every block explorer, DappRadar, MetaMask stats, etc - literally any data shows completely insignificant user adoption (active addresses, number of transactions, etc) when compared to the billions of users that could become blockchain users by installing a piece of software in a few clicks.
I know it sounds like I dismiss it completely but I've been active in this space for the better part of a decade and I still can't figure out where the use case is -or- better yet, the killer app that would lead to user adoption resembling anything even close to the web in the 90s. It's been 8-15 years (depending on your starting line). Where is it? Where are the millions (really should be billions by now) of Joe Everyone daily active users?
Absent anything approaching a semblance of widespread adoption (from the data I referenced) the cynic in me says most of the "value" you reference is overwhelmingly from wash trading and a lot of other unproductive activity with no value or utility other than whatever angle those actors have.
The 'real world' stuff naturally happens in the real world, and not on chain. An example - last year I used a lending app to cover some of my taxes for a few months. I deposited asset X that I didn't want to sell at the time, borrowed their bespoke stable coin against it, swapped that for USDC, withdrew the USDC to coinbase, swapped it to USD and put it in my bank account to pay my taxes. When I could pay it back, I basically did the reverse. And at the end of the day because the lending application was offering 'borrow incentives' with their governance token, I ended up slightly ahead in after paying their repayment fee and gas fees. And all this was done with only substantial human counterparty risk when it came to interacting with coinbase. I found that useful and certianly helpful to me in a real world way. But if you only looked on chain it would not look like anything in the real world was happening at all and just lots of virtual bits moving around.
I just can't understand where the monetary volume you speak of comes from when a tiny number of merchants, platforms, etc accept cryptocurrency payments and (again) the number of transactions, addresses, etc just don't line up. As one example Venmo processes similar monetary volume with similar fees[1]. The difference is they have roughly 78 million users and every time I open the app I'm greeted with a running list of all of the people I know sharing their various (and copious) often daily transactions. The numbers for Cash App and others are similar. ~1B$ of daily volume for 500k - 1m users vs (assuming crypto address = user, which it does not) vs ~1B$ of daily volume for 78 million users... Yeah, something is going on with crypto.
Thank you for elaborating on your use case as an example of "shuffling bits around". Of course I'm not familiar with the situation but again (speaking to my lack of imagination/creativity) I can't imagine undergoing what ends up being a complex 12 step process involving multiple entities to obtain what is essentially a short term loan. Interesting and cool you pulled it off but not exactly something I see the masses being able to accomplish.
[0] - https://markets.businessinsider.com/news/currencies/what-is-...
55 kilowatts is a single car. One car. How many datacenters has your bank? You have a very mistaken idea of computing power and efficiency if you think a Raspberry Pi is more efficient than a server CPU.
My bank has 67 million customers and hundreds of products. The average US adult does 2.3 financial transactions a day. They also have branches, customer service reps, etc because real people in the real world need those things.
I’m sure they have much more compute because they’re handling many orders of magnitude more volume at transaction rates no blockchain could comprehend (let’s not start on Solana, please).
They also have the novel concept of complying with things like regulation, compliance, the law, and actually doing something about fraud. This also takes significant resources.
Yes, given that a Raspberry Pi is capable of running a full Ethereum node on an individual node basis at 10 watts all in it is the most efficient. All 5500 online, distributed, Ethereum nodes utilizing an aggregate of 55 kW is the most efficient power consumption scenario.
A server can’t keep the ECC RAM warm with 10 watts.
The dust will settle on this round of severe malinvestment in crypto, and there will be things which remain and mature.
Where I live, the international payments are restricted. Most of the neobanks/payment only issue payment cards for EEA or USA and Canada. There are a few options like Dukascopy Bank, but the fees are expensive especially for micro transaction. So cryptocurrency (not all though) does have some utility for people like us.
That being said, I do agree that crypto ecosystem is filled with grifters and scammers and only a select few cryptocurrencies are actually useful.
* Plans subject to change.
HN also tends to hate conventional fiat currency based financial capitalism for the same reason.
Like the calculus, the crypto banks will unleash their ideas and vanish leaving only what is understood good and true.
SBF was worth $100 billion for a while there - guess that makes him the sexiest most charismatic risk-taker out there.
Also, crypto currencies are not decentralized. The developers can issue however many coins they want, and give themselves as much of that as they want. I believe we will see this with Bitcoin at some point. At least when a democratic government controls a currency, the people have some sort of control in that process (by voting politicians out if they do corrupt things).
That is true for most people as playing a full game of economic chess with real stakes against a strong opponent that is the market during every purchase is really hard, but I think in general that's absolutely not a requirement. E.g. the entities who can do that will.
What makes you think so? I am not bolstering around unlike your "I understand the Chord protocol ... far better than you understand currencies" or your original "You wrote a lot of words to not say anything at all". Look in the mirror much?
> When currencies are unstable, A. This is why currencies need to be relatively stable.
Where A is essentially "some participants can not function". Which is exactly what I said. Except my point was for you to consider what entities can possibly function in the situation of unstable currencies (including in principle), and if such entities already exist, how viable is the economy of such entities.
On the highest level, volatility is just a rate of change, so if you change the time scale what was volatile suddenly does not look volatile anymore.