[HN Gopher] The Limits to Blockchain Scalability
___________________________________________________________________
The Limits to Blockchain Scalability
Author : bpierre
Score : 190 points
Date : 2021-05-23 19:09 UTC (3 hours ago)
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| jeremycarter wrote:
| Blockchain, Decentralization and Smart Contracts have had nearly
| a decade to prove their value and disrupt the marketplace. So far
| nothing but whitepapers, pipe dreams and exit scams - nothing my
| mother can use. What's the point? Nobody is using crypto as an
| alternative to fiat. Prove me wrong.
| skinnyasianboi wrote:
| NFTs disrupted the digital art marketplace.
| puranjay wrote:
| Maybe I'm wrong but I see this perspective so often on HN. And
| I can't help but feel that this is because so many people on HN
| are already privileged - living in the first world, making
| software salaries, and generally have a world of opportunities
| available to them, especially when it comes to their money.
|
| But coming from a third world country, the promise of a
| decentralized, permissionless market seems extremely promising.
| Particularly if it doesn't restrict me because of my location
| or capital or identity.
|
| If the internet broke geographical barriers, this tech can
| break barriers of capital and identity and credentialsm.
|
| While I won't talk about the idealized vision of blockchains,
| smart contracts can automate away a large number of fairly
| complex interactions. There is already a pretty thriving
| decentralized financial market that anyone can access from any
| part of the world with any amount of capital - no KYC or
| questions asked.
|
| A very basic usage: using Curve.fi to swap between tokenized
| USD (USDC) and tokenized EURO (EURS) with minimal slippage and
| fees, all permissionless, all freely accessible. If I was an
| American and wanted to have Euro to spend on my vacation, would
| this not be a better way to go about it instead of going to the
| bank, dealing with someone, and paying their exorbitant fees?
|
| The only missing part is the ability to easily spend this
| tokenized EURO, but that - I'm hoping - will come later. The
| core tech - smart contracts, blockchains - work.
|
| A more advanced use case: deploy tokenized USD into a vault
| that lends it out according to a set strategy, earning the
| lender interest passively. The individual who created the
| strategy, in term, earns a fee based on their returns
| generated. Again, this individual can be from anywhere and
| doesn't have to have a fancy office and degrees to get
| investment "clients". Nor does the lender have to deal with
| anyone to lend out their money.
|
| If this tech allows Raj from India to build a "hedge fund", and
| for Joe from America to invest with as little as $1, and the
| two never have to know each other, and can interact entirely
| with a smart contract available 24x7, what's there not to be
| excited about?
|
| In the _serious_ crypto world, there is a maxim: Code is Law.
|
| I would reckon that alone should make HN bullish on crypto.
| When was the last time you worked at a tech company where Code
| was _truly_ the Law?
|
| =====
|
| Some links if anyone wants to explore this further:
|
| 1. Uniswap.org - anyone can set up trading between any two
| tokenized assets. Want to trade between the price of gold and
| Venezuelan Bolivar? Sure, go ahead and use the price oracles
| from Chainlink to create these two tokens, set up a trading
| pair, and allow anyone to speculate on these two assets. Or you
| can just be a market maker (something only big funds can do in
| TradFi) and earn fees on the trades.
|
| 2. Curve.fi - swap between tokenized stable coins, such as EURO
| > USD, without ever having to visit the bank or paying their
| fees or doing their KYC.
|
| 3. AAVE.com - Lend or borrow between tokenized assets
| idlewords wrote:
| The insoluble problem is that any system of the kind you
| describe where the final tokens are ultimately spendable will
| be swamped by criminal use.
|
| If you make an end run around the existing regulatory system
| through code, the people who are inhibited from transfering
| money by the current regulatory regime will all use your new
| system. And that traffic will be overwhelmingly criminal.
|
| The amount of illicit money needing to move is overwhelmingly
| larger than the sums that honest people are prevented from
| transferring by corrupt governments or unjust restrictions.
| That is going to doom any attempt at creating a parallel
| money transfer system that works at scale.
| puranjay wrote:
| I think money transfer was Blockhain Era 1.0 use case. The
| use case has advanced - very rapidly - to money automation.
| This is all really new stuff, much of it barely a year old,
| and it has come so fast that even I've been surprised.
|
| A smart contract can currently take your tokenized USD
| (we'll use USDC since its backed by Coinbase), use that as
| collateral to borrow ETH on AAVE.com (a lending protocol),
| use 50% of that ETH to buy up USDC again, use this USDC +
| ETH to create a liquidity pair on Uniswap, and earning 0.3%
| fees on any swaps made between USDC and ETH.
|
| All in a single transaction.
| idlewords wrote:
| This use case is gambling with extra steps, except the
| software that runs a slot machine is far better vetted
| for correctness than a smart contract.
|
| Without money transfer, this system remains a toy system.
| With money transfer, it becomes a regulatory bypass. No
| amount of complexity layered on top fixes this.
| puranjay wrote:
| Money transfer is impossible to stop as long as P2P
| exchange exists. My country banned crypto a few years
| back. I just bought in-person. Nigerian central bank
| banned crypto recently. Nigerians just exchanged it over
| Whatsapp
|
| The fact that central bankers are busy banning it should
| give you an idea how disruptive it is.
| gricardo99 wrote:
| The only missing part is the ability to easily spend this
| tokenized EURO, but that - I'm hoping - will come later.
|
| I think recent history of crypto has shown this is not
| possible without KYC/AML/CTF and all the regulatory bells and
| whistles. Seriously capital flows tied to real economic
| activity cannot exist without identity, governments won't
| allow it.
| CryptoPunk wrote:
| Capital flows are massively rising without this centralized
| system of gatekeeping, tracking and surveillance:
|
| https://money-movers.info/
| puranjay wrote:
| Nothing stopping you from using a P2P exchange to turn that
| Euro into hard cash if you don't want to go through the
| KYC/AML. In fact that's exactly how I bought my BTC after
| the government here banned it.
| gricardo99 wrote:
| I mean on a larger scale. The great promise of crypto, A
| billion plus "unbanked" people turning to a crypto
| enabled shadow banking system, will not happen without
| drawing the attention of the eye of sauron
| puranjay wrote:
| Shouldn't the fact that central bankers want to ban
| crypto make you think that maybe there's something here
| more than ponzis and scams?
|
| If the eye of sauron wants to destroy something, surely
| it can't be all bad?
| kaladin_1 wrote:
| >> In the serious crypto world, there is a maxim: Code is
| Law.
|
| Yeah, what's this thing of code is law. I was discussing with
| a friend today on how governments might have to come in to
| regulated some financial transactions with crypto based
| assets. And he vehemently kept repeating that no government
| can regulate crypto because "code is law". We went down to
| the physics level to see why it's not impossible to do. Only
| for me to come here again and start seeing code is law. High
| time someone explained it better.
| puranjay wrote:
| It essentially means that the Code is the product.
| Everything is visible and public. Every smart contract can
| be publicly viewed and verified. If the code isn't up to
| scratch, you can review it. If it has an exploit, you can
| detect it. Whatever it is doing, is transparent.
|
| You can't say the same when you deposit money into, say,
| Robinhood. You don't know what the code is doing with that
| money.
| Judgmentality wrote:
| > But coming from a third world country, the promise of a
| decentralized, permissionless market seems extremely
| promising. Particularly if it doesn't restrict me because of
| my location or capital or identity.
|
| Your entire argument is about the _promise_ of blockchain and
| not the actual current applications people are using. Your
| argument is theoretical when OP is asking for practical use
| cases. You mention many hypotheticals but not a single "I
| use blockchain for X" or "my mother uses blockchain for X"
| which is what actually matters.
|
| > While I won't talk about the idealized vision of
| blockchains
|
| As far as I'm concerned that's all you talked about, and you
| don't even realize it.
| puranjay wrote:
| I literally gave a real world example: Curve.fi that's used
| to swap between stablecoins. You can literally go right now
| to swap between tokenized USD and EURO.
|
| Or you can go to the bank and pay their exchange rate.
| Maybe they'll ask you for your ID too.
|
| Another example of the second kind: www.Ape.tax, where
| anyone can deploy an investment strategy and beta users can
| try them out, and if they are successful, they can be
| integrated - voted on by a DAO - into Yearn.finance, the
| primary project with several billion $ in investment.
|
| There are existing projects already using the situations I
| talked about. It's not theory. It's not idealized vision.
| It's happening right now.
|
| Blockchain is moving so fast that Yearn.finance, the
| platform with billions in investment, wasn't even a thing a
| year ago.
| lottin wrote:
| What do you mean is happening right now?
|
| For example, you mention foreign currency exchanges.
| According to Wikipedia, trading in foreign exchange
| markets averaged $6.6 trillion per day (April 2019). [1]
| Is there any indication that foreign exchange markets are
| moving towards adopting this trading of tokenized
| currencies that apparently is so much better than the
| system they're using now?
|
| [1] https://en.wikipedia.org/wiki/Foreign_exchange_market
| puranjay wrote:
| You're being disingenuous if you're trying to compare the
| mature foreign exchange market with a technology that's
| barely half a decade old and still obscure by most
| standards. Curve.fi, the example I shared, was launched
| in Jan 2020 and peaked at a daily volume of $1B.
|
| Personally, I can't buy USD without going to the bank and
| filling out paperwork, submitting ID documents and
| clarifying why I need the USD and adhering to prescribed
| limits.
|
| I have no such restrictions with their tokenized
| variants.
| Judgmentality wrote:
| You gave a hypothetical example, not something you use.
| And to answer your question in your original post - no,
| blockchain would not be more convenient than using my
| traditional bank. I can do it entirely on my phone inside
| an app. And every time I've compared it's significantly
| cheaper not to use blockchain to send someone actual
| money.
|
| You're giving me possible applications, not talking about
| you being an actual user. There are products for lots of
| things, that doesn't mean they have enough people using
| them that they're going to last.
|
| > Blockchain is moving so fast that Yearn.finance, the
| platform with billions in investment, wasn't even a thing
| a year ago.
|
| You're talking about something I've never heard of before
| as proof of blockchain having made it. We are on
| different planes here and I don't see us getting through
| to each other.
|
| Anyway, agree to disagree. Cheers.
| seibelj wrote:
| Curve did $1 billion in volume over the past 24 hours
| https://curve.fi
|
| That isn't hypothetical. It's like you keep getting
| refuted and then ignore reality because it disagrees with
| you.
|
| "Blockchain is unused."
|
| [a bunch of links with billions of dollars in actual
| daily usage provided]
|
| "Oh, well, I've never heard of that before so it doesn't
| matter."
|
| What kind of arguing is this?
| puranjay wrote:
| Much of HN is stuck in 2017 Blockchain era. Most haven't
| looked it serious since that crash. Many still think of
| Blockchain and can only think of BTC, LTC, Doge and ETH.
| DeFi is so new that it even caught HN off guard.
| viraptor wrote:
| > the two never have to know each other, and can interact
| entirely with a smart contract available 24x7, what's there
| not to be excited about?
|
| I tell you that I'm totally going to follow what a program
| tells me and you should give me your money to earn interest.
| Are you excited about the possible interest from this
| uninsured, pinky-swear promise exchange?
|
| > Code is Law
|
| "Code is law unless things go really bad." - DAO
| puranjay wrote:
| > I tell you that I'm totally going to follow what a
| program tells me and you should give me your money to earn
| interest. Are you excited about the possible interest from
| this uninsured, pinky-swear promise exchange?
|
| It's a smart contract. You can review it publicly. If there
| are vulnerabilities, if the ownership is not renounced, it
| would be visible. Can you say the same about your
| investment bank?
|
| You don't have to trust the coder or the platform or the
| exchange. Code is Law. Trust the code.
| viraptor wrote:
| But the smart contact cannot interact with real world.
| It's the party on the other side that ultimately gets the
| funds and acts on your behalf. That party can just take
| the money and go away.
|
| Unless we're talking about purely on-chain strategies.
| But in that case why wouldn't you copy their public
| investment contract and execute it yourself?
|
| > Can you say the same about your investment bank?
|
| My investment bank has a tonne of regulation on it. If
| they go under and I can't claim insurance on it, then we
| have bigger issues where "money" may not be an answer
| anymore.
|
| The workers also would be liable to local laws if they
| tried to literally walk away with money. (Sure, we have
| various enforcement issues, but the alternative of none-
| of-that doesn't sound great)
| puranjay wrote:
| All real and legit concerns. Fraud remains a big problem
| which is why returns are so high right now - we're all
| early adopters.
|
| But there are new developments constantly. On-chain
| insurance against smart contract failure and hacks is a
| thing (see: https://nexusmutual.io/). More sophisticated
| insurance strategies to compartmentalize risk are coming
| up (see https://www.unn.finance/). Protocol design to
| reduce risk exposure are being experimented with (see:
| https://saffron.finance/).
|
| It's all new and all very exciting. It's moving very fast
| and its really fun to be in. I haven't been this excited
| by anything since the early web.
| jeremycarter wrote:
| I can see where you're coming from. It is an opinion I have
| from privilege - I don't live a privileged life but I don't
| struggle either (middle income bracket).
|
| After reading your use cases I do have empathy for people in
| those situations, where governments and centralized agencies
| are corrupt etc - just not entirely sure this solves any of
| that.
| akarma wrote:
| > coming from a third world country, the promise of a
| decentralized, permissionless market seems extremely
| promising
|
| > A very basic usage: using Curve.fi to swap between
| tokenized USD (USDC) and tokenized EURO (EURS) with minimal
| slippage and fees, all permissionless, all freely accessible.
|
| As a sibling comment noted, this is hypothetical usage, and a
| future 'promise,' not actual usable by or providing value to
| the average person.
|
| I went to curve.fi, and from a first glance, anyone not
| first-world, techie, and extremely familiar with crypto would
| be completely bewildered by this.
|
| "Select a wallet to connect to this dapp" -- what is a wallet
| and what is a dapp?
|
| "Swap using all Curve pools" -- what's a Curve pool?
|
| "Trade routed through alusd" -- what does this even mean?
|
| "Base APY" -- what? I thought I was exchanging currency, not
| opening a bank account?
|
| "veCRV holder/LP ratio (based on fees): 28.74" -- This is
| where even first-world, college-educated people close the
| website in confusion.
| puranjay wrote:
| Bad UX in early technology is kind of expected, isn't it?
|
| I'm sure lots of first-world, college-educated people were
| equally bewildered by email in 1995.
| akarma wrote:
| Agreed and it's expected, but the question posed was
| whether there's actual current instances of crypto
| helping people in the third-world, or whether it's just a
| bunch of hypothetical future promises of value.
| puranjay wrote:
| Speaking as someone from the third world, absolutely.
|
| I just implore anyone here to approach this with an open
| mind. There's lots of fraud, but that's also leading
| people to come up with newer, more exciting solutions.
| Like on-chain insurance (https://nexusmutual.io/) or
| tranches to compartmentalize risk
| (https://saffron.finance/) or creating entirely synthetic
| assets on-chain (https://synthetix.io/)
|
| It's a weird space where finance and tech and design and
| culture are coming together, and frankly, it's the most
| fun I've had in tech in years.
|
| Even though I feel that current valuations are grossly
| overheated, the stuff coming out on a daily basis is just
| a ton of fun.
| brazzy wrote:
| > I would reckon that alone should make HN bullish on crypto.
| When was the last time you worked at a tech company where
| Code was truly the Law?
|
| Hell the fuck _no_.
|
| Have you _seen_ what kind of code people write?
|
| "Code is law" is the _last_ thing anyone with real tech
| experience should ever want. It 's a _terrifying_ prospect.
|
| Code is buggy. I don't want my laws to be buggy and
| unfixable.
| bpodgursky wrote:
| On January 29, 1886, Carl Benz applied for a patent for his
| "vehicle powered by a gas engine." The patent - number 37435 -
| may be regarded as the birth certificate of the automobile. In
| July 1886 the newspapers reported on the first public outing of
| the three-wheeled Benz Patent Motor Car, model no. 1.
| mvzvm wrote:
| What a strange response. Did you respond to the wrong
| comment?
| foobar502 wrote:
| It takes time.
| mvzvm wrote:
| In his own example, it went from patent to useful in a
| few months. Blockchain has not gone from idea to useful
| at all yet.
| tummybug wrote:
| That is a really hard to achieve definition of useful.
| Asraelite wrote:
| Very very few people were using cars at that time.
|
| If you apply that same low threshold of usefulness to
| blockchain then it became useful just as fast, if not
| faster.
| dmitriid wrote:
| Do quote everything, while you're at it.
|
| > The first production of automobiles was by Karl Benz in
| 1888 in Germany and, under license from Benz, in France by
| Emile Roger. There were numerous others, including tricycle
| builders Rudolf Egg, Edward Butler, and Leon Bollee. Bollee,
| using a 650 cc (40 cu in) engine of his own design, enabled
| his driver, Jamin, to average 45 kilometres per hour (28 mph)
| in the 1897 Paris-Tourville rally. By 1900, mass production
| of automobiles had begun in France and the United States.
|
| So, 11 years after production started, gas-powered cars were
| not only rather common, but there were _rallies involving
| them_.
|
| 11 years from introduction, no one has come up with a use-
| case for blockchain: https://hackernoon.com/ten-years-in-
| nobody-has-come-up-with-... and
| https://medium.com/@kaistinchcombe/decentralized-and-
| trustle...
| BeefWellington wrote:
| > 11 years from introduction, no one has come up with a
| use-case for blockchain
|
| This seems an odd claim to make. Currently there's hundreds
| of Cryptocurrencies using blockchains as a foundation, and
| more than half a trillion dollars tied up in them. Right
| now it seems like they're at least speculative investments.
| If this does not count as a use-case then we'd better break
| the news to essentially all of finance.
|
| Years ago before the values jumped you could do plenty of
| actual currency things with cryptocurrencies: there were
| ATMs, you could buy beers at a pub or pay for server
| hosting (something I did myself), etc. Because of all of
| the speculation cryptocurrencies have generally become too
| volatile for that. Nobody wants to find out at the pub
| there was a market crash and they can't cover their outing.
| At the time though, it all worked and had incredibly low
| transaction fees.
|
| Then there's the applications for areas like logistics,
| supply chain, that are all under development. IMO it has
| absolutely established itself as a technology and like
| everything new people were quick to try to apply it to
| every problem and found it largely didn't fit most places.
| That doesn't mean it isn't useful.
| vehementi wrote:
| You can take any obscenely inefficient technology and
| apply it to anything and say "look, it's useful", but
| that doesn't make it a good idea or viable or really even
| not pointless.
|
| I heard it best put as: blockchain provides trustlessness
| at very high operational cost -- do we have a business
| case where trustlessness is a competitive advantage? If
| not, just use a database or equivalent
|
| So like yes, you can implement insurance and messaging
| and contracts with blockchain. Is there a need to do
| that? Does it make sense? Would that business work? (Zero
| percent of such businesses have worked)
|
| The sending money part is certainly a legitimate use.
| Unfortunately it's being totally broken by speculation on
| all the coins (not to mention high gas).
| atweiden wrote:
| > So like yes, you can implement insurance and messaging
| and contracts with blockchain. Is there a need to do
| that? Does it make sense? Would that business work? (Zero
| percent of such businesses have worked)
|
| The tricky part of this, of course, is in the Bitcoin
| space "validity" hinges upon valuation. Unfortunately
| cryptocurrency valuation is based on narrative entirely,
| and narratives continue driving trading volumes even in
| the face of undeniable technological shortcomings, see
| e.g. the saga of continual unstable "stablecoin"
| implosions, or Ripple.
| idlewords wrote:
| And over the following years the automobile improved rapidly,
| becoming more capable, reliable, and gaining users as it
| went.
|
| It didn't spend its first 13 years up on blocks while its
| supporters yelled at the skeptical and embezzled money from
| everyone else.
| sthnblllII wrote:
| Yea. Its closer to the first 30 years of its existence
| doing pretty much nothing but being sport for rich people.
| n0mad01 wrote:
| This is a very limited and short-sighted view on the emergence
| and development of new technologies.
|
| From the first petrol engine (1879) to the Ford Model T (1908),
| the Arpanet (1969) to the Internet (1990), as also software
| development (Cyberpunk 2077 was developed over 8 years), these
| things have one thing in common: they need time.
|
| When one day your every breath (and its payment) is recorded on
| a blockchain then you should be aware that such a technology
| capable to do so does not exist yet, but its basic features do.
| jeremycarter wrote:
| Yes I know it is very short sighted, but I am very open to
| being persuaded. I'm not trying to be negative, just trying
| to look for the real world "value".
| RobertDeNiro wrote:
| The original use case was for black markets such as silkroad.
| Then crypto made so much sense.
| seibelj wrote:
| I have responded to a thousand versions of your comment on HN.
| No matter what I write the haters never change their minds. HN
| is not an enthusiastic place for blockchain devs.
| diegocg wrote:
| That's because on HN we know that 99% of the blockchain hype
| is about people discovering asymmetric cryptography and
| pretending that the blockchain is the only way to use it.
|
| The only real difference that blockchain solutions bring is
| decentralisation. I have to yet hear one single argument
| about why decentralisation is good. So far I have only heard
| the typical libertarianesque arguments about states, banks
| and inflation. As as I'm concerned, decentralisation is
| unnecessary and so are blockchain.
| seibelj wrote:
| Well I'm a libertarian and an Austrian economics / hard
| money enthusiast so I grant that my love of crypto is
| influenced by my politics. If you are a statist that loves
| government authority, its benefits will be be drawbacks as
| decentralized money is an obvious attack on state power.
|
| The power of decentralization is to reduce the power of
| centralized entities. Even within decentralized networks,
| centralized nodes (companies) gain power. But in
| decentralized networks you can choose alternatives. In
| state-run networks, your only option is the state as guns
| prevent competitors. I like free markers / free minds /
| private wealth / private power.
| idlewords wrote:
| Organized criminal activity is a powerful centralizing
| force that is always ignored in these discussions.
| puranjay wrote:
| If HN was around in 1997, I bet half the comments would be
| about "internet is just scams and porn. Where's the use case
| apart from checking the weather?"
| DemocracyFTW wrote:
| Nonono, you're confounding the internet as it is now with
| the internet as it was 24 years ago. It's just the other
| way round.
| Edman274 wrote:
| Wait, let's keep using this analogy. If the World Wide Web
| was invented in 1991 and by 2002 no one had created useful
| websites besides marketing for scams, drug marketplaces and
| sites to pay ransoms to, and the energy consumption of the
| World Wide Web was the country of Argentina... Wouldn't the
| critics have a pretty good point?
| puranjay wrote:
| Please see some of these sites I shared earlier:
|
| https://curve.fi/ - for exchanging different tokenized
| stable coins (such as USDC > EURO). Already has over
| $300M in daily volume exchange.
|
| https://yearn.finance/ - a platform where anyone can code
| and deploy an investment strategy, provided it is voted
| on by people who hold the platform's governance tokens.
| Already has over $3B in assets locked in. Good idea to
| look at their governance platform as well:
| https://snapshot.org/#/yearn
|
| https://aave.com/ - a platform to borrow or lend your
| tokenized assets. Already has over $9B in assets invested
|
| Please see this with an open mind. And please see this
| from the perspective of someone not from privilege, from
| a third world country, or from someone facing an
| oppressive regime.
|
| Money is freedom. And making that freely accessible to
| anyone from anywhere is important.
| idlewords wrote:
| Yeah, and imagine further that people were bidding up the
| price of IP addresses in a speculative frenzy instead of
| actually using them.
| puranjay wrote:
| People did bid up the price of domain names at least in a
| speculative frenzy instead of actually using them
| jeremycarter wrote:
| I'm not a hater. I am just applying some critical thinking
| and design thinking to try to figure out where the value is
| in all of this to the customer. I am happy to say I'm wrong,
| and happy to backflip.
| seibelj wrote:
| Here is one of many comments I have written
| https://news.ycombinator.com/item?id=25641940
|
| But again, to those reading this thread, HN is not a place
| where you will find a lot of people who patiently defend
| crypto and blockchain. It garners a lot of downvotes.
| jeremycarter wrote:
| I will read it without bias. Thank you.
| puranjay wrote:
| Please see my comment here:
| https://news.ycombinator.com/item?id=27258671
|
| some links to complement the comment:
|
| https://curve.fi/ - for exchanging different tokenized
| stable coins (such as USDC > EURO). Already has over $300M
| in daily volume exchange.
|
| https://yearn.finance/ - a platform where anyone can code
| and deploy an investment strategy, provided it is voted on
| by people who hold the platform's governance tokens.
| Already has over $3B in assets locked in. Good idea to look
| at their governance platform as well:
| https://snapshot.org/#/yearn
|
| https://aave.com/ - a platform to borrow or lend your
| tokenized assets. Already has over $9B in assets invested
| mbesto wrote:
| > https://curve.fi/ - for exchanging different tokenized
| stable coins (such as USDC > EURO). Already has over
| $300M in daily volume exchange.
|
| I'm confused. How do you get EURO currency in your hand
| with this? i.e. either physical paper or in my bank
| account?
| puranjay wrote:
| 1. Transfer to your bank account via an exchange (KYC
| applies)
|
| 2. Turn it into cold hard cash or a bank transfer via P2P
| (no KYC )
|
| 3. Withdraw cash directly from a Bitcoin ATM (KYC may
| apply depending on the exchange issuing the card)
|
| 4. Transfer to a crypto debit card and buy from stores
| directly (KYC may apply depending on the exchange issuing
| the debit card)
|
| 5. Pay directly with your crypto at relevant stores
| (projects like AMP - https://amptoken.org/ - US only for
| now)
| globular-toast wrote:
| That's because many of us already have changed our minds.
| Many of us were big fans of Bitcoin ten years ago and really
| excited about the prospect of trustless digital cash. We
| thought it would work. But now that a decade has passed,
| we've changed our minds.
| bradleyjg wrote:
| Perhaps we don't change our minds because we haven't seen a
| convincing counter-argument to the thesis that blockchains
| are fundamentally about getting rich quick through buying in
| early (or pre-mining) and then finding greater fools.
|
| The most successful actual applications thus far, as far as I
| can tell, have been silk road and paying ransoms.
|
| I know people that send money home and they don't use
| cryptocoins. These remittances communities are savvy and
| price sensitive, if there was a superior product it would be
| spreading like wildfire.
| pfisch wrote:
| Polymarket is a real use case.
| [deleted]
| legulere wrote:
| Why do you need a blockchain for that? Gambling and
| Insurance existed both long before blockchains.
| k__ wrote:
| I think, it will probably take another decade.
|
| I think, BC could go to 5 million before it stablizes.
| kgwgk wrote:
| Or 42 trillion. Sky is the limit.
| throwaway829 wrote:
| If america has Zimbabwean inflation maybe.
| Sleepytime wrote:
| The internet was around a lot longer than a decade before aol
| showed up and started pressing CDs.
| fo0manchu wrote:
| Sources on that claim?
| idlewords wrote:
| Imagine if after TCP/IP was invented, people hoarded IP
| addresses and they became worth millions of dollars, but no
| one used the internet. If you pointed this out, they got mad
| at you for being a luddite or a noiper.
|
| That's the situation we're in with crypto.
| CryptoPunk wrote:
| People use Ethereum..
|
| https://etherscan.io/chart/gasused
| Robotbeat wrote:
| Decentralization is good, but it's almost by definition not
| profitable. It's in centralization that you get profit (pre-
| mining is a bit like centralization).
|
| BitTorrent: good, somewhat decentralized. Not super profitable.
| dehrmann wrote:
| > nothing my mother can use
|
| In developed countries, I can tap with my phone or card to pay
| instantly, there's Venmo, and fees are low-ish. Currently, no
| cryptocurrency has competitive advantages to traditional
| payments...unless it's illegal, but even then, certain
| cryptocurrences are a really bad choice.
|
| Supposedly phone apps are used for payments in developing
| countries, but I'm not entirely sure.
| scabarott wrote:
| I'm a huge proponent of crypto and the many things it's going
| to make possible that were not previously possible. But the
| developing country angle is oversold usually by people just
| parroting it without really knowing what things are like in
| developing countries: 1. In many developing countries
| increasingly you can also use phone or card almost as
| conveniently as you can in the west. In fact some developing
| countries are more advanced as far as mobile payments go (out
| of necessity because of less developed banking systems) e.g
| Mpesa in Kenya. Generally visa/bank cards and payment apps
| are not as alien as you might think they are in many parts of
| Africa or India or South America 2. Using Bitcoins for
| transactions/moving money around with the current state of
| the art is a lot more difficult and less accessible than
| using western union and other financial services that are
| ubiquitous in these places. Since at present you can't really
| use Bitcoin for much you still have to convert it fiat which
| means using an exchange. Most exchanges have even more
| onerous kyc/id requirements than banks and many financial
| institutions in developing countries won't even touch bitcoin
| at all. And not even to talk of the relative technical
| sophistication required to use crypto services let alone
| maintain a wallet. As far as developing countries go crypto-
| currency at present is mostly a curiosity among the well-
| heeled and well-connected in the largest cities. It's going
| to be a long long time before the promise of crypto bringing
| salvation to the un-banked comes anywhere close to reality.
| [deleted]
| narush wrote:
| Vitalik is consistently one of the most interesting people to
| follow in the blockchain space. Even his (5+ year) old writing is
| quite interesting, if nothing else to see how Ethereum's research
| thinking has evolved over time.
|
| A few questions re: why "Ethereum is not going further than
| quadratic [sharding]."
|
| The first reason given: there's a minimum number of nodes
| required for shard for safety guarantees. So, a couple hundred
| shards, each with 1000 users seems like a limit. But I wonder: 10
| years from now, if the blockchain (maybe pipe?) dreams succeed,
| then why do we expect 1000 * 500 = 5M nodes? This seems like it's
| quite small.
|
| Especially if running a node on a phone ever becomes reasonable,
| or at least participating in the data availability process is
| possible here, then why would we not go further?
|
| The second reason for non-super-quadratic sharding is data
| permanence. But here, couldn't we design different shards with
| different appetites for data permanence. Sure, NFTs currently are
| forever, but I can think of many applications where users do not
| give a damn about data permanence, and even some applications
| where users would prefer if data was just forgotten about.
|
| In which case, what's stopping us from saying "these shards, we
| save. The other ones, who cares about." We would want users to
| opt into such guarantees, of course, but it seems reasonably
| possible.
|
| Of course, let's get a good sharded blockchain before we optimize
| for more.
|
| I'm excited to see how sharding research continues to involve and
| drives the cost per TX (economic and environmental) down.
| Consider me a cheerleader rooting for you all!
| an_opabinia wrote:
| [deleted]
| sp332 wrote:
| There is already a PoS chain. After the ice age in June/July,
| there will be another PoW chain as well. It will be up to
| individuals and exchanges to decide which one they want to do
| transactions on. And they might even choose "both", as in the
| case of Ethereum and Ethereum Classic.
| Analemma_ wrote:
| Proof of stake is six months away and always will be.
| TarasBob wrote:
| Ethereum proof of stake beacon chain has been live for 6
| months now: https://beaconcha.in/
| Judgmentality wrote:
| That's running only a fraction of the network, though.
| The concerns are whether or not it can scale (or at least
| those have always been my concerns), and I'm of the
| opinion it won't work.
|
| I hope I'm wrong.
| seibelj wrote:
| It is always preferred to require less resources. There must be
| a healthy balance. If Ethereum accomplishes what a lot of us
| hope, allowing home-hobbyists to run nodes and at least break-
| even in staking or profit a small amount will be crucial.
| Relying on goodwill from a small amount of technically-adept-
| yet-centralized operators is how we get to the Tor situation
| where everyone knows the government runs most of the exit
| nodes.
| crazypython wrote:
| This is precisely what happened in 2017. Miners and exchanges
| unanimously supported increases Bitcoin's blocksize limit from
| 4MB to 8MB, in Segwit2x. However, users stopped them.
| mvzvm wrote:
| Scam after scam, that's all blockchain is. Just another way to
| fleece the average consumer.
|
| There has not been a single valuable use, a single product, that
| actually improves anyone's day / process / life / anything. I am
| very open to changing my stance if someone presents evidence to
| the contrary.
| puranjay wrote:
| I can buy any amount of an asset that I think is more stable
| than my local currency.
|
| Say, switching my Venezuelan Bolivar for USD, without
| restrictions.
| legulere wrote:
| It's pretty useful for scammers, extortionists, drug sellers,
| money launderers and all other kind of people that want to
| bypass or break laws. But that's about it.
| Ar-Curunir wrote:
| Maybe try commenting something at least somewhat related to the
| content of the article?
| dandanua wrote:
| Silkroad, money laundering, tax evasion, exit scams,
| pump&dumps, crypto pyramids, ransomware - all this improves
| someone's day / process / life. Why don't you want to see the
| opportunities?
| parksy wrote:
| A couple of points, the first is criticising lack of real-world
| use-cases for nascent technology is like criticising the web in
| the mid 90's. It's like expecting the cart to lead the horse.
|
| Having said that, there's plenty of projects big and small that
| have merit. Granted, a lot of published "case studies" are just
| marketing fluff to attract search traffic, that shouldn't be an
| indictment of the technology itself which shows a lot of
| potential, especially where complex transactions need to be
| brokered between parties with competing interests.
|
| DHL & Accenture have investigated and prototyped uses in supply
| chain logistics for pharmaceuticals -
|
| - https://supplychaindigital.com/technology-4/dhl-and-
| accentur...
|
| - https://www.dhl.com/au-en/home/insights-and-
| innovation/insig...
|
| - [PDF warning DHL case study]
| dhl.com/content/dam/dhl/global/core/documents/pdf/glo-core-
| blockchain-trend-report.pdf
|
| Banks are serious about blockchain for reconciliation -
|
| - https://australianfintech.com.au/cba-westpac-
| back-r3-blockch...
|
| Use case for trading distributed power generation with power
| ledger smart contracts -
|
| https://www.powerledger.io/clients/tata-power-ddl-india
|
| You'll find most of these projects are in prototype phase or
| early adoption, and as I said there's loads of disinformation,
| but if you filter through the crud and look for serious
| projects with demonstrated applications or investments you
| should be able to see the potential.
|
| Again if you recall the mid 90's, companies like Amazon were
| just an online book shop, or Google was just an idea in a
| statistician's thesis. Far more ideas bombed that were
| successful; there was a time when the internet hadn't decided
| what to do about advertising and settled on Google's model.
| There was a bubble that popped and lots of investors were left
| in the lurch. But eventually the ideas that worked survived and
| these companies are the largest in the world today and spawned
| entire new industries.
|
| In light of this, my view is that it's a stretch to say "scam
| after scam, that's all blockchain is." at this point, although
| there are plenty of scams surrounding it, definitely don't
| write it off entirely just yet.
| conception wrote:
| Remittances are better/easier. That's the only thing I've seen
| and the tech to do that is trivial now and Bitcoin is terrible
| for it specifically now.
| mvzvm wrote:
| Are they? I've had no issues with remittances outside of
| blockchain. In places where I have heard remittances are
| difficult, it is usually due to regulation, something this
| does not solve either.
| noxer wrote:
| Its difficult because it requires parked money (nostro
| accounts) in foreign currencies. This imposes a risk and
| act as "dead capital". At some point the cost to maintain
| the corridor is higher than the profit so the corridor is
| closed. Transaction then are routed trough other corridors
| which means multiple currencies swaps. More loses and more
| parties who want their cut. + it can takes days and the
| system are one-way so you have to ask the recipient if he
| got it to know.
|
| Public ledgers can make a difference See
| https://ripple.com/ripplenet/on-demand-liquidity/
| lottin wrote:
| How are remittances better/easier exactly? With BTC you need
| to exchange currencies at least 2 times, as opposed to one.
| cinntaile wrote:
| Just by the way you describe it you already signal that you're
| not open to change your stance. Which is fine by me, but don't
| fool yourself.
| noxer wrote:
| https://ripple.com/ripplenet/on-demand-liquidity/
|
| This is a real product, real people use it (without knowing
| that they do).
| john_alan wrote:
| Monero.
|
| It's provided a private money for the internet.
|
| That helps people. It's valuable.
|
| A permissionless, censorshipless decentralised private money.
| deadalus wrote:
| Are there any other significant untraceable cryptos other
| than Monero and Zcash(using privacy fetures)?
| john_alan wrote:
| I work in applied Cryptography so I'm well placed to judge.
|
| Other than Monero and ZEC (the latter of which has some
| issues for me which I posted about before) Grin is the only
| other project that isn't a clone.
| tromp wrote:
| Grin is currently not untraceable (it only hides amounts
| and addresses, but not input-output links, which are
| mostly visible in the mempool), but could be if the
| coinswap proposal [1] is implemented and widely deployed.
|
| [1] https://forum.grin.mw/t/mimblewimble-coinswap-
| proposal
| crispyporkbites wrote:
| If this scaling blog post is accurate, a global payment network
| at 1m transactions/second, decentralised, is massively
| valuable.
|
| Imagine if the only way to send a message to someone was
| through fb messenger or WhatsApp, and then someone invented
| email. The UX might not be great, but the benefits are huge.
|
| Additionally if the eth virtual computer can scale with very
| low gas costs, there's a lot of accountancy and banking
| functions that can replaced with eth code. Potentially some
| legal functions as well.
| jbverschoor wrote:
| You should look at it as a public service of authenticity.
|
| Notary services / time stamping. But also noncustodian assets.
| Although still not usable for daily life, I think the more we
| move into digital, the more we will want and need better
| licensing/ownership of digital content. For example when
| blizzard bans your wow account, which is worth many hours and
| dollars.
|
| Big tech has too much control over these things, and the road
| to get a response se or to go to court is way too long and
| expensive for the average joe
| dehrmann wrote:
| > Just another way to fleece the average consumer
|
| How? No one credible has claimed it's a good investment. The
| most you'll get is people suggesting bitcoin as an alternative
| asset that's a small portion of your portfolio.
| c01n wrote:
| - Fuels research for applied cryptography (example Zero
| knowledge cryptography) and privacy technologies.
|
| - Pressures existing systems (Fiat, Paypal ...) to improve and
| keep up.
|
| - Gives options to people living in censored governments
|
| - Shows us that one of our most foundational systems (Money)
| can be re-engineered using modern tech and experience of
| studying what happened in the past.
| noxer wrote:
| This has some really questionable assumptions. Like the part
| about permanence.
|
| "An important property of a blockchain that users really value is
| permanence. A digital asset stored on a server will stop existing
| in 10 years when the company goes bankrupt or loses interest in
| maintaining that ecosystem. An NFT on Ethereum, on the other
| hand, is forever."
|
| This is wrong 2 times.
|
| First, there is no general requirement of permanent storage. Its
| not important at all. It solely depend on the use case. Thats why
| it is very much inefficient to use a DLT with that property to
| move value (btc/eth etc.). I dont care how my coins was moved 10
| years ago. The only storage that is relevant for me, now, for
| value transfer is the current undisputed state (aka the
| balances). Sure the Tx history has use cases and people who need
| them should store them but making that a technical requirement is
| only going to degrade performance and drive up Tx cost.
|
| BTW cash does not have a recorded Tx history who thought "p2p
| cash" should? Its only because of the way BTC works (chain of all
| Tx) that this "believe" became common. Its technically not needed
| at all. There is absolutely no reason to recreate the whole chain
| to come to the current state. You either use the current state or
| you cant participate. If you would find an error in the chain
| whatcha gonna do about? Nothing. The current majority accepted
| state is all that matters. The "validation" is placebo it does
| nothing. And by running the exact same software as anyone else
| your validation would simply do the same error if there would be
| one.
|
| Second, the "forever" is a blatant lie. There is no way to know.
| Its will exist for however long at least someone is willing to
| store it. Exactly the same is true if storing is optional. But
| without the downside of crippling the performance and impose cost
| on the people running the DLT. The cost for storage should be
| paid by the user of the storage. If I can impose cost on all
| participants of a decentral system for all eternity with a one
| time payment then the system is deeply flawed. The possibility
| for abuse can be limited by simply making it expensive at any
| given time. But this obviously reduces the usefulness of the
| whole system especially for value transfer. The idea of an
| internet of value is to make value move like data, dirt cheap and
| decentral so no one takes a cut.
| tromp wrote:
| > There is absolutely no reason to recreate the whole chain to
| come to the current state. You either use the current state or
| you cant participate. If you would find an error in the chain
| whatcha gonna do about? Nothing. The current majority accepted
| state is all that matters.
|
| All that matters is the valid history with the largest weight
| (longest chain rule in PoW). If an invalid branch somehow
| acquires more weight, it simply gets ignored (except by SPV
| clients in bitcoin, which trust others to validate).
| Exchanges/pools that accept an invalid branch are completely
| untrustworthy and should similarly be ignored.
| noxer wrote:
| >All that matters is the valid history with the largest
| weight (longest chain rule in PoW).
|
| No, that exactly the believe that comes from BTCs
| implementation and while it may be true for BTC its
| completely irrelevant for other systems.
|
| Imagine there is a room full of people all have a paper with
| the exact same transactions in order on it. Now a new person
| joins and copies someones paper and then verifies all Tx. Ok,
| now he only has the chain for one person that's not enough he
| needs the chain form as much other people as possible to
| assure he has the longest. Its perfectly fine to ask the
| others to only tell him the hash of the whole thing to see if
| he has the same chain.
|
| So why even copy the chain first he could just start asking
| for the hash of the whole thing and if they all have the same
| there is no point to copy the chain.
|
| He just needs to copy the last state (balances) so he can add
| Tx as well. (BTC does not have accounts with balances so BTC
| does not have the concept of "only the last state" but
| instead of the whole chain only the ends of the tree can be
| used to reduce the size. but again this is ONLY relevant for
| BTC and BTC clones/forks its NOT a property of DLTs in
| general)
| samatman wrote:
| I agree with this, a durable record of every transaction ever
| performed is in fact an anti-feature for a digital ledger.
|
| Mimblewimble[0] is one interesting solution to this.
| Unfortunately, the requirement in current implementations (such
| as Grin) that both wallets be online to complete a transaction,
| eliminates some valuable types of transaction, such as sending
| coin to a cold wallet.
|
| I do think for a 'world computer' like Ethereum, being able to
| ignore a substantial amount of old state is going to be
| critical for long-term use.
|
| I also think that "blatant lie" is unnecessarily harsh. A
| blockchain is aspirationally forever, and it is a massively
| replicated data structure: it's certainly durable, and I would
| expect it to last a long time relative to, say, a random
| torrent.
|
| This is my major concern with the direction Ethereum is going,
| which I could caricature as "scale up massively and keep
| everything forever": it becomes so expensive to keep copies of
| all data, that only large institutional players will bother,
| and not many of them. This makes blockchain integrity a "take
| my word for it" kind of thing, and the whole system is only as
| durable as the increasingly-enormous data centers which hold
| all that information.
|
| [0]: https://scalingbitcoin.org/papers/mimblewimble.txt
| noxer wrote:
| The blockhcain may be "forever" but the history is definitely
| is not. Its a lie because the most likely outcome are that
| Ethereum dies because the history cripples it to an unusable
| system (its a lie then) or the the history dependency is
| removed so it can keep working (its a lie then as well
| because which part of the history is preserved is up to
| whoever does want to preserve it and no longer "guaranteed by
| the system")
|
| BTW history-sharding[1] isn't that complicated. If a DLT is
| build from the ground up with payment in mind and thus
| history is completely optional then you dont have to do any
| tech magic. But ofc this is not the case for Ethereum as it
| was not made for payment.
|
| [1]https://xrpl.org/history-sharding.html
| magila wrote:
| Not mentioned in the bandwidth section is that residential
| connections in the US usually have a monthly data cap of ~1TB.
| Users are unlikely to tolerate a blockchain client using more
| than half of that. So if a full node sustains much more than
| 200KB/s then vanishingly few users in the US are going to run
| one.
| SubiculumCode wrote:
| I used to be a skeptic of blockchain, but then I actually
| investigated what is going on in the industry. Yes there is a lot
| of fud, poor ideas, etc, but there are also lots of interesting
| cool ideas that just will not go away. Reminds me of the dotcom
| boom, actually.
| legulere wrote:
| Which ideas do you think will not go away?
| jollybean wrote:
| The notion of 'decentraliztion' as presented by the blockchain
| community is basically extremist/absolutist, and it's ruining
| their own projects.
|
| Our entire civilization and everything in it depends on networks
| of trust. Without it, we'd fall down instantly.
|
| To require a system of 'absolute decentralization' when 'partial
| decentralization' would work just as well, doesn't make sense.
|
| We technical people have an odd way of falling into these kind of
| traps - we're trapped in theory, unable to map to the real world
| pragmatically.
|
| DNS on the internet works on the basis of 'partial
| decentralization' and it works very well. There wouldn't be that
| much point in making it 'fully decentralized'. We could push it
| maybe a few inches more that way, but there's zero requirement to
| go 'fully decentralized' for it.
|
| You get vastly diminishing marginal returns to effort when you
| start to go absolutist.
|
| Much like Rust, which has some very nice outcomes but trades
| absolutely everything for those outcomes, some small tradeoffs in
| decentralization for Blockchain would yield probably some big
| benefits.
| wmf wrote:
| There are a ton of newer blockchains using "progressive
| decentralization" or "minimum viable decentralization".
| c01n wrote:
| But with fiat there is no trust between the people, the trust
| is provided by the banks, they act as the arbitrators because
| humans cannot trust each other. When we used to barter we
| stopped because it was sometimes unfair (convert bread to
| chickens?) so we invented money (gold) which is natural
| occurring and rare so we trust it more. Later on we invented
| banks which are a third party we use them as arbitrators
| because we don't trust each other. Now we invented blockchains
| (distributed ledgers) so we can see all the changes being made
| on the ledger because we don't trust each other.
| jollybean wrote:
| First - the notion that 'we don't trust the banks' is false.
| We, you, everyone, trusts that system every single day, with
| all of our financing. There is an _incredible_ amount of
| oversight in that system, the Fed publishes it 's actions and
| balance sheets. The banks have immense scrutiny.
|
| While we should never trust banks 'infallibly' we have layers
| and layers of protections.
|
| We have 'backups' for regular people like FDIC insurance so
| when that trust invariably gets broken here and there - there
| are backups. How often has FDIC had to be used? Very rarely.
|
| When someone steals your blockchain stash - which happens -
| where do you turn? Nowhere.
|
| Commerce is subject to the Judicial system meaning that when
| there is a problem, we can backtrack and make ammends, people
| can sue one another there is accounting etc..
|
| Second - it's well established that none of the cryptos thus
| far are usable as forms of currency, and frankly, they are
| poor stores of value.
|
| Your local corner store does not accept BTC for the same
| reason they don't take Euros - because prices fluxuate
| wildly, far beyond their profit margin. To accept BTC is
| tantamount to wild currency speculation which, over time, is
| guaranteed to put them out of business. There's a 100% chance
| that BTC 'will go down' over some period below their
| operating credit and will kill them.
|
| They could feasibly accept BTC and immediately transfer to
| USD, but what would be the point? You do that, it's your
| risk. And then it's 'not a currency'.
|
| Third - the 'never talked about' Elephant in the room is
| Monetary Policy. The ability to control currency is
| _extremely valuable_ - it 's dangerous, yes - but also
| powerful. Using 'Gold' implies 'no monetary policy' but
| arguably more trust, however, we'd probably all be broke.
|
| 'Wars and Pandemics' illustrate this quite well - when a
| nation faces existential calamity, it definitely needs
| monetary policy above and beyond normal operations. The
| economic devastation of COVID without monetary policy would
| have knocked down the economy like a sequence of dominos and
| left nothing standing.
|
| 'No Monetary Policy' is like building 'Brick Homes in San
| Francisco'. Brick is 'stronger than wood' you say? Hello 7.7
| earthquake, which is guaranteed to happen over time, and,
| which will knock down brick homes and leave the wood framed
| homes standing. 'Hard' things are often 'brittle' and without
| flexibility a single 'hard punch' will break it.
|
| And those are just the obvious points.
|
| So - instead of building something which is 'infinitely
| decentralized', you could feasibly build something that is
| partially decentralized and gain basically all of the
| advantages. Viatalin's notion of 'individuals running nodes'
| is essentially fundamentally flawed. Individuals should be
| 'running their own nodes' like they should be 'installing
| their own wiring, flooring, plumbing, adding their own
| additions without Engineering approved drawings'. Yes - you
| can do your own electrical work, but nobody does, because we
| have very effective division of labour and 'electricians' do
| that very well which is _immensely_ valuable.
|
| Let 3rd parties 'run nodes'. Make it so the tech requires
| minimal oversight. But there will never be 'no oversight',
| it's not feasible, and it never was.
|
| I'd go so far as to argue that 'trust based systems' are
| probably a kind of biological development based on some kind
| of actual efficiency optimization: we 'trust our electrician'
| just like we 'trust the authority of the bank'. Neither are
| infallible, but it's better than doing it all yourself.
| c01n wrote:
| Thank you for the reply. I think you misread my comment, I
| never said 'we don't trust the banks', I wrote that we
| invented banks to act as third party arbitrators because we
| (humans) don't trust each other.
| noxer wrote:
| The XRPL was invented shortly after some BTC devs saw that BTCs
| approach was "to extremist" and could never scale. It went
| online in 2013. To this day most crypto people will tell you it
| is centralized and some buggy-man can turn it off/delete/revert
| etc.
|
| While in reality it started as a cluster of nodes run by a
| single entity (centrally controlled just like BTC did) and
| moved to continually enlarge the number of entities to the
| point where the original nodes have absolutely no special
| permission or power left. There was even a software update
| amendment that was accepted by all other nodes but the original
| nodes so they overrules them. The system isn't based solely on
| trust however the people who run a node can pick trusted
| nodes[1]. This is important for reliability. If you trust
| crappy nodes that go offline your node could miss Tx and fork
| off with no way to detect that and if trusted nodes collude
| they could halt your node. However the validation is done
| locally there is no need to trust any other nodes to check if
| the Tx are valid. You see if a node lies and if you previously
| trusted that node you would simply remove it. You dont have to
| trust a single node you have to trust the majority of all nodes
| you trust. There is no way around the "trust the majority"
| anyway. In BTC for example you are forced to trust that 51% of
| hashing comes form honest people who do not collude. the
| difference here is you dont know who they are and you can
| neither pick the ones you trust nor exclude the once you dont
| trust or misbehave. Needless to says the this system
| outcompetes all the other systems for decentral consensus.
|
| But Guess what. People still says the XRPL its centralized.
| Most people simply dont understand the tech in this space. They
| are in it for the gambling.
|
| [1] https://xrpl.org/intro-to-consensus.html#trust-based-
| validat...
| maxrev17 wrote:
| This is a really good read. More of this and less of Elon's
| chatter needed!
| laurent92 wrote:
| I was trying to summarize, for an employee who got caught in
| "Elon Musk shouldn't have manipulated the BTC" (!) (obviously
| the employee lost 25% of his savings), I was trying to
| summarize the list of dangers of having savings in BTC.
|
| - Laws of any big country could change and trigger the sale for
| a lot of sellers of a country,
|
| - Especially given BTC is used by Iran to bypass petrol
| restrictions, used by ransomware and all sort of dealers, as
| well as Chinese who want to flee,
|
| - Currencies are in theory regalian = only emitted by the
| central bank;
|
| - Once any country gets upset with this, they could blame
| terrorism on BTC and ask owners to prove their origin of
| wealth, which would be a major hurdle if the law was strict.
|
| I'm adding this to the list. Volatility is desired because "you
| can make it big", but the rest is only dangers.
| Ar-Curunir wrote:
| Sanctions are not a good thing; they inevitably affect the
| common person much more than they affect sanctioned
| governments.
| javert wrote:
| Bitcoin is about giving the world honest money (someday), not
| about getting rich. Don't put "savings" in bitcoin.
| tromp wrote:
| I feel honest money should be rather more hoarding
| resistent...
| UncleMeat wrote:
| That ship sailed with the bch split.
| maxrev17 wrote:
| Yeah savings vs investment. Crypto is a very high risk
| investment and should be used as the high risk cherry on top
| of any portfolio pie! Unless you are minted and don't mind
| losing a tonne in which case go all in on eth :p
| mantenpanther wrote:
| There is only a loss if you sell.
| rapsey wrote:
| The price is manipulated by hedge funds and/or whales to
| fleece unsophisticated investors. Wyckoff pattern has
| described BTC this tear to a t.
| bob33212 wrote:
| I suspect they are following sentiment analysis on social
| media and also have demand details on the exchanges.
|
| I assume that soon they will let it drop to 9k and leave it
| there for a few years and the start the whole thing over
| again, with the next round of "investors". These
| "Maximalists" are unintentionally helping them set a floor.
| puranjay wrote:
| The price isn't manipulated - the price was overheated and
| we're closer to bear than most realize.
|
| Which is good because crypto is a lot more fun in bear
| markets.
| dehrmann wrote:
| > The price is manipulated
|
| Clearly. Watch the price after Musk's announcements.
|
| > fleece unsophisticated investors
|
| Someone speculating in an unregulated asset that's seen
| massive growth in the past year should have no expectation
| of not being on the bad side of a trade.
| comex wrote:
| > Someone speculating in an unregulated asset that's seen
| massive growth in the past year should have no
| expectation of not being on the bad side of a trade.
|
| And yet some people dump their life savings into it.
| noofen wrote:
| It's genuinely concerning how 1:1 the Wyckoff pattern is
| for BTC at the moment [1].
|
| [1]: https://www.youtube.com/watch?v=Lhf_2gJJS1I
| vehementi wrote:
| That was a month ago and it has since diverged, the same
| youtuber is performing even more mental gymnastics to try
| to explain the divergence
| atweiden wrote:
| As anyone who was around to see the advent of "crypto TA"
| c. 2012 can attest, TA in the Bitcoin space started out
| as quantitative-themed narrative pumping, and it remains
| so to this very day. Crypto TA chartists self-promote and
| advertise coins in a furtive attempt to bolster
| speculation. They can then point to "trading volume" and
| speculation-fueled transactions to further boost
| perceptions of credibility -- "$X zillion dollars were
| settled on this blockchain I'm invested in".
| javert wrote:
| There are also big risks to fiat money, such having the
| entire economic output of your civilization be grossly
| distorted by central banks.
| bob33212 wrote:
| No one is saying that fiat money is perfect. This is a
| logical fallacy to jump to "Fiat has issues, therefore I
| will only own bitcoin". That is like saying "McDonalds is
| unhealthy, therefore I will only eat sand"
| javert wrote:
| I didn't say that. You're attacking a straw man.
| abecedarius wrote:
| "Risk-free rate" as in "nobody gets fired for buying IBM"
| rather than "actually no risk".
| neither_color wrote:
| The first part of point #2 is interesting because it's a
| blessing or a curse depending on which side of the hegemony
| you're on. Hypothetically speaking, if the Soviet Union were
| the current dominant superpower, or if China were the
| dominant superpower 15 years from now, and the US were under
| sanctions, wouldn't point 2 be a blessing? Being able to
| circumvent the wishes of the superpower du jour, for better
| or worse, does give an inherent value to the network
| regardless of whether the energy used is green or not.
| crazypython wrote:
| Hi. Bitcoin.org contributor[0] here. You can start and run a
| fully validating Bitcoin node with 7GB of storage space and
| 128MB-256MB RAM. Download the official GUI Bitcoin software
| here[1]. Enable pruning to store just 7GB. This validates all
| blocks.
|
| The ability to prune older blockchain data is an inherent feature
| of blockchain, as explained by Satoshi himself:
|
| > Once the latest transaction in a coin is buried under enough
| blocks, the spent transactions before it can be discarded to save
| disk space. To facilitate this without breaking the block's hash,
| transactions are hashed in a Merkle Tree [7][2][5], with only the
| root included in the block's hash. Old blocks can then be
| compacted by stubbing off branches of the tree. The interior
| hashes do not need to be stored.
|
| Only the recent several days need to be stored for security,
| which allows Bitcoin to run very securely with just 7GB of space.
|
| [0]: https://github.com/bitcoin-dot-org/Bitcoin.org/pull/3624
|
| [1]: https://bitcoincore.org/
| dmitriid wrote:
| > Once the latest transaction in a coin is buried under enough
| blocks, the spent transactions before it can be discarded to
| save disk space.
|
| Everyone should have this quote ready when there's an
| inevitable "but there's no tampering of the log, and all
| transactions are kept forever and can be verified!"
| crazypython wrote:
| Yes, the blockchain data structure ensures that if you verify
| the older transactions, the newer transactions on top of it
| are verified. If the old version was valid, the newer block
| built on top of it is too.
| gruez wrote:
| This feels like a misunderstanding of how the syncing process
| works. You don't only download the last n blocks and assume
| the current state is accurate. You download the entire chain,
| validate it, and optionally discard the redundant
| information. As far as your client is concerned it still
| verified the entire chain end-to-end. The only difference
| with pruning is that you can't revalidate the chain end-to-
| end without redownloading the whole chain, but I'm not sure
| why you'd want to do that unless your machine was
| compromised.
| dmitriid wrote:
| what happens when everyone on the chain discards old
| transactions?
| wmf wrote:
| That would be bad. Archive nodes are needed.
| narush wrote:
| One thing blockchain scalability conversations often miss is the
| concept of induced demand [1].
|
| City streets and computer hardware and blockchain throughput. We
| dream that 'make bigger, make faster' will alleviate congestion
| in all of these places, and make our commute and compute as fast
| and cheap as we want it to be.
|
| But in practice, commuters are programmers are blockchain users.
|
| For commuters, if more lanes get added to a local highway,
| driving to work becomes traffic free - so why not drive when you
| used to take the train? With all this extra capacity, there's
| traffic again.
|
| For programmers, faster computers mean less need to be efficient.
| Less worry about writing efficient code, seemingly as much JSON
| parsing as one can tolerate, more dependencies, and higher level
| languages that make programming more pleasant but less efficient.
| And so computers are 100000X faster than they used to be, but
| opening a text editor is about as slow as it was 10 years ago.
|
| For blockchain users, it will be the same. As block space
| increases, the applications users dream up to run on the
| blockchain will as well. And so transactions will end up costing
| the same.
|
| That being said, the total capacity will be higher! So we are
| scaling - I just don't think it's gonna be the utopia it might
| appear at first glance.
|
| [1] https://en.wikipedia.org/wiki/Induced_demand
| SubiculumCode wrote:
| And that is why scaling solutions like Polygon have a future if
| Ethereum has a future.
| atweiden wrote:
| That's just a narrative, though. The practical reality is
| cryptocurrency valuation is driven by these narratives 100%.
| The other practical reality is the people pretending as if
| this reality doesn't exist are increasingly perceived to be
| engaged in biased sophistry.
|
| Granted, low information people are still falling for it, but
| high information people increasingly aren't, as evidenced by
| Ethereum failing to get even 3/4s of the way to its previous
| bitcoin-denominated valuation high over the most recent
| market cycle, despite ludicrous levels of hype.
| cinntaile wrote:
| Induced demand is an argument frequently used against bigger
| roads but the reality is that the increase in road size takes
| many years before the road is at its maxed out capacity again
| so it definitely helps.
| mrkramer wrote:
| "It's crucial for blockchain decentralization for regular users
| to be able to run a node"
|
| Yea just like Larry Page is running Google server in his bedroom
| to help scale Google's infrastructure.
|
| Nodes need to be in specialized server farms and compete with
| each other for profit. Capitalism is all about specialization and
| competition in order to improve quality not everybody doing the
| same thing and amounting to nothing at the end.
| mtreis86 wrote:
| Is there anything blockchains can do in less time complexity than
| traditional computations?
| wmf wrote:
| Inherently no; consensus requires redundant computation.
| noxer wrote:
| DTLs aren't "computers" its just that some build a computer
| into it to create a decentral computer.
|
| In its raw form a DTL does not compute an output but ofc all
| participants compute signatures and such stuff to validate
| input and reach consensus.
|
| This is not a competition to a single computer as load is no
| distributed its the exact opposite. Everyone checks the rules
| of the system. (not to be confused with mining that does
| nothing, its just a puzzle to decide who can write the next
| block)
| slver wrote:
| Blockchains subject to laws of logic and physics, confirmed.
| xalava wrote:
| - Why 10% margins on average? What is exactly the risk profile?
|
| - Why consider that a group of diverse group of developers is a
| governance danger while a group of users would be fine?
|
| - What are the incentives to run a full node for an average user?
| jude- wrote:
| So, what happens when one of the shards goes offline, or forks?
| What are the cascading consequences for validators of other
| shards, if any?
|
| Asking because I don't think there's a viable strategy for
| keeping all shard data around indefinitely, without giving up
| either scalability or durability:
|
| * If the system requires cross-shard state-transitions to be
| mirrored to on a "central" chain (e.g. the beacon chain) in order
| to stave off unavailability, then that central chain's capacity
| is the scalability bottleneck.
|
| * If the system requires cross-shard state-transitions to be
| mirrored instead to both shards in order to stave off
| unavailability, then ultimately all shards will host a non-
| trivial fraction of each others' state, meaning that the
| scalability bottleneck is the most-loaded shard.
|
| * If the system requires some nodes to store full replicas of all
| shards in order to avert shard unavailability, then the system is
| no more scalable than the nodes required to carry this burden.
| javert wrote:
| You could also just not scale the blockchain, and instead use
| layer 2 solutions, which is the bitcoin approach.
| jeremycarter wrote:
| But then what's the difference with the existing solutions
| involving central banks?
| gruez wrote:
| Because layer 2 solutions (eg. LN) are trustless. ie. it
| doesn't involve you depositing your coins with some third
| party and trusting that they don't run off with them.
| jeremycarter wrote:
| And you've personally lost money from government regulated
| financial institutions?
| mistrial9 wrote:
| my USA bank re-arranged the order of my checks and ATM on
| a certain day in december of 2007 to create an overdraft,
| which then was charged large fees, several times. At a
| similar time, around dec 2007, I stood next to a BofA
| customer being told that his cash deposit at the BofA
| window, would be credited on the next business day. I
| believe that there are documented cases much, much
| larger, but involving commercial transactions, that ended
| up with large losses also.
| gruez wrote:
| 1. I'm fortunate to live in a country with a stable
| enough banking system that I haven't ...yet. Others are
| not so lucky.
|
| 2. whether you "lost money" is also the wrong question to
| ask. eg. if there was a massive bank failure and the
| government decided to bail them out by printing massive
| amounts of cash, you'd technically gotten your money back
| but you still "lost" money.
|
| 3. this feels like a derail/moving the goalposts and
| eventually devolving to arguments about monetary policy,
| intrinsic value, and whether the state should have a
| monopoly on currencies.
| mantenpanther wrote:
| That it's not centralized?
| jeremycarter wrote:
| Why does it have to be decentralized again?
| mantenpanther wrote:
| Many reasons!
| 542458 wrote:
| BTC's layer 2 method also doesn't scale because (among other
| reasons) you still need on-chain transactions to handle opening
| connections and creating wallets, which the main chain does not
| have the throughput to do at scale. That's also not to mention
| all the practical difficulties of using lightning (have to
| constantly monitor for fraudulent closing of connections, locks
| up liquidity, etc) and technical issues (route finding doesn't
| scale, introduces massive DoS vulnerabilities).
| javert wrote:
| Lightning is not the only layer 2.
|
| In fact, the most obvious layer 2 is simply to use custodial
| solutions.
|
| However, I personally think lightning works better in
| practice than what you're saying.
| tromp wrote:
| It clearly offers much improved scalability since 2 on-chain
| transactions can support hundreds of off-chain ones.
| Certainly, there are still limits on the number of
| transactions it can support in practice, but those numbers
| are orders of magnitude larger.
| rawtxapp wrote:
| Lightning channel factories will reduce the on-chain
| transaction requirements very significantly by batching many
| channels open/closes into a single transaction.
| diegocg wrote:
| Don't worry, bitcoin will solve these problems... With a
| third layer!
| gruez wrote:
| Many of the problems listed are either overstated or have
| solutions already. eg.
|
| >you still need on-chain transactions to handle opening
| connections and creating wallets, which the main chain does
| not have the throughput to do at scale
|
| channel factories
|
| >have to constantly monitor for fraudulent closing of
| connections
|
| watchtowers (which are trustless) and you don't actually
| have to "constantly" monitor, more like once every 2 weeks.
| nivexous wrote:
| So many reputations and projects in blockchain rest on this
| flawed idea that users need to run nodes. Users do nothing to
| extend the chain! If a group of miners wants to change the
| protocol, it takes _another_ group of miners to counter it. And
| there always will be another group, because miners compete. From
| the bitcoin whitepaper: "He ought to find it more profitable to
| play by the rules". And let's get serious: users will hear about
| such a protocol war on news outlets, not by watching their node.
| Then they can choose which fork to buy, sell, and use.
| dmitriid wrote:
| > Then they can choose which fork to buy or sell.
|
| Funny how this is now the only activity for this: buy and sell
| forks in a vacuum.
|
| Because in actual real world scenarios users definitely don't
| chose that. Just go into a shop and watch people not chosing
| anything, but, you know, just paying.
| nivexous wrote:
| Even granting that, it's still not user nodes that matter.
| We've seen from history (BCH/BSV/BCHA) that applications and
| exchanges decide which fork gets the ticker.
| xorcist wrote:
| It was the other way around. Several exchanges publicly
| went all-in on various Bitcoin forks, only to turn around
| on them when all users and economic activity stayed with
| "regular" Bitcoin.
|
| Many prominent people predicted the mainline Bitcoin chain
| dead when so many important exchanges and custodians
| promised to change the consensus rules. In retrospect it
| may sound like empty threats, it doesn't make much business
| sense to go up against economic activity, but at the time
| it was considered a real threat.
| crazypython wrote:
| > So many reputations and projects in blockchain rest on this
| flawed idea that users need to run nodes.
|
| BSV obviates the idea completely.
|
| Any mistake the miners make, is forever.
|
| Without this, miners could increase the money supply by
| indefinitely postponing the block reward.
|
| > "He ought to find it more profitable to play by the rules" >
| If a group of miners wants to change the protocol, it takes
| another group of miners to counter it.
|
| No one is going to mine on a chain that produces worthless
| coins users don't accept. Users forced miners to activate
| Segwit in 2017, and almost all hashpower is still with Bitcoin.
| nivexous wrote:
| _Users forced miners to activate Segwit in 2017_
|
| Honestly, you don't know this. Users != nodes. A single
| individual could have spun up tons of nodes to vote for
| Segwit. Given the stakes and how manipulated social media was
| at the time, I consider this what likely happened. This is
| also what proof of work solves.
|
| _and almost all hashpower is still with Bitcoin._
|
| Everyone knows the game by now. Whoever keeps the ticker
| keeps the hashpower. We saw this with BCH/BSV and also
| BCH/BCHA. Because most users don't follow these details. It
| doesn't mean users won.
| nivexous wrote:
| _They recently rewrote Bitcoin history due to government
| action._
|
| This never happened. You are spreading lies.
| znpy wrote:
| For a blockchain to be decentralized, it's crucially important
| for regular users to be able to run a node, and to have a
| culture where running nodes is a common activity.
|
| you don't _convince_ users to do stuff. you _bribe_ them.
|
| introduce a small form of reward for running a validating node
| and voila, nodes popping up everywhere.
| s17n wrote:
| If Vitalik is correct that the only viable defense against the
| attack described in this article is users validating nodes en
| masse, then blockchain is doomed, because you're never going to
| convince more than a small percentage of users to validate
| blocks.
|
| Personally, I think that custodial entities such as Coinbase (or
| in the future, banks) can probably be relied on to not do
| anything too controversial.
| Ar-Curunir wrote:
| If a decentralized technology has to rely on centralized
| custodians for scaling, then it is not decentralized
|
| (It might still be useful, but you can't call it decentralized
| or censorship-resistant or whatever)
| Closi wrote:
| So back to centralisation of power?
| greg7mdp wrote:
| Looking forward to the bright future where we rely on
| centralized exchanges and banks!
| wmf wrote:
| I don't think you're disagreeing as much as you think. A small
| percentage could still be 10,000 nodes or more which seems like
| a healthy number.
|
| (Of course, even a billion nodes can't prevent attacks if they
| have no economic weight...)
| sktrdie wrote:
| This "blockchain" space is getting so complicated that I can't
| see anymore what it is about. Is it a database? Is it a p2p
| network? Is it a currency?
|
| Most of the "blockchains" listed on aggregators such as
| coinmarketcap.com are essentially clients communicating to a few
| nodes which, for all we know, sync up in a coordinated way to
| provide the illusion of a decentralized consensus system.
|
| Like maybe we need to take a step back and ask "what problem are
| we actually trying to solve?".
|
| Is an uncontrollable & anonymous currency truly the next big
| thing we need? Did we even stop to think of the potential issues
| of a system like that?
|
| To me the future should be more audacious. Maybe we don't need
| some kind of unalterable decentralized database where capitalism
| can thrive from. Maybe we need to rethink society where money is
| not as crucial as it is today.
|
| Hoping that the "next" cryptopunks can think of these ideas to
| really change the world for the better rather than ways to scale
| an unalterable database which, for all I can tell, just provides
| a distributed way to track who owes what to whom.
| DSingularity wrote:
| It's a network supporting both a decentralized data-store with
| a consistent view into valuable data and an a distributed
| computer with consistent results. What is so hard about this?
| jeremycarter wrote:
| Yes but what problem is it trying to solve? It's a solution
| to a non existent problem.
| DSingularity wrote:
| Okay, decentralized currency is one idea. This can be used
| to implement some money with a monetary policy that is
| transparent and modified through consensus: eg bitcoin -
| deflationary via finite supply. Multi-party wallet is
| another. With this, cryptographic signatures from a
| majority of the owners is required to transfer
| currency/digital assets. Non-fungible tokens is another.
| This can be used to -- as an example -- publish land deeds
| and property deeds online and make them easily transferred
| as opposed to the current systems which are not fool-proof
| and are not as user friendly (look at selling a house and
| how expensive it is for no good reason). Or what about
| decentralized finance? A user can literally borrow money
| against Bitcoin without the need of an authority which can
| discriminate against him for no good reason. How nice is it
| that we can now operate such systems that are robust to
| censorship.
|
| But you will just dismiss all these ideas. Same way people
| dismissed all the ideas people were imagining when the
| internet is young.
|
| If you want to broaden your mind-- just detach the idea of
| blockchain from the price of Bitcoin. Yes, it's insane to
| the point of being obscene.
| bpodgursky wrote:
| It's not hard, it's just an easy brain-free dunk.
| mvzvm wrote:
| Hard? Nothing. Useful? Nope.
| samatman wrote:
| Money is much older than agriculture. Recognizable money-like
| grave goods, in the form of shells of a consistent size with
| holes for stringing, date back 80,000 years.
|
| That's about is Lindy as it gets. I'm dubious of anyone who
| supposes we can "rethink society" to make money less crucial.
| It seems simpler to assure that anyone who doesn't have enough
| money gets some.
|
| It's a dangerous experiment we're running, to have all
| currencies in the modern world be government-issued paper. Such
| currencies have a known and spectacular failure mode, which
| continues to happen right now, and "it can't happen to us" is
| just a bet, not a law of nature.
|
| I'm glad that cybercoins exist, as a hedge against that
| occurring. Gold is the old standard, but difficult to transfer
| other than hand-to-hand.
|
| Maybe it won't happen, perhaps Modern Monetary Theory is
| perfectly correct and the Fed and ECB will keep on trucking
| indefinitely with a manageable and smooth inflation curve. I'd
| prefer that, of course, a currency collapse tends to be a
| regime-ending event as often as not, and it's bad for commerce,
| which I need in order to eat, clothe myself, and travel more
| than about ten miles in a day.
|
| But I'm grateful that there exists at-least-one distributed and
| uncensorable way to "track who owes what to whom". We might all
| be grateful for it one day. Or we might not.
| portemonnaie wrote:
| That's why you should stick to Bitcoin, not Ethereum. While I
| find the problems and musings of the Ethereum crew fascinating,
| I have started to wonder if it is the crypto equivalent to a
| planning economy: they'll just add patch after patch to fix
| thing that are not fixable, making the system more and more
| complicated.
|
| I understand Bitcoin (in principle), it is not that hard to
| understand. I don't understand most of Ethereum.
| Ar-Curunir wrote:
| Bitcoin is a stagnant ecosystem. It's not useful for everyday
| monetary transactions, and the developer community is too
| conservative to introduce features that would allow scaling
| up meaningfully (lightning is insufficiently decentralized)
| puranjay wrote:
| I see it as a global, decentralized market anyone can
| participate in without restrictions.
|
| For instance, if I feel my country's currency is heading
| towards hyperinflation, I can buy up tokenized USD as a hedge.
| There is no limit to how much I can buy nor do I ever need to
| visit a bank and comply with an oppressive regime - think
| Venezuela.
| bronzeage wrote:
| In other words, there's no chance in the horizon that crypto will
| ever replace fiat, because the design of crypto requiring full
| verification by most nodes will never deal with the scale
| required by fiat currency.
|
| Anyone saying the fight is between crypto and fiat doesn't
| realize crypto loses big time.
| idlewords wrote:
| The really obvious weakness in any blockchain setup is the
| software. Whoever controls the software upgrade channel will
| always have potential control of the blockchain, whether that's
| the official entity in charge, or some intermediary.
|
| If you want really widespread distribution of full nodes, you
| need to make a consumer-friendly distribution of the node
| software, and package it and keep it updated in a way that
| regular users can run it and forget it. This same convenience
| introduces a centralization problem that obviates the whole point
| of running a distributed ledger.
|
| This is a point so obvious I hesitate to make it, but I've
| learned that in blockchain territory there is no flaw too obvious
| to point out.
| wmf wrote:
| That's why some blockchains have multiple implementations and
| don't use auto-updates. There's also some work on taking
| governance out of developer's hands (e.g. Tezos where users
| vote on new features).
| sp332 wrote:
| Most transactions and legitimacy come from exchanges, not
| individual clients. I think they will have more clout than the
| client writers.
| idlewords wrote:
| Then the exchanges will become the point of control (even
| more so than they are now).
| dehrmann wrote:
| Miners control bitcoin more than people realize.
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