[HN Gopher] Ethereum Has Issues
___________________________________________________________________
Ethereum Has Issues
Author : danso
Score : 200 points
Date : 2022-04-14 16:46 UTC (6 hours ago)
(HTM) web link (blog.dshr.org)
(TXT) w3m dump (blog.dshr.org)
| bulbosaur123 wrote:
| Let me guess. "It's still early". No it's not. "Still early" is
| the laggard's cope. We are in late stage of adoption, entire
| countries (El Salvador) have adopted Bitcoin, to what effect is
| up for discussion. One thing is clear, it's no longer "early".
| maupin wrote:
| Maybe not early, but saying that we are in the "late stages of
| adoption" is laughable.
| whymauri wrote:
| This might get me crucified on HN, since many here are from
| developed countries, but I would argue we're just cresting
| the hill of late stage adoption for the Internet. Like, 40%
| of the world still does not have Internet!
| hitovst wrote:
| Ethereum is an anti-CC bribe. I get how traders might not have
| realized this, but the principled people who were drawn to
| Bitcoin should have realized this a long time ago.
| carlosdp wrote:
| > The long-term effort to implement "sharding" in Ethereum 2.0,
| which in effect parallelizes the operation of the blockchain.
|
| This effort is effectively dead, for what it's worth. We've moved
| beyond this, it was going to over-complicate things and Layer 2
| is a much better scaling solution that is already starting to
| work in production.
| drcode wrote:
| It's not dead, data sharding (not execution sharding) is very
| much part of the plan
| https://notes.ethereum.org/@vbuterin/proto_danksharding_faq
|
| Execution sharding is also still planned, though right now it
| is in the hazy distant future
| Geee wrote:
| Ethereum is a dead man walking at this point. I hope it dies as
| soon as possible. Ethereum is the worst thing that happened to
| cryptocurrency. It diverted attention from what's actually
| important, brought all the scamming in the space, and hasn't
| provided anything of value.
| px43 wrote:
| Ha, Flash Boys 2.0 was from 2019. This blog post is literally "I
| read a thing from three years ago and have lost faith in
| something that I never believed in in the first place".
|
| As someone who knows and has worked with all the people involved
| with the write-ups referenced in this blog post, I can pretty
| confidently say that the author is way way behind here. There
| have been some insane advancements in recent years that would
| blow his mind.
|
| MEV harvesting is actually an insanely fascinating field of
| study, and it comes down to consensus in a world where
| information can only move as fast as the speed of light.
|
| Front-running is a general problem where, if you can find out
| that someone wants to buy something, and can buy it first and
| sell it to the person who actually want it at a premium. This
| gets really interesting in the blockchain space, because Miners
| (Validators) decide the order of transactions, and in some cases
| validators can be incentivized/coerced to move around
| transactions in a way that might be beneficial for certain users.
| This is what is referred to as _" Miner Extractable Value"_.
|
| Yes it's a problem, yes there are mitigations, yes there are fun
| and weird ways around those mitigations, etc.
|
| This is what happens when people are incentivized to take a
| really good hard look at what global consensus really means. At a
| high level, most users don't really need to know or care about
| any of it, but it exists as a parasitic force constantly
| extracting value from the network. Still, IMO the parasites that
| feed off MEV are at a significant disadvantage compared with
| those who feed of legacy financial networks (for more on that,
| you can read the actual Flash Boys book
| https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...).
| Geee wrote:
| The referenced paper is dated 29 March 2022.
| https://arxiv.org/abs/2203.15930
| otterley wrote:
| Can you elaborate on some of these "insane advancements"?
| crazypython wrote:
| It means they worked on it and acknowledge it now. The
| fundamental problem is still very much there.
| repomies69 wrote:
| That sounds insance
| toolz wrote:
| Do we have to accept that MEV is a problem? Just because it's
| been a tactic used in the shadows with traditional finance
| doesn't mean it's a problem in an open ecosystem where anyone
| willing to pay can play. There isn't some shadow elite funding
| a central government here lobbying for restrictive legislation
| to keep competition at arms length. In my opinion the crypto
| ecosystem in general is much more understanding and capable of
| finding ways to distribute information and trust, which
| prevents this from becoming a bad thing like we see in
| traditional finance.
| lukeramsden wrote:
| > Do we have to accept that MEV is a problem?
|
| Yes and no. On the one hand, one does have to accept that
| "MEV" in the "_Maximum_ extractable value" is always going to
| be potentially present on a public blockchain - but often
| times, this is a good thing. Liquidity pool arbitrage is also
| "MEV", but is MEV that is absolutely vital to efficient
| markets, and the more advanced the players in that game get,
| the more everybody gets to enjoy liquid and efficient
| markets. On the other hand, more and more DeFi projects take
| in to consideration possible MEV extraction vectors when
| designing applications, and some even use "MEV protection" as
| a USP (such as CoWswap)
| jkhdigital wrote:
| The real problem with MEV is that it distorts the consensus
| mechanism in weird and unpredictable ways. MEV is essentially
| free money that could be considered part of the block reward,
| but it exists at the application layer so it really can't be
| accounted for in the consensus protocol incentive design.
| Application layer logic ("smart contracts") can move
| arbitrary value in arbitrary ways, which can create wild
| volatility from block to block.
|
| A similar problem appears to emerge when Bitcoin's block
| reward disappears, as high volatility in block rewards would
| cause rational miners to behave in suboptimal ways.
| w_TF wrote:
| Something that rarely gets addressed in these discussions is
| why Ethereum even has fee market to begin with instead of a
| cheap FIFO model which ideally would be more fair.
|
| To answer that I would invite anyone to try using a
| blockchain under heavy load without any way for users to
| prioritize transactions. What you will find is the network
| becomes vulnerable to transaction spamming; possibly to point
| of breaking consensus making it so nobody can transact at
| all.
|
| MEV is a consequence of a design decision to address this.
| And that's not to say Ethereum has everything figured out and
| a better FIFO model can't solve this, but afaik this is the
| current state of things.
| 99112000 wrote:
| FIFO? First in first out? The blockchain is essentially the
| timestamping machine. The timestamp of a transaction are
| untrusted until mined into blocks, even then a fork can rid
| them.
|
| The blockchain is essentially solving the ordering problem,
| one big timestamp machine. The solution you propose would
| require a timestamp machine in the first place lol.
| sl3232323 wrote:
| _Nat_ wrote:
| > As someone who knows and has worked with all the people
| involved with the write-ups referenced in this blog post, I can
| pretty confidently say that the author is way way behind here.
| There have been some insane advancements in recent years that
| would blow his mind.
|
| Looks like they link a lot of stuff from the past month.
|
| Examples of links in the article from within the last month:
|
| 1. https://arxiv.org/abs/2203.15930
|
| 2. https://davidgerard.co.uk/blockchain/2022/04/04/if-you-
| want-...
|
| 3. https://datafinnovation.medium.com/the-consequences-of-
| scala...
|
| 4. https://web3isgoinggreat.com/?id=2022-04-05-0
|
| 5. https://ethresear.ch/t/np-completeness-of-a-strong-form-
| of-s...
| throwaway82652 wrote:
| >it comes down to consensus in a world where information can
| only move as fast as the speed of light.
|
| Yes and now you're circling back around to the usual problems
| with algorithmic high-frequency trading talked about in Flash
| Boys, which has nothing to do with blockchains or
| cryptocurrency. Unless you can cite some "insane advancement"
| in consensus algorithms that solves these problems everywhere
| then I doubt there is much more that can be said here. Because
| AFAICT everything you're talking about is just piling more
| mitigations and edge cases on top of an existing consensus
| algorithm. That work is important and it needs to happen on any
| distributed system. It's not some kind of world-changing thing,
| it's just necessary maintenance (and cost) to keep the system
| going.
|
| >This is what happens when people are incentivized to take a
| really good hard look at what global consensus really means.
|
| They were already incentivized to do that without blockchains.
| This sentence could be more accurately stated: This is what
| happens when people deploy an experimental solution that claims
| to solve global consensus, but as we find out from experience
| that it actually doesn't, in some ways it actually makes it
| worse, and generally speaking those problems are still just as
| hard as ever.
| tornato7 wrote:
| There are actually some insane advancements coming out in the
| form of zero-knowledge order books, Dusk Network being the
| most well known. It essentially removes frontrunning as a
| possibility because buyers and sellers are matched using ZK
| proofs, but are not able to see any orders before they are
| matched.
| throwaway82652 wrote:
| That sounds good for any kind of HFT platform matching
| buyers and sellers. I don't see how that is an "insane
| advancement" or has anything to do with blockchains.
| pazimzadeh wrote:
| Because the miner wouldn't be able to see the order
| book?..
| throwaway82652 wrote:
| Sure, if you care about HFT you probably want the same
| guarantee to apply to any market maker, not just ones who
| operate on blockchains. Unless I missed something here.
| jkhdigital wrote:
| The real question here is not whether one can design a
| market that prevents bad behavior, but whether any of the
| major players will ever bother using it. If the "little
| guy" is always on the losing end of market shenanigans,
| then market makers will never have an incentive to move
| their liquidity to the "fair" market.
| pcthrowaway wrote:
| The "little guy" is always at a disadvantage in
| capitalism (or small business, or mom & pop shop)
|
| I suspect there's a disconnect between people talking
| about democratization of access, and people pointing out
| crypto _doesn 't_ actually make things fair.
|
| Crypto _doesn 't_ make things fair for the little guy.
|
| It _does_ add additional transparency to financial
| markets though, as well as things like open, verifiable,
| non-custodial, programmable financial contracts (as long
| as all the inputs can be verified reliably on-chain)
|
| This gives people equal access (with some limitations on
| what that means)
| throwaway82652 wrote:
| >It does add additional transparency to financial markets
| though
|
| No, not really. This whole comment is more crypto myth-
| building. There's nothing technical about blockchains
| that adds transparency. Any company that wants to publish
| all its financial statements publicly can technically
| already do so and could always do so. They don't for many
| reasons, the most important ones being that customers
| overwhelmingly want financial privacy, and financial
| companies are required by law to provide a certain level
| of privacy for customers.
|
| >open, verifiable, non-custodial, programmable financial
| contracts
|
| No, smart contracts are technically not "contracts" in
| the legal sense and are also not "non-custodial" because
| they require middlemen to run the blockchain. There is
| also nothing more open or verifiable about smart
| contracts compared to any other program. They're just
| programs.
|
| >as long as all the inputs can be verified reliably on-
| chain
|
| This will never happen because the only reason they're
| useful is because they take inputs from off the chain.
| The marketing is that users will be able to actually use
| these things to perform services. Of course that is self-
| contradictory because of the previous reason.
|
| >This gives people equal access
|
| No it doesn't, because only a small fraction of people
| are going to become smart contract programmers or are
| going to become skilled in auditing smart contracts. You
| might as well say all finance gives people equal access
| because anyone can become a CPA.
| rufusroflpunch wrote:
| This is not directly related to the content of the post but is
| about Ethereum. I have been putting this hypothesis out there on
| twitter for a while now, looking for someone to refute me, but no
| one has yet. This seems like a place where I might be able to
| find someone who understand Ethereum enough tell my grasp of the
| protocol is wrong (or right):
|
| Ethereum is going deflationary. Not disinflationary like Bitcoin,
| but actually deflationary, with token burn. Whether you think
| deflationary money is bad or good is not germane to the problem
| I'm about to explain, as I see it.
|
| Ethereum makes a claim at decentralization. However, by moving to
| a Proof of Stake system, they have set a fixed amount to be
| staked (32 ETH in this case, though the number itself does not
| matter). With the token going deflationary, that means that the
| opportunity cost to stake will always be increasing,
| mathematically, in ETH terms. The staking requirement does not
| adjust to changing token supply.
|
| For argument's sake, if there are 100 ETH on the network, and you
| stake 1 ETH, you effectively need to lock away 1/100 of all
| wealth on the network. However, if 10 tokens get burned, now you
| lock away 1/90 wealth on the network. Staking that 1 ETH just got
| 10% more expensive because the opportunity cost of staking that
| ETH increased relative to spending it.
|
| Economically, this means that the system is going to drive out
| marginal stakers, by design. The only response I have gotten from
| ETH holders is about staking pools, but staking pools don't fix
| the underlying economic incentive brought about by deflation:
| increasingly holders will find it less worthwhile to stake their
| ETH.
|
| It seems to me that ETH is headed right for some kind of
| centralization death spiral, as only increasingly wealthier
| holders will be able to justify staking.
| cdiddy2 wrote:
| the premise that it will be deflationary forever isn't right.
| It can't be and it will find an equilibrium or even become
| inflationary again as dynamics around the burn and staking play
| out.
| dudus wrote:
| What you seem to be afraid of is something that might or not
| happen in a distant future. At that point they just change the
| rules again. Ethereum has done it several times. If they don't
| like the direction things are going they just change it. Some
| people get mad about it but it just keeps chugging along and
| these people go out and possibly create a fork that goes
| nowhere.
|
| I still think crypto is high priced poop people currently view
| as valuable. But I don't see how your point goes anywhere to
| prove it.
| pshc wrote:
| Staking pays all stakers out proportional to their stake, which
| is as fair as is possible, and more fair than PoW. Distributed
| staking pools lower the barrier to entry to 0.01 ETH.
|
| Ethereum will still be printing ETH in perpetuity; it only
| becomes deflationary whenever more is burned than printed.
| rufusroflpunch wrote:
| > Staking pays all stakers out proportional to their stake,
| which is as fair as is possible, and more fair than PoW.
| Distributed staking pools lower the barrier to entry to 0.01
| ETH.
|
| This doesn't change the economics of what I said, which are
| about opportunity cost of staking vs. spending.
|
| > Ethereum will still be printing ETH in perpetuity; it only
| becomes deflationary whenever more is burned than printed.
|
| I understand this. But what I've been hearing from ETH
| holders forever now, is that ETH _will be_ going
| deflationary. As in, burning more ETH than printing is
| something will definitely be happening. It 's the bedrock of
| the flipping narrative.
| pshc wrote:
| _> Staking that 1 ETH just got 10% more expensive because
| the opportunity cost of staking that ETH increased relative
| to spending it. Economically, this means that the system is
| going to drive out marginal stakers, by design._
|
| I don't really get it. It's more expensive because you're
| making more money? Why wouldn't everyone just stake until
| they feel like spending? How does this drive out marginal
| stakers?
|
| _> But what I 've been hearing from ETH holders forever_
|
| These are just people pumping their bags. No one actually
| knows how it's going down. Anyone who holds such alpha
| isn't posting it on Twitter.
| svachalek wrote:
| Based on current and projected usage vs staking rewards, it
| looks inevitable. However the rules that Ethereum operates
| by are not immutable. They have changed, and they will
| change again. So just because it looks like it will be
| deflationary this year, doesn't mean it will always be
| deflationary.
| coderintherye wrote:
| You assume everyone always chooses the option of highest
| return, however not everything in life is about opportunity
| cost.
|
| I personally know two people running test stake nodes. They've
| spent the time setting them up, documenting, and really getting
| to know all the ins and outs of it because they find it
| interesting. They will run production nodes. You only need some
| X amount of people to do the same to avoid overt
| centralization. Then it just comes down to an argument of what
| is the minimum number for X where things feel properly
| decentralized.
| mxwsn wrote:
| Eth will hit a stable point of total supply, with both
| inflationary and deflationary mechanisms mentioned in other
| comments finding an equilibrium according to market forces. It
| won't deflate forever, so there won't be a centralization death
| spiral according to your logic.
| uncletammy wrote:
| There is no magic in the mechanism behind ETH's
| inflation/deflation. If an equilibrium is found, it will be
| because the appropriate levers are pulled until the desired
| ratio is reached.
|
| It's also worth keeping in mind that the levers needed may
| not exist within the system. ETH is still a massively
| ambitious and risky experiment. Anyone who says otherwise is
| naive or trying to sell you something. That being said, ETH
| is absolutely the most interesting thing happening in both
| tech and finance. I hope it works out.
| Animats wrote:
| The system is functioning as designed. The suckers are being
| fleeced.
|
| _It is in the nature of markets to move money from the many to
| the few_.
| chrisco255 wrote:
| What kind of quote is that? Markets are clearly many-to-many by
| definition. Money doesn't even have a meaning or value without
| markets. It's just paper without markets.
| 1991g wrote:
| grafs50 wrote:
| I think the idea is that "more capable" participants tend to
| make money off of "less capable" participants. And there are
| a lot more of the "less capable" ones.
| chrisco255 wrote:
| Markets are like ecosystems, they are an emergent property
| of the aggregated activity of many participants. Yes, some
| of those participants will end up at the top of the food
| chain. But that's going to happen regardless of what you
| do.
| capableweb wrote:
| Not sure if you're arguing against Ethereum, cryptocurrencies
| as a whole, or capitalism as a whole? Your point would be
| better understood if you explained what you mean a bit more.
| jamwt wrote:
| Unregulated capitalism. Regulation limits how much
| information/expertise disparity can tip the scales. It
| doesn't prevent it altogether (nor is that a constructive
| objective), but limits it so the distribution between the
| winners and losers ensures still reasonable outcomes for the
| loser.
|
| All that's happening in crypto is the same exploitative
| games/vehicles that happened in other markets before
| regulation protected the least informed and least
| Machiavellian players from the worst outcomes. There's no
| real innovation in that respect.
| mgamache wrote:
| It is the nature of nature to move resources from the many to
| the few.
| [deleted]
| nathias wrote:
| These posts are like horse sheppards talking how cars suck
| without ever seeing one.
| jmyeet wrote:
| So Crypto Andys like to hand-wave about the risk of a 51% attack
| but consider this:
|
| > This is in addition to the long-standing concentration of
| Ethereum mining power, with normally three and sometimes only two
| mining pools controlling over 50% of the mining power.
|
| There is further hand-waving about how Proof-of-Stake (over
| Proof-of-Waste) will magically fix these problems. But it's
| actually this PoW computing power that makes the network more
| resilient to hostile takeover.
|
| I've heard it described that the attraction of Crypto is the
| essence of the American Dream: by getting rich by doing nothing
| while lauding how smart you are over other people. So much of
| Crytpo can be explained by Bitcoin FOMO. Everyone just jumps on
| the latest shitcoin or NFT because "I'm not missing out this
| time".
|
| Ultimately something has to create value or it will come crashing
| down. The only use case we really have is illegal activity. Some
| of that is justified on ethics grounds (eg bypassing capital
| controls in Venezuela). A lot of it is just shady.
|
| There's a ton of talk about the "potential". So far the offshots
| (eg NFTs, Web3) are just ludicrous boondoggles in finding
| problems for a solution. I have doubts this will ever create
| value for the masses.
| bobkazamakis wrote:
| correct. the eternal september of crypto andys who don't
| understand anything about the design of the systems they wax on
| about has nuked the fridge.
| jerry1979 wrote:
| What is a Crypto Andy?
| jmyeet wrote:
| It comes from Twitch [1]. While it often refers to streamers,
| it has transcended that. An andy is someone who is identified
| by whatever adjective is applied. So a Crypto Andy is someone
| who is all and only about crypto, basically.
|
| Put another way: Andys are indistinguishable from each other
| apart from one defining characteristic. And those Andys with
| that characteristic are likewise indistinguishable and
| interchangeable.
|
| [1]: https://knowyourmeme.com/memes/andy-slang
| layer8 wrote:
| I had to laugh at the article's example of "React Andy",
| which I first gave a different interpretation.
| Raidion wrote:
| Andy is a fairly new and derogatory/tongue in cheek term
| (from twitch, long story) that basically means people that
| get attention from jumping on someone else's creative
| bandwagon.
|
| Basically someone else does the creation, and you become an
| Andy by trying to get involved without really adding much
| value.
| [deleted]
| usrusr wrote:
| > The only use case we really have is illegal activity.
|
| But isn't that enough? If we refuse to get rich from investing
| in ransom futures we have no-one to blame than ourselves.
|
| At least that's how I read those typical victory lap posts by
| crypto winners. Or by proclaimed crypto winners desperately
| trying to extend the pyramid. Yes, I'll happily skip out on
| ransom future wealth.
| fleddr wrote:
| No, the only use case is not illegal activity.
|
| NFTs, smart contracts in general, gaming, defi/lending/staking,
| DEX, DAO, Filecoin/IPFS, and a few more in itself are not
| illegal. You may consider them to be useless, but that's not
| the same thing as illegal.
|
| Even if you scrap all that, there's the remaining core use case
| of speculation. Which in itself is also not illegal and an
| incredibly important use case, if not THE use case.
|
| You may be frown upon speculation, look down on it, judge it
| anyway you please, but it does not change the fact that 100M+
| people with an exponential growth rate are into it. I guess
| growing your money is popular, who would figure that.
|
| The point I would like to get across is that instead of
| judging, you should have a deeper look at the WHY. Many people
| think that these risk takers are plain dumb, selfish,
| irresponsible. If only regulation would protect them against
| themselves.
|
| That's not the situation at all. They're fully self-aware. They
| are young people born into an economy that is plain broken to
| them. Burdened by student debt, stagnant/unlivable wages,
| unaffordable housing, zero or negative interest rates, high
| inflation, no job security, unaffordable healthcare.
|
| They barely get by and have no outlook of ever getting ahead,
| owning any asset or wealth, and the very simple goal of a basic
| middle class life has become unattainable.
|
| In a backdrop that cruel, why not throw the little money you
| have into a shitcoin? It might do a 10x. It might also go to
| zero. Who cares? You didn't have any meaningful wealth to begin
| with.
|
| And that is the appeal of crypto. It's not fueled by greed for
| the sake of greed, it's fueled by desperation. Nothing to lose,
| everything to win. Crypto is an asymmetrical bet, and the only
| one available to everyone.
| thebean11 wrote:
| I think there's at least _some_ value that can potentially be
| created. The fact that you can take out a loan or buy insurance
| and your counterparty is a smart contract is pretty
| interesting. It could seriously bring down insurance margins if
| you no longer have drones of people administering policies.
| Obviously remains to be seen how practical it is.
| cuteboy19 wrote:
| In DeFi to take out a loan of $100 you need to have
| collateral worth $200 or more. If the value of the collateral
| ever goes below $200 then it is immediately autosold.
| Moreover the collateral has to be on the blockchain as well,
| so concrete assets like houses cannot be used for this
| purpose.
|
| The main issue with insurance is actually assessment. All
| smart contracts do is replace execution, which was never a
| hassle to begin with.
| thebean11 wrote:
| For sure, DeFi loans aren't practical at the moment (for
| anything but speculation), and may never be practical for
| something like a mortgage or even a credit card. I still
| find it pretty mind blowing that an algorithm can loan me
| money.
|
| For insurance I don't agree. Something basic like weather
| insurance (widely used in agriculture) is already possible.
| The hardest part is getting the weather information onchain
| in a way that's trusted by the buyers and sellers of the
| insurance. Weather oracles do exist though.
| anyfoo wrote:
| > I still find it pretty mind blowing that an algorithm
| can loan me money.
|
| I still find it pretty mind blowing that you can make a
| Turing complete language with nothing but S and K
| combinators. Good luck finding a real world application
| for that, though.
|
| Sometimes the crypto space (the part that isn't just FOMO
| coin buyers at least) strikes me as folks who have been
| looking at something technically interesting for the
| first time in their lives, under the initial lure of
| money, and haven't figured out yet that "technically
| interesting" does not necessarily translate into real
| world applicability.
| thebean11 wrote:
| Why don't you respond to the insurance part of my
| argument? Like I said, I think that's more immediately
| useful.
| WJW wrote:
| > I still find it pretty mind blowing that an algorithm
| can loan me money.
|
| Algorithmic lending has been a thing for decades though.
| What do you think a credit score is for if not a tool to
| let computers decide whether to give you credit or not?
| thebean11 wrote:
| An algorithm might help decide who to lend to, but the
| algorithm isn't actually lending the money. You aren't
| paying the algorithm back. Pretty big difference there.
| RustyConsul wrote:
| Credit is loaning you money and providing an interest
| rate. Usually something insane like 15%.
|
| DeFi is unlocking the value of an asset, making it liquid
| and allowing me to participate in other investment
| opportunities without an APR.
|
| One example is on Kaurura. I have KSM, Stake that KSM for
| a 19% APR Rate. Throw that LKSM into a vault and mint
| AUSD as long as i have 160% collatoral ratio. I can then
| use that aUSD i printed, buy other assets and participate
| in liquidity pools, which are giving anywhere from 50% to
| 300% APR.
|
| It's a new era of finance. Play around in the space
| before you say it's worthless.
| milkshakes wrote:
| this is a margin loan it's not a new concept
| ineedasername wrote:
| It's a fascinating throwback to the dotcom boom where
| everything was "It's $X, but on the internet!"
|
| Now it's "$X but with crypto!". Only with crypto there's
| a constantly evolving set of jargon that obfuscates the
| fact that _yeah, traditional finance does it already_ To
| be fair, the dotcom era had it 's fair share of
| obfuscating jargon too. Maybe crypto just seems worse
| because the dotcom boom was so far back in my memory.
|
| I think there might be some actual valuable use cases for
| crypto. I just wish all the people reinventing the wheel
| and thinking it's new would get out of the way. Then at
| least we can find out if crypto actually has something
| interesting it can do.
| iboisvert wrote:
| > It's a new era of finance
|
| I have no experience with crypto, but this I don't
| understand.
|
| > DeFi is unlocking the value of an asset, making it
| liquid...
|
| Like a mortgage or a bond issuance (bonds are secured
| against assets of the corporation)?
|
| > Credit is loaning you money and providing an interest
| rate. Usually something insane like 15%.
|
| Average rate for a 30-year fixed mortgage in the US is
| about 4%[1]. Average Aaa corporate bond yield is
| 3.43%[2]. I guess that you are talking about interest
| rate on credit cards? I think that credit card debt is
| pretty small compared to the size of the mortgage or bond
| markets.
|
| > One example is on Kaurura...
|
| I'm not sure I follow you here, but it sounds like you
| get a loan at 19% APR against some collateral. Then you
| use the loan as capital for some other investment at a
| higher rate of return.
|
| My question: how is this any different, for example, from
| a company issuing bonds at 4% coupon rate and using the
| proceeds to fund operations when the company's profit
| margin is, say, 50%?
|
| Let's say it's a matter of scale; I, as a person, can't
| issue bonds to trade on a public market. But I can get a
| mortgage and invest in other stuff hopefully at a return
| higher than the rate on the loan.
|
| As I said, I don't understand how this is a "new era of
| finance".
|
| [1] https://www.valuepenguin.com/mortgages/average-
| mortgage-rate....
|
| [2] https://fred.stlouisfed.org/series/AAA
| dabeeeenster wrote:
| "One example is on Kaurura. I have KSM, Stake that KSM
| for a 19% APR Rate. Throw that LKSM into a vault and mint
| AUSD as long as i have 160% collatoral ratio. I can then
| use that aUSD i printed, buy other assets and participate
| in liquidity pools, which are giving anywhere from 50% to
| 300% APR."
|
| I'm sorry, but this sounds ridiculous.
| quickthrower2 wrote:
| It sounds like someone at a horse track who has brought
| along his loan shark.
| thrwy_ywrht wrote:
| This comment is indistinguishable from satire.
| quickthrower2 wrote:
| I miss Ponzi, he really just took my money and dealt with
| the details for me. Now you say I have to do all this
| work?
| danans wrote:
| > The hardest part is getting the weather information
| onchain in a way that's trusted by the buyers and sellers
| of the insurance.
|
| So the hardest part is trust, the very thing that
| blockchains supposedly make unnecessary?
| thebean11 wrote:
| People get touchy about the word "trust" in blockchain
| threads. Would it help if I said that the hardest part is
| creating a way to get the weather data on chain that the
| buyer and seller can agree on ahead of time?
|
| Anyway, I'm obviously not claiming this can work without
| input from humans off chain. My point is that the
| infrastructure needed to get clean and honest weather
| data on to the chain (which requires human inputs) is
| much smaller than the entire infrastructure needed to
| administer weather insurance (which other than the
| previous part, can be done autonomously).
| MrMan wrote:
| Oracles open up a whole giant industry of data middlemen,
| sounds great
| danans wrote:
| > Would it help if I said that the _hardest part_ is
| creating a way to get the weather data on chain that the
| buyer and seller can agree on ahead of time?
|
| > My point is that the infrastructure needed to get clean
| and honest weather data on to the chain (which requires
| human inputs) is _much smaller_ than the entire
| infrastructure needed to administer weather insurance
|
| Is "much smaller" infrastructure on a different dimension
| than the "hardest part" of the problem? If so, what
| dimensions are those?
|
| If not, how can the trust/agreement part be both "much
| smaller" and also the "hardest", especially given that it
| requires human inputs, especially human driven systems
| for routinely validating the process (AKA audits), and
| adjudicating inevitable claims of breaches of the
| agreement (AKA the courts).
| thebean11 wrote:
| It's the hardest part compared to the rest of the
| blockchain solution. The "easy" onchain-only part
| replaces a vast amount of infrastructure that would exist
| in an insurance company.
| throwaway82652 wrote:
| >Would it help if I said that the hardest part is
| creating a way to get the weather data on chain that the
| buyer and seller can agree on ahead of time?
|
| No, because it's still impossible to do that at scale
| without solving the oracle problem. Putting some
| arbitrary data on a chain doesn't mean the data is
| reliable.
| thebean11 wrote:
| You don't need to solve the oracle problem. Just agree on
| an oracle. Weather.com writing weather on chain could be
| your agreed upon solution, for example.
| Karrot_Kream wrote:
| I don't know if there's any way out of the oracle problem
| honestly. There's nothing wrong with shopping around
| between different human-administered oracles though, or
| having some code which polls multiple oracles and takes
| action based on some statistic applied to the oracles
| (mean, etc.) But yeah I'm not convinced the oracle
| problem can be solved.
| throwaway82652 wrote:
| Having multiple oracles doesn't really change the
| problem, then you're implicitly trusting a group of
| oracles instead of just one.
| Karrot_Kream wrote:
| With multiple oracles and a statistic, you're trusting
| their results to be distributed along some distribution.
| But I'm being pedantic. Ultimately, yes, you are still
| trusting the oracles even if you aren't trusting them
| each in totality. Like I said I don't think there's a way
| out. Even if you hook up a weather sensor machine and
| push updates to the chain, even outside of malicious
| tampering, sensors themselves can be inaccurate or fail.
| Perhaps there's a case to be made for an autonomous
| weather sensor machine that is physically tamper-proof,
| but ultimately there's a certain amount of trust when
| dealing with off-chain data. I don't think that's able to
| be overcome.
| ineedasername wrote:
| _I still find it pretty mind blowing that an algorithm
| can loan me money._
|
| Go to Amazon, put some items in your cart, and click the
| (almost always present) banner about opening an Amazon
| credit card. Enter your relevant information, wait about
| 3 seconds, and BOOM! An algorithm just loaned you money.
| 1penny42cents wrote:
| The problem is that the loudest backers overshoot and
| oversell the true potential.
|
| The truly innovative people are those who add the proper
| constraints and work within them to solve the problems where
| blockchains actually fit best.
| throwaway82652 wrote:
| >The fact that you can take out a loan or buy insurance and
| your counterparty is a smart contract is pretty interesting.
|
| No it isn't. I've been hearing this for years and I still
| haven't seen any reason anyone would actually want this,
| beyond the novelty factor. It's strictly worse than any other
| equivalent insurance or loan for a number of reasons, the
| worst one being that there's no human you can talk to when
| something goes wrong. If you think it's bad enough now when
| your bank has terrible customer service or your insurance
| company is fighting your claims, blockchains are like taking
| that a step further by making it technically impossible to
| provide any kind of customer service.
|
| >It could seriously bring down insurance margins if you no
| longer have drones of people administering policies.
|
| This sentence also makes zero sense. You don't need
| blockchains to replace insurance actuaries with an algorithm,
| insurance companies could already do that. Over the long-term
| they can't rely on this because the whole point of insurance
| is you constantly readjust your models based on risk which
| cannot be predicted. Once again I'm reading a cryptocurrency
| thread where everything is wrong and nothing makes any sense.
| Ruphin wrote:
| A number years ago I was unemployed for an extended period
| of time while working on open source projects, and I ran
| out of money, so I took out a loan to cover my expenses. I
| lived off this money for several months until I found a
| suitable job, and after some time I repaid this loan. This
| type of personal credit financing would cost a fortune in
| regular finance (try going to a bank and taking out a loan
| because you're broke and unemployed), but because I had
| digital assets to pawn I had access to a line of credit at
| a reasonable rate.
|
| Without this option, I would have to either finance myself
| at a criminal rate, or accept a job I wasn't ready for. I
| feel I'm much better off personally from having this option
| available.
|
| Outside the personal anecdote, I don't understand how it's
| difficult to see the utility in having digital goods of
| value. It allows all sorts of use cases, and using them as
| collateral for loans is just one. I have a harder time
| accepting that goods of value simply cannot be digital. If
| I look at the past 30 years of history, literally
| everything is turning digital; our consumption of
| entertainment, our work, our communication, social
| connections. What is the argument for having all things of
| value be either be a physical thing, or something
| controlled by some central authority? It seems like a
| "because that's how things have always been" sort of
| position.
| pattrn wrote:
| > No it isn't. I've been hearing this for years and I still
| haven't seen any reason anyone would actually want this,
| beyond the novelty factor. It's strictly worse than any
| other equivalent insurance or loan for a number of reasons,
| the worst one being that there's no human you can talk to
| when something goes wrong. If you think it's bad enough now
| when your bank has terrible customer service or your
| insurance company is fighting your claims, blockchains are
| like taking that a step further by making it technically
| impossible to provide any kind of customer service.
|
| One could make the same argument for a dictatorship being
| superior to the rule of law. After all, you can always talk
| to a human to resolve your problem.
|
| I'm not big into crypto, but this sentiment makes sense to
| me. Removing human decision making from a process makes it
| a game where everyone plays by the same rules. If you get
| burned, it was your fault for making a bad move, and you
| have no safety net to catch you. If you make a good move,
| you reap the rewards.
|
| The person you responded to used an insurance company as an
| example of where crypto might reduce administrative
| expenses, thereby allowing customers to pay lower prices.
| You ignored his point and focused entirely on the portion
| of insurance premiums that he specifically didn't address.
| Then you claimed that "once again everything was is wrong
| and nothing makes sense." If you keep making up your own
| bad arguments and then shooting them down, it makes sense
| that you frequently feel this way.
| SparkyMcUnicorn wrote:
| > I still haven't seen any reason anyone would actually
| want this, beyond the novelty factor. It's strictly worse
| than any other equivalent insurance or loan for a number of
| reasons, the worst one being that there's no human you can
| talk to when something goes wrong.
|
| But people are using it, and (in the protocols I've seen)
| claims are handled jointly between an advisory board and
| community assessors, with a framework for appeals and
| community voting.
|
| I think that's pretty interesting.
| throwaway82652 wrote:
| >claims are handled jointly between an advisory board and
| community assessors, with a framework for appeals and
| community voting.
|
| So you mean like a company with a board of directors,
| shareholders and voting shares. I'm sorry I just I don't
| think that's very interesting, because companies already
| existed without blockchains and DAOs and smart contracts.
| ineedasername wrote:
| So it's still people doing the work, only the contract
| exists in a different type of database. I'm really
| missing something if that is supposed to be substantially
| different than the current relationship I have with my
| insurance company.
|
| Although with my insurance company I at least know the
| assessor is qualified enough to look at pictures from a
| car accident and determine the sequence of events and who
| was probably at fault.
| endisneigh wrote:
| So basically, unpaid volunteers.
| thrwy_ywrht wrote:
| >The fact that you can take out a loan
|
| You can take out a loan in crypto that's fully secured
| against some other crypto. It's turtles all the way down, and
| has zero relevance to what most people think about when they
| talk about taking out a loan.
| jmyeet wrote:
| There are a lot of these theoretical cases but none seem
| likely to come to fruition anytime soon and pretty much all
| of them ignore this basic problem: the transactional nature
| of blockchains falls apart as soon as you interact with the
| real world.
|
| Let me explain: you can have a smart contract where you get
| 5-20% of the value whenevder it's sold and that'll work and
| be guaranteed (assuming the network isn't compromised eg 51%
| attack). That is wholly continaed with the blockchain.
|
| But what if someone wants to sell that for cash? Now you've
| introduced the exact same trust issues that exist in every
| transaction in the traditional finance system: trust in the
| institutions involved and the potential needs for courts to
| enforce contracts.
|
| So what exactly have you gained? Nothing. Literally nothing.
| thebean11 wrote:
| Why can't you sell it for some crypto asset and exchange
| that for cash (obviously this second exchange requires a
| trusted third party)? Maybe I don't understand your
| example.
|
| That seems like an issue with cash (no way to enforce you
| giving me the thing I paid for, and no way for you to
| enforce me giving you the cash for the item you gave me).
|
| Yes using cash gets rid of the guarantee that the transfer
| of goods is fully atomic that crypto generally offers.
| Buying tomatoes at the store has the exact same problem.
| itsoktocry wrote:
| > _It could seriously bring down insurance margins if you no
| longer have drones of people administering policies._
|
| Instead you might a bunch of people with zero actuarial
| experience gambling on policies. I agree, the concept is
| interesting, no regulation makes everything a crapshoot.
| thebean11 wrote:
| Maybe. Or you enable people who need these services but
| have no access currently to get them. Most likely both.
| WJW wrote:
| That seems like an insanely good opportunity for people
| with actual actuarial expertise to profit off any retail
| investors/gamblers in the market btw. That seems like a
| market that would professionalize extremely fast.
| quickthrower2 wrote:
| I wonder if anyone talking here has every made any kind
| of insurance claim?
|
| Doing it with a smart contract is as feasible as dating a
| smart contract.
|
| You can only really "insure" against globally agreed on
| data, for example the price of wheat. That is an
| options/futures market not insurance though.
| xur17 wrote:
| Nexus Mutual offers insurance against smart contract
| hacks, coin depegs, custodial provider withdrawal issues,
| etc, and they've been operating fine for several years.
| The one advantage I really appreciate is the transparency
| it enables over the decision making process.
|
| There's no reason this couldn't be expanded for other use
| cases, including home, car, etc. It really isn't limited
| to just smart contract data as you suggested.
| attilaperez wrote:
| >That seems like an insanely good opportunity for people
| with actual ~actuarial~ expertise to profit off any
| retail investors/gamblers in the market btw.
|
| https://protos.com/tether-papers-crypto-stablecoin-usdt-
| inve...
|
| If only you knew...
| spookthesunset wrote:
| > The fact that you can take out a loan
|
| Why would any rational actor provide a loan denominated upon
| an insanely volatile "currency" like bitcoin or ethereum? The
| lender could loan 100 ethereum bux only to lose big time
| because the price of ethereum went up 10x in a week making
| the amount repaid worthless. Or it could go down, in which
| case the borrower would wind up defaulting because who would
| want to pay back 10x more than they were lent?
|
| Lending requires a pretty stable currency...
| lowdest wrote:
| Have you looked into any of the lending platforms? These
| are pretty well controlled for. Crypto loans are typically
| collateralized, so that below a certain loan-to-value
| ratio, the collateral belongs to the loan provider and the
| borrower can keep what was borrowed. The exact rules vary
| place to place. It's a calculated risk that is competitive
| with other investments.
|
| People borrow to avoid triggering capital gains, or to gain
| leverage or to short.
| bpodgursky wrote:
| > by getting rich by doing nothing while lauding how smart you
| are over other people
|
| This is exactly how I envision the dream of old world wealth
| you see on Downton Abbey or similar.
|
| Get born into a minor lordship somewhere in England and spend
| your days educating yourself (maybe leisurely publishing a book
| or two) and raking in tax revenue from the commoners.
| rsync wrote:
| "This is exactly how I envision the dream of old world wealth
| you see on Downton Abbey or similar."
|
| Then you misunderstand ...
|
| That world you're envisioning is what happens _after_ the
| "getting rich".
|
| In the case of feudalism - and its remnants - the "getting
| rich" involved murderous expropriation of the lands and
| property of anyone that got in the way by sociopaths who
| hoarded and coveted everything that entered their awareness.
|
| I think it was pretty hard work, actually ...
| bpodgursky wrote:
| Yeah but that all happened in like 1071.
|
| The _dream_ is to inherit that wealth and be born into the
| upper-crust. Nobody wants get their hands dirty with the
| murdering and exploiting!
| asasidh wrote:
| "So much of Crytpo can be explained by Bitcoin FOMO. Everyone
| just jumps on the latest shitcoin or NFT because "I'm not
| missing out this time".
|
| This 200%
| null0pointer wrote:
| I think this is true. I also think the flipside of the coin
| is true. So much of the crypto hate can be explained by
| jealousy and anger at missing out.
| asasidh wrote:
| True. Bitcoin was once in a multi generation innovation.
| necovek wrote:
| Something like: https://github.com/ethereum/go-ethereum/issues?
|
| (Sorry, couldn't resist)
| [deleted]
| MichaelRazum wrote:
| Have to agree. Just curios what happens to the whole thing if
| Ethereum switches to POS.
| undersuit wrote:
| I don't think Ethereum will ever switch. The miners control the
| chain now, POS will disrupt that. The miners can't make an
| orderly exit of resources or to a new coin so they will persist
| on the dominant PoW-Eth while PoS-Eth loses all chain
| resources.
| pazimzadeh wrote:
| "If all miners do not make the switch to Proof of Stake, then
| there is the danger that ethereum's blockchain might fork. A
| similar situation occurred in 2017, when bitcoin miners
| forced a fork in its blockchain by throwing their weight
| behind bitcoin cash. Ethereum's founders, however, foresaw
| such an eventuality and programmed its blockchain to
| incorporate increases in difficulty levels for its mining
| algorithm"
|
| https://www.investopedia.com/news/what-ethereums-
| difficulty-...
| delaaxe wrote:
| If the POW miners continue mining, that'll create a fork
| which will quickly become unprofitable because of the
| difficulty bomb, and all of the stable coins on the fork will
| become valueless rendering the fork useless.
| cinntaile wrote:
| It's just code, what is stopping them from removing the
| difficulty bomb?
| delaaxe wrote:
| Nothing, but that'll just create yet another fork, just
| like Ethereum Classic, which is completely worthless
| latchkey wrote:
| > The miners control the chain now
|
| "difficulty bomb"
| thebean11 wrote:
| > while PoS-Eth loses all chain resources
|
| What do you mean by this? Miners are not needed on the PoS
| chain, and the PoS chain cannot be attacked with PoW
| resources.
|
| The end users (people transacting in ETH and launching smart
| contracts) will decide which chain is valuable and which
| isn't.
| Blackthorn wrote:
| The problem is the "if" in that sentence is doing a lot of
| work. POS has been six months away for several years.
| nootropicat wrote:
| >To some extent, the Ethereum project has just given up on
| scaling the main blockchain. "For Ethereum to scale and keep up
| with demand, it has required rollups" -- do the work somewhere
| else and send back the result. The blockchain is only usable if
| you work around actually using it.
|
| Zk-rollups are fundamentally superior to direct scaling because
| they move execution and proof generation cost to only one node
| (entity, could be a server farm) that only has to do it once,
| while ensuring correctness is verifiable by anyone cheaply
| forever. No more scalable solution exists from a purely
| theoretical level. This in theory allows even running complicated
| multiplayer games on a blockchain (turn based directly, realtime
| by dropping state snapshots).
|
| In principle, this should be implemented directly - but it's so
| early that a solution that can last for decades simply doesn't
| exist. In addition, decentralizing zkrollup implementations to
| third party teams allows for much faster innovation.
|
| Optimistic rollups are more questionable.
| jrsj wrote:
| There's really no need to post yet another "crypto is a scam"
| comment on every single one of these posts. I mostly agree but it
| adds nothing to discussion and we've all heard it a million times
| already.
| vmception wrote:
| > We found two blocks in our 12 day span, 14,217,123 and
| 14,241,282, for which miner profits from MEV exceeded four times
| the block reward.
|
| I hope this becomes more common knowledge! All mining calculators
| are wrong as they predict earnings that are upwards of 80% lower
| than reality, for some people. There have been extended periods
| of time (weeks, months) where this has been true.
|
| This is also one of the promises of the blockchain concept, in
| the Satoshi paper for Bitcoin, the idea is for transaction fees
| to exceed the block reward subsidy, in Bitcoin the hope is that
| it occurs before the year 2140, in Ethereum it has been occurring
| for several years, which is a great big deal. But it doesnt mean
| the outcome is good, we just dont have to wait to see how it
| plays out.
| delaaxe wrote:
| Rocket Pool, a decentralized Ethereum staking protocol,
| distributes MEV profits to stakers
| eachro wrote:
| I've always found it odd that basic arbitrage (ex: buy asset A on
| some exchange and sell it immediately on a different exchange and
| earn the delta as profit) and sandwich attacks (place a buy order
| before a whale places a big order and place a sell order
| immediately afterwards) were under the umbrella of MEV. These are
| trades that are possible in tradfi too. I suppose it's possible
| that arb trades and sandwich attacks are more of a concern here
| where miners can insert their own transactions into the mempool
| but I don't know if we actually see miners engaging in this
| behavior.
| flatearth22 wrote:
| bulbosaur123 wrote:
| What useful has Ethereum created apart from providing an ever-
| bloating platform for generation of infinite digital-only tokens?
| As of 2022 the oracle problem still hasn't been solved, so actual
| decentralized, objective real life object-to-blockchain
| interaction is impossible. Monero added fully anonymous crypto
| that is used by most of the dark web. USDT, USDC provided
| stablecoins that can circumvent what fiat can't. Bitcoin is first
| mover, largest liquidity, organic distribution, most
| decentralised and most tested (least chance of bugs compared to
| other projects).
|
| What legitimate use apart from creation of infinite, meaningless
| tokens has Ethereum provided?
| cetxcz wrote:
| USDT uses Ethereum.
| thinkmassive wrote:
| It didn't launch on ethereum, and the largest issuance hasn't
| been on ethereum for a long time
|
| https://tether.to/en/transparency
| treyhuffine wrote:
| You don't give Ethereum credit for USDT and USDC?
|
| Ethereum introduced the concept of decentralized compute
| resources, in which it was also a first mover. Judging Ethereum
| in its current state feels like judging the internet in the
| 1980's and saying it's not a value provider.
| thinkmassive wrote:
| USDT was originally launched on Bitcoin via OMNI
|
| https://en.wikipedia.org/wiki/Tether_(cryptocurrency)#Histor.
| ..
| delaaxe wrote:
| > As of 2022 the oracle problem still hasn't been solved
|
| What do you mean by that? I thought ChainLink solved that
| pretty well
| tick_tock_tick wrote:
| ChainLink just distributes the trust around making it harder
| too corrupt but in no way solves the issue.
| delaaxe wrote:
| Trying to understand by going through this:
| https://blog.chain.link/what-is-the-blockchain-oracle-
| proble...
|
| Aren't they precisely solving the issue?
| hamilyon2 wrote:
| Read their white paper. Looks like secure computation with
| extra steps.
| tootie wrote:
| Reading this blog post kinda flies in the face of crypto being
| more transparent than fiat. The raw data may be transparent,
| but the misuse/abuse are incredibly cryptic. And can only be
| rectified the goodwill of open source code contributors.
| joshu wrote:
| a) i think that continuous auctions have a bunch of
| vulnerabilities and that for exchanges, a periodic crossing might
| be a better mechanism. this works better for high volume
| instruments. it does come at the expense of immediate trading
|
| b) is it possible to make all the transactions in a block go "at
| once"? ie if any tx have some sequential interdependence, kick
| one and make it wait for the next block?
| throwaway98797 wrote:
| sure does, but has value too
|
| a public registry of txns is sweet
| delaaxe wrote:
| Isn't this solved by PBS (Proposer-Builder Separation)?
| Barrera wrote:
| This article goes off the rails for me with this statement:
|
| > Their starting point was the observation that Ethereum "smart
| contract" execution is order-dependent within a block, unlike
| transaction execution in Bitcoin and similar systems: ...
|
| First, Bitcoin runs smart contracts [1]. The lie to the contrary
| has seeped into almost every discussion of Bitcoin vs. Ethereum,
| and this author appears to have taken the bait.
|
| Second, Bitcoin transactions _are_ order-dependent within a
| block. The entire point of the Bitcoin network is to impose a
| global, unique order on all transactions and the only way to do
| that is if order within blocks matters.
|
| I'm not sure about the rest of this article, but the failure on
| these two points does not inspire confidence to continue.
|
| [1]
| https://wiki.bitcoinsv.io/index.php/Opcodes_used_in_Bitcoin_...
| rvz wrote:
| Well guess what?
|
| They both have ridiculous issues that have made them both
| unsuitable for any form of serious application when scaled up
| to the tens of millions or even hundreds of millions. Even the
| very least of all use-cases: Extremely cheap, fast and scalable
| on-chain payment systems using a blockchain for regular users
| to use.
|
| > The entire point of the Bitcoin network is to impose a
| global, unique order on all transactions and the only way to do
| that is if order within blocks matters.
|
| Yes. The whole point of Bitcoin is to be a peer-to-peer
| electronic cash system using a transparent ledger where
| everyone can see the transactions on-chain. Not a _' store of
| value'_ or _' digital gold'_.
|
| Everyone knows on-chain payments with Bitcoin are too slow for
| realistically accepting payments in the real world and places
| like supermarkets, restaurants, etc unless you want to wait
| hours in the queue for it to settle or fail. Given it's even
| slower than VisaNet, you might as well go to the ATM and
| withdraw cash using card to pay; even that is quicker.
|
| By that time, Bitcoin's volatility would already have caused
| the recipient to have a fluctuating price on the paid-for
| product, causing the sender to at worst under-pay for the value
| of their goods regardless. Using the Lightning Network also
| defeats the purpose of what Bitcoin was supposed to be as that
| is centralized by design and the transactions are off-chain
| without a trace anywhere to find it [0].
|
| The whole point of Ethereum is to be the _' world's computer'_
| and a smart contract platform with utility. Instead, it has
| turned into a digital slot machine with its problematic high
| fees when usage skyrockets and regular users that aren't
| millionaires can't use it at all, unless they'd like to spend
| $1000 to send $10. The network also can't even scale either so
| admittedly, users have to use duck-taped layer 2 systems that
| confuse them to even bother using them to save on fees.
|
| Waiting years for ETH on PoS (ETH2) to launch isn't an option,
| as that was promised in 2016 to release by then, yet here we
| are 6 years later it's delayed once again. [1] No-one would
| tell users or even merchants to wait half a decade for a single
| product with years of known issues to get better in order to
| just use it. They will just look elsewhere instead.
|
| The reality is, both of them have failed and deviated from
| their intended purpose and are not designed to scale for on-
| chain activities and both of them require _' layer 2'_
| contraptions which at most are centralized themselves and
| highly complicate the usage for many users to even bother using
| it.
|
| What a shame and a total proof of waste.
|
| [0] https://iopscience.iop.org/article/10.1088/1367-2630/aba062
|
| [1] https://twitter.com/TimBeiko/status/1514010098145759232
| carlosdp wrote:
| Yea but let's be real, when most people think "smart contracts"
| what they really mean is "turing complete smart contracts."
| capableweb wrote:
| Not sure how many people share that "common definition". Most
| people I speak with day-to-day (who understands blockchain in
| the first place), would consider "programs stored on
| blockchain to run when conditions are met" as the most
| defining feature, and doesn't have to be turing complete for
| doing so.
| bsamuels wrote:
| If you ask any engineer outside the BTC cult if bitcoin
| script and the EVM is comparable, they would say no.
| capableweb wrote:
| Absolutely, Bitcoin smart contracts are different than
| Ethereum smart contracts. What's your point? Doesn't mean
| one has smart contracts and the other one doesn't.
| bsamuels wrote:
| Are you seriously going to grandstand whether the word
| "smart contract" can include non-turing-complete
| runtimes?
|
| No, Bitcoin does not have smart contracts. It has a
| limited scripting environment that you can't do much with
| other than colored coins, and we've all seen how that's
| played out.
| Animats wrote:
| Yes. I would have designed contracts as decision tables.[1]
| Those are not Turing-complete. They look more like
| spreadsheets. They have a finite number of cases and can be
| exhaustively tested.
|
| [1] https://en.wikipedia.org/wiki/Decision_table
| [deleted]
| polyomino wrote:
| You're citing bitcoin sv? Is this a joke?
| naoqj wrote:
| idk anything about crypto. why is "bitcoin sv" bad?
| px43 wrote:
| It's a low value Bitcoin fork from Craig Wright, a
| delusional dude who claims to be Satoshi, so he made a fork
| where he could control all the Satoshi coins. "SV" means
| "Satoshi's Vision".
| naoqj wrote:
| That's crazy. If he is satoshi what's his excuse for not
| having the private keys to those coins in the main
| bitcoin network?
| svachalek wrote:
| It would be incredibly stressful for him to prove it, nay
| as much as he would like to be vindicated, the risk of
| the fame and the pressure blah blah blah.
|
| Sorry I can't be bothered to look up the actual quotes
| but they're similarly incoherent. He pretends to have
| them but not to want to use them, even to prove his
| claims.
| rvz wrote:
| To summarize:
|
| In conclusion, if he is unable to prove he is Satoshi, he
| therefore cannot claim to say he is Satoshi, unless he
| can prove otherwise; but so far he has not.
|
| So hence the above unless proven, he is not Satoshi.
|
| QED.
| [deleted]
| Barrera wrote:
| No, it's a mistake by me and should be changed [1]. The link
| I got was, strangely, the first for the search I ran. I was
| in a hurry and didn't double-check. BSV is a scam. It appears
| I can no longer edit the post. Oh well.
|
| [1] https://en.bitcoin.it/wiki/Script
| Arnavion wrote:
| Bitcoin had script opcodes before any forks, so it doesn't
| matter which fork they cite.
| Stevvo wrote:
| Citing a scam from the most famous con artist in the
| industry is never a good form.
| mateuszf wrote:
| Seems like an unintentional mistake though.
| stale2002 wrote:
| The source is suspect for sure, but the information is true
| on this specific point.
|
| Bitcoin does have smart contracts, and op codes. Thats
| correct, regardless of your disagreements with the source.
| polyomino wrote:
| opcodes that are almost all disabled in the real bitcoin
| lostmsu wrote:
| How is that implemented?
| kova12 wrote:
| that wasn't the point
| sandwichinvest wrote:
| So the point is to be technically correct but practically
| irrelevant?
| [deleted]
| Kranar wrote:
| Fair point, perhaps this would be a more reliable source but
| the information is the same:
|
| https://en.bitcoin.it/wiki/Script
| mmastrac wrote:
| This is an honest question as I _really_ don't know the answer,
| but aren't bitcoin contracts technically white-listed? The
| opcodes exist, yes, but you can't just create a random contract
| and have it work?
| nullc wrote:
| That hasn't been correct since Feb 2015:
| https://bitcoin.org/en/release/v0.10.0#standard-script-
| rules...
|
| (The 'almost completely' there refers to operations that do
| literally nothing and are reserved for future extensions).
| mmastrac wrote:
| Thanks for reference, I didn't realize this was opened up
| like that.
| therein wrote:
| You can and it would. You have opcodes, you order them in any
| way you want with the arguments. It is just not Turing
| complete on purpose.
| nullc wrote:
| > Second, Bitcoin transactions are order-dependent within a
| block.
|
| That's a little confused. Yes, bitcoin transactions are order
| dependent but only in the extremely narrow sense that a
| transactions can't double spend the same inputs and can't spend
| an output that hasn't been created yet.
|
| Significant care has gone into assuring that bitcoin's script
| language remains a pure function of the transaction itself, so
| that all script validation can be performed once for a given
| transaction, can be performed with total parallelism with all
| other transactions, and isn't changed by
| adding/removing/reordering transactions. This means that any
| dependency between transactions must be explicit, by having the
| transactions consume outputs (which can be zero value) from the
| transactions they depend on.
|
| Reordering transactions might change their validity due to
| input conflicts (which can be resolved very quickly using a
| hash table), but not due to the expensive-to-validate scripts
| in the transactions.
|
| In ethereum contracts have fairly promiscuous access to shared
| data, including arbitrarily computed on the fly addresses. To
| discover a transactions dependencies you must execute it. One
| could imagine an implementation that executed all transactions
| eagerly in parallel, recorded a transcript of the data they
| touched, performed a union-find to cluster them, accepted one
| transaction from each disjoint cluster, then sequentially
| executed every remaining transaction (you can't execute the
| clusters in parallel, because their dependencies will change on
| re-execution with different state). ... but since dependencies
| are extremely common (people love to think sequentially, and
| the system makes that the easiest way to program) I expect that
| this would actually be a lot slower in practice in spite of the
| initial parallelism.
|
| Aside, please don't link "bitcoinsv" -- it's a scam site setup
| by a conman that pretends to be Bitcoin's creator and uses
| billion dollar lawsuits to silence people who call out his
| fraud.
| [deleted]
| jqpabc123 wrote:
| Without regulation, the marketplace --- any marketplace ---
| becomes a platform for scams and extortion.
|
| Show me a marketplace without regulation and I will show you a
| marketplace best avoided if possible.
| qudat wrote:
| Could you elaborate by what you mean by regulation? Regulations
| come in many forms.
| chrisco255 wrote:
| Show me a regulated market that is free of front-running. It
| doesn't exist.
| BobbyJo wrote:
| Lesser evil?
| viro wrote:
| are you saying that front running is better than
| regulation?
| ironSkillet wrote:
| They are saying the occurrence of front running in a
| regulated market is a lesser evil compared to the
| absolute shitshow of scams and con games that play out in
| an unregulated market.
| rurp wrote:
| There are varying degrees of front running and a well
| regulated market will generally have much less of it.
|
| It's kind of like saying "show me a market without
| corruption". Obviously all markets have some amount of shady
| behavior, but it hardly means every market is equally
| corrupt.
| tootie wrote:
| Show me a human endeavor of any kind free of corruption.
| wussboy wrote:
| So, because we cannot eliminate every issue with regulation,
| we shouldn't have any regulation?
|
| Surely the answer is in "just the right amount" of
| regulation. Getting to this sweet spot is a process, but one
| human societies have been approaching for some time. We would
| be foolish to throw out all that effort because it couldn't
| be perfect.
| chrisco255 wrote:
| What does that even mean in this case? There is no
| regulation against front-running. Take the stock market for
| example. Everyone knows that high frequency traders moved
| all of their infrastructure to be as close as possible to
| Wall Street to get sub-second advantages on trades. No one
| batted an eye. Of course, could you stop it if you tried?
| Information is asymmetrically distributed someone will
| always find and exploit an advantage somewhere and it's
| impossible to be fair.
|
| Everyone knows that Wall Street got bailed out in 2008 by
| the very same regulators you say are for our own good.
| Everyone knows Wall Street and Black Rock got the biggest
| squeeze from the Covid stimulus. In return we got $1400,
| 10% inflation, and a drop in real income. And front-running
| still happens. Hell the whole business model for Robinhood,
| the app, which charges zero trading fees, is to package up
| their retail users trades and sell the orders to high
| frequency traders who will squeeze out profits from front
| running or sandwiching the orders.
|
| Also, everyone knows that Congress does insider trading and
| the speaker of the House is the worst offender. Everyone
| knows that the revolving door that moves between regulators
| and the financial sector is incestuous.
|
| The regulations you praise are written by the lobbyists and
| companies who benefit the most. And I'm not in that club.
| Maybe you are and that's why you defend it. But it ain't
| me.
| yucky wrote:
| >Show me a marketplace without regulation and I will show you a
| marketplace best avoided if possible.
|
| I buy all of my vegetables from the roadside stands that are
| completely unregulated, and often set up in proximity to other
| stands with other offerings. I get a higher quality at a lower
| price - works out great.
| moralestapia wrote:
| Oh, those are regulated, for sure.
|
| Try to steal from them and the cops will come after you, plus
| the risk to your physical integrity.
| jqpabc123 wrote:
| _I get a higher quality at a lower price - works out great._
|
| Are you sure? A lot of these are "the hippies ripping off the
| yuppies".
|
| In my area, they often sell the same stuff as the grocery
| stores --- just priced differently. A little basket of 4
| tomatoes (usually about 2 lbs) is $5. The grocery store price
| is $1.49/lb (or less if you shop at Lidl or Aldi).
|
| The price isn't regulated but there are lots of other
| regulations involved along with legal liability if they
| poison customers.
| whymauri wrote:
| Really depends on where you live. In South Florida, the
| roadside and farm-affiliated vendors really do sell higher
| quality product for less money. I have picked up better
| quality mangoes off the side of the road than I can buy at
| a supermarket. But I grew up in Homestead, near the Redland
| agricultural area.
| aardvarkr wrote:
| And what about the unregulated supply chain for those goods?
| Do you know they're actually higher quality? How do you know
| they're not just buying the cheapest thing from Mexico or the
| passed over produce from a local farmer and hawking it to you
| at premium prices?
| otterley wrote:
| Come on, there's still plenty of regulation involved. There
| are regulations controlling the quality of the water that's
| irrigating the fields, and they're not using raw human waste
| to fertilize the plants.
| shagie wrote:
| > and they're not using raw human waste to fertilize the
| plants.
|
| Nope... industrial waste.
|
| 'Forever chemicals' upended a Maine farm -- and point to
| larger problem -- https://wapo.st/3OeHPEf
| yucky wrote:
| The water used on fields in my area is non-potable. As far
| as human waste goes, I don't think it's regulations
| preventing that, but rather efficiency. Other animal waste
| is used as fertilizer, because it works better.
| otterley wrote:
| That is incorrect. You'll find the relevant regulations
| here: https://www.epa.gov/biosolids/biosolids-laws-and-
| regulations
| cool_dude85 wrote:
| Well, then this is also true of crypto - there are
| regulations about how the electricity used for PoW is
| generated, transmitted, distributed, regulations about how
| these transactions should be reported for tax purposes,
| etc.
|
| But that's not what he's talking about.
| otterley wrote:
| You also can't injure your customers with your produce.
|
| You can't put your produce stand in the middle of a
| public roadway.
|
| You can't lie about what kind of produce you're selling,
| and you can't lie about its grading.
|
| You can't doctor the scales.
|
| You can't charge a higher sales tax than is levied by the
| locality and pocket the difference.
| eldenwrong wrote:
| Darknet markets? Amazing quality, safety and customer support
| with literally 0 regulations.
|
| Sorry but thats a failed argument
| CameronNemo wrote:
| There are scams on DNMs. But there are also high quality
| vendors. And there are also scams that are part of regulated
| markets. So yeah still failed argument.
| eldenwrong wrote:
| Sure but the feedback system works well enough to weed them
| out quite fast. When people get burned they learn, big papa
| gov regulations prevents learning.
|
| Darknet markets are the best example of self regulating
| markets. Its truly amazing and it doesn't get enough credit
|
| Of course most are run or acquired by intelligence agencies
| eventually....
| jqpabc123 wrote:
| Pure bovine excrement. Scammers can change their identity
| at will on the darknet.
| eldenwrong wrote:
| Trustworthy vendors rely on their reputation. They
| usually value it a lot.
|
| So what if they do? They have to start again from 0
| (usually).Its also very easy to avoid them...
| jqpabc123 wrote:
| Scammers only care about ripping you off. And the darknet
| is the ideal environment for them.
| jqpabc123 wrote:
| Safety? Customer support? Really?
|
| What do you do if you're scammed on the darknet? Let me guess
| --- nothing because you can't identify who you're dealing
| with or where they are located.
| eldenwrong wrote:
| Yes? The quality of products is millions of times higher
| than in the streets.
|
| Everything gets continually tested by a lot of people.
| Entire forums dedicated to weed out bad sellers and
| identity good products ..
|
| Yeah, sellers are usually super responsive and will
| normally fix any issue if you are polite and abide by the
| rules.
|
| Ummm what exactly do you do if you are scammed in real
| life? Go to the police and file a complaint that will never
| go anywhere? Lol
|
| Or you mean if in the real world you get scammed by a
| company? Can YOU really start a lawsuit? What amount of
| money are we talking about? 10k,100k, 1m?
| jqpabc123 wrote:
| _What amount of money are we talking about? 10k,100k,
| 1m?_
|
| Zero. Lot of lawyers searching for clients with a
| legitimate legal case. They get a portion of what they
| win.
| ComradePhil wrote:
| Show me a regulated marketplace and I'll show you regulations
| put in place by big players to weed out the competition.
| jqpabc123 wrote:
| Ok, lets take the obvious example ---- traditional banking.
| Lots of small players doing quite well in a highly regulated
| market.
| cryptica wrote:
| That's why DEXs should rely on order books, not AMMs. Front
| running can be avoided by allowing traders to place limit orders.
| AMM orders are even worse than market orders because slippage
| provides more room for manipulation.
| pshc wrote:
| While many contracts within Ethereum have clear flaws, that
| doesn't mean Eth as a whole is broken.
|
| Time bandit attacks go away once proof of stake finality arrives.
| Also, trading ought to be done in Layer 2s. Does MEV work on L2s?
|
| Re: certain token drops wasting lots of gas, it's up to the token
| authors to use an implementation that avoids gas wars.
|
| Once you go into claiming equivalences with P = NP, you've lost
| me. Theoretical optimums are an academic game, in reality you can
| get 95% of the way there with heuristics.
|
| _> Because Ethereum transactions are programs, the halting
| problem means that it isn 't possible to accurately predict the
| resources needed to execute them._
|
| Ah, more appeals to theory. They're programs with a low ceiling
| on the number of steps and possible codepaths. They barely even
| have loops half the time. Estimating isn't that hard in practice.
| throwaway82652 wrote:
| >that doesn't mean Eth as a whole is broken
|
| That's true in the sense that it's not why ETH is broken. ETH
| as a whole is broken because it's cryptocurrency. The whole
| idea of smart contracts is never going to work as advertised,
| it's impossible to make a more complex contract without running
| into any number of these flaws and spending an inordinate
| amount of your time and energy trying to mitigate and
| workaround them. But at the same time these are the types of
| contracts that drive developers to ETH. It's a lose-lose
| situation, at best it's equivalent to a payment API that's
| extremely unpredictable and insecure and will never have those
| issues fixed because they're part of the design. These flaws
| aren't inherent in making online transactions, they only pop up
| when you insist on using blockchains for everything, when
| there's no real reason to do that.
|
| >Also, trading ought to be done in Layer 2s.
|
| It's really baffling to me how L2 chains have become a serious
| thing. If you ask me those are just workarounds for flaws in
| the design of the L1 chains, nobody actually wants to use L2
| chains but they're forced to because ETH (and other L1 chains)
| are so poorly designed that it can't accommodate most things
| people actually want to do.
|
| >They're programs with a low ceiling on the number of steps and
| possible codepaths. They barely even have loops half the time.
| Estimating isn't that hard in practice.
|
| Ok but why should anybody have to estimate in the first place?
| There's no reason for it with a trivial transaction, requiring
| this is just bad design.
| pavel_lishin wrote:
| > _once proof of stake finality arrives_
|
| Which it hasn't, despite being six months away for years now.
|
| You _cannot_ handwave away problems by promising you 'll fix
| them with X in Y months, when you consistently fail to deliver
| X.
| pshc wrote:
| I keep seeing this "eternal six months away" FUD, but no one
| wants to admit the devs delivered on the Beacon Chain which
| has been running smoothly for 1.5 years, and the Merge
| testnets are working quite well. Bitcoin maximalists are out
| there all day grousing about made-up deadlines promised by
| strawmen and laundered through hearsay. It has nothing to do
| with reality.
| tick_tock_tick wrote:
| Is Ethereum PoS yet? Simple Yes or No.
|
| That's what people are complaining about they are years
| behind on what they promised.
| michaelsbradley wrote:
| _What's New in Eth2_ is a biweekly newsletter that 's a
| good resource for tracking progress toward PoS:
|
| https://hackmd.io/@benjaminion/eth2_news
|
| From the current edition: Go/no-go
| decision on doing the Merge or postponing the difficulty
| bomb to be discussed on the 29th of April [2022] ACD
| call. If it's "go" then start merging the
| existing testnets at 2 week intervals with a view to
| doing the real thing in July [2022].
|
| ACD call == AllCoreDevs meeting. Here's a summary of the
| most recent one (includes a link to a recording of the
| call):
|
| https://github.com/ethereum/pm/blob/master/AllCoreDevs-
| Meeti...
| dmitriid wrote:
| > Is Ethereum PoS yet? Simple Yes or No.
|
| It seems you've given a long answer which can be
| simplified to "No"
| michaelsbradley wrote:
| Along with pointers to current and historical information
| as to why arriving at PoS has been such a long and
| interesting road to hoe, while also being an open/source
| process involving teams and individuals all over the
| world.
| dmitriid wrote:
| > I keep seeing this "eternal six months away" FUD, but no
| one wants to admit
|
| that it has literally just been postponed again
| https://twitter.com/TimBeiko/status/1514010098145759232
| [deleted]
| trompetenaccoun wrote:
| Postponed would mean the date was officially announced by
| one of the devs?
|
| I've not had time to pay attention much over the past
| months, but to me that June date was always a silly
| rumor. Correct me if I'm wrong. End of year is what I
| heard, but even that isn't set in stone of course and I
| wouldn't be surprised if it doesn't happen till then.
| dmitriid wrote:
| > Postponed would mean the date was officially announced
| by one of the devs?
|
| In true "decentralised fashion" the devs spread their
| info thin over multiple veues so it's hard to hunt down
| their statements.
|
| But we could take to ethereum.org which previously stated
| [1]
|
| --- start quote ---
|
| When's it shipping?
|
| ~Q2 2022
|
| This upgrade represents the official switch to proof-of-
| stake consensus. This eliminates the need for energy-
| intensive mining, and instead secures the network using
| staked ether. A truly exciting step in realizing the
| Ethereum vision - more scalability, security, and
| sustainability.
|
| --- end quote ---
|
| Same is still on Consensys:
| https://consensys.net/knowledge-base/ethereum-2/faq/
|
| [1] http://web.archive.org/web/20220202044446/https://eth
| ereum.o...
| michaelsbradley wrote:
| There will be a go/no-go decision on April 29 (two weeks
| from now) re: "do[oing] the real thing in July".
|
| See my previous comment above.
| thefourthchime wrote:
| Wasn't the original PoS called Casper? IIRC that was like
| 3-6mo away 5 years ago.
| recursive wrote:
| I understand the arguments about how cryptocurrencies use
| too much electricity, but I understand none of what you've
| just said.
| pshc wrote:
| I can try to contextualize this... at least explain my
| understanding of the history.
|
| Bitcoin grows popular and its proof of work burns
| increasing amounts of electricity. Ethereum devs do not
| want to see Eth go the same way, and prioritize Proof of
| Stake, which will not require any more waste. The devs
| sketch out new roadmaps, do research, and make slow but
| steady progress; software always takes longer than you
| think.
|
| Meanwhile, Bitcoin has completely fossilized for
| political reasons and basically cannot be improved at
| this point. Bitcoin maximalists (diehards) recognize Eth
| as an existential threat and start pushing this meme of
| PoS being always 6 months away, despite the actual Eth
| devs never promising such things.
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