[HN Gopher] What if cryptocurrencies ranked by number of nodes i...
___________________________________________________________________
What if cryptocurrencies ranked by number of nodes instead of
marketcap?
Author : donmezgel
Score : 86 points
Date : 2022-09-05 18:42 UTC (4 hours ago)
(HTM) web link (chainparrot.com)
(TXT) w3m dump (chainparrot.com)
| saurik wrote:
| I would claim that would be just as bad if not even worse, as the
| biggest sin in the marketing of cryptocurrencies is that people
| create a circular value pump that starts with VC money to
| subsidize "rewards" for people running nodes and then they claim
| "we already have hundreds of nodes!!" which causes the value of
| their token to go up... which then means they have more value to
| continue providing subsidies. These rewards are paid out using
| the token, and to run a node--and thereby earn rewards--you have
| to "lock up" (aka, commit to not selling in the near future) a
| bunch of the token, which means people like to "reinvest" their
| rewards (to earn more rewards, which they mentally be model as an
| APY on their capital) rather than converting it immediately back
| into another currency.
|
| This causes a massive--and very unsustainable--"pump" in the
| value of the token, as more people rush to invest in the token so
| they can get paid rewards by staking it (to set up more nodes and
| earn more rewards), which is then used to market the product
| saying "look how many more nodes we have! we keep getting more
| and more nodes!" causing others to rush to invest in the token to
| speculate on the value increase, which adds up to the value of
| the token going up and thereby either the value of the treasury
| held by the company going up or the value that can be extracted
| via inflation going up, which can then be used to pay for more
| rewards.
|
| The ONLY correct metric by which to judge a cryptocurrency
| project is by the amount of legitimate--not "I am going to
| subsidize our nodes by acting as a client and using the network a
| ton randomly to make it look like there is a lot of usage"...
| which, yes, means this is a difficult metric to correctly measure
| --traffic, as probably measured by _revenue_ (but maybe
| "untainted income" or something would work? I have stared at the
| question some but never managed to figure out what the best exact
| figure is... which is of course even harder of a problem than
| valuing a normal stock/company).
|
| To draw an analogy: would you want to decide the value of a
| restaurant chain by the number of locations they have around the
| world--or a gig economy company by the number of people
| _providing service_ --if you knew the company took a billion
| dollars in VC money and could quite literally just be paying
| people to set up locations or drive in circles without a single
| user in sight? You'd want to know how much people were actually
| willing to _pay_ for the food people are buying or how much they
| are willing to _pay_ for the rides they are getting, and if that
| answer were somehow not only $0 but NEGATIVE--as cryptocurrencies
| often set up unsustainable VC /pump-funded incentives focused on
| the USER as well!!--you'd hopefully be skeptical of the company.
|
| (But, of course, I use those examples to explicitly include the
| ilk of Uber or DoorDash, as the question for SOME of these
| cryptocurrencies is "if we can get enough providers in enough
| places, only then can we unlock revenue and value". But that is
| then more of a progress check on their ability to build out their
| network as opposed to a real understanding of whether their
| product has any value or not... an ecosystem where you have a ton
| of supply and almost no actual demand is not an ecosystem which
| is functioning or one which will be sustainable.)
| loxias wrote:
| Always surprised at how few nodes there are relative to how loud
| the noise is about crypto. I don't mind deploying a service and
| running things myself, it seems there are only a few thousand of
| us in the world. Even Tor only has "a few thousand" nodes.
|
| It might be cute to also see some derived statistics like "market
| cap/node", average size of transaction, and "estimated cost of
| 51% attack". ;-)
| overtonwhy wrote:
| Or "estimated cost to DDoS nodes". For a 51% attack can you
| DDoS rival nodes offline?
| mrsnowman123 wrote:
| EddySchauHai wrote:
| It's surprisingly complex to run a node unless you're a
| seasoned developer, and even then when you add things like
| updates and potentially even slashing for mistakes it's not
| worth it. I spent around two years contracting building test
| infra for different crypto companies by creating throwaway
| networks with potentially up to three different cryptos (for
| bridges) and it was a nightmare. There's a definite startup
| idea there to make it easier like spinning up VMs
| c0mptonFP wrote:
| Compared to the shit sysadmins normally have to deal with,
| setting up nodes and spinning up custom nets is a breeze in
| recent years.
| TakeBlaster16 wrote:
| > estimated cost of 51% attack
|
| Someone already built that one here: https://www.crypto51.app/
| password1 wrote:
| These numbers are really low, I think I'm missing something
| otherwise I don't understand why 51% aren't a common issue.
| TakeBlaster16 wrote:
| Those prices are derived from a site called NiceHash that
| tries to commodify hashpower. Most people who want to
| monetize their mining hardware, just... use it to mine, not
| lease it to a reseller. So both the supply and demand are
| low. It's a weird market imo.
|
| The last column is important to understand. It's answering
| the question: if you rented NiceHash's entire supply of
| compute power, how close would that get you to launching an
| attack? For any crypto worth caring about, the number is 0%
| or close to it. And for the others where it's >= 100%,
| attacks are a common issue for exactly this reason.
| drexlspivey wrote:
| That's just how much electricity it will cost you to
| sustain the attack for 1 hour. You still need to find the
| hardware. You'll also need to find someone to accept your
| transaction (that needs to be bigger than those 2 costs
| combined to make it profitable) and give you cash in
| return. Then you can defraud them keeping the cash and
| coins by reversing the transaction.
| latchkey wrote:
| It is a common issue. ETC was 51'd 3 times in a month not
| too long ago... that said, with the upcoming merge, it'll
| soon be the largest hash GPU/ASIC coin.
|
| https://www.coindesk.com/markets/2020/08/29/ethereum-
| classic...
| cowtools wrote:
| If I recall, the problem was that they were using the
| same PoW function as etherium was, so people could just
| use their old ETH hardware to attack ETC. Pretty sure the
| fix was to switch to a slightly different PoW that
| entails re-designing the ASICs.
| mandarax8 wrote:
| Is it 'illegal' to attempt a 51% attack?
| wyldfire wrote:
| It seems very likely it would be considered theft or fraud.
| cowtools wrote:
| I mean maybe if you try to double-spend on purchases that
| you make with cryptocurrency, but small reorgs happen all
| the time and they would have to prove you intentionally
| caused the reorg in order to double spend.
| sparkie wrote:
| The count is "reachable nodes", which is a fraction of the
| number of total nodes. Most people don't open a port to allow
| incoming connections and their node will only make outgoing
| ones. Bitcoin has closer to 50k users running Bitcoin Core,
| with many others using SPV wallets like Electrum.
|
| https://luke.dashjr.org/programs/bitcoin/files/charts/histor...
| dangero wrote:
| You can run a thousand nodes virtually from a single pc
| [deleted]
| risho wrote:
| Wait isn't each collection of 32 eth considered a separate
| validator no matter the source? If that's the case then wouldn't
| that mean that coinbase and other exchanges make up the massive
| overwhelming majority of those validators? If that's the case is
| it really good faith to claim that there are 400+ thousand
| validators and then arbitrarily put ethereum in first place?
| TakeBlaster16 wrote:
| At a minimum I would group PoW and PoS coins separately, as the
| incentives for each category are quite different. This site
| acknowledges that in a way with separate lists at the top for
| "nodes" and "validators", but underneath they still have the
| main list sorted by max(apples, oranges)
| rvz wrote:
| 1. Yes.
|
| 2. Yes.
|
| 3. It is not in good faith.
| [deleted]
| joyfylbanana wrote:
| The point is the shilling as always
| Taek wrote:
| Yes, its not genuine to say Eth has 400,000 validators as many
| of them are the same entity.
|
| It's a similar story for nodes as well. A ton of the reported
| nodes are actually running on AWS and ultimately its a fairly
| worthless metric.
|
| For a while the crypto community valued node count as a
| meaningful number for measuring decentralization, and naturally
| from that moment forward people have been fully shameless about
| running hundreds (at some points in history tens of thousands)
| of nodes just to boost metrics.
| beaned wrote:
| Is this measurable? Is it possible to tell which nodes are
| running in the cloud, and count them?
| ahtihn wrote:
| > A ton of the reported nodes are actually running on AWS
|
| So? That doesn't mean anything, Amazon doesn't control the
| nodes just because they are running on its infra.
| terrio wrote:
| Guess what would happen if Amazon would just block certain
| type of traffic.
|
| US gov or the CIA/fbi just forces AWS to do so.
|
| Since Snowden not unreasonable.
| mhluongo wrote:
| Depends on the custodial setup!
| latchkey wrote:
| Because, tomorrow, they could decide to make it against the
| ToS if they wanted to. Hetzner has already done this.
|
| https://news.ycombinator.com/item?id=32607728
| dakial1 wrote:
| Newbie question, how do you know how many nodes are under the
| same entity, to avoid somebody compromising the distributed
| system?
| drexlspivey wrote:
| You can't, that's why miners vote with their computing power
| (or their staked coins in PoS) instead of the number of nodes.
| The second metric is gameable by spinning up many nodes (Sybil
| attack).
| bitcurious wrote:
| Chia is famously decentralized when using "number of nodes" as
| the measure and yet is missing from this list.
| guilhas wrote:
| Chia sounds like the biggest lost opportunity ever. Why not use
| the drives for cloud storage?
|
| Destroying a lot of HDDs and SSDs for nothing
| [deleted]
| 1024wq wrote:
| Chia currently has 123398 full nodes
| https://dashboard.chia.net/d/em15uQ47k/peer-info?orgId=1
| dbv1 wrote:
| Massive premine on Chia, didn't know that. I have a hard time
| believing that many nodes are reachable, there are probably
| about that many users in general, if that. Looking at the
| latest dozen blocks right now, they're completely empty.
| mjmj wrote:
| Their software runs a full node and a wallet, so most users
| are a node by default (if I'm not mistaken) and rewards are
| double for the first couple years. You can run their
| software and just about anything, low powered CPU's, pi's,
| NAS, etc. So I don't doubt their numbers are too far from
| the truth, esp considering how much China supports them.
| Nodes have been slowly dropping over time as the crypto
| boom cycle has died down.
|
| As far as real transactions, they've got a way to go. Just
| releasing NFT support a few months ago.
| 1024qw wrote:
| In the beginning everyone had to run a full node even if
| they weren't farming (in Chia instead of mining it's 2
| stages, first plotting and then farming) but earlier this
| year Chia released a new light wallet which doesn't run a
| full node. Now it should be mostly actual farmers that
| run full nodes. Chia currently has 22 EiB of netspace
| which would be more than 1.5 million of 14 TB hard
| drives.
| 1024qw wrote:
| Chia Network explains the reason for the prefarm and how
| it's going to be used in their whitepaper
| https://www.chia.net/assets/Chia-Business-
| Whitepaper-2022-02...
|
| Also worth checking about Chia Network projects with
| WorldBank and InternationalFinanceCorporation for carbon
| credits market https://www.chia.net/2022/08/17/bringing-
| transparency-and-ef... about some real use that is
| launching very soon.
| rocket_surgeron wrote:
| I think cryptocurrencies should be ranked by the mass in
| kilograms of the actual, real, physical products and the weight
| of people performing actual, real, services that have been paid
| for using them.
|
| Arbitrage and exchange, and all of the people and infrastructure
| surrounding those, would have no mass in this ranking system.
| dskloet wrote:
| Where does this get its data? Dash has close to 4,000 nodes but
| here it's listed with 27.
| donmezgel wrote:
| It's from active connections here:
| https://explorer.dash.org/insight-api/status
| mjmj wrote:
| Where is Chia? They might out rank all of these.
| _xander wrote:
| Was just about to say the same. Chia is at 123k full nodes.
|
| Source: https://dashboard.chia.net/
| guilhas wrote:
| If you google Chia launch it says it started with more than
| 100k nodes already
|
| If you zoom out that dashboard it says at one point 200k
| nodes that than very sudden changes but in a general trend
| downwards. Data might not be accurate
|
| I don't understand much of Chia or other coins, but it does
| not look very organic
| donmezgel wrote:
| Couldn't find their api to get the numbers..
| sigmar wrote:
| https://www.chia.net/2022/04/06/announcing-chia-
| dashboards.e...
| O__________O wrote:
| Anyone able to comment on why Bitcoin nodes started using TOR
| around January 2020?
|
| https://bitnodes.io/dashboard/7y/
| swivelmaster wrote:
| Can someone explain to me why any of these values truly matter?
|
| My background is in game development both on Facebook and mobile,
| and I spent a lot of time paying close attention to the growth of
| the web and its various startups. Number of nodes and market cap
| both look a lot like vanity metrics to me - numbers that sound
| good in a market/tech-specific way but don't actually reflect the
| true value or growth potential from a business perspective.
|
| Cryptocurrency, AFAIK, has network effects, so the true value
| should likely be measured in common KPI's like DAU, MAU, and some
| kind of replacement for ARPU - likely average transaction volume
| per daily/monthly user.
|
| The numbers I've seen for crypto games - DAU in the tens of
| thousands - are absolutely laughable compared to the numbers on
| Facebook and mobile games even in the first year or two of the
| platforms. If crypto was truly going to be a revolutionary mass-
| market phenomenon, I would expect to see hundreds of thousands to
| millions of DAU on any individual currency and AFAIK that's just
| not happening.
| cowtools wrote:
| The number of nodes doesn't really matter as long as it's
| sufficiently high. The network security is mostly based on how
| decentralized the hash-power is (or staking-power) is.
|
| You're right that better measures are number of transactions-
| per-second, merchant acceptance, etc:
|
| https://mempool.space/lightning
| https://bitinfocharts.com/comparison/transactions-btc-eth-lt...
| https://moneroj.net/merchants/
|
| I agree that crypto games have been pretty pitiful in their
| current incarnation, outside of gambling applications (thanks
| to provable fairness). They have a bad reputation of being too
| centralized and pay-to-win, which is really the only problem
| cryptocurrency is supposed to solve.
| otikik wrote:
| ollybee wrote:
| I think Goodhart's Law will kick in pretty quickly
| Taek wrote:
| It's been in effect for this metric since the block size wars
| of 2016. Node count (and also validator count) has not been
| useful for a very long time.
| system2 wrote:
| Likely only HN would care about the node number so I don't see
| a problem.
| nr152522 wrote:
| Chia is missing from this list.
| Cypher wrote:
| You can rank it however you want. The problem with nodes is that
| anyone can them up cheaply without having any impact on the
| security of the network.
| jgarzik wrote:
| Answer (12 yr crypto dev & veteran):
|
| Number of nodes is a poor metric that is easily gamified (pumped
| up), presenting an artificial picture. If a blockchain's
| economics purposefully incentivizes nodes, then number-of-nodes
| is entirely subsidized, in one common example.
|
| Further, the "Sybil" factor - which one party controls many nodes
| - and other centralizing factors - e.g. 90% of nodes are on Big
| Cloud - also complicates the number-of-nodes use as a simple
| metric and useful comparator.
| lawn wrote:
| It's funny because the whole point of proof-of-work (and proof-
| of-stake etc) is because the number of nodes is a completely
| untrustworthy. If a there are very few nodes then that's a sign
| the crypto isn't very popular/decentralized, but other than
| that there's not much to say.
| SilasX wrote:
| >Number of nodes is a poor metric that is easily gamified
| (pumped up), presenting an artificial picture. If a
| blockchain's economics purposefully incentivizes nodes, then
| number-of-nodes is entirely subsidized, in one common example.
|
| I'm not sure that this dynamic would compromise the metric's
| usefulness. A cryptocurrency can only offer such incentives in-
| protocol if it's made the currency have real-world, persistent
| value. So any _ability_ to bribe users to run nodes would
| itself be a validation of the cryptocurrency 's
| success/influence/etc.
|
| (That is, being paid 1000 ScamCoins a week to run a node won't
| be much of an incentive if they're only worth trillionths of a
| penny each.)
|
| I do agree your next paragraph identifies a real problem
| though:
|
| >Further, the "Sybil" factor - which one party controls many
| nodes - and other centralizing factors - e.g. 90% of nodes are
| on Big Cloud - also complicates the number-of-nodes use as a
| simple metric and useful comparator.
|
| It's definitely hard to identify how truly independent the
| nodes are.
| cowtools wrote:
| Even if the nodes are independent, I don't think it really
| matters as much as the distribution of the hash-power. The
| non-mining nodes will not be able to resist a re-org by
| antagonistic miners.
| mbesto wrote:
| Answer (0 yr crypto dev & veteran):
|
| I start a new coin call $FOO. I release 1,000,000 coins. I sell
| one coin to a friend for $1,0000, and keep the remaining
| 999,999 coins for myself. The market cap is now $100M.
|
| > Number of nodes is a poor metric that is easily gamified
| (pumped up), presenting an artificial picture.
|
| You can game either one.
| throw101010 wrote:
| Firstly I don't understand who you are "answering" to, the GP
| didn't talk about Market Cap as a relevant metric.
|
| Secondly, Market Cap is only relevant when reported by
| popular metrics websites which vet their data sources a
| little... nobody relevant is listing your coin anywhere,
| sorry if it disappoints you.
|
| Thirdly, I'm sure that in your first year as a _veteran_ you
| will learn to care for coins /token which have
| liquidity/volume either on reputable CEXs or in
| tokens/networks with a good track record on DEXs.
|
| You can't really game liquidity for long without risking your
| capital.
|
| I know this is HN, so I would expect less low brow
| criticism... but who am I kidding this is about
| cryptocurrencies, rules don't apply.
| [deleted]
| mbesto wrote:
| > Firstly I don't understand who you are "answering" to,
| the GP didn't talk about Market Cap as a relevant metric.
|
| No but they were clearly refuting the alternative
| suggestion (nodes) was game-able. That was my point.
|
| > Market Cap is only relevant when reported by popular
| metrics websites which vet their data sources a little
|
| > you will learn to care for coins/token which have
| liquidity/volume either on reputable CEXs or in
| tokens/networks with a good track record on DEXs.
|
| This is hilarious, because your idea is that:
|
| - It's a popular metrics website
|
| - You believe they are vetted
|
| by a _centralized_ web site, is the exact antithesis of
| cryptocurrencies. What happened to decentralization?
|
| > You can't really game liquidity for long without risking
| your capital.
|
| Sure, but why is that relevant here? We're not talking
| about liquidity as being the relevant metrics, we're
| talking about market cap.
|
| Market cap is such a hilarious concept for cryptocurrencies
| because it converts everything to a fiat, which, again, is
| the antithesis of cryptocurrency.
|
| > I know this is HN, so I would expect less low brow
| criticism... but who am I kidding this is about
| cryptocurrencies, rules don't apply.
|
| Meeting low brow comments with low brow comments, chapeau!
| fogof wrote:
| This is why I think network fees are a good metric. As long
| as anyone can become a block creator, you can't pump it
| without losing money.
| meltedcapacitor wrote:
| Only works on congested networks, or those that burn fees:
| in original bitcoin style, without congestion, generating
| dummy transactions is free for miners (the fees come back
| in block reward).
| NavinF wrote:
| > 0 yr crypto dev & veteran
|
| 0yr experience with all investments?
|
| > The market cap is now $100M.
|
| Look up "closely-held shares" vs "floating stock" and how
| free-float market cap is calculated.
|
| Btw your comment has nothing to do with the one you're
| replying to. Why derail the thread instead of starting your
| own?
| mgraczyk wrote:
| If there's a public order book, it's very easy to see through
| this. Harder to do that with nodes.
| vlovich123 wrote:
| And yet so many instances of crypto coins that did this.
| I'm pretty sure they all had public books. The challenge
| isn't I sell one coin. It's wash trading. You create
| sufficient volume from multiple different anonymous
| accounts continuously. That's impossible to decipher
| because ownership is impossible to untangle.
| mgraczyk wrote:
| This only works if the exchange is in on it. That has
| happened many times but it's much harder to do than
| faking node activity.
| mbesto wrote:
| It's much easier to fake the initial activity, then start
| to have "real" users pile on. The only value I created in
| my ICO was that I created fake demand and the lemmings
| followed.
| giaour wrote:
| Why does the exchange need to be in on it? If it's not a
| KYC exchange, they would have no way of knowing all the
| Sybil accounts doing the wash trading were being run by
| the same individual.
| mgraczyk wrote:
| Almost all limit order books required posting the assets
| on the book and take a fee on trades. You can read off
| the amount paid to generate the fictional market cap and
| judge for yourself if it's likely to be fake activity.
| For thinly traded books with low liquidity, it's cheap.
| For thick books with high volume, it's expensive.
|
| Also exchanges that are not participating in scams,
| actively or passively, will attempt to detect wash
| trading and stop it.
| jkaptur wrote:
| Is there a metric that quantifies this? Some sort of market
| cap * daily liquidity or something?
| SilverBirch wrote:
| A public ledger only ensures that you can see through this
| if you can verify ownershp of wallets, because as we've
| seen repeatedly, you can programmatically create an entire
| eco-system of fake wallets trading back and forth. What's
| the cost? I can trivially create a series of bots that just
| trade their coins back and forth with each other forever.
| It'll create huge volumes. Now the reason you don't do this
| on real chains is because the transaction costs will
| cripple you. But transaction costs aren't real if the
| currency you're paying them in was entirely fictional to
| start with.
|
| From the outside there is no way of verifying that any
| chain has any real activity without verifying ownership of
| the wallets.
| mgraczyk wrote:
| Your counterargument here only applies when exchanges
| participate in the scam. Of course that does happen, and
| for a long time you could even pay OKeX to do this for
| you. But it's much less common than obscure coins faking
| volume off-exchange or faking node activity.
| literallyWTF wrote:
| colinsane wrote:
| cmroanirgo wrote:
| What is valuable to one person may not be to another. Does that
| make it a scam? Most people are adamant that gold is a
| fundamental unit of value, and yet it's paper value (by volume)
| is 10x the real thing1. Does that make gold a scam?
|
| Personally, I'm much more interested in the value inherent in
| the Human Spirit, but others place almost no value on human
| life. Insurance companies place a dollar value on human life. I
| look at words like _human resources_ and see how it
| collectivises individuals and turns them into cattle, putting a
| dollar value on something I think is priceless.
|
| People addicted to power are really interested in how many
| people they can control. Using this metric, managers, ceo's,
| etc are all buying into the scam that people have value but
| they're worth less than themselves. Using this metric any job
| is a scam, & it rides on the back of the notion that a piece of
| paper with $100 marked on it, formerly backed by gold, is
| actually worth anything.
|
| 1 https://intelligent-partnership.com/paper-gold-volumes-vs-
| ph...
| SirLJ wrote:
| Aces!
| ChainOfFools wrote:
| Number of nodes always and necessarily > number of people in
| control of those nodes, never the other way around. Node count is
| an extremely cheap pseudo-signal that implies decentralization of
| control, but is in no way correlated with it.
| avnigo wrote:
| Another question is what percentage of those is hosted on AWS?
| ahtihn wrote:
| Why is that question relevant?
| AustinDev wrote:
| Single point of failure well not single but we've seen AWS
| disrupted across many regions before.
| jfghi wrote:
| Relevant I'd say because AWS can ban anyone, any time, for
| any reason
| primeblue wrote:
| globalreset wrote:
| Ethereum "validators" are just an address with 32ETH. They are
| nothing like a separate "node".
| Geee wrote:
| I think this is misleading, because every 32 eth stake is
| considered a validator. If you look at the top depositors by
| entity, you see that there are just a few entities controlling
| most of the stake, i.e. there's only a few validator nodes with
| most of the stake: https://etherscan.io/dashboards/beacon-
| depositors
|
| Also, the number of nodes doesn't actually matter that much. It's
| more important that people _can_ run nodes.
| soulofmischief wrote:
| > Any observed statistical regularity will tend to collapse once
| pressure is placed upon it for control purposes.
|
| https://en.wikipedia.org/wiki/Goodhart%27s_law
___________________________________________________________________
(page generated 2022-09-05 23:00 UTC)