All analogies are incomplete and imperfect but I'd say a more accurate mental model would be something like this:
Ethereum is like a global database _with_ stored procedures.
With this analogy, the database component would map to the blockchain : https://ycharts.com/indicators/ethereum_chain_full_sync_data...
The stored procedure language would map to the Ethereum programming language Solidity.
Computers worldwide run stored procedures to decide how to write the next block(s) in the database. (Consensus.)
Embedded in the above is the collective psychology and incentives that attract humans to do the above activity. (aka Proof-of-Work).
To see how simple explanations of Ethereum can leave out the mass psychology aspect, consider another example of an incomplete analogy: The Reddit Place experiment of 2017 ( https://en.wikipedia.org/wiki/Place_(Reddit) )
video of the pixels evolution: https://www.youtube.com/watch?v=XnRCZK3KjUY
We could say that Reddit Place 1000x1000 art canvas is a worldwide "Adobe Photoshop" that runs slower than a 1990s 486 computer ... which is sort of true... but doesn't really explain the whole phenomenon.
Hacker News and Wikipedia are not any better if we add more computing power.
Ethereum is not like that. It requires bit accuracy since it deals with money and contracts. Ethereum would be have a lot more utility with more computing power.
Think of it more like the patent system. A patent is just a publicly available description of your invention. You could write it up yourself and publish it to a website for $5 / mo, so why would you pay the >$10k it costs to work with a lawyer and file a patent?
It's not the description of the invention itself you're paying for, but the rights you get that make it worth it to file a patent.
In Ethereum, the "lawyers" and "patent examiners" are the other nodes in the network and the miners which enforce that the smart contract code ran as it was suppose to and can't be undone.
However, they can be manipulated at will by a centralized authority.
Now, if you want no one being able to manipulate it, you have Ethereum.
I mean, if that's a fundamental point to be made, shouldn't you be able to purchase a machine stronger than a Raspberry Pi and take over the Ethereum marketcap? Maybe you can charge less for gas and win marketshare that way. After all, people are paying for the Raspberry Pi processing power... right?
But does't such limitations fundamentally question the global ambitions of Etherium? Could you really run a global digital economy with such limitations?
To me it seems an apt analogy about the capacity of Etherium, assuming it is correct?
It also invokes the corollary that this virtual computer weaker than a Raspberry Pi is the most efficient computer processor on a realized dollar basis: what other computing system with less processing power than a Raspberry Pi is settling $10 billion dollars of finance per day?
Its too bad people can't _write_ code safely with these adversaries without getting constantly rekt.
You will run into problems though (and Ethereum has had way more than a fair share of these) if people fuck up their code so that others can exploit the code with behavior that was not supposed to happen.
In the real world, you and the counterparty would meet with your lawyers at a courthouse and have a good chance of winning if your claim is solid. In the cryptocoin world, there are no such entities by design, and every error you make cannot ever be recovered.
I am not even sure how it looks like but there are people smarter than me in the world.
It’s humans trying to pass off yet another unfalsifiable (to the masses who lack resources to vet its logic) system of distribution of information, and avoid accounting for “bugs” that don’t effect them.
Why is that? Because that’s all humans are capable of. We don’t literally repeat history but we have often repeated rewriting flawed social constructs with new flawed social constructs.
Just because the math fits neatly in a book does not mean it’s fits neatly into human agency.
[0]: https://www.techspot.com/news/91937-bitcoin-largely-controll... [1]: https://news.ycombinator.com/item?id=29008910
But really it's the pools who would decide and as long as they don't control 51% of the network hashrate they can't dictate.
Also the miners can just take their ball and go home, and they already have see: Ethereum Classic
edit: [1] https://etherchain.org/miner
However, the move to PoS will probably change this, as a valid block containing a "banned" transaction can't be easily disputed even by a majority, as long as the block is correct. The only way to try to fight it is to burn lots of ETH, meaning any pool that engages in such behavior becomes weaker.
(Again, please correct me if I am wrong).
Proposed blocks must conform to the rules. If not, bad faith actors can get their stake slashed by anyone else. Anyone doing anything outside that framework is not following consensus. Whatever they are doing, is not Ethereum. I'm not fully up to date on what could happen if part of the stakers keep on doing that, but I think that the result of that kind of contested fork would be that each part would be able to slash the funds of the opposing part in their own consensus. In short, it results in a split, with the good faith actors in one side. After that split, the good faith actors would now control 100% of the staked funds.
Btw, you're absolutely right on your last sentence. Consensus was and is always a social contract between humans. The protocol is just a neat way to distribute it.
Edit: BTW, isn't this what stealing a token would be?
> overpowering and replacing some of the blocks at the top of the chain.
Regarding "stealing a token": remember that even in the case a block gets replaced by another, both have to be valid blocks, containing valid transactions. This is why the most famous attack is a just a "double spend attack" and not any kind of money steal. Problems with tokens, that is, transactions that run arbitrary code, happen due to bugs in such code, not because of fundamental issues with the protocol.
Transactions are signed using public key cryptography. A miner can't modify a transaction present in the pool or make it up. Transactions need to be correct in order to be part of blocks.
This is the bit I don't understand. A block is a set of transaction information which is chosen by the miner/staker. What's stopping them from just making it up? It will still be a valid transaction.
I think, the mismatch is, while Ethereum is being sold as "the world computer" and being Turing complete, it's actually more narrow in scope, because if the points you just mentioned.
It's more of a decentralized and permissionless clearinghouse.
If you need storage, you wouldn't use Ethereum but IPFS/Filecoin, Skynet/Sia, or Arweave. For compute, you would use Akashnet (albeit a bad example here, but I don't know something better right now).
I don't know if there are plans to integrate features from other chains into Ethereum, to make it more general purpose, or if that's even possible. But right now multi-chain is where things are heading.
If censor resitance and knowing who actually paid for a service are seen as valuable to enough people, it could have a future.
Are any other blockchains using close to as much energy as BTC and ETH?!?
It doesn't happen all at once, it's a transition. There are billions staked in ETH2 already.
> But we don't know how PoS will go for ETH once it has moved.
There's quite a few PoS coins that are working well, Algorand comes to mind.
> Besides, there are many other negative exernalities that the move to PoS won't get rid of.
Such as?
This video[1] covers a bunch and doesn't even mention energy usage much. Off the top of my head: rampant fraud[2] (e.g. so-called rugs in the NFT space and stolen artwork being minted as NFTs), financialization of everything, strong incentives to build intrusive DRM to enable "true" NFT ownership, creating incentives to hoard vs. invest thanks to deflationary currency, and loss of privacy (everything on a public blockchain).
[1] https://www.youtube.com/watch?v=YQ_xWvX1n9g
[2] Oh and thanks to how blockchain technologies work, fraudulent transactions are often irreversible.
Enabling fraud, enabling ransomware, enabling authoritarian dictators to enrich themselves. Furthermore there's still Bitcoin that will never move to PoS, and the popularity of ETH also swaps over to Bitcoin and other cryptos.
Yes, yes, there are also scams in fiat money blabla. The problem here is, that cryptos are a strictly zero-sum game and don't add any value to anybody except people who are able to dump their coins to the next greater fool. So why should we accept all these disproportionate externalities?
I don't think simply yelling "fraud" and "scams" is enough to dissuade people anymore. New talking point please.
Honestly the anti-crypto sentiment here is ridiculous. I hope people know that the same people preaching against it here are gobbling up crypto as fast as they can while trying to dissuade others.
Only a person who extends their crypto-scam thinking to others would think this way. I can assure you that I don't hold any crypto, and that I'm pretty certain that the majority of outspoken crypto sceptics don't hold any crypto.
If you think it will be more lucrative in the future it helps to extend the current prices by investing while dissuading others to invest.
They'd have to get in at a later, much higher price in that scenario.
iTunes gift cards, iTunes gift cards, oil.
Can we ban those too?
But yes. Let's ban it.
Incidentally, while searching for the topic I also found an article[2] from August 2021 with this quote:
> Meanwhile, crypto mining manufacturers like Bitmain and Innosilicon are on track to release new Ethereum mining machines this year, all while knowing that Ethereum’s transition to a PoS network is just five months away, effectively making those machines redundant.
I guess the manufacturers were right.
[1] https://old.reddit.com/r/ethereum/comments/ehpp8m/will_the_m...
[2] https://www.benzinga.com/markets/cryptocurrency/21/08/224855...
The computer I'm typing this on is using gminer to mine on the flexpool.io mining pool. But it's just using a computer I would've purchased anyway. Some miners have tens of thousands of dollars invested in mining equipment or more.
Hashrate has increased from 14.86 to 1001 Th/s in the past 5 years and is at an all-time high. Since "transitioning" to PoS, it has not gone down.
Yes, the hashrate graph has a positive slope over large time series, but it does go down at various points along the time series so therefore saying "the hashrate has only gone up" is a false statement.
I have run into this in about 1 out of 50 interactions on HN over the years and I find it most helpful to point this out and mean no disrespect by it.
It was moving to PoS last year and the year before that. Now it's June, but I heard probably delayed to July.
One telling thing is that ETH miners not only haven't sold their GPUs they're continuing to buy more at greater than MSRP. It's unlikely there will be a good alternate coin to mine after ETH. Some are planning to move to ETC (Ethereum Classic) but it can't absorb the hashrate of ETH and be profitable.
ETC currently has 24.46 Th/s while ETH has 961.14 Th/s. ETC price has been going up dramatically in the last week ($25 to $40 per coin) but it would have to go up about 20x more to absorb that hash rate.
Not surprising really, shell games with insider information being traded against the sheeple is a core aspect of the crypto industry. Who knows if this time is just like the last time and all the times before?
[1]: https://blog.ethereum.org/2021/05/18/country-power-no-more/
When I compared Ethereum to a Raspberry pi I was continuing the comparison from the root comment. The point of the comment was that, although POS would produce a significant reduction in power consumption, it would still consume a significant amount of power compared to the computing power of the network.
Discussions about if Ethereum has extra utility that offsets that extra powerdraw is outside of this comment thread, since the restriction that consider Ethereum as a "global single core raspberry pi" are given by the root comment.
I didn't mean to (and don't think i did) present that in any tricky way, and I think you're projecting an argument onto my comments that I'm not making.
As true as a legislature can be described as a pen + notebook - there is value in consensus.
https://www.congress.gov/bill/117th-congress/house-bill/5376...
If you wanted to calculate pi obviously you wouldn’t do so on Ethereum.
If you wanted a globally distributed ledger then you need something like gas fees in place.
Take Augur, for example. A prediction market without a trusted resolver seems pretty useful, but the fact that a blockchain can't handle any real world application on-chain meant that it was unusable.
Another example is that it's ridiculous on its face that CryptoKitties was able to bring Ethereum to its knees. People want to base real financial markets on this tech when a trading card game is able to congest the network and increase fees 10-fold?
And most (I would even count all) of the biggest cryptocurrencies use-cases are entirely wasteful.