The short of it is:
- The block chain is a distributed ledger database, where all peers hold a full copy to avoid manipulation (faking an entry is only possible by controlling >50% of machines in this peer-to-peer network).
- Spending money is implemented by adding a transactional record to the blockchain ledger at the end saying X amount moved from account A to B. A block is like a page in a paper ledger and they are appended with cryptographic hashes to avoid improper interference.
- Ethereum supports smart contracts, which are little scripts in a language called Solidity. So you can implement legally binding (and unstoppable) contracts along the lines of "if (condition) then (pay some money to someone)". Executing smart contracts cost a little bit of money. All Ethereum nodes collectively implement a distributed VM, and that money (called "gas") is the incentive to keep the network running. Smart contracts are highly interesting, and they have applications far beyond electronic currencies. For example, we played with implementing electronic rights management (https://link.springer.com/chapter/10.1007/978-3-030-36691-9_... - which turned out to be less than ideal due to a stack size limit in the current Ethereum VM, but hey).
- Whenever a new block (page in the ledger) needs to be created because the previous one is full, a randomized alg. determines who is permitted to do that ("mining"). The old process (proof of work) was environmentally a disaster (it still is for the Bitcoin ecosystem), which is why the Ethereum people implemented a smarter method (proof of stake - https://en.wikipedia.org/wiki/Proof_of_stake).
[0] https://ogucluturk.medium.com/the-dao-hack-explained-unfortu...
I have no idea how smart contract could be globally enforced, or can they be, but if they can, the way I see it, this should create new prosperity for those who have been unable to enjoy access to fair courts and binding contracts.
This is the heady mythology of those who said 'Crypto would create XYZ for those who cannot'.
Except it's been 10 years of Crypto popularity and they have no material function, are a huge drain of energy and human intellectual capital.
Contracts are subject to legal oversight of a Judicial system, the credibility of which is require of a system to function.
Digitization of a 'contract' really doesn't make sense so much at all in terms of it's 'legality'. The algorithm whether it's in regular code or Ehterium makes no difference.
If someone really wanted to 'help those without legal recourse' they'd just use a foreign legal system for transaction record. So, contracts between 2 people in Haiti could be designated under 'Canadian Law'.
But even that would be besides the point: It's not the 'legal system' that makes things work, it's the integrity of the system overall, maintained by a 'legal system'. Canada isn't rich because it has a 'legal system' - that's just one component. It's rich because people and groups act with integrity. The 'law' is involved very rarely.
There's no technical utopia that will replace 'integrity'. Or frankly 'values'.
Ehterium is a neat experiment, that's all it is for now.
This is so important.
If someone is trustworthy, you need fewer checks in balances to be able to be confident that transactions with them will go well.
If, on the other hand, someone is not trustworthy, all the systems in the world cannot guarantee good outcomes.
On the other hand, if those factors are addressed, an intricate system of verifications and hash checks is just unnecessary friction and a source of added complexity to maintain.
You have flipped the direction of the causal arrow here.
The existence of functioning and accessible court systems in the western world is one of the reasons that western societies have higher levels of trust—not the other way around. It's much easier to trust someone when you know that if they cheat you, you have recourse to pursue justice in the courts.
In my experience doing business in both developed countries and less-developed countries, there isn't much difference with regards to individual human beings' "integrity". In fact, in countries without functioning judicial systems, business owners might demonstrate more "integrity" toward their customers, vendors and partners than we see in the US—but this has more to do with incentives than it has to do with people's character. In countries without functioning and accessible judicial systems, people typically do business with people that they have done business with before, because doing business with strangers is so risky. Reputation matters a bit more.
> There's no technical utopia that will replace 'integrity'. Or frankly 'values'.
Yes, as a general matter, many of the problems that exist in the less-developed world originate from deficiencies of trust [0]. But again, this is largely attributable to there not being reliable ways for people in those societies to mediate disputes.
This isn't about utopia. If smart contracts can take the place of functioning court systems in commercial transactions—or at least can reduce the complexity of legal disputes and narrow the discretion of judges to influence dispute outcomes—a real problem is solved and an impediment standing in the way of economic development is removed.
Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives.
[0] https://www.bi.team/blogs/social-trust-is-one-of-the-most-im...
My grandfather used to do business out of his wallet with cash and handshakes. He would do deals with farmers to make things in his workshop, and then get paid in pigs/parts of cows 6 months later. Farmers in particular are extremely reliable and credible people.
People in agrarian areas didn't move around much and personal integrity was definitely a kind of currency.
When you're dealing with industrial level trade and commerce, esp. with far flung traders and investors - yes, you're right.
And you're right to point out the relationship on some level.
But ultimately, Crypto is not going to add integrity to the system, and, integrity is essential.
"Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives."
No - they do not.
The naming of these things are a total misrepresentation.
Contracts can only exist within the context of a Judical system, otherwise, they're not really contracts.
No businesses on planet earth are going to allow their businesses to be managed outside the auspices of some kind of judicial oversight, and especially not in things that cannot be undone.
The world is full of accidents, misinterpretations.
Every situation we see a 'smart contract' there is probably room for a market maker, and/or just some kind of simple software that 'implements' a regular contact.
You don't think that this kind of trust exists outside of the developed world? Why do you think that your grandfather's experience is unique, compared to small farming communities anywhere else in the world where people have already known each other and done business with each other for many years?
> When you're dealing with industrial level trade and commerce, esp. with far flung traders and investors - yes, you're right. And you're right to point out the relationship on some level. But ultimately, Crypto is not going to add integrity to the system, and, integrity is essential.
The argument I am making is that at the industrial level, the existence of institutions capable of mediating disputes and enforcing agreements paradoxically increase levels of trust within society as a whole by reducing the need for counter-parties to depend on each other's personal integrity.
Of course personal integrity is important in business! But it is not a difference in integrity between societies that explains differences in development. Rather, differences in development can be largely explained by different levels of trust, which are a function of the tools and mechanisms available to mediate disputes. You are going to trust people more if you believe that cheaters will be penalized somehow for their cheating.
In traditional societies, cheating is punished by repetitional mechanisms within the community. The courts have served this function in modern industrial societies, and have thereby facilitated industrialization at a massive scale. Smart contracts can serve a similar purpose in places where courts are unavailable or cannot be relied upon today.
> "Smart contracts allow for certain types of commercial transactions to be conducted without the existence of a reliable judicial system, which transactions would otherwise be too risky to undertake. This incremental improvement will have a material impact on people's lives."
> No - they do not.
> No businesses on planet earth are going to allow their businesses to be managed outside the auspices of some kind of judicial oversight, and especially not in things that cannot be undone.
In some circumstances, it is better to have the option of taking a dispute to court. But even today in the US, most businesses try to avoid the courts and instead use arbitration to resolve disputes. In most of the third world, neither arbitration nor the government court system are available to most businesses.
Around the world, I think there are a lot of businesses that would prefer to completely eliminate the kinds of ambiguities in paper contracts that lead to disputes, by opting instead to use a smart contract to specify the mechanism of a transaction. If you don't see it being done already, that is because there is still a lot of infrastructure that needs to be built out.
> The world is full of accidents, misinterpretations.
> Every situation we see a 'smart contract' there is probably room for a market maker, and/or just some kind of simple software that 'implements' a regular contact.
Smart contracts are interpreted by machines, so there is no misinterpretation—if there is a problem, it is a problem with the implementation.
Sure, you could delegate the responsibility of encoding the terms of a paper contract to some third party. But then all parties need to agree on and trust that third party, and the third party itself needs to agree and accept some risk. A smart contract is a better solution because there is no third party involved. Everyone gets to read the smart contract before the transaction is performed, and if all agree, the terms are set.
You just wrote that trust is thanks to judicial system and that's what GP countered based on personal experience.
> You are going to trust people more if you believe that cheaters will be penalized somehow for their cheating.
Indeed. That's what we have with judicial system. And the opposite is true too, if cheating is not penalized if it was due to a maliciously crafted smart contract (because smart contact would be king) then I sure am going to trust everyone and everything much less.
I think both jollybean and I are drawing a distinction between traditional societies where high trust primarily exists within smaller communities, and industrial societies where trust operates at scale. I don't disagree with jollybean regarding how trust operates within smaller traditional communities.
My point was that at the level of industrial societies with millions of people doing business with each other, high trust is maintained largely because of the existence and functioning of the judicial system, not due to some unique personality characteristic of the individuals living in that society. Smart contracts can serve a similar functional purpose in societies where ordinary people do not have access to a functioning judicial system.
> And the opposite is true too, if cheating is not penalized if it was due to a maliciously crafted smart contract (because smart contact would be king) then I sure am going to trust everyone and everything much less.
Certainly trust would work differently in an economic system that is mediated primarily by smart contracts. Do not forget, though, that you currently have the advantage of living in a society which has a functioning and accessible judicial system. Your level of trust is already very high. People who live in societies that don't have the same advantages are starting at a lower trust threshold.
Using imperfect smart contracts to mediate commercial transactions might be a step down for you. For other people, waiting for a perfect system does nothing but stop them from improving things right now.
Absent the existence of a functioning and accessible legal system to mediate the resolution of disputes, smart contracts can serve the societal purpose otherwise served by traditional paper contracts.
Yes, smart contracts are not paper contracts disputes over which are judiciable by a court, but in many situations smart contracts can replace paper contracts, reducing or eliminating the need for courts to intervene in the first place.
Yes, Ethereum's security model is a problem. There's no reason to believe, however, that it won't be improved upon.
Like for example in the world of finance, where you have to be able to backtrack.
Meaning such 'contracts' are least useful for things like, well, 'currency' and 'stores of value' ... hmm ...
Yes, a blockchain gives you an (ideally) immutable foundation. No, that doesn't mean that every transaction that invokes a smart contract has to be immutable. If a smart contract for a particular use case needs to have the ability to "backtrack", so it can, there's nothing stopping it.
Needs backtrack, code it in, then everyone knows how the rules work and there isn't any side deals or exceptions.
Cheers!
I think the bigger issue is that the system is somewhat arbitrarily controlled by the large players. That could work out well in some cases (funds hacked are returned) but it could also be less optimal (e.g. you're thrown on some list and all of a sudden your transactions are not valid). We've already seen hackers and obviously malicious actors dinged, which is good. But this opens up an avenue for things like forcing participants to go through regular banking protocols that starts to affect more and more people (e.g. political dissidents). By then you just recreated the modern financial system with all its flaws and gatekeepers, except its less efficient.
There's no problem with spending the energy if it actually buys us something. It's a disaster because it failed to actually decentralize the network.
Instead of everyone with a computer being able to participate, we have very few people buying up all the hardware for their massive centralized mining operations. If that's how it's going to be, then we might as well move on to proof of stake.
Monero seems to have a better designed proof of work system. It's ASIC and GPU resistant, normal people manage to use their computers to mine XMR. One CPU one vote, that was the whole point since the beginning.
I would just call that "automated decision" The legally binding contract is the one where the parties agree on using the implementation as their means to fulfill the contract.
There is nothing legal related in that and no law in any legislation I am aware of giving it any special treatment.
No - they are not necessarily legally binding.
They are just called 'contracts'.
We have no idea what they mean, and each individual 'contract' will have to be scrutinized by the Judge, or else it's not 'legal' anything.
what are some examples of these conditions? how is it not like... i put money in escrow, if the buyer agrees i did my part, they click agree and that's the "condition"?
A bit off-topic, but do you think this kind of rights management ledger is better stored and accessed in traditional data stores and managed by either a government entity or a private-public partnership of some sorts?
It seems like self-signed authentication would still be viable but with the added bonus of a mechanism for dealing with lost private keys while at the same time allowing for individual entities to quickly and effortlessly exchange ownership.
how large is a full copy these days?
how are peers jump started and why is that mechanism trusted so well? like say I want to connect to the blockchain, I need to make an API request to some IP. how is that resolved and why is that regarded as "decentralized"? why is the mechanism for serving me peers trusted and why is every peer in the network trusted?
"What is going on now" is largely the same thing as before:
* consensus / Sybil resistance / game-theory / "crypto-economics"
* cryptography - signatures, data structures (e.g. Merkle tree)
* p2p networking
* deterministic computation / virtual machines
I guess crypto-specific consensus might be new, but you can get a good grasp reading few articles. And that part is actually opinionated, so you need to decide on a camp before you read materials. Bitcoin people would likely disagree with anything written about PoS.
Another fun thing is Zero-Knowledge Proofs (ZKP). That's actually quite new, complex and might be interesting.
The rest can be rather boring. Users submit cryptographically-signed commands (transactions) which processed in a deterministic fashion. I'm not sure it's worth reading a whole book about it.
OTOH cryptocurrency consensus is mostly about answering a question: "How do we prevent bad guys from stealing money or doing other nasty things?"
While a concept of Byzantine Fault Tolerance was known before Bitcoin, it was never really applied in practice AFAIK - people thought it's overkill. Also I'd say doing it within a private network is one thing, and doing it with random weirdos on internet is completely different.
Distributed computing researchers like Lamport were considering models where e.g. up to 30% of nodes are compromised, that won't work on internet where an attacker can potentially simulate billions of fake nodes. Nakamoto consensus is really elegant as it combines Sybil protection, incentivization and consensus into one thing.
That can be difficult if you read tech news like us, but it will give me a small twinge of joy if I live longer than crypto. Guess we'll see.
The underlying problem that blockchains solve is 'distributed consensus'. This is a solution with a much broader range of applications. For example Maersk has a system for signing handover of shipping containers in ports (https://www.maersk.com/apa-tradelens). This is an international problem with a lot of it happening in countries with a lot of corruption (i.e. you can't rely on legal mechanism). Not being able to forge who is responsible for which container eliminates a lot of problems.
Ethereum does something even more interesting, which is that the network can agree on the result of computations (these are called dapps for "distributed apps"). These can be used to implement simple "smart contracts" for financial purposes but they have a much broader applications. To some extent I'm slightly underwhelmed by the things people are doing with them, but the potential is enormous.
The Maersk thing is a fine example. It's one company. They already have the trust relationships and legal power that make distributed-consensus approaches unnecessary. That "blockchain" is involved makes no practical difference. It was a shiny bauble that got a lot of consulting hours for IBM, and surely helped getting the project approved because Maersk execs were seeing "blockchain" in the news a lot when it was kicked off.
I have little trust in cryptocurrency beyond "people like hype markets", but a global consensus layer is an obvious step with many applications for whittling down every process to its barebones - with some guarantees at a protocol level that the savings aren't going to anyone in particular. This doesn't need to do anything new, it doesn't need to do anything flashy. It just needs to slowly devour every existing business and reduce them to essentially open source software, uncontrolled by any middlemen or power brokers, accessible by anyone for pennies. And it probably will!
The blockchain hype cycle peaked nearly five years ago: https://trends.google.com/trends/explore?date=all&geo=US&q=b...
There were many pilot projects that soaked up vast sums of money. But in reply to a comment saying I haven't been able to find any practical results, what do I get? No practical results, just the same sci-fi guff.
Is it possible that there will be "a relatively-uncontrollable internet consensus layer won't be built upon with some interesting results down the line"? Sure. Lots of things are possible. But it's also very possible that after another decade of Bitcoin, et al, we'll still have just a bunch of stuff that's not adding at all to the world beyond a playground for scammers and some tooling for light financial crime.
Sometimes a small and ugly technology turns out to be the Internet. But most of the time, it's just a bit of garbage that never went anywhere.
A transaction on the Ethereum base layer takes 12 seconds to be confirmed once. There is a vast variety of second layer tech available to allow faster transactions.
There are very different amounts of risk associated with accepting a transaction on the base layer of Bitcoin vs Ethereum after n blocks. For example, Coinbase accepts Bitcoin deposits after 3 confirmations (30 minutes) and Ethereum deposits after 35 confirmations (7 minutes).
Compare to traditional banking: Coinbase accepts ACH deposits instantly (up to a limit) and wires of any size can take 24 hours.
Secondly, is Bitcoin + Lightning in combo decentralized in practice?
I don't know. I'm much more interested in Ethereum, personally.
Solana: 0.12 seconds
Bitcoin: 1.2 seconds (on Lightning)
Ethereum: 12.0 seconds
Banking System: ~30 days (2 hours to 5 days for usable funds)
Payment Card Industry: 180 days (2 seconds to a few minutes for usable funds)
15 minutes is 75 confirmations.
The Ethereum network has never deviated by more than 2 confirmations (24 seconds) and with PoS this is even less likely to happen.
Finally, the likelihood of that happening AND a car buyer colluding with block producers to scam you is effectively zero.
You're FAR more likely to be struck by lightning in the 15 seconds it takes the driver to leave than you are to have their transaction reversed on the Eth2 blockchain.
Many in tech look at crypto, and blockchain specifically as if it is another technicalogical capability they can integrate into their enterprise architecture. From that perspective blockchain in general doesn't really make sense. As cool as the composability of tokens and smart contracts are, that's not a capability only blockchain can deliver (in fact that's not the blockchain at all... that's the standards that have been built on top of it).
Others in tech look at blockchain as a currency to replace traditional currencies issued by governments. A reasonable world view, as that's kind of how it's been sold for a very long time, but it's pretty clear to me at least, that's not really possible. The US Gov is always going to require taxes to be paid for in dollars. The US, EU, China... everyone, they're not going to give up monetary sovereignty.
So what does crypto provide then? In my opinion, the sole thing the blockchain provides, when sufficiently decentralized is digital sovereignty... but more importantly an unlimited amount of digital sovereignties. Opt-in self governing communities that can decide for themselves what's fair. An enforcable user bill of rights that's global in nature. This doesn't replace the real-world sovereign nations, it's like a new layer in the digital world for digital applications. I've personally come to realization that Crypto doesn't really work well in the physical world. But in the digital world, it's proving quite adept...
Technology is still evolving, ETH2 is a huge leap forward... and glad to see it. Personally, I'm still attached to the Avalanche community because I personally think the technology is still superior. But the technology is kind of not the important part. It kind of just needs a minimunm spec, and then it's not important. It's how you treat the users who are using the stuff built on top of the technology. Libertarians were the first to understand that (though i'd argue they fail to understand that need to have a foreign policy, and real world governments are legitimate trading partners that you need to negotiate with. Their insistence on idelogical purity will be their undoing) But crypto is big enough for all kind of communities to crop up, and you can choose to join or not.
That's ultimately the thing, any app you can build in Web 3, you can replicate in Web 2 with a single server. But in Web3, the users can own it, and they can decide for themselves how to govern themselves. That's the value. We live in feudal system, a world dominated by Web 2 companies. Web3 in my opinion is the way we can build a diverse economic ecosystem of free (as in speech, not beer) digital services.
One thing I Think a lot about... today, all people in crypto are dual citizens. They have citizenship in their geogrpahic world, and in the digital world. But there's a future where AI can be pure digital citizens (citizens who have needs, such as compute, and they will trade their AI skills for that compute). I view a lot of the debate around crypto as a debate about foreign policy, and that gets really interesting when it's AI on the other end.... maybe a free AI :D
First problem is that the owner(s) of majority of voting tokens can unilaterally decide anything in the community. Because they work on "winner takes it all" principle. This means they are not self governing (because minority stakers are effectively excluded from any governing), and they are not decentralised.
Second problem is that there are no "people"/"humans" in the token infrastructure, there are only wallets. And there is no public mapping between wallets and humans (unless they expose themselves). This leads to the ability of "oligarchs" who own the majority of tokens (see problem #1) to obfuscate their existence. Creators of the community will false advertise that "oh no, we have no majority stakers, here people can truly decide anything by voting", but in reality there can be majority staker who owns majority of voting tokens, just spread out across the several wallets.
Basically these DAOs are recreating feudal fiefdoms in the digital realm but obfuscated by lies or omissions of information.
This is fairly new tech academically btw, and it's only possible anonymously since the ZSnark cryptography tricks.
Fingerprints, I infer that's basically digital signatures in use today - also controlled by centralised entity
Social networks - to base your auth on the bot moderated and bot infested 3rd party platform with zero support functions is a laughable idea
Stake based bounties - what does this even mean? Inferring from stake based, you meant that the auth will be based on the stake, meaning on the wallet with tokens? Then that's precisely the problem I've described above.
There is no clever technical way to solve social problem. Human identification is a social problem. You can't anonymously identify a person, unless dragnetting through his life with spyware scripts and fingerprinting (great idea for privacy, I'm already dreaming about it).
Passports - the cost of creating fake passports or removing valid ones to most lawful countries is prohibitive enough and visible enough to watchdog groups that we're not under any serious threat from governments going rogue here anytime soon. It's a decent start. At least a few thousand $ cost to forge security wise - increased the better your security market is watching for it.
Social networks - I mean furthering social verification by having networks of users (probably bootstrapped with their passports, and whatever other verification data - video, fingerprints, documents, etc) vouch for each other as real-world connections. You dont need Facebook etc for that - you build that into your identity system as a second layer which compounds the trust. A network discovering a fake user gets financially penalized for vouching (stake based bounties) so there's incentive to really do what you're asked - verify in person someone you've known for some time.
We don't need to anonymously identify a person. In fact, I'm expecting people will be willingly supplying some ungodly amount of data to prove they're real for the financial incentive alone (securing larger loans based on trust). But we can make the verification functions taking all this data go through smart contracts with zero knowledge proofs that can ensure said data doesn't leak to anyone the user doesn't want to share it with - and the protocol can establish a trust score.
And even if we failed to keep personal data off the internet, regardless of how public your profile is you'll always be able to use those zero knowledge proofs to setup an anonymous avatar with a proof hash that it belongs to (exactly) one existing profile from the set of verified profiles, allowing you to vote with the avatar while the system can still guarantee one-person-one-vote. So - anonymous voting.
Because you don't really own it in web3 either. Until normal people get comfortable with self hosting their own stuff there will always be gate keepers and places where governments can apply pressure.
You don't really own your crypto coins unless you have your own wallet on your own hardware (with proper backups as well). And for most normal people even just that is too much.
And we are rapidly approaching a point where we don't really even own our hardware any more.
And everything else, that is build on top of that needs to run on top of some machine somewhere and unless you own it, you can't really rely on it. It's all encrypted so they can't steel from you (unless bugs), but they can also shut it down. Sure there are plenty(and jet still not enough) of nodes on ipfs system now. But many someone's need to run them and it's always possible that people will loose interest or economies will change and number of nodes goes down enough that it becomes practically unusable.
Same problem is with much of the other web3 stack. With few companies controlling much of the developers/stack and infrastructure needed.
Sure it's all open source and distributed, but even nowadays in early stages, before the masses come in, we are talking about lot of infrastructure needed to run everything.
And right now there are VC's putting billions in investments in this space, so having lots of infrastructure for "free" seems like it works. But sooner or later this people will want their money back, with interest, and regular people will be even more screwed, because this is completely unregulated (which is why VC's love it so much ) as a design principle.
On the other hand if you are technical enough to be able to self host your own stuff, boring old federated systems, like smtp, jabber , matrix, ... are a lot easier, cheaper, with a lot less moving part - easier to administer etc.
I am all for federated content and people owning their own digital features in their own hands and I think crypto chains are a distraction/overcomplication at best and could possibly be a trap for ultimate corporate walled gardens.
So my focus is on boring old self hosted federated services.
Well, that's the thing about freedom. It's a pretty big responsibility. You can't offload the responsibility and still be free. True in the real world, and true in crypto.
You always need to rely on third parties for finance (even if you manage your own crypto wallet) and for other stuff in life.
Perhaps my biggest issue then is I'm not all in on the purely digital world that you describe and admit doesn't really exist, yet. That is to say, my plumber doesn't care about any of this and just wants cash. In the future, that can and probably will change, of course.
But today, in our current world, very few industries and virtually no blue collar industries accept such currency.
So then the question becomes, what is the value of <insert coin here>. Some will talk about energy, or efficiency. Some will talk about scarcity. Some will talk tech merits. But nobody to date has been able to convince me that it has any real value. There are no armies or economies validating it.
I think in simple terms, perhaps I'm a luddite. If someone, say completely disconnected from modern conveniences, were selling an item, I could perhaps trade physical goods for it. Or perhaps shiny metals, and explain why they're valuable(assuming they didn't know). Or explain dollars, and the guarantee behind them. How would you sell them on cryptocoins having value? The tech doesn't matter a ton here to a person, so onto the value. Why are bitcoins worth more than say, beanie babies of yore? Both seem to be run purely on speculation, at this point.
Said another way, if someone gives me 10k in cash, I have faith it will still be worth 10k in a year(ignoring our awful inflation). If someone gave me 10k in bitcoins, I have zero faith it would be worth anything tomorrow.
The world doesn't need to be purely digital, and crypto doesn't need to be the entire worlds economy. In fact, my argument is that it's NOT. It's something seperate, and unique and new. It's not a replacement for the economy, it's an addition to it. Though i'm sure a plumber could find a useful digital service hosted in crypto... i'd argue crypto isn't for plumbers. Not their plumbing business at least.
Imagine a git + smart contract service (this doesn't really exist today, and it's my side project i'm trying to build) which is integrated with a hosting service like Akash (cosmos). You can build new digital services/games/worlds that are governed in a decentralized way. You could build a new Facebook for example. The difference here, are changes are voted on by the owners of the token. I'm not even sure the token would be worth a whole lot monetarily (depends how the owners). But as a user, how much is having control over the social media you use daily worth? To me, A lot.
Everything in crypto is open source, but unlike the open source world today, crypto provides a mechanism and culture to pay contributors. So a lot of crypto applications are designed to capture that value in a communial way to pay people (or bots) for their work. The value of the crypto is access to these services. It's no different from the value our digital economy today provides. Just governed differently. Instead of Zuck controlling the digital service, the users can control the digital service.
Given that people won't pay when it's easy, why would they suddenly start paying when the barrier of converting cash to crypto is added on top?
Perhaps I'm misunderstanding and you're instead referring to actual ownership of said services. How does that differ from written agreements or stocks today?
What you may be describing seems similar to how Brave sees the world. I respect that and love the product, but don't see it as a reality.
NFT projects have demonstrated new forms of monetization that don't need ads or all users to pay, we can now experiment with these now that we have a value layer for the internet.
> So then the question becomes, what is the value of <insert coin here>. Some will talk about energy, or efficiency. Some will talk about scarcity. Some will talk tech merits. But nobody to date has been able to convince me that it has any real value. There are no armies or economies validating it.
Why are stocks without dividends worth anything? Companies have earnings. Many protocols have earnings as well, and they are built on top of Ethereum, which provides the security layer. What do you mean by "real value"?
> Said another way, if someone gives me 10k in cash, I have faith it will still be worth 10k in a year(ignoring our awful inflation)
10k denominated in what? I think ignoring inflation is an example of why people care. You only trust your cash because you trust the US government, which may be reasonable, but people in other parts of the world don't trust their government with monetary policies, e.g. [0]. Imagine inflation gets worse, the EU needs bailout, or we have WW3, and the the US government says "Sorry, you're no longer allow to buy gold or move your assets abroad, you need to buy our bad government bonds" - stuff like this has happened before, in many countries. And you can't do anything about it other than watching your savings crumble. Crypto gives you optionality. A government-independent monetary ecosystem. Nobody can lock you out. I trust the "Ethereum government" more than most centralized governments due to the transparency, global footprint, and aligned incentives. I can hold my savings in a USD-backed stablecoin as long as I believe in the US government's monetary policy. If that changes, I can swap into something else in a matter of seconds, and I don't need permission from any government to do so.
My experience has been that the value people see in crypto is directly inversely proportional to how much they believe in their government and whether they have experienced governments being malicious due to misaligned incentives. Most middle-aged people in the US don't fall into this category - they have never experienced war or malicious governments because they were lucky being born at just the right time and place and enjoyed nothing but prosperity. Convincing them about crypto is hard.
[0] https://devonzuegel.com/post/inside-argentina-s-currency-exc...
That's an interesting thesis and 'feels' true, but I have a hard time reconciling HN's (seeming) indie ethos with it's cryptoskepticism if that's the overriding factor. Have you any theories to explain the seeming disconnect?
I think many of the more "indie communities" are now assembling in Discord, subreddits, etc.
I'm also somewhat surprised at the extreme crypto hate on HN, but I'd attribute that to demographics. I do think that quite a large number of HN users are middle-aged Americans significantly above middle class. They probably started using it when they were early 20s interested in tech/startups and YC, which means they're now ~35-40 and have probably made a decent amount of money in tech. And that demographic doesn't really benefit from crypto for the reasons above...
I'm waiting for a good relevant use Case.
Haven't found one yet which is purely digital.
No, rampant speculation made that.
I don't need to understand how an internal combustion engine works to know cars are not a fad. Same way I don't need to know how to reverse-engineer a distributed ledger system to know crypto is.
Other systems that do not use cryptography and instead often rely on trust in exchanging critical secrets, such as how the banking system generally works, are outdated.
You could argue the intermediary knows the info, but most crypto buyers also use an intermediary.
Crypto doesn't give a shit about borders, there's no intermediary who can freeze your assets (unless you decide to leave them on am exchange), etc.
It's ignorance.
You can easily do that with other tech.
Crypto right now is just to new to have been properly regulated yet.
And while you are true that you can run your own wallet, you are depending on the decentralized network, you do need a certain amount of stabity and you need to make sure you can recover and keep your wallet.
Enough people demonstrated at least with the last point and millions lost in locked away wallets that there are still fundamental problems.
Yes, this is due to regulations, but it's also due to the centralized nature of the technology which requires permission to use.
Even when more regulation is forced onto cryptocurrencies, the architecture will always be permissionless, as it's a decentralized network. That is a fundamental difference.
Because you actually need to convert your Fiat into crypto first.
The current limitations are real and the theoretical possibility is equally good of what currently exist: a black market.
In Iran everyone took euros or exchanged them on the spot. Even when the currency shop was closed people were waiting outside for us
The word works is doing a lot of work there. Every compromise, hack, scam, theft, and weird "oops I sent the crypto to an address that doesn't exist and now it's gone forever" incident screams for central authority. Even what we call Ethereum is a rage-quit to pretend the DAO thing didn't happen.
Or you can start trusting the individuals at the other side of the transaction. Perhaps these folks who do not have experience can also benefit from your exp... Oh wait, you've become an intermediary?
Cryptocurrency is just an asset that you can sell nearly everywhere in the world. But it depends on electricity, is volatile in value, and has long transaction times. It's just an inferior cash, except the fact that it's not physical so border control can't take it away from you. If you are optimizing for that... Maybe there can be a simpler solution? Buy art shares? I don't know.
In the case of crypto you're trusting that an adversary won't be able to control 50% of the computation power on the network for a substantial amount of time (and cryptographic theories, but you're trusting those whenever you use the internet anyway). Generally you're not even trusting the other party.
Yes, it depends on electricity, but so does 95%+ of the modern economy. https://www.scientificamerican.com/article/2003-blackout-fiv...
Depending on the level of trust you are willing to give the other party, you could use one of many automated eskrow services (that kick back to a human when one or both parties dispute the transaction), or on the other end of the spectrum, you can have a mostly automated smart contract with built in refund mechanisms where all of the rules of the transaction are declared upfront.
At the end of the day, reducing the number of parties you need to trust for a transaction to succeed is a strictly better outcome than the status quo (or expanding the number of parties that need to be trusted).
How do you think that would be better than paypal, ebay, or anything else? Do you think people who use cryptocurrency escrow services have less problems than people who use anything else?
I just searched and the first service I found had already exited the business after stealing the coins of many people: https://bitcointalk.org/index.php?topic=1260582.0
Ebay isn't a payment provider, as far as I'm aware, so I'm not sure why they are relevant. They have certainly focused on the digital to physical mapping, but are overall rife with buyer and seller scams and they aren't really offering a solution beyond their easily gamed reputation system.
>Do you think people who use cryptocurrency escrow services have less problems than people who use anything else?
Typically, yes, the people using escrow have less problem by virtue of there being far less reports within the crypto community of actual escrow services being bad actors.
You brought up a random company from 2015 that happened to have eskrom in its name. That was not an eskrow service in the crypto sense of the word. If you are sending your crypto to a stranger and hoping they do the right thing, it's no eskrow. The typical eskrow setup will be some kind of multi-sig wallet (e.g. 2 of 3 signature) where the buyer, seller and eskrow service provider have a signature each, and two are required to release the funds.
Note: Eskrow systems are the very lowest tier of "zero-trust" when dealing with services or physical goods. It's a sliding scale of effort versus security, where a smart contract would be the "gold standard", and the eskrow is "better than nothing".
[1] https://twitter.com/flipper_zero/status/1567194641610465281
Also, you are still trusting humans, or a company as a trusted intermediary (and in the case of escrow services, most likely with no course of legal action if things go wrong). My argument still stands.
Paypal doesn't even appear on the radar (even if you overlook their outright predatory and scummy behaviour) when there is the option to outright remove the payment provider from the equation and reduce the number of involved parties by one, while still allowing for a third-party (a human for eskrow, or an oracle with human fallback for a smart contract) to arbitrate if necessary if one or both parties are malicious.
Also who says there is no legal action if it goes wrong? It's better to set things up such that things can't go wrong, but if they do, the rule of law doesn't cease to exist just because it happened online.
I haven't seen a coherent argument yet, but maybe I'm missing something...
It increases how much you have to trust them. You can also build the same escrow system with anything. You don't need cryptocurrency for that.
> the rule of law doesn't cease to exist just because it happened online
Is there any legible escrow businesses for cryptocurrencies? If yes, how are they "less amount of parties involved" in comparison to Paypal?
> I haven't seen a coherent argument yet, but maybe I'm missing something...
Maybe you don't want to?
The trust is that the bank recognizes when a transaction looks off, and holds it/notifies me, without my involvement
This describes any "push" payment system where you instruct your bank, service provider, wallet, device etc. to transfer funds, rather than providing the payee with your information, as well as any pull-based system with additional verification (such as 3DS and PIN-based payment cards), and isn't unique to crypto at all.
This is not a very good explanation, but basically, you can have a "currency" using just asymmetric key cryptography: users simply sign "transactions". The problem is that you need a central authority to confirm the order of transactions, otherwise the recipient of a "transaction" will not know if the funds associated with that transaction have already been spent to someone else ("double spending"). You can solve this using hashcash to make the transaction order hard to reverse- creating a "proof-of-work" by doing something that is easy to verify but hard to determine (like reversing a hash function). Another method is "proof-of-stake" wherein transaction order is not signed by a central authority but instead general users that are guided by some internal incentive structure.
Cryptocurrency is often expensive to run or use because a cryptocurrency transaction has to be synchronized across the entire network of that cryptocurrency, and there are incentive structures like fees to prevent people from spamming the network.
There is also tech like zero-knowlege-proofs, multisig, etc. that can do interesting stuff. But this is the basic concept.
This is just a vague example, not a working idea. The point of it is that the level of security and trustlessness is not always required to be absolute. E.g. even with fully-secure pow crypto we still have to trust non-crypto claims about usdt, [non?]shitcoins, “hot” wallets, and other maybe-not-ponzis.
The problem is that banks won't implement these systems unless they're forced to. They seem to benefit from the insecurity, surveillance, and bureaucracy of the existing system. So we will have to make new banks...
https://www.bankofengland.co.uk/research/digital-currencies
https://www.federalreserve.gov/central-bank-digital-currency...
He covers a range from high level opinion essays to (imho) good technical simplified explanations of the special kinds of low-level cryptography. I've personally found the articles on how SNARKs and STARKs work very helpful.
Note that Ethereum and the other "smart contract" blockchains which link general program execution with transactions, are very different from Bitcoin and the other "money only" blockchains.
I also suggest https://ethereum-magicians.org/ if you want to get more into the guts of protocol discussions or just see them, and the Eth R&D discord.
Smart contract blockchains like Ethereum have a lot that classic blockchains like Bitcoin don't have, but all of the lessons of classic blockchains are relevant to Ethereum. The original Bitcoin whitepaper by Satoshi is still a strong introduction to the goals and basics of cryptocurrency; understanding the goals of Bitcoin and the idea of solving double-spending in a decentralized manner is critical to understanding cryptocurrency. (But anyway after reading the Bitcoin whitepaper, just move on to reading docs about other projects like Ethereum. There's little interesting to Bitcoin beyond its initial invention.)
Vitalik's original Ethereum whitepaper, updated to be relevant in 2022 - https://ethereum.org/en/whitepaper/
Vitalik's blog - https://vitalik.ca/
other than that https://ethereum-magicians.org/ and github.
In my opinion too, the crypto crowd is typically one I like to avoid. But to dismiss the tech behind it as babble is sad.
And this is my opinion as someone who loves the value proposition of what cryptocurrency was supposed to be (see first line of Satoshi whitepaper), and care more about seeing the technology gain mindshare than hype cycles and price movement.
But those also aren't ponzi schemes offering 1000's of % APY based on convoluted multi-token staking schemes, minting, etc. that directly interact with money (as tokens) you send it, potentially breaking SEC rules because of what it means to be a money transmitter (low bar).
(Overall I'm talking about a bunch of tokens/dapps on Ethereum, not Ethereum itself, BTW.).
Anything of values get its share of fakes, even dev shops.
There's a lot of other stuff beyond Ethereum, too. Privacy coins in particular look very little like what was envisioned in Satoshi's paper.
Whether that's all worth anything from an economic perspective, I'm not sure (and even less sure whether it's worth what it's valued), but crypto is legitimately a bunch of very clever technological solutions to hard problems, invented by actual hackers, so I'm a little sad to see people minimizing it on Hacker News.
Especially since this particular innovation is ameliorating the whole global warming problem, which is the prime criticism leveled at crypto. Take that away, and isn't it just open source software that we're talking about here?
Crypto is one of the primary grounds for hacking right now. Not just hacking in the sense of writing code, but hacking in the sense of defining a system from scratch.
Cryptocurrency is so quintessentially hacker that hackers have a "no true scotsman!" moment about its ascent.
Similar feelings abounded with this thing called the Internet if you look in the archives.
Edit: Yes, it's raw. Yes, it's messy. The beginning of every new era of protocols is always like this. Look in the history of computer science and tell me that the Internet's origin was materially more orderly than the chaos that is web3. It's always a mess until it becomes boring, and then we do the dance again.
No it's not.
Web2 exploded largely because of XMLHTTPRequest which from the second it was released was simple to understand, simple to use and solved an immediate problem.
To this day I'm still yet to find a problem that Web3 solves uniqely well other than money laundering, sanctions evasion etc.
Many of cryptographical constructs of the past 4 years were and are spearheaded by blockchains, in particular fast signature aggregation, threshold signatures protocols and zero knowledge proofs. This translates to protocols for:
- voting.
- splitting a critical company secret between say the CEO, COO, CFO, Head of HR, Compliance, Legal and requiring 4 out of 6 to sign off critical actions, without ever revealing that secret.
- proving that you did or you own something without revealing what. Which could be quite interesting for law enforcement for example.
Not to mention the adoption possibly going on behind the scenes.
Adoption? More like, speculation. I still don't know anyone who's doing any real world transactions with crypto, but I know people who hold it for speculation purposes.
Adoption has mostly increased thanks to centralization, via exchanges, which seems antithetical to Bitcoin's foundation. What's the number one use case? Speculation and scams.
I'm not sure it's going in the right direction.
I recall some videos/articles dissing internet as a passing fad at that time - does anyone who remember what it was like then think the crypto industry going through something similar?
The utility of systems like email was very quickly apparent, and while the 90s web was much more about publishing structured information than any sort of interaction, again it was pretty immediately recognised as a powerful, useful thing.
I don’t recall any negativity to “the internet”, but a lot for the dot com hype cycle, which is what I think cryptocurrency most closely resembles, but it has dragged on for years
"The Internet, bah. Hype alert"
- https://www.youtube.com/watch?v=UlJku_CSyNg
"What is the Internet, Anyway?"
To be fair, so is Linux.
Good news is, those topics change and become more accepted after some time. It's an endless cycle of Bash-and-Move-on. If something is "too popular", then it's obviously the worse technology ever, according to HN.
What is the widespread problem crypto is solving ?
Hint: darkness and obscurity most of the time don't hide shy virtuous people.
They're as smart as they come.
The problem is fundamentally that cryptocurrency requires network effects to work. Cryptocurrency is not an easy thing to explain to most people, and it can be quite dangerous, so the best thing you can do for new users is tell them to stay away.
a single enterprising dealer could have started it off - exchange rate basically didn't matter, as long as someone was buying and selling BTC, it'd work to keep the dealer's identity private. SR tapped into a massive new market, regular people started learning about crypto so they could buy drugs, this created a flow of money through the market. honestly, I was excited to see my friends using Tor and buying BTC for cash - it's the gritty, cypherpunk dream!
whenever there's a real market opportunity like that, network effects don't seem to get in the way. Monero and Zcash got very popular from all the ransomware, though I'm admittedly less exuberant about hospitals being ransomed than drugs.
Here is some more history on early cryptocurrencies and blockchains:
The consensus and scaling mechanisms being rolled out were only just created in the last few years (that's why Ethereum PoS took so long, thery were still making changes to the design as new research came out).
B. This "merge" in particular utilizes innovations in computer science that were non-existent 12 years ago when the original Bitcoin whitepaper was published.
C. There continues to be loads of cutting edge CS research that is broadly applicable to the entire industry but is being spear-headed by blockchain development, for example work on Zero-Knowledge Proofs.
BLS was invented back in 2001, but was expensive to verify. A paper published in 2018 showed how to verify n aggregated signatures on the same message m with just 2 pairings instead of n+1.
https://ethresear.ch/t/pragmatic-signature-aggregation-with-...
I will gladly give a Turing award to whoever formally proves the safety and liveness of Gasper like Lamport did for Paxos.
However, I don't regularly dismiss fields like that, but rather I understand that not everything is meant for me to understand without a deeper meaning. Not sure why anyone would treat the (technical) ecosystem of cryptocurrencies differently. Seems like a non-curious way of acting.
Just like I realize the problems pornography introduces to the world, but reading and speaking with engineers working at those companies are still a fruitful endeavour for me.
> The "Helium 5G" network is instead a 4G LTE CBRS network, which right now has significant advantages over 5G but doesn't have the "5G" moniker Helium and its partners wanted for marketing. So it's just calling it 5G because, apparently, anyone can use any word to mean anything.
https://www.pcmag.com/news/is-heliums-new-5g-network-just-ho...
Helium was, until recently, one of the companies bound to come up if you asked around for real-world use cases of crypto.
> In the current architecture, specific transactions, including Proof-of-Coverage and Data Transfer Accounting, are processed on-chain unnecessarily. This data bottleneck can cause efficiency issues such as device join delays and problems with data packet communications, which bloats the Network and causes slow processing times. HIP 70 proposes transferring these processes onto Oracles which will resolve these issues and further stabilize the Network.
There's a bunch of jargon, but for "Oracle" read "EC2 instance".
I was clearly defining the entire practice of formal research as a null set within the crypto set.
Crypto culture is a compounds noun that's additive absent declination of sub distinction.
About Helium you assert that token has some kind to recognition and beau regard for- I really don't know what you're talking to but if I was sub editing your comments for clarity, I'd use the word Kudos. You claim this 5G access token has community kudos "glommed" or "attached to it" but in actually read the papers for Helium when first announced vector of investing adjacent to private 5G networks (UK Gov lets you drive truck throughout publishing network licenses awards since 2016) absolutely nothing but a more expensive convoluted and arbitrary code for the putative but barely functional exchange of on demand cellular next generation service.
If can possibly convey only one insight into what we're discussing to your everlasting benefit it sure would definitely be giving you a innate sense for why any discussions or even detailed research into things that you can build out of Lego isn't mathematical geometry or symmetry learning but model box picture building the prettiest parts you purchased.
Fully distributed consistency algorithms running on N nodes on linked list in which each node is a Turing-machine program run concurrently on N nodes, whose consistency shall also be insured, and which can write on said linked-list. Everything has absolutely tons of edge-cases related to the distributed nature of the thing to take care of.
Of course, I haven't even begun anything about the whole "crypto" part, and minimizing power usage.
Absolutely no meaning besides "linked lists", riiiight...
How would you
A) allow for secure payments without giving away something like a bank account # or debit card number
and
B) ensure that, even if those payments were secure, there was no other cheating, such as people at a bank just deciding to initiate an account with one million?
Generally speaking the way to handle those requirements is by employing cryptographic signatures and public blockchain(s), and the result is usually referred to as a cryptocurrency.
You can use PKI for this. The public key is public and the private key never has to be online. That's how (most?) crypto works, but the system doesn't have to be a cryptocurrency to work like this.
> B) ensure that, even if those payments were secure, there was no other cheating, such as people at a bank just deciding to initiate an account with one million?
You can have public ledgers without crypto, there's usually no reason to do so, and good reasons not to do it (privacy, funnily enough).
Crypto is _a_ solution for this, not _the_ solution, and not even the best solution at that.
I didn't actually say "cryptography" for the block chain. What do you propose other than a block chain for the public ledger? And if your system uses cryptography for the transaction security and has a public ledger, why would you not call it a cryptocurrency? It would seem to be in the same category if you ledger was secure.
A csv file, SQLite file, mysql database dump, ... The blockchain is a distributed, trustless ledger, which is not necessary for most applications.
If I may paint a picture of why this matters with an example from the gaming industry - simply because I'm familiar with it: There are projects being made where the inventory/achievement/whatever system lives on a public blockchain, so that you may use/display it in another game, website, whatever.
But this already exists without blockchain! If you play Spiral Knights or Half Life on Steam, you get a hat in Team Fortress 2. There are various third-party websites where you can display your Steam/Team Fortress/Dota/LoL achievements, inventories, ... because those 'ledgers' are public already. You can trade Steam items on third-party websites (which interfaces with steam underneath) that dodge Steam's 30% store tax and will actually pay money out unlike Steam.
The above applications only require public (or even just shared) ledgers. Distributed and trustless is not a requirement for these use cases.
> And if your system uses cryptography for the transaction security and has a public ledger, why would you not call it a cryptocurrency?
You could just as easily transfer USD, GBP or EUR using such a system. The currency itself need not be 'crypto' for the system itself to use cryptography for transactions. You wouldn't publish such a ledger for obvious reasons, but technically you can.
A centralized MySQL database is not a "public ledger" in the same way that a decentralized blockchain is considered a "public ledger."
In the former, the database can be removed or censored easily by the central entity controlling it. This includes issuing API keys: the central controller decides who has permission to access, use, modify, and even retrieve the data.
In the case of a "decentralized, permissionless, public ledger" blockchain, no single entity controls the data structure.
A public ledger is just that, a public ledger. It need not be distributed nor trustless to be public. The novelty of blockchain is the distributed and trustless, but most applications (as I outlined in the example above) only need to be public.
Trust me, I understand that a database dump is very different from a blockchain ala bitcoin, in exactly the ways you described, but that doesn't mean we need to shove blockchain everywhere.
But if you want to build a system that is not wholly dependent on "banks" and centralized actors securing consensus of financial transactions - which is effectively Proof of Authority - you end up having to look at alternative consensus mechanisms like Proof of Work or Proof of Stake.
The same logic applies to something like game assets. People buy and sell game assets already without a blockchain, but they do so only through centralized custodians and intermediaries.
That ledger is controlled/can be edited/changed by Vavle. Valve can delete your inventory and there is nothing you can do. Wouldn't that defeat the purpose of having a public ledger that no one can modify on a whim?
The second one is a dubious benefit if you're at all interested in stopping crime (eg money laundering is very easy if no party can block a transaction.)
Thats not to suggest there's no benefit to ETH, or even that crypto might be better than traditional money in some ways, but those two specific points are fairly easily argued.
We have a whole bunch of these systems, like Open Banking payments in the UK, Pix in Brazil, and to a lesser extent stuff like Apple/Amazon pay and other payment proxies which don't require you to expose account numbers to merchants. Physical credit-card transactions work this way too, as the chips have built-in cryptographic processors.
> such as people at a bank just deciding to initiate an account with one million?
This is not a problem people really have. Having a limited quantity of your means of exchange is not a desirable quality in a currency.
Cryptocurrencies don't necessarily have to operate on an (effectively) fixed supply, and actually if you are concerned about modifying the supply frequently it is possible to design a cryptocurrency that gives you much better control over that.
That's not really "at the bottom of things", for physical, customer-present transactions which I was talking about there. At the bottom of things are private keys stored on the card, which sign the transaction. Exposing the credit card number gets you no more than having someone's cryptocurrency wallet address, in fact a lot less as you can't look up their balance. The idea that credit card transactions are simply the handing over of a number, that a merchant can then do with whatever they like, is very outdated, though I guess still makes sense in countries that haven't moved on from magnetic strips.
Yes, plugging in your card number online to buy things is still distressingly popular for various reasons, I agree we should definitely get rid of it. And we can! Either by reforming the credit card payment process in the sort of way Apple Pay online payments and Paypal already have (though they still use the numbers themselves, it's true), or by ditching cards entirely and going with things like open banking payments and pix, which tend to have OAuth under the covers (among other measures) that don't involve 'card' infrastructure at all.
The question was how you design a system from the ground up that will "allow for secure payments without giving away something like a bank account # or debit card number". Well, I would use these sorts of technologies (that already exist and are in widespread use), rather than a blockchain.
Was I supposed to have a revelation that cryptocurrency is the answer, in some sort of holistic come-to-jesus moment? Sorry, no, cryptocurrency is still a crapfest.
Not sure how this opinion relates to failure, but just in case, things only got worse since.
Most of it is just companies putting blockchains everywhere because VCs give them money in that case. Nothing scientific about that.
I work in the crypto industry, and definitely agree there's a ton of innovation in the space, but the innovations lie at an incredibly technical intersection of cryptography, game theory, and distributed networks. Get marketing, sales, and investment capital involved in the mix (which almost every project has), and you have a bundle of products being thrust in front of the public which they can't rigorously evaluate, and because everything is directly incentivized, tons of scammers, grifters, liars, and fraudsters.
When my non-technical friends ask me about crypto, I'm happy to tell them some of the things I think are really cool about it. But I don't recommend buying anything based on my perspective; it's basically gambling (even if you're well-informed)
And it all went downhill from there.
it's well researched https://en.wikipedia.org/wiki/Byzantine_fault
Again, _please point out how you can have a distributed ledger with global consensus with only signatures and no other technology_
So then the innovation of cryptocurrency was an economic one.
It does have the word "currency" in it, so that should not be surprising.
> It turns out that "distributed linked list" is actually a difficult problem that involves very interesting challenges
It's not that.
Are you saying it's easy? The PoS algorithms I've read seem quite complicated, and honestly quite interesting. Also there is a lot of academic research about this stuff, some of it private, some of it public.
I mean, I know there are people out there who think that, for example, particle physics is totally uninteresting, and you are of course free to decide that a given research area is totally uninteresting, but you can't expect others to agree. It is just your opinion
Even something like a Dex can be far superior to traditional order book exchange models in some cases
So you mean like me calling you and saying 0 1 0? Well, yeah kind of, but faster! And we can even have conference calls! It's going to change the entire world! Yeah, ok... Well, I'm going to leave now. Wait, sorry... I mean I'm going to '0 1 1 0' now. Wow, I can feel the world shifting already.
The applications of a technology often are far greater than the most simplified fundamental upon which it is built.
I remember having a similar feeling when NFTs were getting big. It turned out that I did understand the terms, there just wasn't enough actually there, triggering a feeling that I must have been missing something despite my eyes telling me the emperor has no clothes.
You are on the right track.
There's an incredible amount of word salad piled on the fact that people are playing a negative sum game when getting involved with any cryptocurrency that has transaction fees.
is much cheaper - less inflation.
is more environmentally friendly.
with PoS, only people who already own ethereum can mine. Rich get richer.
has less desirable consensus properties.
Many people keep coins on a handful of exchanges - now those will control the network.
Nothing-at-stake attack.That's been my entrance into crypto as well. I really dislike the speculative, get-rich-quick, even casino like connotation crypto has (inevitably) acquired. It shades the incredible technology behind it.
For a couple of years I have been studying and playing around with smart contracts in my free time, getting a better understanding of this paradigm (every smart contract can be seen as a singleton object "living" in the blockchain, with functions that are like API endpoints which you can interact with in a decentralized fashion), how it shapes applications built on top of it, and the possibilities ahead of us (ex: DeFi - Decentralized Finance).
There's a lot of skepticism around crypto, like "it's a solution without a problem", but I don't buy it. Even if it were, it's a solution sophisticated, interesting enough, worth diving yourself into ;)
https://people.csail.mit.edu/nickolai/papers/gilad-algorand-... Algorand: Scaling Byzantine Agreements for Cryptocurrencies
http://people.csail.mit.edu/silvio/Selected%20Scientific%20P... A DIGITAL SIGNATURE SCHEME SECURE AGAINST ADAPTIVE CHOSEN-MESSAGE ATTACKS*
The tech in Blockchain/Web3 world is changing and evolving incredibly fast (as is evident from this historic event today) and so by the time books come out, they already become outdated.
I would highly recommend reading Vitalik's blog[1]. He talks about various topics and has a knack for explaining things brilliantly.
I find the book "The Bitcoin Standard" by Saifedean Ammous a good read to break down those concepts. Nevermind the extremists or so called "maximalists" and their exaggerations. The book is a really good intro to macro economics and helps understanding why cryptocurrency is interesting as a store of wealth and/or money replacement.
I'd recommend just taking look at the documentation / code.
Here's some sample ones:
Ethereum - https://ethereum.org/en/developers/docs/evm/
It's a crypto/blockchain podcast, but very technical, it's focused around the advanced technology that makes up the ecosystem (zero-knowledge cryptography, multi-party computation, consensus algorithms, miner-extractable value, new blockchain programming languages, etc).
Very technical, almost nothing about investing. The downside, some episodes may be a bit hard to jump into due to the technical nature.
They are 20min episodes that build up to explain the foundations of cryptocurrencies.
If you have any suggestions for future episode let me know. I’m thinking of spending a bit more episodes on Bitcoin to talk about bitcoin scripts, layer 2 apps, UTXOs, etc. Before talking about ethereum
Came out about 4 years ago
In between a blog post and a book. I think it’s a good starting (and ending lol) point.
we are writing history not books
--
beside jokes and comments. as any research field it's difficult to have books yet and catch-up with everything is hard, i feel your struggle. said that, as i can see from the comments, there are already some good resources where you can learn and catch-up.
fwiw, i followed this in the 2018, i learnt foundations with the book mastering in ethereum and then by articles starting from a specific domain. like you would do in academic research.
other resources i recommend
- digest discussions https://t.me/lobsters_daily
- digest events https://t.me/thedailyape
- directory/kb https://thedailyape.com
I feel kinda ashamed. I work in the IT industry and I claim to have knowledge about ("good") software engineering practices, distributed systems, compilers, algorithms, etc. Nevertheless, I didn't understand a word of what the article is saying. Could you recommend serious references (preferably books and not random blogs) I could read to catch up with what's going on with crypto these days? I'm not planning to "buy" crypto; I would like to understand the technicalities.