Topic: The Ethereum Paradox - page 32. (Read 99889 times)

I need to spend more time thinking about it in detail. Devil is in the details.

I'd estimate, that 'working' DAPPs can only be nichy ones w/o any real risk exposure. Similar to bitcoin early bootstrapping with Silkroad you can start with:

Gaming, Betting, Cheating, Porn...

More reasons Ethereum can't scale decentralized:


Truth is started to come out...





Also the Dapps look mostly like nonsense or they don't need Turing complete scripts:

Vitalik hasn't even understood Iota yet, which I thoroughly analyzed in the Decentralization thread:

Biggest volume is in BTC. I wonder if in the coming down move cash out is in fiat...

My rough estimate is that there no more than 500-1000 miners out there. Which is of course very small number. And there also between 6,000 to say 20,000 machines out there. Far from great processing power. It needs to get way bigger to really become economically justified. But there are no incentives I could think of to become part of the network other than mining. Very expensive acquisition of miners as well. The big question is who is paying for it all ? Bitcoin millionaires ? Who else is buying ether ? Investors ? Anybody has any info on that ? I think what we are witnessing right now is a birth of very unique type of the market which the world haven't seen before.

ok guys instead of boring discussion about technology lets dive a little bit into finance. I did some calculations and what I discovered scared me a lot. Please correct me if I'm wrong because this is more important than the technical side of things at this point.

So we have 114,000,000 eth initial supply of ether plus 24,000,000 mined each year.
Using todays exchange rate this is 240,000,000 dollars worth supplied each year.

Its really hard to create economic model for something like ether but like any currency its subject to supply and demand. For this price to stabilize there should be demand for 240 mil USD worth of eth every year.

Now lets look at some current network stats:

- daily gas consumption 520 mil (this is total by the entire network correct ?)
- avg gas price 56 bil wei
- network utilization 4%

Now if I haven't made any mistake if we assume these numbers constant for a year (which of course is a false premise) the entire value of gas used in a year in the entire network is only 2336 USD dollars!
If I understand the meaning of network utilization correctly the maximum capacity of the network today is 25 times higher than what is being used. That puts the maximum cap on ethereum economy (if we assume the price of gas constant, which is wrong thing to do of course) to about 58,400 USD.

Now in 8 months the hashrate has grown 4 times. Lets assume its gonna grow 6 times in a year. So in a year we will see 350,400 USD annual gas transaction volume (a bit less because of gradual growth but not that important now)

For the real demand for ether to catch up with the current exchange rate the gas price has to increase 684 times. That will bring block processing cost to 1.27 USD
One transaction seems to take about 5 seconds. If we assume average block with 5 transactions and lets assume that your financial derivatives application generates 1000 txn per day, its going to cost you 254 dollars per day just to process it.

I make few obvious conclusions from this. First one is that the current price is not simply unsustainable its infinitely far from current fundamentals. The second conclusion is that they desperately need more miners to increase network capacity. And they going to get more miners if the price remains so high. So it has to be manipulated if it is to remain so high. The cost of manipulating the price is also quite significant. Somebody has to keep buying 240 mil USD worth of Ethereum every year. I'm not stating that the price is manipulated for sure, I simply don't know. But if mining profitability drops the network is not going to get anythere close to what it should be to have processing capacity for large number of apps that supposed to be coming. The cost of processing the apps should remain low otherwise again the whole thing doesn't make sense for the "community" seeking freedom, independence etc.

I haven't tried to model it quantitatively. It might be a long-tail distribution, thus maybe they can get away with for a while until there is failure of the Nash equilibrium and perhaps split into multiple forks that refuse to converge.

It is something for them to think about, not me. I wouldn't waste my time with that sort of design flaw. Thus I am not that interested in developing a model of its failure. Limited time and resources to do work that doesn't benefit my goals.

Just to reiterate or resummarize, if a validator of a shard has to trust the validators of other shards (for cross-shard state, e.g. the gas balance from one shard being spent to run a script that resides in another shard) then it creates a game theory which is not a Nash equilibrium but rather a Prisoner's dilemma, because the trusting validator can lose his income if the other validators lied to him (and that includes all blocks downstream from that one). Now one could perhaps reduce the probability of the other validators lying over the short-term by incentivizing them to report each other in exchange for a reward (proof-of-cheating), but I analyzed this for my own design and realized it is flawed and abandoned the idea. Because of several reasons such as those validators have an incentive to become coordinated to cheat (in some game theories whereby they can profit, e.g. shorting the coin), and it is impossible to make the reward more than any possible value that can be gained from cheating, etc...

Using a receipt is lowering security by orders of magnitude,correct?

Vitalik hasn't replied.

The error is here on slides 11 & 12:

https://docs.google.com/presentation/d/1CjD0W4l4-CwHKUvfF5Vlps76fKLEC6pIwu1a_kC_YRQ/edit?pref=2&pli=1#slide=id.gd284b9333_0_39

As I predicted:


Again a receipt instead of every validator validating breaks the Nash equilibrium and creates a Prisoner's Dilemma:

NATO. No action, talk only.
When a HUGE ego is obfuscating view on reality.

I dare you to do this, but this is just another lie like the rest you keep throwing at this forum about your imaginary vaporware.

Do it.

Just....

Do it!

Fresh air would help your brain function again, the fact that you physically threaten people here after you cry for months that you are terminally ill is laughable (and you do that on a crypto forum). You can't go any lower. Just leave.

The big problems come when positive Momentum turns into negative .

Grasping, flimsy excuses: check.
Attempt to milk pity with purported chronic illness: check.
                                                         old age: check.
Tripping all over self to make peace soon as thrown a bone (with the skimpiest, most pathetically insincere of all possible apologies, one which would've made a real_man just fly into a fit of fuckin' violent rage, jump on a plane & DESTROY that insolent little shit. Right in front of his bitch buddies, on his own gay turf): check.
Bawk baawk?

Totally unprepared are you
To face a world of men
Timid and shy and scared are you
Of things beyond your ken

You need someone older and wiser
Telling you what to do
I am seventeen going on eighteen
I will take care of you!

Forget all the other drama going on. Let's face it - 18 mil was one hellava lot of money to burn through for what was produced.  Price manipulation since is a given.  Eth may turn out to be the best thing since sliced bread but it started out tainted.

I couldn't stop laughing reading the above ))

The one that claims to have superior intelligence is lecturing me about ego. My friend your entire activity here is about your huge ego. By saying something developed by group of people with combined resources both financial and intellectual by the order of magnitude bigger than yours won't work you are trying to satisfy your ego. 

This is for you:

"And so your life
Your life has failed
You've made the progress of a snail
Don't worry you'll get your revenge
For we're all equal in the end
The small and mighty all the same
This life a shallow, facile game
Where every empire turns to dust
And every ego will be crushed"

I received a shockingly cordial PM from stoat which I appreciate. He and I disagree about the potential of Ethereum, so agree to disagree.

Now this AnonyMint needs to try to find a way to get back to the work habits and patterns that once made him successful.


I am itching for a fight to take out my frustations for 3 years of being chronically ill, for doing what I should have done when the gang attacked me and destroyed the vision in my right eye (I was not ruthless back then because I was only 34 years old), and as a motivation to get me to train against all odds to try to break free of this chronic illness. I am not chicken shit. I relish someone who makes me angry enough.

Yeah, you're both too chicken to fight.
Boxing duel   Baaawwk bawk bawk!
Prov me wrong