Topic: The Ethereum Paradox - page 8. (Read 99876 times)

No response from the people shilling for this thing that by their own admissions, it wouldn't be useful until 2-3 years from now? (but the solution they claim doesn't even work/exist)

Looks like the Ethereum price got just a tad bit ahead of actual value.


http://www.marketwatch.com/story/this-bitcoins-challenger-is-up-1100-this-year-but-is-it-ready-for-prime-time-2016-05-18

So much for Bitcoin "scalepocalypse".  Ethereum isn't even a permissionless or decentralized network in the first place while using PoS, but even if they try to trick people into thinking they are, they're now saying a scaling solution (which doesn't exist) will take 2-3 years.

My estimate for what capacity Bitcoin needs to act as a checkbook type device for large value transactions with market penetration in middle/upper middle class first world nations is around 8 MB blocks.  After Segwit + the 2017 hard fork, Bitcoin will have around half of that, but it will also have payment channels due to segwit.  3-4 MB blocks + payment channels will likely give far more capacity than just plain 8 MB blocks, so Bitcoin will already be good enough to do it's job as a worldwide currency.

Both cannot be accepted by populace.


Again, local communities don't have a good reason to invest in existing popular ledgers, they can issue their own POS scrip for local trade. Globally traded cryptocoins will be used but not at the extent some on this forum like to imagine, dreaming about trillions of dollars volume taking over the world is utter nonsense.


I still don't own 1 Eth and don't create threads on Eth.
I advocate for POS viability and utility in general and don't dismiss POW either by the way. Compared to you, I'm trying to be open-minded and receptive of various ideas.

What do you mean by centralization? Concentration of ownership of
means of production?

It is a moot point at best, since we have a multiplicity of
cryptocoins that can be mined with consumer-grade equipment. Your
critique makes sense only in the context of Bitcoin maximalism. But
you yourself already invoked the altcoin environment with its many
opportunities.

As for PoS, the difference is only of a degree, since significant returns
can be obtained only by heavy investment. And any perceived
differences in the fairness of the two schemes are, I am afraid, offset by
the flaws in the fundamentals of current  PoS implementations.  

Let me demonstrate why you Eth shills have no idea what you're talking about.

Why proof of stake has no value:

Since Satoshi did not solve the Byzantine generals problem, this means confirmations are completely arbitrary.  So why are two confirmations more useful in Bitcoin (PoW) than one?  Because it's an open entropy system where over a period of time, it's either unlikely or statistically impossible for someone to maintain a monopoly on block validation when there is no upper limit to confirmations.

Recursive systems like proof of stake tend to permanently monopolize block validation by design, with no real fault or state recovery to fix it once it goes off the rails.  The act of introducing interest compounds this problem even more.  This makes a proof of stake confirmation essentially worthless due to being a bounded entropy system.

On top of being worthless, proof of stake is also a permissioned ledger.  The purpose of mining in Bitcoin is to create a permanent decentralized exchange peg, which thus results in a permissionless system.

Distribution of hashing power requires capital investment and so tends to centralize. Capital investments to issue proof of stake coins that keep wealth re-distributed are negligible. But please read the next paragraph.

Imagine you live in a small community in the future in a failed state like Venezuela or hyperinflationary environment and fiat currency loses 10% of purchasing power every week. This small community can delegate a local authority to issue a proof of stake currency to service the local economy. Since the number of coins in circulation is known, the local authority can't easily abuse their power issuing more currency than necessary for fear of being thrown out of the office by an angry mob, but this is not the only difference to government moneys. People are not required by law to use this community scrip, remember that fiat is "money by emperor's decree". There is no reason a plumber should want to make miners in China and early adopters rich buying Bitcoin if all he needs to do is keep accounting with a local grocery store. The plumber may save his excess earnings in something else he considers more stable than local scrip if such a thing exists. My point is there will not be one as it's more convenient to use locally issued proof of stake credits to service small local economies, keeping wealth in the local communities because there is no top-down money production scheme imposed on them, whether it be government fiat or chinese Bitcoin miners.

You point out that the powerlaw of distribution of wealth is a non-issue since
you have altcoins. Why doesn't the same logic apply to distribution of hashing power?

I am not aware if there was an attempt to fork to a continuous 50 coin reward. If there was one, the hashing power was not concentrated in 3 mining farms at the time of the first Bitcoin halving, this made all the difference. The strong decentralized fork won.

"Miners will go where the economic majority is" - it's a theory based on what they have done in the early years of Bitcoin. Powerful competition would not matter that much if Bitcoin hashing was dispersed as it was at the time of the first Bitcoin halving. The problem is conditions that define faith in Bitcoin have been changing to notice for anyone paying attention. We can no longer make a clear-cut conclusion that miners haven't turned into dictatorship class. Sure they don't exercise their full power yet, but this is temporary while they are content with profits and there is no competing decentralized Bitcoin fork to challenge them this time.

ethereum is all about smart contracts. the problem is that the quality of the contracts is bad, and there are not really alot of usefull public contracts. but i guess eth will be important as a backend solutions for alot of problems, not a frontend gear with alot of dapps like augur or dgb. i see here different approaches more successfull as Lisk or Rise or even IOTA for IoT

Wrong.  People already attempted this at the first Bitcoin halving by trying to fork to a continuous 50 block reward chain and it was a miserable failure.  Even if you temporarily rented all hash power on earth to try and get temporary consensus, the economic majority would stay on the normal chain and miners would be forced to switch back and mine on it after their coup fails.  Miners are forced to go where the economic majority is, not vice versa.

Same reason miners are not mining Borgcoin for profit right now; there is no economic majority there:

Bitcoin has no scarcity because it's code, it's not material. Chinese miners can decide tomorrow to change code to produce more than 21 million coins if they think their profit is not enough. Will you switch from this "high security" (in your mind) hashing network to a "low security" fork with a different POW algo or swallow this spit in your face and continue to use Bitcoin?
Network effect is delusioned nerds. 7 billion people in the world don't care and can use whatever their local community adopts to use in the future if it comes to that. You can't compare the network effect and naturally proven scarcity of gold to Bitcoin unless you're a delusioned nerd.

I am not sure what you ask.

So why don't you go and try to convince people your copper ingot should have the same value as a gold ingot in real life?  The only thing giving value to gold is scarcity and network effect.  You should have no trouble buying up all the cheap copper to corner the market and then presenting your copper as the superior solution to the world.  Try it and tell us how it works out.

But you argued that PoW leads to a concentration of ownership
of "means of production". Don't you think you ought to qualify that
pronouncement in the light of what you now stated, as quoted?  

Powerlaw distribution of wealth in cryptocoins is a non issue. Wealth will be distributed and re-distributed many times for the simple reason that code can be cloned unlike material wealth like gold. You don't expect in the future one global ledger, one world currency like most nerds here, do you?
Bitcoin is not backed by electrical power consumed to produce blocks, its idea can be copied and re-implemented. Its value is based on faith, we're watching some of this faith evaporating now to competition. Competition is code as well and wealth will be re-distributed to better competition, and so on, ad nauseam.

Voting is never capitalist.


Voters own the means to have their wealth siphoned away in the inexorable powerlaw distribution of wealth.

Money is not a corporation.

It is also true that proof-of-work is convergent (or divergent depending on your basis expectation) on the powerlaw of distribution of wealth.

How do we remove wealth from a decentralized consensus protocol 

This is BS. Proof of stake is capitalist. Stakeholders own means of production, in their stakes. In Proof of work most users don't have this luxury, means of production are concentrated among 0.01%. PoW descends to corporatism, corporations controlling means of production, while PoS is many small business owners, read mom and pop shops, producing and validating blocks. For all intents and purposes PoS is a more capitalist system and I don't care how Vitalik views it. You shouldn't either, think for yourself.

Already covered why Vitalik likes proof of stake.  Even though all recursive systems (PoS) are inherently permissioned ledgers and not decentralized networks, he has some crazy, far leftist view that capitalism will cease to exist and everything will be run by authoritarian technocrats (which I'm sure he loves to pretend he will be one).  PoW only works in capitalist systems.  PoS, just like all permissioned ledgers (the US dollar is a federated chain), is ideal for usury based, neo-feudalistic, slave plantations.  

Vitalik slobbering over the idea of being trapped inside a completely vertically integrated, centrally planned, communist regime where capitalism doesn't exist, and all means of production and methods of travel are controlled by the state:

https://www.youtube.com/watch?v=i5VVmTI9F9s&feature=youtu.be&t=168

I don't think he's really an Eth dev, either. He's given some talks at Eth events, and has been involved in some Eth businesses.

Anyway, he's obviously someone who has been around crypto for a long time and has a deep understanding of many of the issues. That doesn't mean he is always right but I'd give his opinions a fair amount of weight, and if I disagreed with him about something in the domain I'd want to hear his reasons.

I didn't say he was. Bitcoin devs are an example of how devs can be biased and their words should be taken with a grain of salt. Nick is a Eth dev and he is biased just like Bitcoin devs are biased, like every human.