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Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

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Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#521

Post by FabHK »

akrymski wrote: post #461
tromp wrote: post #448

Earlier quoted context omitted.

Well, PoW needs to assume that 51% of miners is honest, while PoS needs to assume that 51% of stakers is honest. The bigger downsides of PoS to me are that 1) a pure PoS system starts with the creators holding all supply and can keep an arbitrary portion for themselves while selling the rest as they please 2) the truth in PoS is subjective (nodes need to rely on other nodes to determine what is the current state of t…

In PoS systems validators can vote for both chains in case of a fork, as there is nothing at stake. It's not about honesty. It's about resources being committed.

Exactly. The ETH PoS FAQ is a good introduction to the problem. In a nutshell, when there are two competing chains,

A) in PoW you

A1) either put all your resources (hash power) behind one chain, and get the block, thus the mining reward, with probability equal to your proportion of the total hash power (as before) assuming that chain ends up the longest chain (so you have a strong incentive to pick the "correct" one), or

A2) distribute your hash power between the two competing chains, but then each of them only gets half the hash power, and you reduce your probability of getting the mining reward to half, thus halving your expected reward.

At any rate, as soon as one of the chains is ahead, there is a very strong incentive to fall in line with the LCR (longest chain rule) and place all your bets on the putative winner, rather than diluting your expensive hash power.

B) In PoS, you can just continue staking on both competing chains, and whichever wins, you got get your mining reward (as usual, with probability equal to your proportion of the total stake). No incentive to settle on a winner early ("nothing at stake"), so just keep your options open by supporting both chains, and thus no incentive to congeal on a winner quickly.

https://eth.wiki/en/concepts/proof-of-stake-faqs

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#522

Post by fshr »

igorkraw wrote: post #247
pcthrowaway wrote: post #118

Earlier quoted context omitted.

Except with git repositories there's no built-in consensus mechanism, and we have the potential for a double spend. Say we're assuming the git repo includes gpg signing and users can make commits attesting that they've sent some amount of their balance to another user. John makes a commit saying he sends his entire balance to Alice. John pushes that to a central repository, and Alice gives him her house in return. Jo…

No it's not. If you run a trust based economy without clear property rights, this whole scenario doesn't exist. If you have property rights, you have a state to enforce them, so that state has a court, sues Alice (or Bob), sues John, the state punishes John, done. If you try to establish property rights without a state, then ans only then does it become interesting, but why would you do that? Establishing a democrati…

Could it make the whole court process of suing more efficient? Determinations prior to enforcement are very intensive.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#523

Post by noxer »

MacsHeadroom wrote: post #485
noxer wrote: post #478

Earlier quoted context omitted.

PoW is not needed at all its just a puzzle do "randomizes" who can write the next block. Its comically inefficient and p much the worst known working solution. Some BTC devs realized this and created Federated Byzantine Agreement (FBA) which used Byzantine Agreement rather than a puzzle to created the consensus and then federated the whole system to prevent 51%-like attacks. Obviously if the peers work together with…

PoW is needed for the "trustless" qualifier. Other schemes like PoS can be very low trust but not fully trustless. They also tend towards ever increasing centralization.

No, its really not. It is literally just a puzzle which solves the "problem" as to who gets to write the next block.

Instead if you define the rules for the next block as strict as possible so it essentially eliminates a huge variety of possible blocks, participants can instead easily agree on one (the best) block (one that follows all rules and is objectionably better than all other possible blocks). There is no need to "fight" over who can add that block, agreeing is way more efficient. And Consequentially the puzzle is no longer needed.

PoS is not what I'm talking about at all. PoS just replaces the PoW puzzle with a "virtual puzzle" that acts as if higher stakes are higher hash power thus more chance to win the puzzle. Other than that its still the same "fight" over who gets to write the next block.

PoW and PoS at scale leads to more centralization over time because of the economy of scale principle. While FBA (Federated Byzantine Agreement) leads to more decentralization because its in everyones interest to increase the number of participants, they are helping the system not competing.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#525

Post by laverya »

baby wrote: post #514
baby wrote: post #500

Earlier quoted context omitted.

I do. Check out Mina. It uses recursive zero knowledge proofs to give you a proof of all state transitions since genesis.

For the curious: https://minaprotocol.com/

A 22kb fixed size reads like transparent bullshit to me. Fundamentally you cannot store infinite information within such a block, and "participant X has the right to send Y amount" is information. To me this implies that either there is a limit to the number of participants, that there is information stored off-chain, or that there will be data loss over time - possibly all three.

And the fact that you've mentioned one cryptocurrency to fix the transaction rate issue, and another to fix the blockchain size issue, but not one to fix both issues at the same time, has not escaped me.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#526

Post by myownpetard »

kybernetikos wrote: post #507
myownpetard wrote: post #483

Earlier quoted context omitted.

Does participation in a smart contract imply any kind of legal agreement? You're essentially interacting with an api/bot that's being hosted by whatever blockchain community at large. Anybody can publish anything, and any unrelated parties can interact with it. Here's a thought experiment for you. If I were to publish a public webpage where you entered a routing number into a textbox and money was immediately transfe…

> how can we do away with our existing systems for mediating disputes, determining intent etc? I think everyone in this conversation fully agrees on this point. As I said earlier, "I'm sure there are extremists that think smart contracts make law obsolete, but they are just wrong." We absolutely shouldn't do away with our existing systems for mediating disputes and determining intent. I think perhaps the crux of the…

I don't think we're in disagreement; I'm more or less agnostic on the points I brought up, just thinking out loud. My original intent was to explain what I think the ethos is behind, 'code is law', which was in response to your statement, "I don't know exactly what you mean by 'code as law'".

But I do think there will be technical difficulties in applying the existing legal system to smart contract execution if there is no other artifact related to its execution (e.g. website, documentation, communication b/w parties etc.), which probably represents the vast majority of such contracts.

I've seen contracts representing complex derivatives, and some insane things like collateralized NFTs. The financial ecosystem within crypto is becoming incredibly complex. Many grey area strategies within traditional finance have been recreated within crypto, e.g. HFT and front-running, and there are some complex strategies like vampire attacks a la sushiswap that I don't think have analogs.

If one participates in complex smart contracts and get hosed, in a lot of cases I think it will be essentially impossible to differentiate between fraud vs. speculation, bugs vs. proper execution, exploitation vs poorly understood secondary effects. I'm curious to see how the legal system will try to keep up. Then again, I'm not sure it has kept up that well with the traditional financial system to begin with.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#527

Post by FabHK »

FabHK wrote: post #248
paulsutter wrote: post #171

Earlier quoted context omitted.

The transactions don’t use the power, the power is used to protect the contents of the chain (sorry i intended this as a reply to a different comment, not yours, not sure how i did that!)

We agree. Around 0.000001% of the power is used for transactions, which is way more than necessary due to duplication, and 99.999999% for "protection".

I might have been a bit too eager with the 0's and 9's, might be able to cut half of them.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#528

Post by arcticbull »

pcthrowaway wrote: post #475
arcticbull wrote: post #426

Earlier quoted context omitted.

Of course there's room for improvement, what's silly is thinking a coal-powered linked list is an improvement :) You don't want true decentralization for state level activities such as voting. If it's truly decentralized and permission less, allowing anyone to control the ledger, your adversaries will take control. If you have to build a system that accounts for that, you rely on a central authority to switch you ove…

> Of course there's room for improvement, what's silly is thinking a coal-powered linked list is an improvement :) Again, Proof of Work is not the only consensus model for blockchains (and while I dislike PoW, it's worth noting that while there's a lot of "greenwashing", many mining farms have legitimately been moving towards using more renewable energy)

That renewable energy is still a net negative for society because it’s not being used to decarbonize the actual grid we do productive things with - while generating mountains of ewaste.

You know 97% of all bitcoin mining hardware will be thrown out without ever mining a single block in its entire useful life? Just heating up the ol planet.

It’s an embarrassment that we even try to justify any aspect of it as a profession. Society needs us to step up and call this emperor nude.

You know every time the price goes up, the waste budget does too, and the perverse incentive is miners are rewarded for wasting more.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#529

Post by arcticbull »

etherael wrote: post #486
arcticbull wrote: post #420

Earlier quoted context omitted.

> Of course, many dozens of thousands of times throughout my life, desperately wished for that to be the case. Unfortunately there is no evidence for this and immense amounts of evidence for the contrary. I think the fact that 7 billion people live overwhelmingly under a multi-hundred-year improving standard of living [1], leveraging low-friction global trade, commerce and communication in among the most peaceful per…

Nothing that is the largest cause of unnatural death in the last century should be considered as "working". https://en.m.wikipedia.org/wiki/Democide https://mises.org/library/anatomy-state https://en.m.wikipedia.org/wiki/The_Problem_of_Political_Aut... . Blockchain based systems over the duration of their existence by contrast have killed nowhere near as many no matter how you scale it, and although I believe the sys…

It’s the largest preventer of death lol. Citation needed there. People will always die. Government minimizes this to the best of our abilities. How many do not die each year because of government?

As in software testing we don’t often measure the impact of our work in terms of things that don’t happen because our system exists. It is far easier to count instead the failures. But this misses the whole point. Count the deaths that don’t happen.

Meanwhile bitcoins thirst for coal kills thousands per year and achieves literally nothing.

Blockchains can only represent true state of things wholly representable on chain, which is why only currencies actually work. As soon as you try and ledger things off chain reality gets in the way and reality supersedes the chain.

Re: Ask HN: Am I going insane or is there genuinely no value in blockchain tech?

#530

Post by TimJRobinson »

I'm always happy to talk anyone's ear off about Blockchain, it is by far the most interesting space I've ever worked in. Feel free to ask me your hardest questions.

Decentralized Finance (DeFi) is my favorite aspect. It's honestly outstanding how far behind the curve of DeFi knowledge HN is and so few are willing to debate and learn.

I work at a company called Balancer, we've built an app that allows you to essentially invest in index funds of tokens. You can put money into a pool of say 40% ETH, 30% Bitcoin, 20% LINK, 10% USD. Then instead of you paying fees for someone else to manage this fund, you get paid - often 5% - 20% per year, to have this fund.

How? Traders use your funds as an arbitrage opportunity when the ratios go out of wack. There are a lot of day traders in crypto right now and every time they make a trade through your pool they pay a 0.3% - 1% fee.

These tokens are mostly crypto coins right now but they can be anything, including tokens that track oil, gold, share prices, or even housing index funds. Other companies build these tokens and as they are standardized they can be used in Balancer pools.

Balancer the app is completely decentralized and open access to all. Your money is yours, we have no access to user funds.

This is barely the tip of the iceberg, eventually the entire financial system is going to be overtaken by open, permissionless systems and they will be much bigger than today because there are far fewer rent seekers, and entire world gets to participate.

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