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Building for the Blockchain

blog.ycombinator.com

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Re: Building for the Blockchain

#321

Post by CryptoPunk »

0wing wrote: post #318
CryptoPunk wrote: post #255

Earlier quoted context omitted.

The initial windfall can only be spent once. The important difference between distributed finance and traditional finance is that the former has no gatekeepers that provide their controllers with recurring economic rent. Both mining and staking are competitive industries that require productive activity by their participants. A central bank can extract 2-10% of the money supply's worth of economic rent every year in…

Every system deserves critique and improvements. Mining and staking algorithms have so far been measurably distributed disproportionately to a tiny minority of users. PoS is ironically manipulative in its own way, where an exchange or early adopter who controls a large sum will simply exponentially accumulate the newly minted coins. For a algorithmic solution in software to persist beyond a fad like beanie babies or…

A small minority doing the mining does not imply rent seeking. Specialization through division of labour would produce the same result.

In any case I'm not saying they are perfect or that they permit zero rent seeking. What I'm arguing is that for reasons I've articulated, the current crop of cryptoeconomic platforms are much less rent-seeking than traditional financial platforms and systems.

Therefore, all other things being held equal, meaning that if we're only comparing on the grounds of how much rent-seeking they permit, I believe it is likely that it would improve public welfare if they supplanted the current monetary and financial system.

Re: Building for the Blockchain

#322

Post by goldenkey »

lgierth wrote: post #290
goldenkey wrote: post #287

Earlier quoted context omitted.

One thing that these networks don't seem to protect well against are fake peers that request data but dont provide it. These currencies and coins have been lucky in that regard and have prevented some of it by seeding their own trusted peers as the initial peer neighborhood. But is this true decentralization? Seems a bit obtuse. To add to the baffle, IPFS started using bitcoin and ethereum for storing the initial pee…

> To add to the baffle, IPFS started using bitcoin and ethereum for storing the initial peer data for new clients to connect to. This is false. Where did you get that impression?

You are absolutely wrong.

https://en.m.wikipedia.org/wiki/InterPlanetary_File_System

In 2014, the IPFS protocol took advantage of the Bitcoin blockchain protocol and network infrastructure in order to store unalterable data, remove duplicated files across the network, and obtain address information for accessing storage nodes to search for files in the network.

https://cointelegraph.com/news/ipfs-protocol-selects-ethereu...

https://mobile.twitter.com/Alex_Amsel/status/778440701902139...

Re: Building for the Blockchain

#323

Post by EGreg »

CryptoPunk wrote: post #319
EGreg wrote: post #305

Earlier quoted context omitted.

If you want to be part of the Bitcoin network, you have to trust Bitcoin's miner du jour (actually du 10 minute). What is there to trust? That they'll take your transaction? About the only thing they can do is refuse to include it in a block. Not much to trust really.

You don't have to trust anyone. You have to only trust that over 50% of mining power is motivated by cryptoeconomic incentives, which is a much more reliable assumption than assuming someone is altruistic or a good actor. The fact that miners do not need to be known and trusted third parties means that there is great difficulty for any network adversary to identify enough miners to make an attack effective, and that…

You have to only trust that over 50% of mining power is motivated by cryptoeconomic incentives, which is a much more reliable assumption than assuming someone is altruistic or a good actor.

That's still a lot to trust. How do I know someone isn't just gonna go crazy? How do I know someone isn't shorting bitcoin? That's rational.

Someone could short Bitcoin Cash and then mine in secret using Bitcoin ASICs and make a fortune screwing the whole Bitcoin Cash chain with their superior power. Proof of work sucks!

Re: Building for the Blockchain

#324

Post by lgierth »

goldenkey wrote: post #322
lgierth wrote: post #290

Earlier quoted context omitted.

> To add to the baffle, IPFS started using bitcoin and ethereum for storing the initial peer data for new clients to connect to. This is false. Where did you get that impression?

You are absolutely wrong. https://en.m.wikipedia.org/wiki/InterPlanetary_File_System In 2014, the IPFS protocol took advantage of the Bitcoin blockchain protocol and network infrastructure in order to store unalterable data, remove duplicated files across the network, and obtain address information for accessing storage nodes to search for files in the network. https://cointelegraph.com/news/ipfs-protocol-selects-eth…

Ah, thanks - you're half right :) The plan for Filecoin was initially (in 2014) to be based on Bitcoin, but since then this changed to its own Proof-of-Replication and Proof-of-Spacetime, reusing parts of Ethereum.

IPFS itself has never had any cryptocurrency integration, although there are external services that store your data on their IPFS nodes in exchange for Bitcoin.

(source: https://filecoin.io/blog/update-2017-q4/ and I'm on the IPFS team)

Re: Building for the Blockchain

#325

Post by CryptoPunk »

EGreg wrote: post #323
CryptoPunk wrote: post #319

Earlier quoted context omitted.

You don't have to trust anyone. You have to only trust that over 50% of mining power is motivated by cryptoeconomic incentives, which is a much more reliable assumption than assuming someone is altruistic or a good actor. The fact that miners do not need to be known and trusted third parties means that there is great difficulty for any network adversary to identify enough miners to make an attack effective, and that…

You have to only trust that over 50% of mining power is motivated by cryptoeconomic incentives, which is a much more reliable assumption than assuming someone is altruistic or a good actor. That's still a lot to trust. How do I know someone isn't just gonna go crazy? How do I know someone isn't shorting bitcoin? That's rational. Someone could short Bitcoin Cash and then mine in secret using Bitcoin ASICs and make a f…

>>That's still a lot to trust. How do I know someone isn't just gonna go crazy?

It's not though because it takes a lot more than one individual to go crazy. It takes a huge number of people, who have a huge amount invested in the platform, to simultaneously go crazy and burn their hundreds of millions of dollars worth of their own assets down. People who own that much are generally mentally stable and focused individuals, and the idea that such a huge portion would spontaneously go crazy at the same time is extremely farfetched.

Relying on cryptoeconomic incentives is a much safer bet than trusting that a handful of trusted third parties won't be bent to the will of some political elite who pass a law, or won't collude to raise fees once they have attained a significant network effect and customer lock-in.

Re: Building for the Blockchain

#327

Post by eyezick »

Zalastax wrote: post #231
eyezick wrote: post #164

Earlier quoted context omitted.

> But then you've lost all of the advantages that the blockchain was claimed to possess. That's a very wide brush stroke to paint. You just have to analyze each use case independently. In the same example of land registry, just a transparent history is a huge value add when dealing with corrupt government officials. Here's a case study https://s3.amazonaws.com/ipri2016/casestudy_collindres.pdf . Voting transparency e…

How does the blockchain ensure that I can both verify that my vote was counted but can't sell my vote? https://youtu.be/BYRTvoZ3Rho describes one electronic voting system that's supposed to have those important properties, even though I don't fully all the details yet.

Depends on the specific implementation. Just because you do it on a blockchain doesn't mean you can't require people to show up to a polling center and sign transactions in person.

With Ethereum, one way to do it is to make the voting weight non-transferable, meaning to give someone else your vote you'd need to give your private key.

It would be of course crazy to do that; like giving someone your bank card and PIN number to give them cash.

Re: Building for the Blockchain

#328

Post by EGreg »

CryptoPunk wrote: post #325
EGreg wrote: post #323

Earlier quoted context omitted.

You have to only trust that over 50% of mining power is motivated by cryptoeconomic incentives, which is a much more reliable assumption than assuming someone is altruistic or a good actor. That's still a lot to trust. How do I know someone isn't just gonna go crazy? How do I know someone isn't shorting bitcoin? That's rational. Someone could short Bitcoin Cash and then mine in secret using Bitcoin ASICs and make a f…

>>That's still a lot to trust. How do I know someone isn't just gonna go crazy? It's not though because it takes a lot more than one individual to go crazy. It takes a huge number of people, who have a huge amount invested in the platform, to simultaneously go crazy and burn their hundreds of millions of dollars worth of their own assets down. People who own that much are generally mentally stable and focused individ…

That same logic can and does apply to Bitcoin. The governments can seize or buy many ASICs and mine in secret to destroy trust in Bitcoin's longest chain.

The mining has ALREADY been centralized in a small number of mining pools. They become a cartel that charges high fees, no collusion needed. You have only one miner every 10 mins, and it has to take every transaction made in the whole world. You call that a good scalable design. Not to mention they can just be DDOSed.

But anyway tell me again why it's not rational behavior for someone to mine Bitcoin Cash in secret and then unleash their far longer chain, after shorting Bitcoin Cash on the exchanges? Why is Bitcoin Cash even secure at all?

Re: Building for the Blockchain

#330

Post by CryptoPunk »

EGreg wrote: post #328
CryptoPunk wrote: post #325

Earlier quoted context omitted.

>>That's still a lot to trust. How do I know someone isn't just gonna go crazy? It's not though because it takes a lot more than one individual to go crazy. It takes a huge number of people, who have a huge amount invested in the platform, to simultaneously go crazy and burn their hundreds of millions of dollars worth of their own assets down. People who own that much are generally mentally stable and focused individ…

That same logic can and does apply to Bitcoin. The governments can seize or buy many ASICs and mine in secret to destroy trust in Bitcoin's longest chain. The mining has ALREADY been centralized in a small number of mining pools. They become a cartel that charges high fees, no collusion needed. You have only one miner every 10 mins, and it has to take every transaction made in the whole world. You call that a good sc…

1. Not all cryptocurrencies have ASIC mining. Ethereum has GPU mining. If a government attempted to attack Ethereum with GPUs that it bought, the public would likely react by turning their own GPUs toward Ethereum to protect it against the attack.

2. No one said that proof of work based cryptocurrencies can't be attacked. Obviously there's no such thing as an invincible protocl. The point is that it is much more costly/difficult to stop a proof of work based cryptocurrency than one that depends entirely on a small set of known and trusted third parties.

>>The mining has ALREADY been centralized in a small number of mining pools.

Already been addressed in my previous comment.

>>But anyway tell me again why it's not rational behavior for someone to mine Bitcoin Cash in secret and then unleash their far longer chain, after shorting Bitcoin Cash on the exchanges?

It would be much riskier than simply mining honestly. If they short it and their attack fails, they would lose a huge amount of money.

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