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Ask HN: When is federation a better solution than decentralization?

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Re: Ask HN: When is federation a better solution than decentralization?

#61

Post by sanderjd »

Taek wrote: post #16

Most decentralized projects are approaching the problem in the wrong way. Blockchains are a new, early technology, and most of the developers building blockchains don't understand them very well and aren't using them correctly. I think the dotcom bubble was much the same way - suddenly everyone had a website, but almost nobody had a useful website, because people didn't really understand how a website was best able t…

It's been a pretty long time since the Bitcoin paper. About the same or longer than the time between the definition of HTTP and the emergence of the web as a useful mainstream technology. Why does this seem to be developing more slowly than the web? Maybe a better analogy is the time it took arpanet to develop into the modern web? Perhaps analogies like this are not worth looking at?

I'm not sure about any of this, but I feel like lots of people recently have been making the argument that it's really early, hasn't had time to develop, etc., when I've been waiting for it to turn into something for a long time now and becoming increasingly skeptical as the goal posts have continued to move.

Re: Ask HN: When is federation a better solution than decentralization?

#62

Post by abakker »

moviuro wrote: post #23
pjc50 wrote: post #13

I think you're looking in the right direction - governance. The problems of governance are real. There's a libertarian tendency to just try to define them away, but this underestimates the extent to which abuse questions are important and how a few bad actors can overwhelm a distributed system, requiring considerable dedicated central effort to fight. USENET had its cancels ( http://wiki.killfile.org/projects/usenet/…

> Similarly Linux has "Linus decentralisation": there's an elaborate decentralised version control system, but nonetheless Linus has effective final veto in practice. And Etherum has "Vitalik decentralisation": disasters such as the DAO can be reversed by code changes, because even if the blockchain is immutable the code required to interpret it isn't. There is nothing but "sheep mentality" preventing most people fro…

Well, yes, except that unless you get a critical mass of people that agree with you, you lose all compatibility. Nobody will buy your Ether-fork and while your Linux fork might work, it’s all yours to maintain from that moment on. There is value in standardization, even if the standards aren’t perfect.

Re: Ask HN: When is federation a better solution than decentralization?

#63

Post by gota »

smilesnd wrote: post #59
purvis wrote: post #49

Earlier quoted context omitted.

Your argument against crypto is one of the more compelling I've read. I like the "deep local optimum" visual you painted. I definitely agree if you're comparing "crypto" directly to centralized companies doing traditional things -- they're not going anywhere. However, I think it solves a different problem. It's a geopolitical problem. Blockchain technology provide a bulletproof (so far) way of exchanging value across…

But currently this only works in third world countries where the government lacks resources or care to combat it. Plus their is still a middleman if you don't mine the cryptocurrency yourself. I still have to pay a exchange if I cannot find someone willing to take cash/check from me. You also have the opposite effect where you need the exchange and a bank account to turn that coin I sent into usable cash.

Maybe that's enough of a use case for an established following that supports a long-term 'market' for cryptocoins. Maybe the ideal (or something closer to ideal) would be that people in too-strong States got to use it; but there are enough people in too-weak States with dreams of authoritarianism

Re: Ask HN: When is federation a better solution than decentralization?

#64

Post by sanderjd »

kuschku wrote: post #54
heckanoobs wrote: post #41

Earlier quoted context omitted.

This doesn't explain why IRC can't compete with Slack or the other corporate messaging services. Slack was a side project by a failing game company. Its growth was largely organic. I think the original premise is right that user experience is more important than ethics or philosophy or whatever the heck it is we're talking about when federations come up

IRC didn't by even have anyone trying to improve stuff until the IRCv3 WG came along, and now we're seeing massive innovation and adoption in short timeframes.

But the fact that nobody was working on it is also part of the same discussion: non-centralized services haven't had clear ways to incentive the time investment to develop them. The community and respect of working on open source has worked well enough for some developers to create and keep these projects sputtering along, but it never worked for the designers and product vision folks. One of the promises of blockchain-based decentralized projects is that they may be able to incentive their contributors by cutting them in on the potential success of the project. It remains to be seen whether that's workable, but it's an interesting idea.

Re: Ask HN: When is federation a better solution than decentralization?

#65

Post by lostctown »

sanderjd wrote: post #61
Taek wrote: post #16

Most decentralized projects are approaching the problem in the wrong way. Blockchains are a new, early technology, and most of the developers building blockchains don't understand them very well and aren't using them correctly. I think the dotcom bubble was much the same way - suddenly everyone had a website, but almost nobody had a useful website, because people didn't really understand how a website was best able t…

It's been a pretty long time since the Bitcoin paper. About the same or longer than the time between the definition of HTTP and the emergence of the web as a useful mainstream technology. Why does this seem to be developing more slowly than the web? Maybe a better analogy is the time it took arpanet to develop into the modern web? Perhaps analogies like this are not worth looking at? I'm not sure about any of this, b…

I believe this has to do with the level of fuck you money made by early devs of these systems and the nature of liquidity in crypto. I'm sitting here working on my non-blockchain product, exhausted after a long weekend of work and mentally preparing for another week of it. I can assure you if there were 10 million plus in my bank account I would have taken the weekend off and explored some of my less profitable interests. I would have written code, read papers, and all of that, just in a more relaxed way. Instead I focused solely on making the product of my business better. Unlike a tokenized system, I can only liquidate the value I have created once I have taken it to the finish line. Myself and my team won't be fat and happy until we get there.

I've had a few people hand wave this explanation, but I've been involved with Ethereum for about 2 1/2 years and this absolutely happens. Productive work is rarely the work that makes us happiest in the moment. That's why we must force founders to hold out for liquidity.

Re: Ask HN: When is federation a better solution than decentralization?

#66

Post by dnomad »

EGreg wrote: post #53

As someone who has worked exactly with these issues for the past 7 years, let me share what I have learned. Just a bit of background. My first startup, https://qbix.com focused on letting each community host its own social network, the same way Wordpress powers blogs. Wordpress powers 30% of the Web so it seemed to be a good business model (and it is). Here is a video explaining that: https://www.youtube.com/watch?v=…

I got to say... that looks pretty hopeless. Complementary currencies [0] are not new and they have limited utility -- especially since the currency takers still have to pay taxes in fiat.

It's very easy to design systems where a single node captures the majority of the value in return for doing the majority of the coordination work. This goes deeper than politics. Look at the design of biological organisms and you find big brains capturing 20 percent of the energy. Look at the design of nation states and you find sovereigns capturing 20-30 percent of GDP. Central coordinators seem to inevitably capture 20-50% of the value. One might even argue that they "earn" it too. Distributed coordination is costly and in a world of scarce resources it's silly to entertain additional coordination costs if you can avoid them. Central coordination has a lot going for it -- in terms of speed, efficiency, economies of scale, and even reliability they are very hard to beat.

Decentralization isn't hopeless though. There exists a class of problems where distribution pays off. Problems that can be truly paralellized, indeed ones that when you examine them you realize they are in fact embarassingly parallel [1]. For these problems it's expensive to introduce a central coordinator. Rather than costs being decreased, the central coordinator now introduces costs intothe system. The central coordinator in fact must hire enforcers to go out and impose its will because there is a natural tendency to parallelize and devise local solutions.

Here's the tragedy of cryptocurrencies: currencies are not in this class of "embarassingly parallel" problems. It's just the opposite: currencies absolutely require a single coordinator with currency power. In the absence of a single coordinator the currency (which can be anything from gold to stones) is reduced to a commodity and is subject to mere supply and demand. And demand can always go to zero. This is what ultimately makes a real currency a real currency -- there exists an undying and infinite "demand" for the currency [2].

Playing games with decentralization and federation will not alter these dynamics. You can solve the double spend problem but you cannot generate infinite demand.

It's unfortunate because there are problems that the blockchain could solve that really are "embarrassingly parallel." The hope here is that all of the innovation going into blockchains will live on long after all the cryptocurrencies have gone to zero or been centralized behind trusted gateways. These innovations will be used to solve big problems that aren't currencies. Big problems like journalism (in fact all content generation a la Wikipedia, Youtube), transportation (Uber), lodging and logistics (ie Amazon and Walmart), resource overuse (this includes everything from overfishing to carbon credits) that are embarassingly parallel and are begging for blockchain-based solutions. These problems are truly global problems and it's quite likely no single central coordinator can solve them. The solution to these problems don't require a new currency and indeed if there's any hope for adoption the users will need to be able to transact in fiat. But these problems do require exactly the sort of real-time global coordination and consensus that blockchains can provide.

[0] https://en.wikipedia.org/wiki/Complementary_currency

[1] https://en.wikipedia.org/wiki/Embarrassingly_parallel

[2] http://neweconomicperspectives.org/2011/07/mmp-blog-8-taxes-...

Re: Ask HN: When is federation a better solution than decentralization?

#67

Post by CM30 »

hxchen wrote: post #5

I agree with you on that hybrid would be a more sustainable solution. I want to highlight a technical perspective. That’s the scalability issue of Blockchain. Fully decentralization cannot afford scalability, just as we cannot afford referendum on every polical proposal. In fact, many technical solutions to scale the Blockchain are using the same principle of your idea of federation.

> just as we cannot afford referendum on every polical proposal.

Part of me wonders whether this would be a good thing. I mean, the best political systems are those where things are difficult to change on purpose, like how in the US the constitution is virtually impossible to change without overwhelming agreement from most involved.

In that sense, having referendums be required on a lot of political proposals may well help kill lobbying, as well as downplay the effects of knee jerk reactions and 'think of the children' style pearl clutching. Require a majority, and well, a lot of things like copyright extensions simply can't get off the ground at all.

Re: Ask HN: When is federation a better solution than decentralization?

#68

Post by dnomad »

openfuture wrote: post #14

I've thought a lot about this recently so I'll share my 2c First some semantics; I use decentralization as a term that applies to both distributed and federated systems. That way the aggregate term 'decentralization' contrasts centralisation properly. Centralized systems usually work quite well until they reach a certain scale. At what scale centralized systems start breaking down is an interesting question that depe…

> For example I think the world would be a better place if we had put into place laws early on in capitalism that would limit how many employees a company could have to some smallish amount like 25 - 100

Most likely you'd see a very stagnant economy suffering from very high transaction costs. The interesting thing is what happens when transaction costs are reduced via regulation. Most jobs are strangely (probably deliberately) bespoke -- they're not defined by clear protocols with well-defined responsibilities and metrics. But if you can get impose efficient regulations than you will get, I suggest, lots of small businesses and freelancers looking to optimize value under efficient regulations. The interesting thing about Uber and AirBNB is not that they are ignore regulations but that they are increasing regulatory efficiency. Slowly but surely leading to two very important industries, transportation and lodging, are being decentralized via efficient regulations that invite all sorts of competition.

Re: Ask HN: When is federation a better solution than decentralization?

#69

Post by EGreg »

dnomad wrote: post #66
EGreg wrote: post #53

As someone who has worked exactly with these issues for the past 7 years, let me share what I have learned. Just a bit of background. My first startup, https://qbix.com focused on letting each community host its own social network, the same way Wordpress powers blogs. Wordpress powers 30% of the Web so it seemed to be a good business model (and it is). Here is a video explaining that: https://www.youtube.com/watch?v=…

I got to say... that looks pretty hopeless. Complementary currencies [0] are not new and they have limited utility -- especially since the currency takers still have to pay taxes in fiat. It's very easy to design systems where a single node captures the majority of the value in return for doing the majority of the coordination work. This goes deeper than politics. Look at the design of biological organisms and you fi…

If you're talking about Intercoin, then no, it's extremely far from hopeless. (Plus, even "hopeless" projects have been heavily funded in the last 2 years to solve e.g. stablecoins.)

Complementary Currencies aren't new, in fact many of them have been around for a while. Bristol Pounds [1] and Berkshares [2] are just two examples of many. And yes you can pay local taxes with them.

In fact, before the Greenback (the paper dollar) was fiat currency, there was the Free Banking Era [3]. Money was actually federated: banks would keep gold reserves, and issue banknotes. That's what circulated, not the gold. The gold and silver coins were fiat currency, and only Congress could mint them. However, people traded in local community currencies. The Greenback started as a way to finance the Civil War, and was good for paying tarriffs land taxes of the Federal government (the only kind of taxes they had). It became so popular that Congress made it legal tender after the war. That's what you have come to take for granted and think it's the majority of the money. But it's not.

Today, community currencies exist, but it's not as visible. They are federated with "landlords" who can confiscate your money, but no longer location-based. A casino or Disneyland bucks are probably the most visible examples. But actually, Facebook/GMail/iMessage Payments, PayPal, WeChat, and your local bank, are all examples of internal currencies. And you can't pay taxes with them either. Yet we all use them.

The problem is, until now, they've been pretty "dumb" money. Paper currency, or a centralized bank. Not an open platform. For payments, currently, centralized wins. WeChat, PayPal, Facebook, Venmo, as well as all the banks. They know how the money is being spent, you don't. Mint.com was a play for just the data, that's how valuable it is. What if there was a free and open source network for communities to have their own currencies? That would lower the barrier to having your own currency, run your own monetary policy and generally do all the cool things you can do when you are in control.

You know, it's less than 100 years that anyone can print anything without a gatekeeper. In most countries, even in the 80s, you could only typewrite some document on 4 carbon papers, and if you wanted a 5th paper you needed to type it all again. Then XEROX invented the copier and it spread to other countries. Then Steve Jobs and Apple led the way in desktop publishing. Then we got the Internet, and blogs. And then we got cellphones. Now we take it all for granted.

So in the same way, new technologies allow people who previously needed gatekeepers (the post office, print shops, etc.) to do it all themselves (email, blogs). Dangerous stuff for entrenched institutions? Perhaps! Or perhaps they can adapt with the times.

It's just the opposite: currencies absolutely require a single coordinator with currency power.

I think this is the source of most of your confusion. No, you just think they require it because you haven't seen an alternative. At the very least, there is no reason why two people buying coffee in NYC and in Paris should be on the same ledger. But even more to the point, look at what SAFE Network is doing, read the primer I linked to above. It is massively parallel, and it's secure!

I would respond to the rest, but this message is getting pretty long already.

[1] https://www.youtube.com/watch?v=QtGEby4ORGM

[2] https://www.youtube.com/watch?v=bzzkDRIjW30

[3] https://en.wikipedia.org/wiki/History_of_central_banking_in_...

Re: Ask HN: When is federation a better solution than decentralization?

#70

Post by drablyechoes »

rqs wrote: post #56
toomuchtodo wrote: post #17

Earlier quoted context omitted.

If he's wrong and it's easy, why can no one do it? Why did Slack overrun IRC? XMPP left by the wayside by Google and Facebook? Because it isn't easy, and users will always value the experience over compatibility and principal.

One thing I think some people got it wrong: Decentralization is not a feature, it's a method. (Most) Users won't care whether or not they are using something decentralized, they only care what they can achievement with that software/service. Is it doing better than others on the market? Back to the topic, about why Slack defeated IRC & XMPP: A product -- whether or not it's a online service or a hardware -- needs to…

> Users won't care whether or not they are using something decentralized

This is a good point, and it is demonstrably the case even among cryptocurrency users who have a coinbase wallet. Coinbase is not decentralized, and for a lot of users this is actually a nice feature because you can transfer BTC balance from one coinbase user to another without incurring any miner fee or waiting a long time for confirmations.

If most people who wanted to use bitcoin actually cared about decentralization, coinbase (and other similar services) would have virtually no users.

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