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Hard Problems in Cryptocurrency: Five Years Later

vitalik.ca

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Re: Hard Problems in Cryptocurrency: Five Years Later

#21

Post by jkhdigital »

snitko wrote: post #10
sincerely wrote: post #7

In a space absolutely filled with hucksters and scam artists, vitalik is legit. Good read.

Vitalik and ETH are the definitions of scam and scammer. He's very good at obfuscating it by appearing very smart: read his articles and tweets, they always sound complex, but can be rewritten in much simpler terms. And ETH is the same: it obfuscates its uselessness and nonsense by being overly complex, every year employing new terms and coming up with tons of code that only increases the attack surface and complicat…

> tons of code that only increases the attack surface

Ethereum itself was the original sin in this respect. In Bitcoin, for the most part, the economic value at stake in a block is (1) the block reward, (2) the transaction fees, and (3) the amount transacted. (1) + (2) + (3) is therefore the maximum amount that can theoretically be "moved" if a block is invalidated through an adversarial fork, since someone else can claim the miner rewards and every transaction could possibly be double-spent. Anyone who wants to be assured of transaction immutability can, at the very least, calculate the total value that is at stake and wait until at least this much PoW has been layered on top of the transaction.

Not so with smart contracts. A paper I read yesterday showed how smart contracts can be used to execute trustless, crowd-sourced DoS attacks on rival blockchains (https://eprint.iacr.org/2019/775.pdf). It's ridiculous. Once you open the Pandora's Box of smart contracts, you can throw your consensus guarantees out the window.

Re: Hard Problems in Cryptocurrency: Five Years Later

#22

Post by wyldfire »

broodbucket wrote: post #3

It's such a shame that useful proof-of-work is so impractical. The amount of cycles spent mining for the sake of mining is pretty depressing.

Besides proof-of-stake, there's also a coin that tries (tried?) a proof-of-work with greater public utility: Primecoin [1]. It creates Cunningham chains of prime numbers [2].

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

[2] https://en.wikipedia.org/wiki/Cunningham_chain

Re: Hard Problems in Cryptocurrency: Five Years Later

#23

Post by seibelj »

snitko wrote: post #19

Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma of Bitcoin being black market money. However, you ONLY need black market money. Everything else that's ok with being regulated, does not need a blockchain. The hard problem that Bitcoin solved was "How do we create money that wouldn't collapse and lose value o…

Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum.

I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of the good ones.

Re: Hard Problems in Cryptocurrency: Five Years Later

#24

Post by chx »

snitko wrote: post #19

Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma of Bitcoin being black market money. However, you ONLY need black market money. Everything else that's ok with being regulated, does not need a blockchain. The hard problem that Bitcoin solved was "How do we create money that wouldn't collapse and lose value o…

Obviously all cryptocurrencies are a scam.

Previously: https://news.ycombinator.com/item?id=2107770

https://news.ycombinator.com/item?id=21145147

Re: Hard Problems in Cryptocurrency: Five Years Later

#25

Post by snitko »

seibelj wrote: post #23
snitko wrote: post #19

Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma of Bitcoin being black market money. However, you ONLY need black market money. Everything else that's ok with being regulated, does not need a blockchain. The hard problem that Bitcoin solved was "How do we create money that wouldn't collapse and lose value o…

Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum. I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of…

What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.

Re: Hard Problems in Cryptocurrency: Five Years Later

#26

Post by snitko »

chx wrote: post #24
snitko wrote: post #19

Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma of Bitcoin being black market money. However, you ONLY need black market money. Everything else that's ok with being regulated, does not need a blockchain. The hard problem that Bitcoin solved was "How do we create money that wouldn't collapse and lose value o…

Obviously all cryptocurrencies are a scam. Previously: https://news.ycombinator.com/item?id=2107770 https://news.ycombinator.com/item?id=21145147

Except Bitcoin. And the market justly reflects it via price.

Re: Hard Problems in Cryptocurrency: Five Years Later

#27

Post by lostmsu »

snitko wrote: post #19

Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma of Bitcoin being black market money. However, you ONLY need black market money. Everything else that's ok with being regulated, does not need a blockchain. The hard problem that Bitcoin solved was "How do we create money that wouldn't collapse and lose value o…

Disclaimer: I hold positions in both, more in Ethereum.

1. Both are very complex. How did you compare?

2. "Constantly coming up with new terms and features and "new hot thing"" - this is a fact. "to try and pump the price" - this is a speculation. Even if it is not - I don't know why is it necessarily bad. That is one of the major goals of every company applying to YC, or doing any kind of innovation in business.

3. Technically, all the use cases for Bitcoin are the same as the use cases for Ethereum, AFAIK.

4. It has the same proof of work system with miners, so in the end Buterin has the same 0 direct control over it, as Nakamoto would over Bitcoin. True, a lot of influence.

5. "97.3% of all statistics are made up."

Re: Hard Problems in Cryptocurrency: Five Years Later

#28

Post by jkhdigital »

ddtaylor wrote: post #17
jkhdigital wrote: post #15

I literally spent the past week reading a couple dozen papers on cryptocurrency attacks, in service of a term paper which should hopefully turn into a master's thesis (and possibly more during my PhD campaign). I'm pretty damn pessimistic as a result. Smart contracts basically throw all of your consensus guarantees out the window because they can cause arbitrary exchanges of value in the application layer, which can…

> Smart contracts basically throw all of your consensus guarantees out the window because they can cause arbitrary exchanges of value in the application layer, which can be used to incentivize miners into all sorts of shenanigans. Do you have an example?

So glad you asked:

1. https://eprint.iacr.org/2019/748.pdf 2. https://arxiv.org/pdf/1810.11605.pdf 3. https://eprint.iacr.org/2019/775.pdf 4. https://users.encs.concordia.ca/~clark/papers/2019_wtsc_fron... 5. http://homepages.cs.ncl.ac.uk/patrick.mccorry/minerbribery.p...

This one isn't an attack per se, it is mostly an exploration of arbitrage bots in decentralized exchanges running on Ethereum smart contracts. However, they point out that miners can trivially capture the value of the arbitrage transactions by front-running, and that this "free money" is like a bonus block subsidy that falls outside of the PoW consensus models:

6. https://arxiv.org/pdf/1904.05234.pdf

This one actually operates through transaction fees only, so it doesn't depend on smart contract functionality. However, it is waaaaay more expensive (for the attacker) than the others:

7. https://www.cs.umd.edu/~jkatz/papers/whale-txs.pdf

Re: Hard Problems in Cryptocurrency: Five Years Later

#29

Post by EGreg »

snitko wrote: post #25
seibelj wrote: post #23

Earlier quoted context omitted.

Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum. I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of…

What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about.…

How about being able to raise money for a project, and whitelist investors, without people having to trust you to send them the securities after they send you the money, and them seeing exactly what is being done with dilution or whatever instead of having to trust?

Or having a fair pricing model as investors buy in using a bonding curve, eliminating priced rounds and other crap, pg said that’s the “future” - Ethereum makes it possible.

All this is only possible because enough gateways trade ETH that it can now be considered money. And it can be used as an input to tons of cool smart contract things. You couldn’t do this stuff 10 years ago, at best you’d have some sorta hookup to Stripe API and banks.

Re: Hard Problems in Cryptocurrency: Five Years Later

#30

Post by lostmsu »

snitko wrote: post #25
seibelj wrote: post #23

Earlier quoted context omitted.

Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum. I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of…

What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about.…

> That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.

I thought the point of this would be that the contract code, that defines organization would automatically pay you back in whatever. No need in regulators with laws, that random judge can overturn any day. And that is the whole point of it...

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