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Hard Problems in Cryptocurrency: Five Years Later

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Re: Hard Problems in Cryptocurrency: Five Years Later

#101

Post by buboard »

snitko wrote: post #78
EGreg wrote: post #35

Earlier quoted context omitted.

What’s stopping a YC startup from going bankrupt after having disclosed tons of risks in a PPM? At least here we know exactly how much was invested. Why does everything have to be about voting and receiving dividends? Amazon’s shareholders don’t do either one but value the shares greatly. And dividends can be programmed into the smart contracts too. Want them in DAI, USDT, ETH? You can! One way would be for the compa…

Explain the mechanism. How do I know this organization made this much money and that the amount I'm being paid is fair in regards to their profits? How can this code track all the money the company is making? It's not like they're being paid with their tokens. And for minority of projects where indeed they're expected to be paid using their own token, how do I know the company owners don't run away with all the money…

valid points, however, do you think it's impossible to have such a 100% on-chain business ?

Re: Hard Problems in Cryptocurrency: Five Years Later

#102

Post by MuncleUscles »

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 are a bad paradigm for developing applications on the ledger, they're far too permissive, the stakes are too high to want to trust your assets to arbitrary turing-complete code.

You can do much better with composable state machines, because everything you do gets the same level of security as the native token transfers https://www.radixdlt.com/post/radix-engine-a-simple-secure-s...

Disclaimer: I work at Radix

Re: Hard Problems in Cryptocurrency: Five Years Later

#104

Post by algerd »

mrb wrote: post #60
beefield wrote: post #49

Funny. Article discussing hard problems of crypto and ignoring the elephants in the room. There is still no actual and relevant use case for crypto outside illegal transactions and gambli^H^H^H^H^Hinvestment purposes. The second elephant is that it brings monetary policy back to medieval times. Third is that in practice the whole concept of credit and ots role in money creation is ignored.

« There is still no actual and relevant use case for crypto » What a short-sighted view. Perhaps no use case for you personally. There are 7.7 billion people in this world who have vastly different life circumstances, some of them certainly need crypto to make their lives better. In no particular order: hyperflation, financial censorship, instant low-fee international transfers, etc

>> Hyperinflation Human competence the main cause. >> Instant low-fee international transfers We have it already >>financial censorship Depends firstly on political system. If you have undemocratic government crypto won't help you anyway, because it will be banned or controlled.

Practice is the criterion of truth. Can provide cases, when crypto solves problem better than existing instruments?

Re: Hard Problems in Cryptocurrency: Five Years Later

#105

Post by max_ »

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…

Less famous person here :)

I also did a blog post in back in 2018 on whats keeping blockchains from full mainstream adoption.

For those interested, its here https://asindu.drileba.capital/2018/05/why-bockchain-is-not-...

Re: Hard Problems in Cryptocurrency: Five Years Later

#106

Post by hanniabu »

Bombthecat wrote: post #88
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…

Eos is a good a example. It's governance is falling apart. How to solve it? Well, I guess it needs more governance and rules :)

EOS is not really something to use as an example

Re: Hard Problems in Cryptocurrency: Five Years Later

#107

Post by hanniabu »

jkhdigital wrote: post #28
ddtaylor wrote: post #17

Earlier quoted context omitted.

> 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. Howe…

You're using a poor implementation of an app as a reason why smart contracts are bad. I hope you realize this is the same thing as saying databases are bad because of the Equifax hack.

Re: Hard Problems in Cryptocurrency: Five Years Later

#108

Post by joosters »

bouncycastle wrote: post #75
fxtentacle wrote: post #42

Earlier quoted context omitted.

Plus there's the problem that smart contracts cannot be easily modified if they are found to be buggy and that one can always reverse engineer them, because they're distributed to everyone. These two together have already caused lots of damage https://hackernoon.com/yes-this-kid-really-just-deleted-150-... and they make most real-world uses impossible. It is pretty much impossible to sell anything digital with smart…

There hasn't been any high profile smart contract hacks for a while now. Early days are always fraught with disasters. The field is evolving with "best practices", formal verification and lessons learned from past mistakes, so you'll find that these days things are more stable. One example is MakerDAO which has around $300 million in value locked, and has been running without incident for a while now.

I bet you that their smart contract, like most other significant ones, has been designed to be upgradable. That means the authors can modify the smart contract whenever they want, which means it implicitly has a centralised trust mechanism (I.e. you had better hope that the authors don’t go rogue and screw over the users) Central point of trust => blockchain part is now pointless, as ever.

Re: Hard Problems in Cryptocurrency: Five Years Later

#109

Post by nootropicat »

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.

Wouldn't work, the security of PoW explicitly relies on waste. If the external value from mining is X and an attack costs Y, the net cost of the attack is X-Y=Z, so the real security is Z, the waste portion.

Re: Hard Problems in Cryptocurrency: Five Years Later

#110

Post by alanfalcon »

fxtentacle wrote: post #42
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…

Plus there's the problem that smart contracts cannot be easily modified if they are found to be buggy and that one can always reverse engineer them, because they're distributed to everyone. These two together have already caused lots of damage https://hackernoon.com/yes-this-kid-really-just-deleted-150-... and they make most real-world uses impossible. It is pretty much impossible to sell anything digital with smart…

The best smart contracts don't need to be reverse engineered, they've got shared, verified source code. The bugginess is a real problem as you've pointed out. The "impossible to sell anything" couldn't actually be farther than the truth from all my experience buying and selling NFTs. Over $150,000 USD worth of digital collectable game cards have been traded this week alone over at https://opensea.io/recent - everything is based on cryptographic signing and verified ownership on smart contracts, and it works great.
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