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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

#181

Post by Avamander »

lawn wrote: post #61
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.

What's actually funny is how people still believe that no use cases exist. Here are just some examples: * Uncensorable donations * No way for a third party to freeze your payments (internet is full of horror stories of PayPal) * Not all businesses can accept digital payments (marijuana stores or porn have trouble) * Credit cards and payment processors take a 2-4% cut, of all transactions. * You can use cryptocurrenci…

> Credit cards and payment processors take a 2-4% cut, of all transactions.

Most payments regular people make every day are sub three-digit. On those payments 2-4% in the US is much cheaper than the current Bitcoin (and similar) transaction fees. That means crypto is rather unusable for most people. I won't even start talking how Bitcoin doesn't compete at all with European SEPA Instant payments for most use-cases.

The only use crypto currently has is censorship resistance, pseudonymity and illegal purposes.

Re: Hard Problems in Cryptocurrency: Five Years Later

#182

Post by jotakami »

neiman wrote: post #86
jkhdigital wrote: post #28

Earlier quoted context omitted.

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…

I haven't read all those papers, but basically you could always bribe miners, even without smart contracts, just by giving them money outside the blockchain they mine. One of the ideas of PoW is that if you have enough money to bribe the miners, it's better for you to be a miner yourself. Is this the principle your examples weakens? I may have misinterpreted them.

Bribing outside of the system (i.e. in real life) could be a tremendous coordination and logistical challenge, especially given the amounts needed to make these attacks profitable. Smart contracts can make all of that trivially easy.

It’s like... the people most interested in trustless collaboration are people who are untrustworthy. A trustless settlement layer seems fine, but any real human application is going to have an element of trust and doesn’t belong alongside settlement.

Re: Hard Problems in Cryptocurrency: Five Years Later

#183

Post by davidmurdoch »

elamje wrote: post #57

Can some people from the crypto space give a quick tl;dr of what’s going on in the space that’s of note? Seems like I hardly hear about interesting stuff after the bubble burst (kind of at least). Are there any people using crypto to actually do work for clients and solve fiat currency based businesses problems? I am curious if the crypto start up space is mostly filled with crypto-to-crypto services or if there are…

I build blockchain development tools at Truffle (a for-profit company). Most of our efforts are on Ethereum tooling, but not all, we are building some tools for enterprise blockchain tech as well as other public chains.

I think most of us here believe we are building tools that will have had a role in the long-term future of (decentralized) finance.

https://trufflesuite.com/

Re: Hard Problems in Cryptocurrency: Five Years Later

#184

Post by DennisP »

heinrichf wrote: post #122
BLanen wrote: post #81

Earlier quoted context omitted.

This is the guy that thought you could do Shor's algorithm by emulating a quantum computer and having it be faster than a classical solution.

Hm, sounds worrying, do you have a source for that?

From what I've seen, it's true, but Ethereum launched when Vitalik was 19 and his quantum silliness was years before that. Personally I'm glad nobody's looking at the stupid things I was thinking about at that age.

Re: Hard Problems in Cryptocurrency: Five Years Later

#185

Post by wyldfire »

_Kristijan_ wrote: post #146
wyldfire wrote: post #20

Earlier quoted context omitted.

Proof-of-stake has been in use in other non-Ethereum cryptocoins for a very long time [1] [2]. In Nano's case, there's no transaction fees paid to stakeholders (nor their delegated representatives). [1] https://en.wikipedia.org/wiki/Peercoin [2] https://en.bitcoinwiki.org/wiki/Nano

Nano consensus mechanism is called Open Representative Voting (ORV). It has similar sides to proof-of-stake, but differs in important places. e.g. it is less a "stake" than a voting weight that the users themselves distribute to nodes of their choice (or their own). ORV's self-description at: https://docs.nano.org/glossary/#open-representative-voting-o...

> or their own

Sure, it's an optionally-delegated-proof-of-stake. In practice, most do delegate their stake. But at the end of the day the "voting weight" that secures transactions is majority stake and not a proof of work.

Re: Hard Problems in Cryptocurrency: Five Years Later

#186

Post by cyphar »

dunkelheit wrote: post #124
cyphar wrote: post #72

Earlier quoted context omitted.

Excluding the transaction fees problem you mentioned (which cryptocurrencies also have -- while it might not be 4% it's definitely not 0%), all of the uses you listed are really just one use-case -- uncensorable transactions. Don't get me wrong, that's a very good feature of cryptocurrencies (assuming that you have the ability to transform crypto back to real money on the other end), but you should be aware that your…

I'm struggling to understand if uncensorable transactions are a good thing (note: struggling not in a sense of "I actually think it is evil but let's hear your bullshit arguments so that I can easily debunk them", but in a sense of really being undecided). I am not a libertarian so I don't think that laws are just a useless form of violence. So how can uncensorable transactions be useful for a law-abiding citizen? On…

The most obvious example I can think of is when WikiLeaks (or pick your own politically-unfriendly charitable cause) had their PayPal and bank accounts frozen -- people donated using Bitcoin because the transactions couldn't be blocked by private companies. There are also several other examples of completely legal but unfriendly-to-large-corporations transactions -- in the several US states where marijuana has been legalised it is still difficult to conduct non-cash transactions with the proceeds because most payment processors are under federal jurisdiction thus making it possible for your (completely legal) funds to be seized.

Re: Hard Problems in Cryptocurrency: Five Years Later

#187

Post by jotakami »

nootropicat wrote: post #123
jkhdigital wrote: post #16

Earlier quoted context omitted.

From 2015: http://www.truthcoin.info/blog/pow-cheapest/

Incorrect. The supposed MR=MC law means that the entire economy is zero-sum and wealth creation is impossible. His reasoning also directly translates to real world physical security, as in, if you want to protect wealth worth $1000 from theft, according to him you have to spend $1000-epsilon, otherwise someone is going to outspend you and steal it. Fortunately, that's not how the world works. Visual illustration of t…

Fortunately, we get asymmetric security through laws and criminal punishment rather than machine gun bunkers.

Also, MR=MC doesn’t imply that wealth is never created, it just means that it can’t be created purely through exchanging commodities.

Re: Hard Problems in Cryptocurrency: Five Years Later

#188

Post by jotakami »

dunkelheit wrote: post #124
cyphar wrote: post #72

Earlier quoted context omitted.

Excluding the transaction fees problem you mentioned (which cryptocurrencies also have -- while it might not be 4% it's definitely not 0%), all of the uses you listed are really just one use-case -- uncensorable transactions. Don't get me wrong, that's a very good feature of cryptocurrencies (assuming that you have the ability to transform crypto back to real money on the other end), but you should be aware that your…

I'm struggling to understand if uncensorable transactions are a good thing (note: struggling not in a sense of "I actually think it is evil but let's hear your bullshit arguments so that I can easily debunk them", but in a sense of really being undecided). I am not a libertarian so I don't think that laws are just a useless form of violence. So how can uncensorable transactions be useful for a law-abiding citizen? On…

Thank you for substantially raising the mean thoughtfulness of the comments in this thread.

Re: Hard Problems in Cryptocurrency: Five Years Later

#189

Post by golergka »

arcticbull wrote: post #141

None of these are the actual hard problems in cryptocurrency and the fact this is the focus speaks volumes. The real hard problems are: 1. How do we stop using more power than Switzerland to process 4 transactions per second (lol) 2. How do we stop payments to international terrorists and rogue states. 3. How do we stop money laundering. 4. How do we stop price manipulation by fraudulent actors. 5. How do we allow pe…

Those are features, not bugs.

Re: Hard Problems in Cryptocurrency: Five Years Later

#190

Post by Shoue »

arcticbull wrote: post #152
emsimot wrote: post #148

Earlier quoted context omitted.

1. I don't know if it will work, but the idea is Proof of Stake (ETH2 in Ethereum-land) 2. You can't -- this is a cultural problem, not a technological one 3. There's no such thing as money laundering 4. Peer-to-peer, transparent finance infrastructure 5. User-money as a layer on top of cryptocurrency

> 1. Proof of stake. This has yet to be proven, and as you say, there’s reasons why it has yet to land. I give this one vitaliks sideways smiley face. > 2. You can't -- this is a cultural problem, not a technological one Uh, one that doesn’t exist in the current financial system. I’m sure y’all will find a way. As I said, it’s a prerequisite. > 3. There’s no such thing as money laundering. Hilarious. I see someone ne…

>This has yet to be proven, and as you say, there’s reasons why it has yet to land. I give this one vitaliks sideways smiley face.

Yeah, the hundreds of cryptocurrencies using it isn't enough.

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