Ethereum 2.0 launches • Hacker News Board

Re: Ethereum 2.0 launches

#211

Post by thebean11 » Tue, Dec 01, 2020, 2:55 PM UTC

konschubert wrote: post #190

lekevicius wrote: post #39

I am incredibly happy about this. It's the first step for a major cryptocurrency towards ledger security that does not damage the environment via mining. I always hated how wasteful and energy-inefficient mining is. Staking reduces energy costs by many, many orders of magnitude. With lightweight clients in development, it is possible to validate chain using Raspberry Pi. I hope (but don't expect) that some time in th…

Eventually Proof of Work WILL kill Bitcoin - but I have to admit this may be decades out in the future. Right now, most of the mining is financed via inflation. But as this comes to an end, eventually, the cost of mining will be borne by anyone making transactions on the network through tx fees. Somebody has to pay the electricity bill on all these ASICs. EDIT: One could try to argue that high transaction costs are n…

What's your take on off chain solutions like lightning as a solution to the high tx fees?

Re: Ethereum 2.0 launches

#212

Post by andrewla » Tue, Dec 01, 2020, 2:55 PM UTC

tormeh wrote: post #31

Is it still deflationary? Wondering if I should invest in the coin itself (which makes sense for deflationary coins) or a company doing something with it (which makes sense for an inflationary coin)

This is a term thrown around a lot. "Deflationary" has different meanings in different contexts.

Conventional economists use "deflation" to mean "price deflation" -- that is, the price of goods, on average, decreases over time, as denominated in the currency in question.

Austrian (heterodox) economists often use the term "deflation" and "inflation" to refer to changes in the money supply, rather than prices.

In the crypto space, people often use the term "deflationary" to refer to currencies that do not increase exponentially in supply; or more specifically whether the marginal change in supply is decreasing.

For 1, no -- saying "Ethereum is deflationary" is equivalent to saying "the value of Ethereum will always go up", which is clearly nonsensical, because it's saying that Ethereum is a risk-free investment.

For 2, no, Ethereum is not deflationary, the supply increases linearly, so the supply is always increasing.

For 3, yes, Ethereum is deflationary, because the supply increases linearly, which means the marginal change in supply tends to zero.

Your question about investments seems to be following the implication that if 3 is true, then 1 must be true, since they both use the word "deflationary". That may be the case, but I would hesitate to think that a mechanical system can guarantee an increase in value.

Re: Ethereum 2.0 launches

#213

Post by DennisP » Tue, Dec 01, 2020, 2:56 PM UTC

hardwaresofton wrote: post #36

seibelj wrote: post #10

Earlier quoted context omitted.

Beginning of switch from Proof of Work to Proof of Stake consensus, which will end the mining process for Ethereum and switch to securing the network by locking up funds, drastically reducing the amount of energy used to secure the network. As a side effect of the consensus change, the amount of transactions per second will scale massively. There is not universal agreement among blockchain enthusiasts that Proof of S…

any idea on the increase in transactions per second/month/some time period? The things that have stopped me from getting into btc/eth are: - scaling issues (it can't be used as a currency if this isn't fixed) - power issues (would be nice if we didn't create a huge pointless energy sink if we could avoid it) - the amount of footguns in ethereum (I think the language is too permissive) It looks like this solves at lea…

There are basically two big things in Ethereum's scaling roadmap. One is sharding, so each node only has to process a fraction of all transactions. Initially there will be 64 shards, but it's designed to allow up to 1024. As individual nodes get more powerful, both the number of shards and the amount processed by each shard increases, for quadratic scaling.

The other part, which is on Ethereum mainnet already, is a layer-2 idea called rollups, which store transactions on chain in a very compressed format without losing security guarantees. There are several rollup systems, capable on today's Ethereum of doing 1000 to 9000 simple tx/sec.

Once both systems are live, total capacity will be 20K to 100K tx/sec, not counting the quadratic improvements.

On the research side, there's also work to make data validation more efficient by replacing merkle trees with something more compact, like polynomial commitments. That would add another 10X factor to rollup scaling.

Regarding footguns, people are working on more rigorous languages than Solidity that still compile to the EVM. So far their compilers aren't as solid so they don't get much production use yet.

Re: Ethereum 2.0 launches

#214

Post by KSteffensen » Tue, Dec 01, 2020, 2:57 PM UTC

markkat wrote: post #125

louwrentius wrote: post #46

I don't understand this. I don't understand any of it. I don't understand cryptocurrencies. I don't understand what problems they really solve. > "Ethereum is open access to digital money and data-friendly services for everyone – no matter your background or location. It's a community-built technology behind the cryptocurrency ether (ETH) and thousands of applications you can use today." I can do all these things alr…

It makes me sad, because I expected a comment like this to be the highest on HN. In the case of Ethereum, digital scarcity secured by a blockchain enables a turing complete state machine that the world can use. In the most basic terms, this will remove clearing houses for transactions of assets. In the long term this will lead to novel types of assets, and make ownership extremely liquid. Imagine using your phone to…

> In the case of Ethereum, digital scarcity secured by a blockchain enables a turing complete state machine that the world can use

This sentence is completely opaque to me. I have no idea what you are trying to say.

> In the most basic terms, this will remove clearing houses for transactions of asset

So I will be able to go to Starbucks, buy a cup of coffee, pay for it with Ethereum and not involve my bank?

> Imagine building a stream of passive income based on the shares you've earned in projects you've worked on throughout your life.

I can currently buy shares in companies I work for. Why is Ethereum different (other than I don't understand it)?

Re: Ethereum 2.0 launches

#215

Post by dmihal » Tue, Dec 01, 2020, 2:57 PM UTC

naringas wrote: post #17

One thing I haven't been able to figure out about proof of stake is this: if one entity somehow manages to control over half to the total ETH tokens, does this enable an attack analogous to bitcoin's 51% problem (which happens when one miner controls over half of the network's raw cpu power)?

Imagine somehow a single party gets 66% of all ETH, enough for them to execute the equivalent of a "51% attack".

The community will notice and can decide to do a hard fork of the network where they "delete" the attackers coins.

So the network would have experience a hickup, but the hacker has lost billions of dollars worth of ETH and can't attack anymore.

This is different from Proof of Work & Bitcoin. If an attacker gets 51% of the "mining power" (physical hardware), there's nothing the community can do to "delete" their hardware.

Re: Ethereum 2.0 launches

#216

Post by konschubert » Tue, Dec 01, 2020, 2:58 PM UTC

thebean11 wrote: post #211

konschubert wrote: post #190

Earlier quoted context omitted.

Eventually Proof of Work WILL kill Bitcoin - but I have to admit this may be decades out in the future. Right now, most of the mining is financed via inflation. But as this comes to an end, eventually, the cost of mining will be borne by anyone making transactions on the network through tx fees. Somebody has to pay the electricity bill on all these ASICs. EDIT: One could try to argue that high transaction costs are n…

What's your take on off chain solutions like lightning as a solution to the high tx fees?

It doesn't solve the fundamental cost problem with Proof of Work:

- If people pay high effective tx fees, it's shit because, well, it's expensive.

- If people pay low effective tx fees (through lightning or block size increase or whatever) then, as soon as inflation ends, the money won't be enough to pay for a sufficient hash rate.

Re: Ethereum 2.0 launches

#217

Post by newswasboring » Tue, Dec 01, 2020, 2:59 PM UTC

louwrentius wrote: post #171

anonymousab wrote: post #106

Earlier quoted context omitted.

Crypto is easy to transfer and keep and has more lasting value in countries that are facing hyperinflation, often moreso than USD. This particularly applies to Venezuela, which is exerting extra pressures and taxes in foreign currencies.

So it's basically irrelevant for the USA and Europe. Then why is it such a hot topic on Hacker News? I have some ideas, but they are not kind.

> So it's basically irrelevant for the USA and Europe. Then why is it such a hot topic on Hacker News?

This is just plain racist. HN is not just for US and Europe people.

Re: Ethereum 2.0 launches

#218

Post by dmihal » Tue, Dec 01, 2020, 2:59 PM UTC

kzrdude wrote: post #37

howlgarnish wrote: post #20

Earlier quoted context omitted.

Because Bitcoin touched an all time high and proceeded to plummet $1700+ immediately afterwards, dragging all other cryptos along with it.

I wonder why all other cryptos follow bitcoin up and down, though.

If this thread is any indication, most investors don't understand nuances of cryptocurrencies, just Bitcoin and "not-bitcoin".

As projects like Ethereum continue to develop, I imagine it will diverge from Bitcoin more.

It should also be noted that Bitcoin has been highly correlated to the SP500 this year, despite being a completely different asset class.

Re: Ethereum 2.0 launches

#219

Post by joeblau » Tue, Dec 01, 2020, 2:59 PM UTC

earthtolazlo wrote: post #181

joeblau wrote: post #118

Earlier quoted context omitted.

I can do all these things already. You're absolutely right, but just like you can send a letter in the mail, email does the same thing but is digitally native to the internet. Up until the invention of Bitcoin, there was ZERO scalable way for me @joeblau to send you @louwrentius money the way I send an email. By that, I mean the only thing I need to rely on is a protocol (like SMTP) and you'll receive it. What proble…

Bitcoin wastes an obscene amount of energy for a theoretical maximum of seven transactions per second globally. How is that even remotely scalable?

I'm not a Bitcoin advocate, I just recognize the value the invention provided and I recognize that this whole cryptocurrency space relies on it being successful for long enough for anything else usurp it. If Bitcoin got hacked right now, everything crashes with it.

Compared to Bitcoin, there are consensus mechanisms that are a lot faster (3 orders of magnitude), cheaper (almost free transaction cost), near instant finality (seconds, not 1 hour) and leave almost zero carbon footprint. They just haven't been proven out at scale yet.

Re: Ethereum 2.0 launches

#220

Post by cdiddy2 » Tue, Dec 01, 2020, 3:00 PM UTC

louwrentius wrote: post #129

dbetteridge wrote: post #101

Earlier quoted context omitted.

On a personal level I to have no need or want of cryptocurrencies, but the stated benefits are not for first world, white, city dwellers with ready access to the existing monetary system. - Someone lives somewhere that the U.S refuses to bank with (Sanctions) - Someone who lives somewhere that simply has no financial infrastructure readily accessible and relies on prepaid cards for things like water and electricity (…

> - Someone lives somewhere that the U.S refuses to bank with Cryptocurrencies won't solve this problem. If that happens, there are much bigger issues. > - Someone who lives somewhere that simply has no financial infrastructure readily accessible and relies on prepaid cards for things like water and electricity (Rural Africa?) Let's be honest. The whole blockhain / cryptocurrency was never about that ever. > - Some i…

> - Someone lives somewhere that the U.S refuses to bank with

We are already starting to see this with Venezuela. The easiest way to get USD equivalents to certain people there is via USDC, which is being worked on with the Treasury Department and Federal Reserve.

"According to the company’s blog post, the Treasury Department and the Federal Reserve deposit funds seized by the U.S. into a bank account in the U.S. tied to the Guaidó government, which converts the funds into USDC that Circle then sends to Airtm." - https://www.coindesk.com/circle-usdc-venezuela-airtm