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Coinbase from YC to DPO

blog.ycombinator.com

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Re: Coinbase from YC to DPO

#261

Post by hctaw »

cbhl wrote: post #207
Fede_V wrote: post #35

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be sig…

If Coinbase gets sufficiently mainstream, I suspect it will mitigate a lot of this. A transfer of BTC between two Coinbase users can happen off-chain, which means skipping the work necessary to mine a block including the given transaction.

Doesn't that defeat the entire purpose of cryptocurrency

Re: Coinbase from YC to DPO

#262

Post by eloff »

Fede_V wrote: post #35

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be sig…

I think we've given this proof-of-work experiment plenty of room to run, and it's time to end it as a failure through governments making it illegal.

The algorithm sort of worked, but the costs are too high. In the end those high costs led to efficiencies of scale leading to a few large miners controlling the whole blockchain. So it never lived up to the decentralized dream anyway.

Now it mostly serves to fuel rampant speculation and crime. It enabled a whole new category of crime through cyberlocker attacks (well not new, but made it so, so much more successful.)

The harm well outweighs the good. If it continues unabated proof-of-work crypto could double the energy requirements of the planet in just a few decades. It's not worth that. Kill it now before the consequences get worse.

Re: Coinbase from YC to DPO

#264

Post by jude- »

CuriousCosmic wrote: post #208
jude- wrote: post #166

Earlier quoted context omitted.

PoW is open-membership, because the means of coin production are not tied to owning coins already. All you need to contribute is computing power, and you can start earning coins at a profit. PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast en…

One important difference in favour of PoS that isn't brought up often is the financial cost to pull off an attack. Pulling off an attack in most PoS protocols results in coin slashing for the attacker ("deletion" of coins used in the attack) and on top of that can (and likely will) result in coin devaluation as well. This makes a successful attack against a PoS system very very expensive. The resource is spent and ac…

It's far easier to break a PoS chain -- you simply knock the coin-holding nodes offline. Knock enough offline, and you can no longer reach quorum. If offline nodes' coins get slashed in order to reach quorum and restart block production, and the system permits forking, then why would offline nodes rejoin the original fork? They're incentivized to only consider forks where they're not slashed. If the system does not permit forking, then the system breaks once the attackers (1) stake a nominal amount of coins, and (2) knock enough other nodes offline such that they are the majority staker.

Re: Coinbase from YC to DPO

#265

Post by CuriousCosmic »

toolz wrote: post #121
rawtxapp wrote: post #98

Earlier quoted context omitted.

PoS is yet to be proven, I'm really hoping eth2 shows that it actually works, because the other ones with PoS aren't that heavily used or tested in adversarial ways. When it comes to money and value, the utmost important thing is security, that's the tradeoff that Bitcoin makes and that's what people are buying into. Everything else is secondary.

cardano is completely distributed PoS 46 billion market cap (5th largest crypto) - I'm not sure what you mean by "yet to be proven" it also theoretically supports 1MM tx/second - to put that into perspective VISA does somewhere in the ballpark of 2k tx/second (but theoretically can do much more than that I'm sure)

As much as I like Cardano and as much as I have faith that it will succeed, I think you might be overstating what has been accomplished so far.

- The network is decentralised and running Proof of State.

- The network is not currently running automated peering. Block producing peers are manually selected by stake pool operators at the moment. This doesn't necessarily make the network more centralised but it exposes certain risks. A node update (and I believe a protocol update as well) will be coming out in the next 2-3 months that will transition SPOs to running automated peering.

- The network currently sits around 250-300tx/s max.

- A near term (next 6 or so months) protocol revision will be raising that limit to around 1k tx/s.

- Hydra (isomorphic state channels) allows 1k tx/s to be processed per state channel (which then periodically checkpoints against the network) and was demonstrated to maintain these performance metrics up to 1k state channels.

So the network is decentralised and it is doing very well however it is not currently capable or currently theoretically capable of handling 1MM tx/s. It can however handle an impressive amount of transactions compared to many other decentralised networks at the moment. The protocol revisions that will allow close to the stated 1MM tx/s are completed with corresponding papers (containing formal proofs and simulations to support tx rate and security claims) already accepted to or well received at cryptography conferences.

Cardano is doing very well and moving at a solid pace however overstating where the project is and what it is capable of will only serve to undermine outside perception of the project.

Re: Coinbase from YC to DPO

#266

Post by Aunche »

Coinbase is very profitable and has huge cash reserves for a company of its size. I don't see any reason why they would feel the need to IPO if not to take advantage of people's FOMO.

Re: Coinbase from YC to DPO

#267

Post by px43 »

Fede_V wrote: post #35

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be sig…

Why are you so worried about cryptocurrencies, and seemingly not worried about energy companies who actually are the ones who are creating the carbon emissions?

Using electricity and emitting CO2 are only loosely correlated, and in the case of cryptocurrencies are even less correlated because cryptocurrencies are dis-proportionally mined with energy from hydroelectric dams.

All of these articles about the ecological impact of cryptocurrencies only exist to divert public and regulatory attention away from the energy companies that are actually doing all the damage.

Oil companies did the same thing in the 70s when there was public outcry about plastic pollution, so they funded the "reduce reuse recycle" campaigns, and the crying Indian commercial etc, all to divert responsibility from the companies manufacturing the plastics to the consumers who use them.

There is a documentary called "The Story of Plastic" which covers this strategy, and how successful it has been for them in the past.

Re: Coinbase from YC to DPO

#268

Post by Paradigma11 »

gonehome wrote: post #138
Fede_V wrote: post #35

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be sig…

I'm skeptical of proof-of-stake, proof-of-work seems like the main innovation of cryptocurrencies that differentiates them from the standard financial industry? If you swap out POW for POS (or worse clearing house type trust orgs like Stellar) then aren't you just putting trust into some incentive based system no different than existing financial systems? Just instead a government you're trusting some other entity. Y…

The staking rewards for block generation are inflationary. So you are penalized by not staking and it does not matter how long how stake your tokens your share of the blockchain does not increase. You also have to pay taxes for staking rewards in most countries so you have to sell at least that much. In the context of a bc with smart contracts you are basically owning and operating a share of a cloud for financial services. Those customers pay fees which get distributed with the staking rewards.

This does sound a lot saner to me than having some cabals operating giant computer farms and hydroelectric dams to generate new blocks. Their interests are different than those of token holders and having to pay for all those gpus and electricity is just stupid.

What mathematical properties are you losing?

Re: Coinbase from YC to DPO

#269

Post by dlubarov »

jude- wrote: post #166
jtsiskin wrote: post #159

Earlier quoted context omitted.

For the uninformed, what mathematical guarantees does POW have that POS doesn’t?

PoW is open-membership, because the means of coin production are not tied to owning coins already. All you need to contribute is computing power, and you can start earning coins at a profit. PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast en…

It seems like your contention is that PoS coins are priced based on discounted cash flow, correct? I think that's a reasonable model, but it's hardly unique to PoS coins, and it doesn't really seem problematic.

> the system is only as resilient as the nodes run by the people who bought in initially

This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume. And looking at some numbers on CoinMarketCap, it doesn't seem like PoS coins have lower trading volume than PoW coins. As one example, XTZ seems to have ~double BTC's turnover in the past 24h.

> these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer

This could be said about most assets, even ones without cash flow like PoW coins. In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.

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