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The Limits to Blockchain Scalability

vitalik.ca

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Re: The Limits to Blockchain Scalability

#411

Post by meowface »

littlestymaar wrote: post #379
meowface wrote: post #360

Earlier quoted context omitted.

Right. The "value" / perceived value won't be permanent (and may be very subjective and disputed from the start), but in terms of long-term data integrity and availability, blockchains can be useful. An NFT ownership transfer that occurred in 2020 on some blockchain may not be considered too valuable in a hypothetical 2040 world where almost no one is using that (or perhaps any) blockchain anymore, but you can likely…

> but you can likely at least retrieve that record and be pretty sure the data is accurate and wasn't tampered with. You will have no way to tell if this data came from the legitimate Ethereum blockchain that was in use in 2021, a forked chain, or even a completely fake one which has zero blocks in common with the real one. The authenticity guarantee in blockchains doesn't come from cryptographic schemes, it comes fr…

If the network is totally gone, it's indeed more tricky. But if it still exists, and if there's no indication that the main network and chain was ever disrupted between then and now, you can be pretty confident the data is accurate if you join the network.

If no one uses it anymore or if it's so little-used that it's schismed into tons of other chains over the years, I think you can still probably obtain the original data you're looking for, but it'll take more effort to verify its authenticity.

Especially if the data you're looking for occurred at a time when the network was healthy and intact (like 2020), all you need to do in 2040 is find a block number and corresponding root hash that existed in 2020. I think these'll likely be possible to find even if the network's dead, and you can compare them against several different sources to increase confidence that they're not fake. Then as you scour the internet and download different published blockchain copies, you can truncate it back to that block number and compare the hash.

It's possible your search will be futile and you'll be unable to find a trustworthy record of block numbers and root hashes or that you'll be unable to find a verified 2020 blockchain, but I think your odds will be pretty good if the internet hasn't collapsed. Either way, as Vitalik pointed out, the odds are way higher you'll be able to find that compared to some data you entered into some SaaS in 2020.

Re: The Limits to Blockchain Scalability

#412

Post by DennisP »

jude- wrote: post #294
DennisP wrote: post #274

Earlier quoted context omitted.

Why would they all be in the same datacenter? The beacon chain will periodically select staking nodes at random to go in each shard, and there's an economic incentive for stakers not to use the same infrastructure as everyone else.

Why is the chain's liveness and resiliency to server failures dependent on where people happen to be keeping their validators? This isn't a problem in Ethereum 1.0.

I mean, if all the miners were on one datacenter and that datacenter went down, so would Ethereum 1.0. That's the same sort of failure you're worrying about for 2.0.

Re: The Limits to Blockchain Scalability

#413

Post by [deleted] »

dmitriid wrote: post #392
n0mad01 wrote: post #387

Earlier quoted context omitted.

its worth a dollar - its a scam. its worth a hundred dollars, people use it to buy goods - its a scam. its worth a thousand dollars, people start using it as a store of value and a hedge against inflation - its a scam. its worth 65.000 dollars, theres also ethereum changing the face of banking forever - its a scam. calling me a scam artist while disregarding all the givens of reality, at this point its really hard to…

> its worth... its worth... its worth... its worth... its worth... Empty words > people start using it as a store of value People are using for speculation, not for the store of value. > theres also ethereum changing the face of banking forever Ethereum is changing literally nothing > while disregarding all the givens of reality What you're describing are fantasies that have little to no bearing on reality. > at this…

[deleted]

Re: The Limits to Blockchain Scalability

#414

Post by cko »

rapsey wrote: post #8
laurent92 wrote: post #3

Earlier quoted context omitted.

I was trying to summarize, for an employee who got caught in “Elon Musk shouldn’t have manipulated the BTC” (!) (obviously the employee lost 25% of his savings), I was trying to summarize the list of dangers of having savings in BTC. - Laws of any big country could change and trigger the sale for a lot of sellers of a country, - Especially given BTC is used by Iran to bypass petrol restrictions, used by ransomware an…

The price is manipulated by hedge funds and/or whales to fleece unsophisticated investors. Wyckoff pattern has described BTC this tear to a t.

A friend who trades crypto tells me altcoin prices are all manipulated - the buyer and seller are the same person.

What's the point of ownership if the value of the stuff that is owned is centralized?

Re: The Limits to Blockchain Scalability

#415

Post by mbesto »

puranjay wrote: post #371
mbesto wrote: post #259

Earlier quoted context omitted.

1. But I still need a bank in the currency on the other end. So this might eliminate some forex fees, but that's it? 2. Again, still need a bank account on the end. 3. How pervasive are these? Can I find one on the street while traveling Munich for example? How do I get a card? 4/5. No one wants to use crypto because they get FOMO on price fluctuations. Until then it's basically useless. Until crypto becomes pervasiv…

1. P2P exchanges can happen in cold hard cash. No bank account necessary. 2. Bitcoin is barely a decade old. Ethereum was launched in 2015. Most of the DeFi core projects were launched in 2019-2020. This is extremely early stage and comparing it to the ease and convenience of legacy financial systems is a little disingenuous. It might be complicated currently, but it works. I give up. All I see on HN are people who’v…

> All I see on HN are people who’ve somehow dismissed an entire new tech sector without even being curious about it.

If I found a new animal species that walked and talked but lived using photosynthesis, I'd be asking all sorts of questions. "Does it breathe? Does it need water? Why does it need sun to live?"

So here we are now asking a bunch of questions and seeking clarifications.

> At the very least, if you are on HN, I expect you to be curious about the technology and make up your mind after satiating that curiosity.

"No true scotsman"...People are being critical because they ARE curious about crypto. How do you expect people to "make up their mind" when "Most of the DeFi core projects were launched in 2019-2020". That's exactly the issue.

Re: The Limits to Blockchain Scalability

#416

Post by wcoenen »

k__ wrote: post #386
wcoenen wrote: post #365

Earlier quoted context omitted.

The dynamics of mining make this impossible. If Bitcoin were worth millions, then miners could spend millions on electricity to find each block and still make a profit. And because they're competing with hashrate, they would do exactly that. If you do the math, you'll find that basically all electricity would go to mining. Before we would get to that point, the electricity price would start going up of course. For ev…

I did some math and my idea was: If the max amount of Bitcoin is 21mio and we assume that a huge chunk of the economy will be payable with these Bitcoin. Then on Bitcoin has to be worth (at least) 1/21mio of that economy chunk.

That is one way to estimate a maximum possible value.

My point is that by assuming "Bitcoin cannot consume more than X % of all electricity or there will be trouble", you can calculate another maximum value which turns out to be much lower.

In fact, if you assume Bitcoin can consume no more than 1% of all electricity (before regulatory trouble starts brewing) and electricity costs 0.05 USD/kWh, then you get a maximum price which is pretty close to the current price.

https://www.wolframalpha.com/input/?i=0.05+USD%2FkWh+*+10+mi...

Re: The Limits to Blockchain Scalability

#417

Post by artfulhippo »

Bold of Vitalik to mention CryptoKitties for two reasons. Not only did CryptoKitties overload he Ethereum chain in 2017, breaking usability for everyone, the founders of CryptoKitties, Dapper Labs, were forced to make their own blockchain, Flow, to actually serve customers the experience that’s become the first “mainstream” blockchain app, NBA Topshot.

That was bold, and his claim that Ethereum nodes need to be runnable on old laptops on residential internet is confused. Ethereum, worth many billions of dollars, most of which is controlled by whales and nerds with beefy gaming rigs, is deliberately sacrificing desperately needed scalability for a superficial narrative of “decentralization”.

I would almost get it if the post included a picture of some skinny African children; is “decentralization” just a euphemism for “diversity and inclusion” now?

Sometime soon, the DeFi “yield farming” free-money well is gonna run dry, and when it does, the Ethereum ecosystem will wake up in the freezing cold of a “dark forest” of their own creation.

But what about sharding? Sharding, like roll-ups, sidechains, and layer 2s including any of the forms of “Plasma”, are fundamentally less valuable than a high-scalability main chain. Reason being that transactions on the main chain are arbitrarily composable, while cross-shard communication with reasonable latency is an open problem.

And composability is important. Composability is an intrinsic aspect of DeFi, and the part that will remain even when the yields are brought down to parity with traditional finance.

Re: The Limits to Blockchain Scalability

#418

Post by 3np »

dannyw wrote: post #353
billytetrud wrote: post #345

Earlier quoted context omitted.

For Bitcoin, Stratum v2 will solve this problem and return block creation power to the miners instead of the handful of large pool operators, which will be a huge win. However, even then, miners are beholden to the actively spending economic majority.

Miners want ROI. Running your own block creation infrastructure offers no benefit and only drawbacks and more services to keep online.

"Miner-extractable value" changes this dynamic.

Re: The Limits to Blockchain Scalability

#419

Post by qualudeheart »

dannyw wrote: post #348
seibelj wrote: post #31

Earlier quoted context omitted.

It is always preferred to require less resources. There must be a healthy balance. If Ethereum accomplishes what a lot of us hope, allowing home-hobbyists to run nodes and at least break-even in staking or profit a small amount will be crucial. Relying on goodwill from a small amount of technically-adept-yet-centralized operators is how we get to the Tor situation where everyone knows the government runs most of the…

Genuine question: can crypto economics provide incentives for a more decentralised Tor? I'm talking about being paid crypto for hosting a tor node, and charged crypto for using a tor node. Using privacy technologies like ring signatures of course.

Mysterium and other decentralized vpns let you do that.

Re: The Limits to Blockchain Scalability

#420

Post by legionlegion »

dmitriid wrote: post #407
spaceman_2020 wrote: post #398

Earlier quoted context omitted.

Blockchain is what makes it freely accessible to anyone from anywhere without requiring a sign up or kyc or local presence. For instance, I can’t sign up for a US trading account without a certain amount of capital, going through a specialized broker, and clearing certain KYC rules. I can do all of that without ever needing to go through a single centralized authority. I can buy a tokenized version of TSLA stock with…

> Blockchain is what makes it freely accessible to anyone from anywhere without requiring a sign up Except... You need to signup because there's literally no way to obtain anything on blockchain if you're not a miner. Well, you could probably sell something for bitcoin, but then oops, you need to sign up somewhere to convert it into actual real money. > I can’t sign up for a US trading account without a certain amoun…

> Well, you could probably sell something for bitcoin, but then oops, you need to sign up somewhere to convert it into actual real money.

Not quite, you can cash out BTC without going through any KYC. You can use non-kyc exchanges like hodlhodl, ATMs which just give you cash, or in person p2p trading.

> Until you pay for something and that something never arrives. Then you would be very glad to have a central authority.

Lol, you clearly do not live in a country with double digit inflation, government mandated bank limits, oppression. Cryptocurrency is literally saving lives in some parts of the world

> Ah yes. The tired old "but the poor people in poor countries" cries the person whose first example was "I can’t sign up for a US trading account without a certain amount of capital".

And you clearly need to workout that empathy muscle

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