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Ethereum Has Issues

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Re: Ethereum Has Issues

#361

Post by talentedcoin »

throwaway82652 wrote: post #353
talentedcoin wrote: post #248

Earlier quoted context omitted.

I am pretty anti-crypto generally but I feel compelled to reply to your maximalist position that there is "no practical value whatsoever, current or potential" to blockchains. The one use case I have seen for blockchain that is real is that cryptocurrency is great for moving money around the world when governments or banks maybe don't want you to do so. At the very least the experience of sending crypto is about as a…

>The one use case I have seen for blockchain that is real is that cryptocurrency is great for moving money around the world when governments or banks maybe don't want you to do so. No it isn't. You don't need blockchains to create illegal banks and exchanges or to launder money. All of that was around for a long time before blockchains. You could even create those things "as a service" without blockchains, it would b…

This is like saying you don't need a car to get downtown. It's true, of course, but it's not interesting.

Re: Ethereum Has Issues

#362

Post by talentedcoin »

hnaccount_rng wrote: post #290
talentedcoin wrote: post #248

Earlier quoted context omitted.

I am pretty anti-crypto generally but I feel compelled to reply to your maximalist position that there is "no practical value whatsoever, current or potential" to blockchains. The one use case I have seen for blockchain that is real is that cryptocurrency is great for moving money around the world when governments or banks maybe don't want you to do so. At the very least the experience of sending crypto is about as a…

But isn't this awfully close to saying: Blockchains/Cryptocurrencies are useful exactly for money laundering and sanction busting? And ... saying that publicly _and_ supporting the implementation tends to go very badly. (As it should imo, but that's a different story). IF that is the summary conclusion to crypto (which I'm currently holding), then this is pretty close to "no practical value whatsoever", isn't it?

> But isn't this awfully close to saying: Blockchains/Cryptocurrencies are useful exactly for money laundering and sanction busting?

Yup.

> And ... saying that publicly _and_ supporting the implementation tends to go very badly. (As it should imo, but that's a different story).

Good. (I don't support the implementation.)

> IF that is the summary conclusion to crypto (which I'm currently holding), then this is pretty close to "no practical value whatsoever", isn't it?

For ordinary people who don't need such services, yes.

Re: Ethereum Has Issues

#363

Post by ypeterholmes »

"Because Ethereum transactions are programs, the halting problem means that it isn't possible to accurately predict the resources needed to execute them."

Cardano fixes this with deterministic execution and fees.

Re: Ethereum Has Issues

#364

Post by CryptoPunk »

spopejoy wrote: post #359
CryptoPunk wrote: post #325

Earlier quoted context omitted.

Dark pools rely on the operator being trustworthy. Distributed encryption relies only on cryptography and the validator set being too large, and costly to join, to allow cooption, and both assumptions are highly trustworthy.

Even if this is true, it is still just a dark pool, which is trivial to game. One ping is all you need. I think the race to put order books on blockchain is misguided. Constant-product DEXes can offer way less gameable best-execution by simply trading more cautiously for the swapper. Problem is, on Ethereum, gas makes it too expensive _not to trade_ once you get to the blockchain. MEV is a problem that can be managed…

>>Even if this is true, it is still just a dark pool, which is trivial to game. One ping is all you need.

If that's true, then you're right. Assuming an effective decentralized dark pool, that is not vulnerable to side-channel attacks, is possible, it is preferrable to the centralized variety that traditional finance uses.

>>Constant-product DEXes

What is a constant-product DEX?

Re: Ethereum Has Issues

#365

Post by fleddr »

FabHK wrote: post #343
fleddr wrote: post #320

Earlier quoted context omitted.

I didn't say it works for everyone, I explained why people take the risk, what the macro backdrop is for this behavior. It's quite disappointing that nobody engages with that point. Further, getting rich at somebody's expense is business as usual for any asset, be they stocks, housing, metals, anything. It's a false morality to think that this is a behavior that "good" people widely reject. Absolutely everybody in a…

> Further, getting rich at somebody's expense is business as usual for any asset, be they stocks, housing, metals, anything. No, see, that's the point I am trying to make and that you are not getting. Housing and the economy as a whole are constructive activities that create value. Crypto is not, as far as I can tell.

I'm not getting your point because you don't have one.

When I own a home worth 200K, and 5 years later sell it for 400K, I have 200K in profit. Do explain which "value" was created for that 200K?

Re: Ethereum Has Issues

#366

Post by ngc248 »

thebean11 wrote: post #54
jmyeet wrote: post #51

So Crypto Andys like to hand-wave about the risk of a 51% attack but consider this: > This is in addition to the long-standing concentration of Ethereum mining power, with normally three and sometimes only two mining pools controlling over 50% of the mining power. There is further hand-waving about how Proof-of-Stake (over Proof-of-Waste) will magically fix these problems. But it's actually this PoW computing power t…

I think there's at least some value that can potentially be created. The fact that you can take out a loan or buy insurance and your counterparty is a smart contract is pretty interesting. It could seriously bring down insurance margins if you no longer have drones of people administering policies. Obviously remains to be seen how practical it is.

>>> The fact that you can take out a loan or buy insurance and your counterparty is a smart contract is pretty interesting.

it would be like if google is your insurance provider. If something goes wrong (it eventually will) there would be no recourse, no one to talk to ... all hail our algorithmic overlords.

Re: Ethereum Has Issues

#367

Post by RustyConsul »

milkshakes wrote: post #168
RustyConsul wrote: post #131

Earlier quoted context omitted.

Credit is loaning you money and providing an interest rate. Usually something insane like 15%. DeFi is unlocking the value of an asset, making it liquid and allowing me to participate in other investment opportunities without an APR. One example is on Kaurura. I have KSM, Stake that KSM for a 19% APR Rate. Throw that LKSM into a vault and mint AUSD as long as i have 160% collatoral ratio. I can then use that aUSD i p…

this is a margin loan it’s not a new concept

Four risks with margin loans. The first two also apply with crypto:

1.) Amplified losses if the securities in your account decline in value

2.) Margin calls or liquidation of securities

3.) Losses greater than the original investment are possible

      - Not possible due to constant access via oracles to the underlying asset. The Protocol may experience more loss in very rare instances, but as an individual i never will.
4.) Interest rates may rise, increasing the cost of your loan.

And due to 3.) is why you have an 'interest rate'. I have no rate of interest on my margin loan. The protocol generates money from trade fees, more liquidity is and leverage increases TVL.

Re: Ethereum Has Issues

#368

Post by spopejoy »

CryptoPunk wrote: post #364
spopejoy wrote: post #359

Earlier quoted context omitted.

Even if this is true, it is still just a dark pool, which is trivial to game. One ping is all you need. I think the race to put order books on blockchain is misguided. Constant-product DEXes can offer way less gameable best-execution by simply trading more cautiously for the swapper. Problem is, on Ethereum, gas makes it too expensive _not to trade_ once you get to the blockchain. MEV is a problem that can be managed…

>>Even if this is true, it is still just a dark pool, which is trivial to game. One ping is all you need. If that's true, then you're right. Assuming an effective decentralized dark pool, that is not vulnerable to side-channel attacks, is possible, it is preferrable to the centralized variety that traditional finance uses. >>Constant-product DEXes What is a constant-product DEX?

> it is preferrable to the centralized variety that traditional finance uses

Citation needed :) . Seriously, crypto needs to do better than just assert that ownerless decentralization is instantly better. Traditional dark pools work just fine once you accept that with the right model, a single fill can tell you loads about the order book.

> What is a constant-product DEX?

That's the model used by Uniswap and almost every other major swap-based DEX. MEV as described in the TFA is preying largely on these DEXes and people conclude that it's the fault of the constant product model, or of being transparent. It's not: it's the fault of gas making it impossibly expensive to use the most basic tool in execution, splitting your order into smaller trades and applying logic to when you choose to trade.

I'm actually kind of a constant-product maximalist because it shows you CAN have a public, transparent market, which is something genuinely new to finance. IMO the last thing the world needs are old-fashioned order books and dark pools on blockchain.

Re: Ethereum Has Issues

#369

Post by CryptoPunk »

spopejoy wrote: post #368
CryptoPunk wrote: post #364

Earlier quoted context omitted.

>>Even if this is true, it is still just a dark pool, which is trivial to game. One ping is all you need. If that's true, then you're right. Assuming an effective decentralized dark pool, that is not vulnerable to side-channel attacks, is possible, it is preferrable to the centralized variety that traditional finance uses. >>Constant-product DEXes What is a constant-product DEX?

> it is preferrable to the centralized variety that traditional finance uses Citation needed :) . Seriously, crypto needs to do better than just assert that ownerless decentralization is instantly better. Traditional dark pools work just fine once you accept that with the right model, a single fill can tell you loads about the order book. > What is a constant-product DEX? That's the model used by Uniswap and almost e…

On the basis that the cryptography remaining unbroken and the protocol-genetated incentives creating a validator set too large to coopt are more reliable trust assumptions than the trusted third party controlling a traditional dark pool being competent and trustworthy.

>>It's not: it's the fault of gas making it impossibly expensive to use the most basic tool in execution, splitting your order into smaller trades and applying logic to when you choose to trade.

Yes that makes sense.

Re: Ethereum Has Issues

#370

Post by max599 »

bnralt wrote: post #326
max599 wrote: post #256

Earlier quoted context omitted.

>The whole point of a loan is that you're willing to pay extra over time in order to have access to more funds at the present No, that's not the point of these loans at all. They are the equivalent of remortgaging your home to get cash. If need money for renovation and you have a lot of equity in your house you can borrow against it. They are doing the same thing with crypto. They don't want to sell their crypto beca…

> They are the equivalent of remortgaging your home to get cash. It's actually the opposite of remortgaging a home to get cash. Remortgaging a home to get cash is paying a premium to increase the amount of liquid assets available to you; this is the point of most loans. A DeFi loan is paying a premium and _decreasing_ the amount of liquid assets available to you. As you said, it's useful for juicing speculation, wort…

A DeFi loan is paying a premium and _decreasing_ the amount of liquid assets available to you.

No, because from their point of view the crypto they put as collateral is NOT liquid. the entire point is do not sell them but somehow get cash from it.

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