IPFS 0.5 • Hacker News Board

Re: IPFS 0.5

#121

Post by anchpop » Wed, Apr 29, 2020, 7:25 PM UTC

rglullis wrote: post #61

anchpop wrote: post #60

Earlier quoted context omitted.

That is actually the intent of filecoin. In perfect competition, which is the ideal state for a commodity, there is no economic profit. The reason Amazon and other companies are able to make a profit selling cloud storage is because there is not yet perfect competition. Right now if I wanted to compete with Amazon, I could buy 2 or 3 petabytes of storage space and some bandwidth. But nobody would trust me not to lose…

Your arguments do not follow: > which is the ideal state for a commodity, there is no economic profit. No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) > While it is very hard to make an economic profit selling grain, many people do farm grain and m…

> Your arguments do not follow:

> > which is the ideal state for a commodity, there is no economic profit.

> No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded)

You cut off the first half of my sentence. The full sentence was:

> In perfect competition, which is the ideal state for a commodity, there is no economic profit.

Oil is not in perfect competition because of OPEC, a gigantic state-sanctioned cartel. Since there's imperfect competition, there can be economic profit.

> who would be interested in taking the supply side of the filecoin network, when there is no profit to be made?

If we assume the filecoin network is technically able to do what it's supposed to, there will likely be profit to be made. Just not economic profit. Economic profit is different from accounting profit because economic profit takes into account opportunity cost.

In the real world many people, such as grain farmers, do seem to be interested in taking the supply side of a transaction even when their economic profit is 0 (or negative). I don't see why filecoin would be any different.

Re: IPFS 0.5

#122

Post by woodandsteel » Wed, Apr 29, 2020, 8:01 PM UTC

I was impressed to read that the IPFS public network scaled 30X in 2019. It sounds like they have gotten over a big hump for usability and utility.

Re: IPFS 0.5

#123

Post by Nursie » Wed, Apr 29, 2020, 8:15 PM UTC

zozbot234 wrote: post #115

Nursie wrote: post #101

Earlier quoted context omitted.

That's the economic flaw in all of this - Amazon have economies of scale and access to cheap power and network connectivity and that means smaller competitors will be locked out of the market. You're not going to be running a node on your spare capacity that brings in more than your costs, in fact unless you're a datacentre operator, you're going to be making a loss. In the end it favours big centralised services, an…

Cryptocoin miners' profit is largely based on "access to cheap power and network connectivity", and many of them run fairly large-scale operations but nowhere near the same scale as Amazon. No reason why a "file coin" should be any different.

But they do centralise. And they do quickly go out of profitability for those with some spare compute power at home, into the hands of those with cheap power and specialised equipment who can undercut and outcompete them.

You are right - there is no reason this would be different. That specialised equipment is storage space here.

Re: IPFS 0.5

#124

Post by ric2b » Wed, Apr 29, 2020, 8:38 PM UTC

rglullis wrote: post #116

zozbot234 wrote: post #115

Earlier quoted context omitted.

Cryptocoin miners' profit is largely based on "access to cheap power and network connectivity", and many of them run fairly large-scale operations but nowhere near the same scale as Amazon. No reason why a "file coin" should be any different.

That is missing the point. No one doubts that it is possible to bring down the costs of storage and its infrastructure. The point is that no matter how low these costs are all nodes are driven to undercut each other until their profitability is zero.

There's a lot of spare capacity in personal devices, getting _anything_ out of that capacity is nice and means you'll have people gladly undercutting Amazon and friends. Maybe limited and not at the same level of availability but still competition.

Re: IPFS 0.5

#125

Post by rglullis » Wed, Apr 29, 2020, 8:55 PM UTC

anchpop wrote: post #121

rglullis wrote: post #61

Earlier quoted context omitted.

Your arguments do not follow: > which is the ideal state for a commodity, there is no economic profit. No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) > While it is very hard to make an economic profit selling grain, many people do farm grain and m…

> Your arguments do not follow: > > which is the ideal state for a commodity, there is no economic profit. > No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) You cut off the first half of my sentence. The full sentence was: > In perfect competition,…

I am sorry. Just like I am missing how someone would work on a farm without any expectation of return on their investment, I fail to see how "there is profit to be made", however you want to call it.

Also, with farming at least there is the notion of resource constraints. To be a farmer one needs to have access to land and dedicate some time to actually work on it.

With storage, unless the hard disk manufacturers start holding their production and use it to offer storage directly, what is the resource that other people can't have?

What would stop anyone to see that Filecoin network bids of (say) $1/TB-month and think "oh, I can buy some disks and offer $0.95/TB-month, and I will get my money back in 3 months", only to be outbid by someone who thinks they can offer $0.90/TB-month and recoup costs in six-months", until we get to the point where the time to break-even gets longer than the lifetime of the disks...

Re: IPFS 0.5

#126

Post by rglullis » Wed, Apr 29, 2020, 9:15 PM UTC

ric2b wrote: post #124

rglullis wrote: post #116

Earlier quoted context omitted.

That is missing the point. No one doubts that it is possible to bring down the costs of storage and its infrastructure. The point is that no matter how low these costs are all nodes are driven to undercut each other until their profitability is zero.

There's a lot of spare capacity in personal devices, getting _anything_ out of that capacity is nice and means you'll have people gladly undercutting Amazon and friends. Maybe limited and not at the same level of availability but still competition.

> getting _anything_ out of that capacity is nice

Ok, now go tell that to the ones that put 257 million USD on the Filecoin ICO and are expecting profits on a growing network!

> undercutting Amazon and friends.

That is so short-sighted. Amazon storage is not priced only due to the cost of storage. If it were, Wasabi would be stealing all of their customers given they charge "only" $6/TB-month, and I could go steal all of their customers because I have a cluster of Minio Servers that cost me $3.50/TB-month.

People are paying Amazon and the other major players a premium is not due to lack of competition or collusion between them or because they are price-sensitive. If they are (like I am), they would figure out how to setup Minio/Ceph and run their own servers.

Re: IPFS 0.5

#127

Post by ghayes » Wed, Apr 29, 2020, 10:39 PM UTC

jonathanstrange wrote: post #107

jillesvangurp wrote: post #95

Good progress. I looked at IPFS a few months ago from the point of view of fitting a decentralized file store. The decentralized requirement came primarily from the point of view wanting to fit this in a broader product that is all about decentralized for various reasons. Key problems in this space: - decentralized is something techies obsess about but that has as of yet no business value whatsoever. Customers don't…

> decentralized is something techies obsess about but that has as of yet no business value whatsoever. I don't really understand that point. If it works, then it has the business value of saving you all running server and maintenance costs. For most larger businesses these costs may be insignificant and easily recovered, but for small businesses with a lot of customers they can make a huge difference. For example, I'…

Many service providers, e.g. CloudFlare or AWS, among others, will offer sufficient resources for smaller sites for free, in hopes of capturing larger returns if that company scales. This largely negates the specific benefit (cost for small orgs) that you're referring to.

Re: IPFS 0.5

#128

Post by lodi » Wed, Apr 29, 2020, 11:26 PM UTC

rglullis wrote: post #56

fg6hr wrote: post #46

IPFS is really just a mix of a torrent tracker with a torrent client, but once IPFS VMs start paying for themselves, people will sign-up in masses. I guess that's what Filecoin is about. Edit: The way I see filecoin working is anyone can post a reward for a file and once the file is provided, the reward is paid. In other words, it's bit like a brokerage that connects downloaders with uploaders. The difficultly is tha…

I am yet to write more about this, but one thing that bothers me with Filecoin: the economics don't add up. The price per GB stored will tend to reach an equilibrium around the commodity price - i.e, costs of disks+computers+electricity+internet. Unless I am missing something, if the price gets higher, more people would buy disks and put them online, bringing the price down. If that is true, it means that a node can…

I think you're conflating different definitions of "profit". There's at least three important ones:

1) Accounting profit: revenue - expenses. This is colloquially what most people mean when they say "profit". To break even you just need to make enough money to cover your explicit expenses. In your example, you would need to make more in Filecoin income than you spent in disks/electricity/etc.

2) "Normal profit": this is a technical term in microeconomics. Basically this takes into account opportunity cost; the cost of not doing some other profitable thing with your time/money. By these standards, to break even you'd not only have to cover the cost of disks/electricity but also the "opportunity costs" of whatever else you could have been doing with those disks/electricity (like mining Bitcoin), or whatever you could have been doing if you never even purchased those disks to begin with (like investing in the S&P or whatever).

3) "Excess" or "economic" profits. These are extra profits on top of whatever you earn in #2. This is the part that goes to 0 for commodities like milk/gasoline/Filecoin but is non-zero for differentiated products like iphones.

For Filecoin specifically, I would expect that normal profits would probably be above the raw costs of disks and electricity, since it takes some effort to purchase and administer all that hardware, but probably below the cost of renting a VPS, since a VPS is typically used for more profitable things than just sitting around and holding stuff on disk.

Re: IPFS 0.5

#129

Post by viraptor » Wed, Apr 29, 2020, 11:42 PM UTC

StreamBright wrote: post #108

viraptor wrote: post #96

Earlier quoted context omitted.

I get what you're trying to say, but disagree with the examples. If you want to prototype and start a project, you don't care what exactly that box type means. You can use it and things will not break. It's part of that particular boilerplate. It's like people using `std::string` and not necessarily caring for years what `template , class Allocator = std::allocator > class basic_string;` means or does. For the second…

>> If you want to prototype and start a project, you don't care what exactly that box type means. I disagree. The whole point is to get to know a language. What do you how many things can you have in your code that you do not understand? Now you put it in production and it breaks. Who is going to fix it? I do not have a particulary positive experience with Rust on Stackoverflow. As a tech decision maker I put Rust in…

> The whole point is to get to know a language.

When you're actually starting up (you set the context to "someone starting to learn rust"), there will be some unknown things in any language. You'll get there, but you don't need to understand it from the beginning. If you do want to understand it, then you should get it from the official guide. Errors, dyn, box, lifetimes and send are covered.

"Value on the heap, which implements the error interface, is available forever, and can be shared between threads" is... not that complicated.

> Now you put it in production and it breaks.

If you're still learning the language and don't understand the boilerplate, you don't put your app in production.

> Why would I pass in a mutable reference when all I need is a global static immutable value?

You missed the context. The fragment was about a mutable global. If you just need an initialised, but immutable config, you pass a non-mutable reference.

Re: IPFS 0.5

#130

Post by rglullis » Thu, Apr 30, 2020, 12:59 AM UTC

lodi wrote: post #128

rglullis wrote: post #56

Earlier quoted context omitted.

I am yet to write more about this, but one thing that bothers me with Filecoin: the economics don't add up. The price per GB stored will tend to reach an equilibrium around the commodity price - i.e, costs of disks+computers+electricity+internet. Unless I am missing something, if the price gets higher, more people would buy disks and put them online, bringing the price down. If that is true, it means that a node can…

I think you're conflating different definitions of "profit". There's at least three important ones: 1) Accounting profit: revenue - expenses. This is colloquially what most people mean when they say "profit". To break even you just need to make enough money to cover your explicit expenses. In your example, you would need to make more in Filecoin income than you spent in disks/electricity/etc. 2) "Normal profit": this…

Thanks for the breakdown of "profit" definitions, but I still think that all of these observations are largely missing the point...

> I would expect that normal profits would probably be above the raw costs of disks and electricity, since it takes some effort to purchase and administer all that hardware

No, it doesn't. Most of the people selling the idea of distributed file storage (Filecoin, Storj, Sia) are thinking about getting the excess capacity of everyone's disks and turning into a marketplace. Getting the hardware and administering are sunk costs. Participants are only supposed to download a client, indicate the payout method and ensure that they don't turn off their computers. It's a one-off effort. Even understanding (or pretending to understand) all of the crypto-babble in order to get paid is something that people are supposed to do only once.

This is the part where these different projects are working out their market dynamics and where I get lost about Filecoin:

- With Storj (and Sia, I believe) the price of the data is determined by the governors of the network. Storj last rollout was paying $5/TB-month for every client. There is no bidding war. As long as you could prove you held the data for that period, you would get the money. This makes sense for me - no matter if I am some dude in a basement with a disk on my laptop or if I am a datacenter and I get to charge more than $5/TB-month from my usual customers, my excess capacity can be sold for $5/TB-month and this becomes a simple matter of waiting for the demand to grow.

- With Filecoin the idea is to have a completely open market, where each node says how much they are willing to charge for the data, and what are the constraints (availability, time to retrieval, etc). This leads to possible (inevitable?) bidding wars. No matter the demand curve, there is always someone who will be willing to put the lowest price possible that gets them "something". For excess capacity, this "something" can be effectively zero or whatever is the lowest price possible in the bid. And if it can be zero, the only thing I see helping them would be if the nodes starting cooperating with each other and acting like a cartel.

To be honest, even Storj and Sia are hard sells for me. I wouldn't bet on these projects for a long run and I don't believe that they will actually threaten the current players, but at least I understand the incentive structure. With Filecoin, it can only be profitable when the demand for data storage grows faster than the storage capacity from the network, but no so profitable as to attract people from the demand-side to the supply-side. It's crazy.