Ethereum Has Issues • Hacker News Board

Re: Ethereum Has Issues

#181

Post by thebean11 » Thu, Apr 14, 2022, 9:40 PM UTC

danans wrote: post #137

thebean11 wrote: post #112

Earlier quoted context omitted.

People get touchy about the word "trust" in blockchain threads. Would it help if I said that the hardest part is creating a way to get the weather data on chain that the buyer and seller can agree on ahead of time? Anyway, I'm obviously not claiming this can work without input from humans off chain. My point is that the infrastructure needed to get clean and honest weather data on to the chain (which requires human i…

> Would it help if I said that the hardest part is creating a way to get the weather data on chain that the buyer and seller can agree on ahead of time? > My point is that the infrastructure needed to get clean and honest weather data on to the chain (which requires human inputs) is much smaller than the entire infrastructure needed to administer weather insurance Is "much smaller" infrastructure on a different dimen…

It's the hardest part compared to the rest of the blockchain solution. The "easy" onchain-only part replaces a vast amount of infrastructure that would exist in an insurance company.

Re: Ethereum Has Issues

#182

Post by iboisvert » Thu, Apr 14, 2022, 9:40 PM UTC

RustyConsul wrote: post #131

WJW wrote: post #80

Earlier quoted context omitted.

> I still find it pretty mind blowing that an algorithm can loan me money. Algorithmic lending has been a thing for decades though. What do you think a credit score is for if not a tool to let computers decide whether to give you credit or not?

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…

> It's a new era of finance

I have no experience with crypto, but this I don't understand.

> DeFi is unlocking the value of an asset, making it liquid...

Like a mortgage or a bond issuance (bonds are secured against assets of the corporation)?

> Credit is loaning you money and providing an interest rate. Usually something insane like 15%.

Average rate for a 30-year fixed mortgage in the US is about 4%[1]. Average Aaa corporate bond yield is 3.43%[2]. I guess that you are talking about interest rate on credit cards? I think that credit card debt is pretty small compared to the size of the mortgage or bond markets.

> One example is on Kaurura...

I'm not sure I follow you here, but it sounds like you get a loan at 19% APR against some collateral. Then you use the loan as capital for some other investment at a higher rate of return.

My question: how is this any different, for example, from a company issuing bonds at 4% coupon rate and using the proceeds to fund operations when the company's profit margin is, say, 50%?

Let's say it's a matter of scale; I, as a person, can't issue bonds to trade on a public market. But I can get a mortgage and invest in other stuff hopefully at a return higher than the rate on the loan.

As I said, I don't understand how this is a "new era of finance".

[1] https://www.valuepenguin.com/mortgages/average-mortgage-rate....

[2] https://fred.stlouisfed.org/series/AAA

Re: Ethereum Has Issues

#183

Post by thebean11 » Thu, Apr 14, 2022, 9:41 PM UTC

throwaway82652 wrote: post #126

thebean11 wrote: post #112

Earlier quoted context omitted.

People get touchy about the word "trust" in blockchain threads. Would it help if I said that the hardest part is creating a way to get the weather data on chain that the buyer and seller can agree on ahead of time? Anyway, I'm obviously not claiming this can work without input from humans off chain. My point is that the infrastructure needed to get clean and honest weather data on to the chain (which requires human i…

>Would it help if I said that the hardest part is creating a way to get the weather data on chain that the buyer and seller can agree on ahead of time? No, because it's still impossible to do that at scale without solving the oracle problem. Putting some arbitrary data on a chain doesn't mean the data is reliable.

You don't need to solve the oracle problem. Just agree on an oracle. Weather.com writing weather on chain could be your agreed upon solution, for example.

Re: Ethereum Has Issues

#184

Post by ineedasername » Thu, Apr 14, 2022, 9:43 PM UTC

SparkyMcUnicorn wrote: post #146

throwaway82652 wrote: post #118

Earlier quoted context omitted.

>The fact that you can take out a loan or buy insurance and your counterparty is a smart contract is pretty interesting. No it isn't. I've been hearing this for years and I still haven't seen any reason anyone would actually want this, beyond the novelty factor. It's strictly worse than any other equivalent insurance or loan for a number of reasons, the worst one being that there's no human you can talk to when somet…

> I still haven't seen any reason anyone would actually want this, beyond the novelty factor. It's strictly worse than any other equivalent insurance or loan for a number of reasons, the worst one being that there's no human you can talk to when something goes wrong. But people are using it, and (in the protocols I've seen) claims are handled jointly between an advisory board and community assessors, with a framework…

So it's still people doing the work, only the contract exists in a different type of database. I'm really missing something if that is supposed to be substantially different than the current relationship I have with my insurance company.

Although with my insurance company I at least know the assessor is qualified enough to look at pictures from a car accident and determine the sequence of events and who was probably at fault.

Re: Ethereum Has Issues

#185

Post by thebean11 » Thu, Apr 14, 2022, 9:44 PM UTC

jmyeet wrote: post #125

thebean11 wrote: post #54

Earlier quoted context omitted.

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.

There are a lot of these theoretical cases but none seem likely to come to fruition anytime soon and pretty much all of them ignore this basic problem: the transactional nature of blockchains falls apart as soon as you interact with the real world. Let me explain: you can have a smart contract where you get 5-20% of the value whenevder it's sold and that'll work and be guaranteed (assuming the network isn't compromis…

Why can't you sell it for some crypto asset and exchange that for cash (obviously this second exchange requires a trusted third party)? Maybe I don't understand your example.

That seems like an issue with cash (no way to enforce you giving me the thing I paid for, and no way for you to enforce me giving you the cash for the item you gave me).

Yes using cash gets rid of the guarantee that the transfer of goods is fully atomic that crypto generally offers. Buying tomatoes at the store has the exact same problem.

Re: Ethereum Has Issues

#186

Post by thrwy_ywrht » Thu, Apr 14, 2022, 9:45 PM UTC

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

You can take out a loan in crypto that's fully secured against some other crypto. It's turtles all the way down, and has zero relevance to what most people think about when they talk about taking out a loan.

Re: Ethereum Has Issues

#187

Post by eldenwrong » Thu, Apr 14, 2022, 9:46 PM UTC

CameronNemo wrote: post #169

eldenwrong wrote: post #165

Earlier quoted context omitted.

Darknet markets? Amazing quality, safety and customer support with literally 0 regulations. Sorry but thats a failed argument

There are scams on DNMs. But there are also high quality vendors. And there are also scams that are part of regulated markets. So yeah still failed argument.

Sure but the feedback system works well enough to weed them out quite fast. When people get burned they learn, big papa gov regulations prevents learning.

Darknet markets are the best example of self regulating markets. Its truly amazing and it doesn't get enough credit

Of course most are run or acquired by intelligence agencies eventually....

Re: Ethereum Has Issues

#188

Post by dmitriid » Thu, Apr 14, 2022, 9:46 PM UTC

trompetenaccoun wrote: post #140

dmitriid wrote: post #134

Earlier quoted context omitted.

> I keep seeing this "eternal six months away" FUD, but no one wants to admit that it has literally just been postponed again https://twitter.com/TimBeiko/status/1514010098145759232

Postponed would mean the date was officially announced by one of the devs? I've not had time to pay attention much over the past months, but to me that June date was always a silly rumor. Correct me if I'm wrong. End of year is what I heard, but even that isn't set in stone of course and I wouldn't be surprised if it doesn't happen till then.

> Postponed would mean the date was officially announced by one of the devs?

In true "decentralised fashion" the devs spread their info thin over multiple veues so it's hard to hunt down their statements.

But we could take to ethereum.org which previously stated [1]

--- start quote ---

When's it shipping?

~Q2 2022

This upgrade represents the official switch to proof-of-stake consensus. This eliminates the need for energy-intensive mining, and instead secures the network using staked ether. A truly exciting step in realizing the Ethereum vision – more scalability, security, and sustainability.

--- end quote ---

Same is still on Consensys: https://consensys.net/knowledge-base/ethereum-2/faq/

[1] http://web.archive.org/web/20220202044446/https://ethereum.o...

Re: Ethereum Has Issues

#189

Post by thrwy_ywrht » Thu, Apr 14, 2022, 9:47 PM UTC

RustyConsul wrote: post #131

WJW wrote: post #80

Earlier quoted context omitted.

> I still find it pretty mind blowing that an algorithm can loan me money. Algorithmic lending has been a thing for decades though. What do you think a credit score is for if not a tool to let computers decide whether to give you credit or not?

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 comment is indistinguishable from satire.

Re: Ethereum Has Issues

#190

Post by jkhdigital » Thu, Apr 14, 2022, 9:50 PM UTC

toolz wrote: post #106

px43 wrote: post #70

Ha, Flash Boys 2.0 was from 2019. This blog post is literally "I read a thing from three years ago and have lost faith in something that I never believed in in the first place". As someone who knows and has worked with all the people involved with the write-ups referenced in this blog post, I can pretty confidently say that the author is way way behind here. There have been some insane advancements in recent years th…

Do we have to accept that MEV is a problem? Just because it's been a tactic used in the shadows with traditional finance doesn't mean it's a problem in an open ecosystem where anyone willing to pay can play. There isn't some shadow elite funding a central government here lobbying for restrictive legislation to keep competition at arms length. In my opinion the crypto ecosystem in general is much more understanding an…

The real problem with MEV is that it distorts the consensus mechanism in weird and unpredictable ways. MEV is essentially free money that could be considered part of the block reward, but it exists at the application layer so it really can’t be accounted for in the consensus protocol incentive design. Application layer logic (“smart contracts”) can move arbitrary value in arbitrary ways, which can create wild volatility from block to block.

A similar problem appears to emerge when Bitcoin’s block reward disappears, as high volatility in block rewards would cause rational miners to behave in suboptimal ways.