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An engineer's observations on Web3 and its possibilities

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Re: An engineer's observations on Web3 and its possibilities

#201

Thanks for the great article! I wished the section on DeFi addressed the biggest elephant in the room, overcollateralization. A DeFi borrower always needs to lock in more assets as collateral than what they are borrowing, thus defeating the whole purpose for taking a loan aside from financial speculation. And there's no real way to solve it: all mechanisms I've heard of either try to replicate some form of background…

It works well for coin speculation. You can take a heavily levered position of borrowing USDC, swap and buy X-coin, deposit and repeat.

Re: An engineer's observations on Web3 and its possibilities

#202
post #106

Earlier quoted context omitted.

Lack of human support in the old Web 2.0 is bad, but going full zero-trust in response seems more like throwing a fit instead of improving things (e.g., banning the exploitative ‘free’ ad-supported business models). A world in which you lose some magic alphanumeric combination (or a thief pinches your hardware key, etc.) and you are literally locked out of your identity (together with access to your eternal blockchai…

It does not even require hacker, a thief could show up at your house and demand your keys.

How would this be any different from a thief breaking in anyways and taking your valuables at gunpoint?

Re: An engineer's observations on Web3 and its possibilities

#203

> Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors. Blockchains upend this, allowing inventors to capture considerable value for themselves. That... seems like a huge negative to me. No wonder crypto enthusiasts give me the same feeling as relentless door-to-door salesmen.

[deleted]

Re: An engineer's observations on Web3 and its possibilities

#204

Web3 requires retrofitting the web to use blockchain technologies to do what the web can mostly do already. In "Blockchains Are a Bad Idea", James Mickens gives several arguments against blockchain-based systems like Bitcoin: See his presentation here: https://youtu.be/15RTC22Z2xI 1. People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities unde…

1. Existing payment systems expose your entire financial history to the service provider (e.g.: your bank, your credit card company etc.). I don't understand how people can complain about surveillance and data collection by tech companies, and then be perfectly fine with consumer finance companies doing the same thing.

2. What is legal is not what is moral. E.g., outlawing sex work, which results in SWers in even Western countries getting kicked off traditional payment systems, or having SW forums taken down (e.g. backpage). Having a decentralized and censorship-resistant infrastructure for these essential utilities is vital, and blockchains can be a key component of that infrastructure.

3. As a cryptographer, PKC and digital signatures have thoroughly failed to provide a decentralized and secure P2P communications infrastructure. (And no, Signal doesn't count: it's fantastic, but it's run by a benevolent operator.)

Re: An engineer's observations on Web3 and its possibilities

#205

Not going to lie, I thought and still think that the whole Web 2.0 thing was clever marketing and window dressing on top of fairly pedestrian but useful technologies. It was actually less of seismic shock than mobile first which despite being a bigger shift didn't actually get a number. As far as I'm concerned, Web3 is beyond this. It's what happen when you let Ponzi schemers write the marketing material. I can't for…

When upward mobility has been stymied for generations (the US has the lowest upword mobility among Western nations, outdoing even the class-ridden Brits) and insane house prices, student loans and cost of living increases have cut all the bootstraps, people are looking for anything - anything - that offers the slimmest of opportunities, because education and hard work don't cut it any more. Hence the crypto nonsense among the younger generation and MLM cults for the older Facebook crowd.

Re: An engineer's observations on Web3 and its possibilities

#206

Earlier quoted context omitted.

Blockchain isn't even central in Web3, but it surely helps. Web3 = decentralized identity, full data and connection graph ownership by user, reputation transfer, verification via zero knowledge proofs, support for VR/AR and 3D objects. All of this stuff is either in prototype or draft phase, but it's ok. These things need to be built to stop horror stories on HN about "algorithm justice" and "data kingdoms”: - Google…

Even if you're logging in with the 'blockchain' they can still ban your account, all of the good usages of 'Web3' I've seen look like WebAuthn but with most possibilities for scams

Indeed. Blockchain identities have the unfortunate property of being immutable and easily traceable. No longer can you just create a new email account to evade a service ban...

Re: An engineer's observations on Web3 and its possibilities

#208

Not going to lie, I thought and still think that the whole Web 2.0 thing was clever marketing and window dressing on top of fairly pedestrian but useful technologies. It was actually less of seismic shock than mobile first which despite being a bigger shift didn't actually get a number. As far as I'm concerned, Web3 is beyond this. It's what happen when you let Ponzi schemers write the marketing material. I can't for…

Blockchain isn't even central in Web3, but it surely helps. Web3 = decentralized identity, full data and connection graph ownership by user, reputation transfer, verification via zero knowledge proofs, support for VR/AR and 3D objects. All of this stuff is either in prototype or draft phase, but it's ok. These things need to be built to stop horror stories on HN about "algorithm justice" and "data kingdoms”: - Google…

People can self publish and now we have a total shitshow of misinformation. It’s not guaranteed that decentralised finance and web solves world peace. There is always a tradeoff.

Maybe it’s awesome. Maybe it’s the web version of string theory. Can someone tell us why it’s more of the former than the latter?

Re: An engineer's observations on Web3 and its possibilities

#209

> Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors. Blockchains upend this, allowing inventors to capture considerable value for themselves. That... seems like a huge negative to me. No wonder crypto enthusiasts give me the same feeling as relentless door-to-door salesmen.

Putting monetisation before use case, rather than the traditional use case before monetisation, leads to several perversions:

- It turns practitioners into "relentless door-to-door salesmen" as you put it, fanatical commission-based salesmen, which makes any kind of rational discussion about pros and cons etc. impossible.

- It allows you to monetise without having anything to monetise, which has drawn in the scammers and fraudsters on an unprecedented scale.

- It offers no incentive to working solutions. All the ICOs failed because they got the money up front with no obligation to deliver anything, so even the small number that weren't out and out scams ended up effectively becoming scams. Spend any time in the space, and you'll realise the gap between what is promised and what is possible is often insurmountable, but the gap isn't important, because you just need to convince enough people that what you are trying to do is possible for long enough to get rich quickly.

- It offers no incentive to more efficient solutions. Why use existing fast, free and low energy money transfers, for example, when you can make slow, expensive money transfers that use up 5% of the world's electricity but make a handful of people rich in the process? There are very few cryptocurrencies which have genuine legitimate use cases, and the small number that arguably do are always worse in every way than what they replace, but they are still attractive and gain traction because they can get a small number of people rich quickly.

- It doesn't look like it'll go away. While putting use case before monetisation means something without a use case will wither away, with monetisation before use case it could go on burning up trillions more programming hours and countless other resources indefinitely without ever finding a genuine legitimate use case.

Re: An engineer's observations on Web3 and its possibilities

#210
post #47

Earlier quoted context omitted.

Original author here. I strongly disagree. While it’s certainly true that firmware on many devices can’t be or simply isn’t updated, it’s also the case that bugs ship. Because of this, engineers design and ship their more complex devices with the facility to upgrade firmware. Even my ages old stereo receiver is upgradable (although painfully so). But this is about smart contracts: code that in many cases moves money.…

For instance, the primary USDC contract on Ethereum is a proxy contract — it’s upgradable by design. By whom? "Upgrading" a contract should require the approval of all parties to the contract.

USDC is upfront about being centralized.
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