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Why I’m so “against” Ethereum

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Re: Why I’m so “against” Ethereum

#261

Post by stale2002 »

XorNot wrote: post #252
stale2002 wrote: post #240

Earlier quoted context omitted.

> And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up. So you are saying that bitcoin would only ever become more and more valuable? How can you similtaneously believe this statement, and that bitcoin is worthless? They can't both be true. Either bitcoin is deflationary, IE, it goes up and up in value, and becomes…

It's a fact about deflationary currency in general, and why it's a bad idea. It grants that for some reason we suppose Bitcoin is worth holding - i.e. some government or entity accepted Bitcoin (or another deflationary currency) as payment for taxes. Maybe someone builds a seasteading community and decides to try this. The reality is, with nothing backing it (i.e. no government accepting it for taxes), it's not actua…

> some government or entity accepted Bitcoin

But this is already happening. There are multiple places around the world that accept bitcoin to pay for their taxes.

> it's not actually worth anything in the long run because eventually everyone has to cash out.

Is gold worth nothing, because eventually people have to cash out? Gold is also deflationary.

What people need to understand is that deflationary currencies have existed for centuries. The idea of a federal reserve, constantly controlling inflation rates, is a new phenomenon.

People 200 years ago somehow survived with deflationary currencies.

I am in favor of free choice. And I see no reason why people shouldn't have the choice to own a deflationary currency. If you don't like deflationary currencies, all you have to do is simply not use it, and leave the rest of us who disagree alone.

Re: Why I’m so “against” Ethereum

#262

Post by DennisP »

polyomino wrote: post #152
phlip9 wrote: post #124

Earlier quoted context omitted.

First, some Proof-of-Stake setup: 1. Assume we have some set of "validators" who control the global consensus process. They come to consensus on the current global state of the system. These validators are vaguely analogous to miners in Proof-of-Work consensus. 2. These validators have coins bonded as collateral in exchange for more voting power in the consensus process. One key idea necessary for Proof-of-Stake is t…

Miners are not responsible for validating the Bitcoin blockchain. Users are responsible for validation, miners are responsible for ordering blocks. If a miner produces an invalid block, their block is not accepted by the network of users.

Nevertheless miners have a strong incentive to validate, so they don't waste their effort on an invalid block.

Re: Why I’m so “against” Ethereum

#263

Post by CryptoPunk »

keymone wrote: post #193
CryptoPunk wrote: post #189

Earlier quoted context omitted.

PoS requires that you get the consensus rules AND a hash of the most recent valid block from a trusted source. With PoW, you only get the consensus rules. Either way, you're relying on a trusted third party for bootstrapping. The risk that the party you trust is defrauding you is infinitesimal in both cases, given you can poll the community widely until you settle a highly credible source of truth, or several credibl…

> PoS requires that you get the consensus rules AND a hash of the most recent valid block from a trusted source. no, nothing in PoS requires that. just a sad state of affairs with most centralized insecure PoS coins these days. > With PoW, you only get the consensus rules. no, you can opt to get hash of the most recent block if you want to compromise your security. > Either way, you're relying on a trusted third part…

>>no, nothing in PoS requires that.

It's necessary for bootstrapping. What alternative is there for bootstrapping using PoS?

>>just a sad state of affairs with most centralized insecure PoS coins these days.

I have no idea what superior alternative for PoS you're referring to. What bootstrapping alternative does any PoS blockchain have to getting the recent state and consensus rules from a trusted third party?

Right now your argument makes absolutely no sense to me as you suddenly seem to be implying that there is a superior PoS mechanism that existing PoS chains don't use, which is an entirely new argument you haven't touched on before and an have not detailed right now, so please elaborate on this with a mind to explain its connection to the argument thread that preceded it.

Re: Why I’m so “against” Ethereum

#264

Post by keymone »

CryptoPunk wrote: post #263
keymone wrote: post #193

Earlier quoted context omitted.

> PoS requires that you get the consensus rules AND a hash of the most recent valid block from a trusted source. no, nothing in PoS requires that. just a sad state of affairs with most centralized insecure PoS coins these days. > With PoW, you only get the consensus rules. no, you can opt to get hash of the most recent block if you want to compromise your security. > Either way, you're relying on a trusted third part…

>>no, nothing in PoS requires that. It's necessary for bootstrapping. What alternative is there for bootstrapping using PoS? >>just a sad state of affairs with most centralized insecure PoS coins these days. I have no idea what superior alternative for PoS you're referring to. What bootstrapping alternative does any PoS blockchain have to getting the recent state and consensus rules from a trusted third party? Right…

> It's necessary for bootstrapping

your claim was consensus rules AND hash of most recent block are necessary. this is false, hash of most recent block is not necessary for bootstrapping.

> your argument makes absolutely no sense to me so please elaborate

you have to be more specific. i've responded to every point of your message. if you don't understand something in my response - point that out.

Re: Why I’m so “against” Ethereum

#265

Post by XorNot »

stale2002 wrote: post #261
XorNot wrote: post #252

Earlier quoted context omitted.

It's a fact about deflationary currency in general, and why it's a bad idea. It grants that for some reason we suppose Bitcoin is worth holding - i.e. some government or entity accepted Bitcoin (or another deflationary currency) as payment for taxes. Maybe someone builds a seasteading community and decides to try this. The reality is, with nothing backing it (i.e. no government accepting it for taxes), it's not actua…

> some government or entity accepted Bitcoin But this is already happening. There are multiple places around the world that accept bitcoin to pay for their taxes. > it's not actually worth anything in the long run because eventually everyone has to cash out. Is gold worth nothing, because eventually people have to cash out? Gold is also deflationary. What people need to understand is that deflationary currencies have…

> There are multiple places around the world that accept bitcoin to pay for their taxes. No there are not. There are jurisdictions which sign agreements with Bitcoin exchanges to integrate them into the tax payment process. The exchanges must always be able to source enough local currency to meet the payment. The government does not accept and hold Bitcoin - the value of your taxable obligations, once determined, can change in Bitcoin with the exchange rate - whereas my tax obligations in local currency don't, provided I hold local currency.

> Is gold worth nothing, because eventually people have to cash out? Gold is also deflationary.

Gold is not used as a currency today. Neither is Bitcoin. The argument over deflationary currency presumes a world in which Bitcoin fulfills the stated objective of it's adherents as a currency.

Bitcoin and gold are both commodities today. As a commodity Bitcoin has very little to recommend it. Strictly speaking this is true of gold as well, but gold is historically very complicated, and has the benefit of being a physical resource which displays some physical scarcity (of note: gold as a currency isn't strictly deflationary, your inflation rate it just pegged to the rate of mining and discovery).

On gold as a currency - Middle Ages economies routinely bankrupted themselves by making huge windfalls in gold, and failing to recognize that all they'd done was drive a lot of inflation (i.e. the Spanish after they found the Americas - they didn't raise taxes, so the royal treasury found itself in debt even though by simple thinking they should've been very wealthy). Bitcoin has all these problems, but unlike gold also consumes resources to retain it's value. A block of gold after 10 years is still just a block of gold.

> I am in favor of free choice.

And I'm not arguing anything should be illegal. I am arguing rational people should recognize what Bitcoin is, and think carefully about how they value it. It is not what it's advocates say, and it is mostly powered by the reality that your average person does not think carefully about the nature of money very often.

Re: Why I’m so “against” Ethereum

#266

Post by CryptoPunk »

keymone wrote: post #264
CryptoPunk wrote: post #263

Earlier quoted context omitted.

>>no, nothing in PoS requires that. It's necessary for bootstrapping. What alternative is there for bootstrapping using PoS? >>just a sad state of affairs with most centralized insecure PoS coins these days. I have no idea what superior alternative for PoS you're referring to. What bootstrapping alternative does any PoS blockchain have to getting the recent state and consensus rules from a trusted third party? Right…

> It's necessary for bootstrapping your claim was consensus rules AND hash of most recent block are necessary. this is false, hash of most recent block is not necessary for bootstrapping. > your argument makes absolutely no sense to me so please elaborate you have to be more specific. i've responded to every point of your message. if you don't understand something in my response - point that out.

>>your claim was consensus rules AND hash of most recent block are necessary. this is false, hash of most recent block is not necessary for bootstrapping.

A hash of A block from a trusted third party is needed for a node to bootstrap into a PoS network. Regardless of which block that is, the same amount of trust is required. And getting a more recent one reduces the number of blocks the node needs to download.

Anyway, the point is, the difference in bootrapping between PoW and PoS is in PoS, a hash of a block is also needed from a trusted third party. In both cases, a trusted third party is needed, and if the TTP is malicious, they can totally defraud the user.

Re: Why I’m so “against” Ethereum

#267

Post by ric2b »

lostmsu wrote: post #248
seibelj wrote: post #67

Earlier quoted context omitted.

You are speaking as if your philosophical viewpoints are settled facts. Your opinions on the nature of money are not facts and cannot be proven. We can propose theories about why something has value, such as a currency, but ultimately it comes down to philosophy when you are trying to understand why dollars / gold / bitcoin is worth something. At the end of the day, something has value because two people agree it doe…

I support you point in general, but I am curious, that you say "painting is worth X because two people agree". What if they disagree? I'd be interested to read some thoughts on that. Even better - proper theories.

I think it goes even further than what the previous comment said. The value of the painting is different for everyone and even for the same person it will change in different circumstances (value of a cup of water at home or in the desert).

When a transaction happens the two people very probably don't agree on the value. Rather, the seller values the painting at "less or equal" of the strike price and the buyer values it at "equal or more". The transaction happens if those two regions overlap somewhat.

Re: Why I’m so “against” Ethereum

#268

Post by feanaro »

XorNot wrote: post #198
feanaro wrote: post #156

Earlier quoted context omitted.

Not all commercial transactions involve debt.

Care to give any examples which aren't just examples of very short-lived debts? (i.e. when I buy something at the corner store, we immediately resolve the debt).

A fair enough terminological point, but in this case, I'm not sure it is much more than a play on words. The parent was clearly talking about longer-lived debt and debt financial instruments, where the debt changes hands so the debt-closing parties aren't necessarily the same as the parties that formed the debt.

To quote:

> Because no one can be compelled to accept Bitcoin to extinguish my debts to them (i.e. by the courts) and I can't pay my taxes in Bitcoin to my local government (no, "just-in-time currency exchange doesn't count).

In the edge cases of (almost) immediately resolved debt, this is a non-problem, given that we can simply agree not to complete a transaction in case one of the parties involved doesn't want to accept Bitcoin. Hence, the fact that you cannot be compelled to accept Bitcoin is irrelevant in this situation.

Re: Why I’m so “against” Ethereum

#269

Post by feanaro »

stillbourne wrote: post #250
feanaro wrote: post #156

Earlier quoted context omitted.

Not all commercial transactions involve debt.

As all commercial transactions are literally called either credits or debits and the definition for debit according to Webster's debit noun Definition of debit (Entry 2 of 2) 1a : a record of an indebtedness specifically : an entry on the left-hand side of an account constituting an addition to an expense or asset account or a deduction from a revenue, net worth, or liability account I would say yes all transactions…

See my response on a sibling comment: https://news.ycombinator.com/item?id=18805017

Re: Why I’m so “against” Ethereum

#270

Post by runeks »

rictic wrote: post #257
runeks wrote: post #184

Earlier quoted context omitted.

> Is there a subtlety that makes that unworkable? The reason this can’t work is because it has no cost to create a new chain from scratch. I can create a thousand valid PoS chains in virtually no time, and there’s no decentralized way for you to choose the one everyone else chooses. The only way to solve this is to give special rights to some set of stakers.

Isn't that only an issue for a chain that's starting from PoS from the beginning? Ethereum already has a PoW chain that they plan to turn into PoS. If the ethereum protocol agreement is to switch to PoS at block N, then I don't see how you can create a valid-looking N+1 block without yourself putting a large amount of real eth at stake.

That’s a good point. I’ll have to think about that.
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