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The Limits to Blockchain Scalability

vitalik.ca

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Re: The Limits to Blockchain Scalability

#281

Post by YuriNiyazov »

mvzvm wrote: post #232
jbverschoor wrote: post #55

Earlier quoted context omitted.

You should look at it as a public service of authenticity. Notary services / time stamping. But also noncustodian assets. Although still not usable for daily life, I think the more we move into digital, the more we will want and need better licensing/ownership of digital content. For example when blizzard bans your wow account, which is worth many hours and dollars. Big tech has too much control over these things, an…

Your example makes no sense. How would blizzard banning a wow account (I don't know the game particularly well, but let's just use this since you brought it up) be solved w/ Blockchain?

This is what people mean usually when they make this argument:

Blizzard can ban WoW accounts and take away your hard-earned in-game assets, and that makes people unhappy. Therefore, because capitalism, a competitor to Blizzard's WoW can arise whose killer feature is "we technologically commit to not being able to take away your assets because those assets are distributed through a decentralized blockchain."

Of course, it's pretty far-fetched. The "banned account had lots of assets" problem happens to a tiny minority of people compared to how many enjoy WoW because Wizards and Goblins or whatever, so to compete with WoW on the basis of "we can't take away your assets and they can" is not going to appeal to anyone. You have to also be better than WoW in other aspects that would make people want to migrate.

But the general idea is, "if part of your offering is 'virtual assets' you can use this technology to commit yourself to never being able to take those assets away". Hence ICOs.

Re: The Limits to Blockchain Scalability

#282

Post by gomox »

iudqnolq wrote: post #249
puranjay wrote: post #189

Earlier quoted context omitted.

All real and legit concerns. Fraud remains a big problem which is why returns are so high right now - we're all early adopters. But there are new developments constantly. On-chain insurance against smart contract failure and hacks is a thing (see: https://nexusmutual.io/ ). More sophisticated insurance strategies to compartmentalize risk are coming up (see https://www.unn.finance/ ). Protocol design to reduce risk ex…

> Nexus Mutual is run entirely by its members. Only members can decide which claims are valid. This sounds like a high school popularity contest, not code as law

Well, any political system is a contrived popularity contest, so no surprises there.

Re: The Limits to Blockchain Scalability

#283

Post by atweiden »

SubiculumCode wrote: post #262
atweiden wrote: post #243

Earlier quoted context omitted.

> I really don't know what you are talking about. ETH hit its all time high a few weeks ago (May 10th) both in terms of USD and BTC. Its still double it's ATH from its peak in 2018, before the crypto crash. > As to your other ramblings, mere snobbish tripe meant to demean and belittle those that disagree with your opinion. In other words, yours is a low information post. ETH broke 0.12 ETH/BTC last narrative cycle. T…

You are correct re BTC, but not it has well exceeded that re USD. Why BTC has some special place in terms of the utility of smart contract blockchain is questionable.

That’d be because Bitcoin awareness is c. 100% amongst altcoin investors. When an altcoin underperforms Bitcoin, its investors have traditionally realized the opportunity cost of holding it — particularly seeing as Bitcoin is the longest standing, most stable and widely recognized, original cryptocurrency with the simplest and safest technical implementation.

Re: The Limits to Blockchain Scalability

#284

Post by TimJRobinson »

sillysaurusx wrote: post #268
jimmydorry wrote: post #248

Earlier quoted context omitted.

The model you propose is weak to sybil attacks [1] and is based on trust, while the BTC model is based on zero-trust. There is nothing stopping someone malicious from spinning up thousands of nodes that all say the current hash is Y (with transactions that break the rules of the blockchain) while the remaining minority of nodes say the hash is actually X (the original longest chain). It is only by calculating the has…

One way to sidestep this: every few minutes, post the longest hash to some distributed medium that can't be edited, like Twitter. Then the threat model moves to "do we trust the person with the keys to this twitter account?" However, this is also "zero trust," because you can write a program to verify every tweet as it's tweeted, and run that on a server somewhere. But, now that I've written this, I suppose Vitalik's…

If you write out to a centralized service like Twitter than you may as well just use a centralized database, it's much more efficient than a blockchain. A core property of a decentralized blockchain is that every person using the chain has equal opportunity to participate in the security of the chain, there are no "blessed users" and you should be able to use it without trusting any other user on it.

Re: The Limits to Blockchain Scalability

#285

Post by atweiden »

noxer wrote: post #239
vvillena wrote: post #219

Earlier quoted context omitted.

Blockchains don't have a concept of a "current undisputed state". If you managed to create a longer (and valid) Bitcoin chain on your own than the longest one there is at this very moment, and publish it, all other clients will start using it as the new longest chain. And if two equally long chains are published at about the same time, and clients get split, things will probably get resolved in the next block. So, mo…

Don't assume blockchains are bitcoin or BTC like systems. I talk about the "current and undisputed or better indisputable (final) state". Bitcoin does not have this. Hence it can not function without history. This is a property of BTC not one of blockchains in general. Plenty other systems have a current state and a final state and there is no "better state" that can comer around and replace it. Final really means fi…

> BTCs "final" is just to wait some blocks its never final its just becomes incredibly unlikely to change the longer you wait. This is objectively worse than having a final state and on top of that it requires the history rather than just the last final state.

You can have that type of finality with centralized protocols built on top of the Bitcoin blockchain — Lightning Network being the standout example.

N.B. this issue is nuanced in PoS due to the complete absence of a quantitative fork ranking protocol. The PoW blockchains pow1, pow2, pow3 can be algorithmically ranked according to cumulative hash difficulty unfakeable sans external input (electricity). High difficulty == high certainty. Conversely, the PoS blockchains pos1, pos2, pos3, cannot be compared sans external information/trust. All theoretical finality in PoS is based on trust in central authorities — this type of “finality” is similar to the finality you have in a particular OSS project’s Git history, insofar as the history is dictated by trusted authorities in all cases.

As many commentators have quipped historically, you can build centralized systems on top of decentralized ones, but the reverse isn’t true.

Re: The Limits to Blockchain Scalability

#286

Post by rauljordan2020 »

idlewords wrote: post #115

The really obvious weakness in any blockchain setup is the software. Whoever controls the software upgrade channel will always have potential control of the blockchain, whether that's the official entity in charge, or some intermediary. If you want really widespread distribution of full nodes, you need to make a consumer-friendly distribution of the node software, and package it and keep it updated in a way that regu…

Ethereum proof of stake has 4 production implementations today that run the chain. They are from independent teams that are not part of the Ethereum Foundation

Re: The Limits to Blockchain Scalability

#287

Post by TimJRobinson »

jude- wrote: post #104

So, what happens when one of the shards goes offline, or forks? What are the cascading consequences for validators of other shards, if any? Asking because I don't think there's a viable strategy for keeping all shard data around indefinitely, without giving up either scalability or durability: * If the system requires cross-shard state-transitions to be mirrored to on a "central" chain (e.g. the beacon chain) in orde…

The shards have thousands of different validators, all of which are staking their Ethereum on being accurate, and if they are malicious, they lose that Ethereum they staked. There are over 100k people signed up to this already (each staking 32+ ETH). So the likelihood of a shard going offline or forking is about as likely as AWS going down.

The beacon chain is the central chain, all shards write a hash of what they've done to this one. All nodes validate the shard they've been assigned to as well as the beacon chain.

Re: The Limits to Blockchain Scalability

#288

Post by Geee »

jeremycarter wrote: post #16

Blockchain, Decentralization and Smart Contracts have had nearly a decade to prove their value and disrupt the marketplace. So far nothing but whitepapers, pipe dreams and exit scams - nothing my mother can use. What's the point? Nobody is using crypto as an alternative to fiat. Prove me wrong.

I am using Bitcoin as money and there are a lot of people like me. Just by saving in Bitcoin is using it. The primary purpose of money is to save your purchasing power. From my viewpoint, it is inevitable that Bitcoin replaces fiat currencies. Given free markets, people will eventually choose the most sound money.

Re: The Limits to Blockchain Scalability

#289

Post by TimJRobinson »

jeremycarter wrote: post #20
DSingularity wrote: post #15

Earlier quoted context omitted.

It’s a network supporting both a decentralized data-store with a consistent view into valuable data and an a distributed computer with consistent results. What is so hard about this?

Yes but what problem is it trying to solve? It's a solution to a non existent problem.

Some examples that are being worked on right now:

Trading of any financial asset - why do we need Robinhood / Fidelity etc to trade shares? If shares in companies can be listed on a blockchain then people can trade them anywhere anytime directly with each other even when they don't trust each other.

Larger markets for digital goods: Many games have started putting their items on Etherum (or layer 2 solutions) so that players can easily trade them without the developers needing to run their own marketplace. This can then extend to being able to use items across multiple games, or trade items from one game with items from another.

Now there's ethereum tokens that allow the original creator to get a cut of all trades of that item. This opens an interesting funding model where a company could create an open source permissionless game where you download the client, connect to the public chain, play and acquire items, trade those items with others, and the game creators gain funds based on a cut of all trade happening around the game which allows them to further development. Then because it's open source people can create forks with their own art styles and mod the game easily and people can participate in the same world with many different clients.

Re: The Limits to Blockchain Scalability

#290

Post by TimJRobinson »

kaladin_1 wrote: post #156
puranjay wrote: post #124

Earlier quoted context omitted.

Maybe I'm wrong but I see this perspective so often on HN. And I can't help but feel that this is because so many people on HN are already privileged - living in the first world, making software salaries, and generally have a world of opportunities available to them, especially when it comes to their money. But coming from a third world country, the promise of a decentralized, permissionless market seems extremely pr…

>> In the serious crypto world, there is a maxim: Code is Law. Yeah, what's this thing of code is law. I was discussing with a friend today on how governments might have to come in to regulated some financial transactions with crypto based assets. And he vehemently kept repeating that no government can regulate crypto because "code is law". We went down to the physics level to see why it's not impossible to do. Only…

When you put money in your bank account, where does it go? Who uses it? When you purchase shares, where do they come from? How many market makers were involved? How much profit did they make front-running your purchase?

All these things are currently completely opaque to the average person. Decentralized Finance fixes this. Every transaction and system you interact with is completely open source, transparent, and fair for everyone involved. There are no rich and powerful people taking a cut of your money every time you use the system, as it is in traditional finance.

You can see the exact code doing what you want done, and nobody can stop it doing that, or change the rules part way through (see: the Robinhood GME saga)

Traditionally the government set the rules, but the government can be corrupted. Most people know that wall street regularly breaks the law if the profit they make will be greater than `fines they pay * risk of getting caught`. Until now there was nothing we could do about this. Code can't be corrupted in the same way.

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