Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A faster, more efficient cryptocurrency

news.mit.edu

Post reply on HN
Print view View original

311–320 of 839 posts

Re: A faster, more efficient cryptocurrency

#311

Post by ryan_j_naughton »

sbenitoj wrote: post #248
ryan_j_naughton wrote: post #222

Earlier quoted context omitted.

A predetermined monetary policy would be great when a financial crisis or credit crunch hit, causing a collapse in the velocity of money /s While I have invested in crypto and believe it has great potential, one of its touted benefits by its supporters is also one of its biggest pitfalls, namely that its money supply is predetermined. The inability to actively manage a money supply given exogenous shocks to the econo…

I 100% disagree, the central planning of money is (1) what causes inflation, and (2) greatly exacerbates (and in many cases creates) financial crises. Any supply of money will do, the idea that money should increase in supply along with population growth (or some other arbitrary metric) otherwise we’ll permanently live in a deflationary disaster is an imagined monster — we live in the here and now, therefore people h…

A low, but positive, inflation rate is of critical importance.

> Any supply of money will do.

That is just nonsense. If you have a fixed money supply, given that economic growth is happening, would result in a naturally deflationary currency. That is a terrible place to be for the system as a whole as no one has any incentives to spend or invest in anything as money itself will simply gain value over time just sitting as cash. Thus, that money isn't being used / circulated. Having a ideal velocity of money has significant multiplier effects and deflationary currencies are fundamentally flawed.

The problem then is: if you want a low rate of inflation but there is a natural variation in the growth rate due to the cyclic nature of the economy, then how to create a system that could do that without a monetary authority.

Re: A faster, more efficient cryptocurrency

#312

Post by sparkie »

BenoitEssiambre wrote: post #249
malloreon wrote: post #16

I have long wondered how cryptocurrency fans would answer the question: ‘Would you be happy if the crypto-utopia you bring up happens in the next 10 years, and all value is stored/transacted through a cryptocurrency, but it was a coin that you do not possess now, nor could you transfer any of you current currencies into it?’ Say tomorrow someone releases the one true coin, but no one notices. All other cryptocurrenci…

You don't have to ask that question. If they really cared about the tech, they would make sure their tokens are not deflationary. Deflationary tokens are not much good as a currency but they are good as a Ponzi scheme.

I think here's your answer: It isn't just about the tech.

This is what most "blockchain" enthusiasts get wrong. They think it is just about technology, and thus, they can come up with "a better bitcoin."

They're missing that the predetermined monetary policy is the key innovation of Bitcoin, and that by creating a new "blockchain" which prints new money, they are shooting themselves in the foot, because they can't ever be "a superior bitcoin" when they have inflation as part of the parcel.

A free market does not really care about whether some people have the opinion that deflation is bad. At the end of the day, nobody can change Bitcoin's monetary policy, and it will be left to the free market to decide whether or not they are going to put their money in this, or whether they're going to bet on inflation.

Re: A faster, more efficient cryptocurrency

#313

Post by mihaifm »

solean wrote: post #282
throwaway415415 wrote: post #264

Earlier quoted context omitted.

If no fees, what are the incentives to accept transactions in a block?

Also, what stops you from spamming the network?

I've had concerns in this area as well, as far as I know the team performed some stress tests and the network can do 100+ transactions per second, maybe more. There is also a small computation that the hardware needs to perform before sending the transaction, which is only a small guard against spam but pretty useful.

Re: A faster, more efficient cryptocurrency

#314

Post by ur-whale »

sbenitoj wrote: post #181
malloreon wrote: post #16

I have long wondered how cryptocurrency fans would answer the question: ‘Would you be happy if the crypto-utopia you bring up happens in the next 10 years, and all value is stored/transacted through a cryptocurrency, but it was a coin that you do not possess now, nor could you transfer any of you current currencies into it?’ Say tomorrow someone releases the one true coin, but no one notices. All other cryptocurrenci…

Absolutely — I would gladly trade all my gains for a world where governments have no control over the creation and regulation of money.

> I would gladly trade all my gains for a world where governments have no control over the creation and regulation of money.

Indeed. And not just because they're absolutely terrible at it: giving control over money creation to a government is like giving a drug addict the keys to the heroin factory.

Re: A faster, more efficient cryptocurrency

#315

Post by dlubarov »

throwaway415415 wrote: post #236
SkyMarshal wrote: post #221

>In experiments, Vault reduced the bandwidth for joining its network by 99 percent compared to Bitcoin and 90 percent compared to Ethereum, which is considered one of today’s most efficient cryptocurrencies. Ethereum is not considered one of today’s most efficient cryptocurrencies, not remotely. One of the most full-featured perhaps, but not efficient. Not even Bitcoin is since the invention of the MimbleWimble proto…

This is true. I would be interested in knowing the difference in approaches between vault and coda.

CODA uses cryptographic arguments to demonstrate that a block is valid (including ancestor blocks). I haven't read much of the Vault paper, but it sounds like they're having users vote (with weights proportional to their stake) on whether blocks are valid.

If someone corrupted enough voters, they could theoretically create a "Vault certificate" for an invalid block (e.g. one which spends the same coins several times), and other nodes would accept it. That wouldn't be possible with CODA, unless someone broke their cryptographic primitives.

Re: A faster, more efficient cryptocurrency

#316

Post by AnthonyMouse »

good-idea wrote: post #242

I'm shocked and disheartened by how infrequently environmental concerns are brought up when discussing crypto. Proof of Work vs Proof of Stake, security, storage size - these are problems for the network and those that want to see it become a real part of our economy. (I am one of those) But the amount of energy being used to mine bitcoin is a real problem - it's not just a technical challenge (like the problems abov…

> In that sense, the coin would create an economic incentive to pollute (there are plenty of these already), and there's no way to regulate that kind of decentralized network. (That's the whole point)

And that's also the solution.

The reason people are interested in decentralized trust is that the existing system of centralized trust is a dumpster fire. Politicians want to use the banking system to attack their enemies, but not all politicians are good and not all of their enemies are bad, and there is a vast amount of collateral damage.

You can't get your payments processed if you're a terrorist, but also if you're suspected of terrorism without any real evidence, or suspected of political heresy without any real evidence, or suspected of supporting someone else who is suspected of political heresy without any real evidence or due process etc.

People who are afraid to reveal their identities because they have powerful adversaries are impeded from raising money for their cause, or even just making a living, and it's really not obvious that this results in less radicalization. Things that make people angry and scared generally don't.

But it's all caused by AML/KYC laws. The promise of Bitcoin is that you can't have your accounts locked out and your funds stolen because a lazy or corrupt politician in a foreign country leaned on a bank that leaned on a corporation that decided your business was worth less to them than the effort required to resist, regardless of your guilt or innocence.

So now we have a choice. Either we stop using the banking system as a tool for surveillance and political pressure, which cuts the legs off the demand for cryptocurrency, or we keep trying to do that and then all the innocent and guilty people who it was impacting get together to build a workaround, and the rules are ineffective regardless but now people burn an extra billion tons of coal.

Re: A faster, more efficient cryptocurrency

#317

Post by Aelius »

seanyesmunt wrote: post #293
JoeAltmaier wrote: post #274

Earlier quoted context omitted.

Irrelevant. Renewable energy could be used to replace other sources, instead of peed away on this. A larger demand for energy likely means more polluting forms of energy will come back into service/stay in service to meet the demand.

It's not being "peed away". It is being used to help people send money to each other. That's like saying the energy used to run the security system in a bank is being peed away.

And coal power shouldn't be replaced as long as it helps people have electricity. /s

Your comment misses the point that it is still a monumental and needless waste.

Re: A faster, more efficient cryptocurrency

#318

Post by hanniabu »

sbenitoj wrote: post #304
hanniabu wrote: post #290

Earlier quoted context omitted.

You need inflation for proper incentives. It's like a tax on the entire network to keep it supported. Without proper incentives, the game theory collapses. The difference here is that inflation is predetermined and set instead of printing money on demand like we do in the traditional financial system.

“You need inflation for proper incentives. It's like a tax on the entire network to keep it supported. Without proper incentives, the game theory collapses.” What, specifically, do you think the consequences of a stable money supply are?

No incentive to support the network if there's no block rewards. The transaction fees are not sufficient and just meant to prevent spam. It's also better to tax the network as a whole (through this set inflation) than to tax for each usage.

Re: A faster, more efficient cryptocurrency

#319

Post by ur-whale »

sbenitoj wrote: post #252
hanniabu wrote: post #240

Earlier quoted context omitted.

I think it makes sense. You have an economy built on an economic model rather than an economic model based on an economy. With the latter you're constantly guessing and tweaking the model and roughly every 10 years there's a crash and the economists say okay, NOW we have it perfect and we'll never get it wrong again. Why do you need an unlimited money supply? The only thing causing these shocks is that the economy is…

Exactly, any supply of money will do, no need to permanently increase the amount in circulation — this is why the market settled on gold (which has an inherently low inflation rate due to the difficulties of mining) and impossible to pass off counterfeit gold at scald.

>this is why the market settled on gold

Gold, which, by the way, has an extraordinarily high energy and environmental cost to extract.

Re: A faster, more efficient cryptocurrency

#320

Post by buboard »

School-Cotton wrote: post #64
haolez wrote: post #61

Earlier quoted context omitted.

Yes, if it means that my government cannot create inflation anymore.

Why do you think moderate inflation is bad?

you can create a crypto with some pre-set amount of inflation to make up for e.g. lost coins. or create inflating derivative securities. though, having inflation in a single globalized market doesn't make much sense, as there are no competing economies.
Post reply on HN