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

In defense of cryptocurrency

blog.cryptographyengineering.com

Post reply on HN
Print view View original

51–60 of 578 posts

Re: In defense of cryptocurrency

#51

Post by s1k3s »

matkoniecz wrote: post #38
s1k3s wrote: post #21

Earlier quoted context omitted.

Off topic but I’m really curious, why are these taxes a percentage? What justifies paying $0.1 for every $10 transfer, but $1 for $100? Is it more complicated to move $100 than it is to move $10? In the end it’s still a single transaction, right?

Form of price discrimination? Charging the same price for 1$ and 1000$ transaction would either make 1$ transaction not viable (BTC/ETH is doing this) or would be overall less profitable. https://en.wikipedia.org/wiki/Price_discrimination Also, insuring against fraud is actually more expensive for more expensive transactions. And CC provide some minimal service here.

I was not aware of that concept, thanks!

Re: In defense of cryptocurrency

#52

Post by matkoniecz »

yieldcrv wrote: post #48
matkoniecz wrote: post #31

Earlier quoted context omitted.

Even if it would be 0% then it is still wasting energy and removing that consumption would reduce overall waste. And "green" energy still have massive environmental and economical costs.

I was waiting for this comment. I was going to preemptively write the acknowledgment and rebuttal to this in the earlier post but I didn't want to be accused of posting a "strawman argument", by different people, or maybe the same people that would chose to pretend they weren't going to say exactly what you did. Basically, the idea of "zero-sum energy" is incorrect. So the disdain for Bitcoin/Proof-of-work using any…

> There is plenty of energy currently out there, currently being wasted for decades, that would cost more to store, and cost more to transport. (...) While proof-of-work can (and does) use it directly on the spot. These are often remote, low infrastructure, areas and so unlike other computationally intensive things, such as a data center

this remain almost (or completely) theoretical, vast majority of POW wastes perfectly fine energy displacing productive use

Re: In defense of cryptocurrency

#53

Post by jolux »

The biggest problem I see with cryptocurrency is the transaction rate problem. It’s not like attempts haven’t already been made to solve it (Bitcoin Lightning), and Dr. Green fully admits that it’s not certain that any currently proposed changes can solve it either. How long is the world supposed to wait for reasonable transaction rates on this technology? If this is truly like the early internet, they should have vastly improved over the past ten years, and should definitely improve over the next five. But as far as I know they’ve been basically static throughout the technology’s life so far.

Re: In defense of cryptocurrency

#54

Post by criddell »

pavlov wrote: post #7
j_walter wrote: post #4

Earlier quoted context omitted.

Not really...the fees for Bitcoin, Ethereum and other L2 options are flat fees and are well under Visa/MC fees most of the time. Might want to look at Western Union and the like too...way way under those fees. Current transaction fee (for 1 cent or a billion dollars) Bitcoin - $1.62 per transaction Ethereum - $3.50 per transaction Ethereum L2 - as low as 12 cents https://l2fees.info/ Here are credit card fees by comp…

Well, L2 systems aren't on a blockchain at all, so do they even count? If we get to cherry-pick from whatever money transfer systems exist, it's worth remembering that bank transfers within the Eurozone area are free and practically immediate. What crypto can beat that? Clearly you don't need cryptocurrency to deliver a service that's ideal for consumers, as regulation has achieved it in Europe.

I don't understand why L2 systems are even necessary. There's a relatively well known email exchange between Nakamoto and Mike Hearn in which Nakamoto says:

> The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.

If the original design of Bitcoin anticipated Visa-scale transactions for a fraction of the cost, what's the motivation for a L2?

I'm assuming Nakamoto wasn't being cheeky when he wrote fraction of the cost. Afterall, 1000/1 is a fraction...

Re: In defense of cryptocurrency

#55

Post by tptacek »

MattPalmer1086 wrote: post #44
propter_hoc wrote: post #29

This article is a rebuttal to a letter, that in his interpretation, claims: >[...] that the entire technology field is worthless and cannot be used for any practical purpose. However, instead of addressing the core issue of whether cryptocurrency or DLT serves any practical purpose, the article instead cherry-picks specific issues that he thinks are resolvable: * Energy waste * Transaction speed * Privacy The author…

He says why he cares are the end. That it could be a viable payment system, if you solve the scaling and energy and regulation and a few other things.

It does not sound plausible that all of this engineering, required to make these systems even viable in the real world (and, we hope, preventing it from eventually demanding approximately as much energy as Eastern Europe, despite the weak incentives to actually accomplish that) is the best, fastest way to lower transaction fees for the working class.

Re: In defense of cryptocurrency

#56

Post by matkoniecz »

s1k3s wrote: post #51
matkoniecz wrote: post #38

Earlier quoted context omitted.

Form of price discrimination? Charging the same price for 1$ and 1000$ transaction would either make 1$ transaction not viable (BTC/ETH is doing this) or would be overall less profitable. https://en.wikipedia.org/wiki/Price_discrimination Also, insuring against fraud is actually more expensive for more expensive transactions. And CC provide some minimal service here.

I was not aware of that concept, thanks!

You may enjoy https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-... and https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/ - about this kind of economic strategies/effects explaining few hings which seem mysterious otherwise

Re: In defense of cryptocurrency

#57

Post by 99_00 »

hericium wrote: post #27
99_00 wrote: post #13

My hot and uneducated take is that in 5 years we will see some Phoenix rise from the ashes of Cryptomania. If the entire field turn into toxic waste that no one wants to touch it will be extremely undervalued. Therefore it would be a tremendous opportunity.

> If the entire field turn into toxic waste that no one wants to touch it will be extremely undervalued. Bagholders will always try to find new victims. Crypto is praised even when it's in the shitter. "Buy the dip, it will be $200k before years end, I'd buy it myself but..." etc.

Ok. I don't understand your point.

If this clarifies: I'm talking about blockchain technology and its applications. Not a particular blockchain asset.

Re: In defense of cryptocurrency

#58

Post by sparkie »

propter_hoc wrote: post #29

This article is a rebuttal to a letter, that in his interpretation, claims: >[...] that the entire technology field is worthless and cannot be used for any practical purpose. However, instead of addressing the core issue of whether cryptocurrency or DLT serves any practical purpose, the article instead cherry-picks specific issues that he thinks are resolvable: * Energy waste * Transaction speed * Privacy The author…

Some others have already countered the letter on that point, but it's very easy to bury your head in the sand if you are not directly affected (yet!).

https://www.financialinclusion.tech/

Re: In defense of cryptocurrency

#59

Post by 99_00 »

>Proof-of-stake systems are not perfect: they still lead to some centralization of power, since in this paradigm the rich tend to get richer.

What does this mean? Is there a central node in PoS, or are they saying that power is proportional to stake size?

Re: In defense of cryptocurrency

#60

Post by j_walter »

_6hmp wrote: post #33
matkoniecz wrote: post #8

Earlier quoted context omitted.

From article itself: > That’s why it recently cost $22 (!) to send a single token transaction on Ethereum So Ethereum has prices ranging from 3.5$ to 22$? Great. And vast, vast majority of my transactions would be costlier on Ethereum. I am rarely paying over 267$ in one transaction. 22$ per transactions would result in typical grocery shopping doubling in price. 3.5$ would be noticeable. Also, in bank transfers that…

A small bit of nuance that could explain why the range could be $3.5 to $22 on a given day would be that they could be referring to different token types. The native token of ethereum (Ether) costs a fixed, smaller number of units of computation to send, whereas custom tokens (erc-20) have to do some additional bootstrapping work during transactions and cost more to send. So there's the units of computation used x "g…

Exactly this...it's not apples to apples comparison. Transferring an NFT is a larger transaction size so the cost is higher (hence the $22 price they are referring). The cost of the transaction is also based on how busy the blockchain is...like a way to discourage transactions if it's really busy. Like if you had a gas station that the price of gas (or actually more like a fee to use the gas pump) fluctuated based on how long the lines were.
Post reply on HN