17 ms·

New Kid on the Blockchain

226 points by drcode 11y ago

drcode 11y ago
(The title of the HN post is the updated title for the article, as it will appear in Monday's NYTimes print edition - See article footer.)
johng 11y ago
I've been into Bitcoin (and Litecoin) since the early days. Well, relatively early. Ethereum really has me interested.
- brighton36 11y ago
  No one needs smart contracts. And the value proposition of Ethereum will require an inordinate need for ether in order to support the mining requirements of the chain. This project is a scam
  - erikpukinskis 11y ago
    Personally I'd be happy to pay way over market hosting rates to host, say, my articles of incorporation, equity trades, and accounts receivable. That seems like one of the most exciting uses of ethereum to me. Write a plugin to "export to IRS".
    - magicGLASSman 11y ago
      Why not just use a database? what do you think the advantage of using Ethereum for this is?
      - dev1n 11y ago
        no more annoying financial audits?
      - erikpukinskis 11y ago
        Each party can audit the contracts and infrastructure at any time. There's also an easy path for a dissenting quorum to reincorporate on their own.
- moab 11y ago
  What exactly are you contributing with this statement? Isn't voting up the link identical to your comment? Why is Ethereum really interesting to you?
zaroth 11y ago
Wow, great publicity for Ethereum. Except, they can't ever bring themselves to explain what it does, or what it means. We're missing the 'why'.
- natrius 11y ago
  Blockchains are peer-to-peer cloud computers that collectively enforce a set of rules on a historical record that they create together. If the rules meet your needs, you can use a blockchain’s history as the source of truth for any information you want because no one can break those rules. Bitcoin’s rules define a currency: how are new tokens produced, how many are allowed, how they can be transferred from one person to another, etc. Ethereum’s rules define a process for defining new rules. This makes it a universal blockchain where rules for any interaction can be defined, and anyone can choose whether to treat its historical record as their source of truth. We're in the process of defining economic interactions—both existing and novel interactions—as entries in a digital historical record to eliminate the need for middlemen in much of our economy and give everyone access to financial tools that were once limited to the wealthy and their corporations. Social interactions that don't involve money can be built as well. Join us. Let's build software that users control.
  - Anonobread 11y ago
    Users don't control cloud software.
    - natrius 11y ago
      Rules in blockchain-based software cannot change ex post facto. The only decision involved is the user's choice to use the application in the first place. These are user-controlled applications. (I've tried explaining these as applications that no one controls, but that has a wild west connotation that isn't applicable.)
      - Anonobread 11y ago
        My point is running all the nodes in the cloud means that the users of those nodes don't own them. > the user's choice to use the application in the first place. Right, but if none of the users can even run the so called "peer-to-peer" component, what's the difference between that and run-of-the-mill centralized DB software? Either way nobody but the chosen few can directly access the DB.
aminorex 11y ago
Great. More fools for the fire.
seymores 11y ago
Just want to mention RootStalk here, make bitcoin on par with ethereum in regards to smart contract.
test6435341 11y ago
Corporate handling bitcoin... Interesting.
- qwtel 11y ago
  I'd say this is corporate handling bitcoin: http://chain.com/ http://chain.com/
grapevines 11y ago
Ethereum could quickly outdate itself by defining a fixed language. How will the language adapt? Very slowly by consensus if Ethereum hopes to become a large market player. Bitcoin could be easily made Turing complete. If each transaction can store 80 bytes of information, then one could use 48 bytes to store code and the remaining 32 bytes to refer to another transaction storing the next block of code and thus chain together code. Unless I am missing something, a new currency is simply unnecessary, and will always be at a second-mover disadvantage. Soon, I am sure a prototype of what I described will be released on bitcoin thus obscuring Ethereum. A solid use-case for distributed computing would be distributed HTTP delivery. If ethereum could offer a product for decentralized web-hosting, then I would buy into their product, but until then the whole situation is just vaporware to me.
- adrianmacneil 11y ago
  > Ethereum offers nothing more than Bitcion It offers a more powerful scripting language to define contracts. > Ethereum could quickly outdate itself by defining a fixed language. If offers a "bytecode" type language which can be created by compiling contracts in >=2 languages already. Bitcoin currently lets you define contracts in the equivalent of assembly code, with no higher level languages available. So this statment seems to apply more to Bitcoin than Ethereum. > Bitcoin could be easily made Turing complete. Bitcoin developers can't even agree to a simple block size increase. What makes you think they would be able to do something as complex as adding turing-complete scripting capabilities? > Unless I am missing something, a new currency is simply unnecessary. Since bitcoin does not support 2-way pegged sidechains yet, it's not possible to launch a new blockchain without launching a new currency to power that blockchain. Besides, you need a way to reward the miners. > Soon, I am sure a prototype of what I described will be released on bitcion thus obscuring Ethereum. That's basically what Rootstock[0] is supposed to be. Although at present, it seems to be vaporware. A year ago I used to have a similar viewpoint to you, that Bitcoin had such a massive first mover advantage and network effects that it would remain the dominant public blockchain, and that even as new inventions appeared, they would be backported to bitcoin. But over the past 6 months I've realized how useless Bitcoin is without a genuine respected leader/BDFL, and now think that without a leader it's doomed to design by committee and stalemate on key decisions, which leaves the playing field wide open for competitors like Ethereum. [0] http://www.rootstock.io/ http://www.rootstock.io/
pmorici 11y ago
Ethereum boosters have really been taking advantage of the strife in the Bitcoin community over the past two months. There was a massive private message spam campaign on Reddit and then when classic didn't immediately win there were a ton of "I sold all my btc and bought ETH" posts many of which were probably spam. The Peak in ETH price was a few days ago around 14 and the price has been tanking since. These NYT pieces will probably give it another leg up though. The funny thing is that there are very few exchanges where you can buy ETH for USD directly instead you have to first buy BTC then exchange it for ETH.
qwtel 11y ago
The 'emperor has no close situation' with all blockchain technology is that they simply don't scale to any real-world capacity. What sets ethereum apart in that respect, is that they at least have a plan about how to solve it. It is far from clear if it will even work and if they will be able to switch out the engine of a running blockchain, but if they are able to pull it off, I guess it would be a big deal.
- reddytowns 11y ago
  Not true, bitshares (bitshares.org) can handle 100,000 transactions per second right now. Also, regarding bitcoin, there is the lightning network which can take most of the load off the main chain.
- sgt101 11y ago
  Blockchain technology is a big area, proof of stake vs proof of work debates are interesting but there are simple mechanisms that provide different levels of trust in different settings. For example a simple 2/3 membership vote implemented in a closed system can provide substantial trust - although not perfect. On the other hand if 60% of your proof of work capability lives behind a firewall and may in reality belong to one actor due to that actors track record of kidnapping anyone behind the firewall that disagrees with it then you have an imperfect situation as well.
bsurmanski 11y ago
One of the 'selling points' of Ethereum is the 'global computer' aspect. Essentially Ethereum is designed so that you can put programs on the block chain. Programs that can be called transactionally and where the result of the program is guaranteed to be correct. Why is this important? Well, lets imagine a dice game. If on a traditional server, the program can cheat and give an unnatural edge to the site-owner. With ethereum programs, you can look at the source and know that said dice program is 'fair'. At the same time, from the perspective of the programmer, the blockchain ensures the users can't cheat you, either. Now this sounds cool, but I can say from first hand experience that this is actually kinda trash. Last I looked into this (around October), programs were limited to a very low number of clock cycles before the program cancelled out. How long a program would be too long? Through experimentation I found that a program more than about 30-40 lines of their C-like language would regularly hit the limit. What happens when you hit the operations limit? the program rolls-back without any effect, eating your transaction fee. Now, you can pay for more operations, but there is a limit. Even with the max number of operations you can't do too much. You can store values on the block chain, but any write or update takes up an substantial amount of 'gas' (the unit of currency for computation and storage). So to imagine the limits, their 'global computer' acts like a coin-op machine where each quarter gets you 40-50 bytes of storage OR maybe 500 clock cycles on a virtual CPU. But, if the program tries to use more than a quarter, everything is rolled-back and your quarter is gone. (There is (last I checked), no way to know if your program will go over. Just trial and error). Not only that, but (last i checked), the programs were compiled to a bytecode and there was no dissembler. Meaning that if someone wants to verify a program, they need the exact source code and exact compiler the dev used, and must MD5 the results. Beyond that, there isn't really any good testing tools. Last i checked, the only way to run a program is to deploy it. So, you have to setup your own private chain to test on and continuously deploy and wait and test. There was a way to sort-of put debug prints in your program, but remember how I mentioned that a program that fails rolls-back? Well, it won't output anything either. And there were operations (some undocumented) that would simply crash the program. Index-out-of-bound? Silently crash program. AND the act of debug-printing would take up valuable storage (pushing your program over the edge of the limit). In summary, the 'global computer' is so limited to be practically useless and the development process is (currently) a fate worse than hell. /rant
Taek 11y ago
Proponents of Ethereum ignore the fact that Ethereum fails to address any of the most significant problems in Bitcoin. Bitcoin's major advantage is decentralization, and it's about the only thing that Bitcoin does better than anything else. Bitcoin is an extremely expensive way to build a financial system, and there's no reason to go through the trouble unless you are utilizing the decentralization. Bitcoin's major problems are scale, miner centralization, and developer centralization. Ethereum is worse than Bitcoin in all three respects. Transactions on Ethereum are heavier, develoepment is very heavily controlled by the Ethereum foundation and by Consensys, and the block algorithm in Ethereum more strongly favors larger miners as compared to Bitcoin (which already favors bigger miners). Further, the Ethereum develoepment team is under qualified. There have been several ametuer mistakes, including allowing negative balance, leaking private keys, and putting consensus at risk by advocating that different users should be running different consensus codebases. Most of the highly capable developers in the cryptocurrency ecosystem avoid Ethereum because it's not been constructed well, nor does it's design suggest strong resistance to adversarial environments. Bitcoin did go through similar growing pains. Bitcoin did have many ametuer mistakes when getting started. But those have all been fixed, and there is a positively enormous amount of competent mindshare powering Bitcoin, and the thoroughness of decentralization in Bitcoin is unmatched by any altcoin, including Ethereum. Ethereum has offered a lot of cool tricks with its turing complete scripting language, but is standing on a house of cards. It scales less well than Bitcoin, it's design more heavily promotes centralization, it's development is more ametuer, and the potential applications offered by its fancy scripting language are not actually that much stronger than what you can do with Bitcoin. The showcase applications such as Augur and Slockit suffer from weak cryptographic fundamentals and under-qualified developers even worse than Ethereum does.
- kushti 11y ago
  Bitcoin is highly centralized, 90% of mining power was in one room recently. Ethereum's Ethash is better protected against specialized hardware, but not well verified yet. In other aspects you've mentioned, especially scaling, Ethereum is surely nightmare.
  - manigandham 11y ago
known 11y ago
You cease to exist as an Independent Nation if you can't print your own currency
joosters 11y ago
Ethereum becomes useless as soon as it interacts with the real world. Its brave new world of digital contracts works fine for creating simple gambling games or 'provably fair' Ponzi schemes, but as soon as a piece of code on the blockchain has to rely on a real world piece of data, you lose all of the benefits of the system. You want to write something related to (say) a share price, or property ownership? Then your code needs to trust an external system providing the data, and the users need to trust that other people will honour the 'facts' decided by your program on the blockchain. You want to create even a simple system that opens a lock when someone pays money? (The much-hyped Slock.it startup selling 'smart' locks) The blockchain makes no promise that a physical lock will operate based on bits in the blockchain. You have to trust that someone isn't cheating you. And why is this need for extra trust a problem? Because once you require trust, you are back into the real world where we already have real solutions to these Ethereum based problems, that rely on trust (e.g. Share dealing, property sales, etc). By moving onto the blockchain, you have gained nothing and only complicated matters. It's like the IoT: putting a blockchain into an existing system is just as helpful as wiring your fridge up to the Internet. For anyone getting seriously involved in Ethereum, sorry for your loss.
- qwtel 11y ago
  If you are sure that the Ethereum project will fail, I'd be happy to take on bets 1 : infinity. I pay you $1 if the project is no longer around, say 10 years from now, you pay me everything you have otherwise. It would only be rational for you to take this bet, since I'm offering you a free dollar according to your beliefs. EDIT: the intent here was to expose overconfidence and vague predictions, not pay fan service to ethereum or suggest an actual bet. if anybody is interested in how to make proper predictions, I recommend the books by Philip Tetlock, especially the latest called Superforecasting [1]. EDIT2: I wasn't aware my views are so controversial, so here is some more background: If somebody was convinced something couldn't happen, he'd assign a probability of 0 to that event. If that person wanted to act according to her believes, taking on bets, no matter the odds, would have positive expected utility. Since almost nobody takes on such bets, it suggests that we generally over-exaggerate when we say things like "impossible" or "sorry for you loss", hence we are being overconfident. The other is vagueness. By not being clear about what exactly we are predicting, we're leaving the door open to back out of it later. In fact, Tetlock has found that, by making vague predictions, experts could later convince themselves (and others) that they were "close", skewing their sense of accuracy. Unfortunately, when subject to a prediction tournament with strict rules, they would score no better than random [2]. [1]: http://www.amazon.com/Superforecasting-The-Art-Science-Prediction/dp/0804136696 http://www.amazon.com/Superforecasting-The-Art-Science-Predi... [2]: http://www.amazon.com/Expert-Political-Judgment-Good-Know/dp/0691128715 http://www.amazon.com/Expert-Political-Judgment-Good-Know/dp...
deleted 11y ago
[deleted]
Kiro 11y ago
So is it time to invest in ETH?
- defgeneric 11y ago
  yes
aserafini 11y ago
Although superficially 'almost' as large as Bitcoin in terms of market cap and transaction volume, the amount of hash power securing the Ethereum network is several orders of magnitude lower: Bitcoin: 1.2 Exahash / second Ethereum: 1.6 Terahash / second
- onestone 11y ago
  Comparing the two is completely meaningless. Ethereum's hash function (Ethash) is orders of magnitude more expensive than Bitcoin's SHA256. And also, it is ASIC-resistant.
  - aserafini 11y ago
    Good point, a better way to compare would be the Watts consumed by each network: that gives you the minimum energy costs required for a 51% attack. Unfortunately I can't seem to find any typical "hashes per joule" numbers for Ethereum mining rigs that would allow us to extrapolate this. I still speculate it would be orders of magnitude more expensive to launch such an attack on the Bitcoin network.
    - tromp 11y ago
      The mining reward itself is a good estimator of the energy cost (an over-estimate in fact since the reward has to cover both energy costs as well as hardware investment/depreciation, but the former dominates the latter). So attacking bitcoin costs roughly 150BTC per hour, while attacking Ethereum costs roughly 1200ETH (worth about 30BTC currently) per hour. This suggests Bitcoin is 5 times more "secure".
      - aserafini 11y ago
        Mining reward and exchange rate gives us a strict upper bound on the cost of energy it's economical to spend on mining but I'm not sure it provides a good estimate of the actual energy being used. If energy_used = mining_reward * exchange_rate, an increase in hash power would be correlated positively with exchange rate. In reality, Bitcoin hashrate has increased over 30x in the last 2 years and the exchange rate in USD has actually decreased in the same period. That suggests we aren't using anywhere near the upper bound of energy that remains economical. Given that Bitcoin network performs 1 million x as many hashes per second than Ethereum, the energy cost per Ethash must be somewhere like 200,000x more expensive than SHA256 to compute if we are to assume Bitcoin is only 5x as 'secure'. I have't fired up an Ether mining rig to test whether that is the case or not, but it seems highly unlikely so I'm still maintaining a 51% attack against Bitcoin is orders of magnitude more costly to perform than the equivalent attack on Ether. Realistic 'energy use per hash' for SHA256 versus Ethash would be good numbers to have that either refure or back that up. UPDATE: found some numbers from mining rig data. We can use 'hashes per joule' numbers for the most efficient Bitcoin mining rig and Ethereum mining rig. Top Bitcoin mining rig performs 4000 Mhash/J according to [1] Top Ether mining rig performs 0.08 Mhash/J according to [2] So if every miner achieves those numbers, the Bitcoin network is currently running around 300,000,000W versus 20,000,000W on Ethereum network (15x). So, perhaps not orders of magnitude more secure, but probably at least one! (for the time being). [1] https://en.bitcoin.it/wiki/Mining_hardware_comparison https://en.bitcoin.it/wiki/Mining_hardware_comparison [2] http://www.vmxlabs.com/ http://www.vmxlabs.com/
jtwaleson 11y ago
Is it naive to think this NYT article will cause the ETH price to go up for the next few days? Suppose the article has 10M viewers, 1% decides to buy some ETH for investment, on average $500, that means $50M of extra demand in a matter of days. (These numbers are wild guesses.) Current daily trade volume is $25M.
- wslh 11y ago
  It's not naive, but there is no Coinbase for Ethereum so you need some knowledge to run the node (also, it is not just running it because sometimes it fails to work properly). Taking into account this friction less people will try.
  - DennisP 11y ago
    People can buy ether on Bitfinex, Kraken, and Poloniex. The first two take dollars, the last only bitcoins.
tdkl 11y ago
Being honest sometimes results in being a jerk. No big deal, an emotionally mature adult can handle it.
- ska 11y ago
  Your last statement is true, but your first one couldn't be more wrong. Being honest never requires being a jerk. That is always a choice you make.
  - nomercypercy 11y ago
    Can we all agree that saying sorry for your loss when people are obviously buying into a hype bubble is not "being a jerk". A lot of people will lose a lot of money here, just like with Bitcoin bubbles. "It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future." - Wikipedia, Economic Bubble (https://en.wikipedia.org/wiki/Economic_bubble https://en.wikipedia.org/wiki/Economic_bubble) That is exactly what is happening here and anyone denying it is probably a person who bought earlier than you.
  - edo 11y ago
    I would like to argue that being a jerk even devalues the argument one is making. Because through being a jerk (which requires as much effort as bringing it in a more neutral way), one provides proof of subjective involvement. This subjective involvement detracts from your credibility as a source of reason.
    - ska 11y ago
      I agree, but think this is orthogonal to my point.
  - randomnumber314 11y ago
    If I tell a fat person that they're fat, and they are, they can perceive that I'm being a jerk, but they're still fat, and my statement is still objectively true. The perception of the truth being spoken by me as negative comes from the receiver--it's their issue with the statement that attaches emotion, not mine. Remove context from his statement and surrogate anything we have objective knowledge of (e.g. housing market 2009) and the statement morphs from "arrogant prediction and condescension" to an appropriate comment on reality.
theworstshill 11y ago
Ethereum is a distrubuted JVM basically? Guess its alright if you wanna run a casino that can't get taken down, otherwise I dont know what kind of uses you can find for this thing.
- nix_said 11y ago
  Except much much more limited and every line of code costs way more money to run on one computer while only acting as if it was ran on a single computer in practice.
  - theworstshill 11y ago
    Thats exactly why I mentioned an application such as a casino - the vm will provide guarantee of a payout. People will pay for that, but they won't pay for you to run 3D games on the thing.
babukumaran 11y ago
For anyone who wants to get into Ethereum or buy Ethers, here is some great info on getting started: http://www.blockgram.com http://www.blockgram.com
- csomar 11y ago
  You should mention if you are affiliated with this site.
  - babukumaran 11y ago
    Yes, I wrote the tutorial. I am not associated with any of the companies providing the services I mentioned in the blog. Thanks for pointing it.

226 points by drcode 11y ago

(The title of the HN post is the updated title for the article, as it will appear in Monday's NYTimes print edition - See article footer.)

johng 11y ago

I've been into Bitcoin (and Litecoin) since the early days. Well, relatively early. Ethereum really has me interested.

brighton36 11y ago
No one needs smart contracts. And the value proposition of Ethereum will require an inordinate need for ether in order to support the mining requirements of the chain. This project is a scam
- erikpukinskis 11y ago
  Personally I'd be happy to pay way over market hosting rates to host, say, my articles of incorporation, equity trades, and accounts receivable. That seems like one of the most exciting uses of ethereum to me. Write a plugin to "export to IRS".
  - magicGLASSman 11y ago
    Why not just use a database? what do you think the advantage of using Ethereum for this is?
    - dev1n 11y ago
      no more annoying financial audits?
    - erikpukinskis 11y ago
      Each party can audit the contracts and infrastructure at any time. There's also an easy path for a dissenting quorum to reincorporate on their own.
moab 11y ago
What exactly are you contributing with this statement? Isn't voting up the link identical to your comment? Why is Ethereum really interesting to you?

zaroth 11y ago

Wow, great publicity for Ethereum. Except, they can't ever bring themselves to explain what it does, or what it means. We're missing the 'why'.

natrius 11y ago
Blockchains are peer-to-peer cloud computers that collectively enforce a set of rules on a historical record that they create together. If the rules meet your needs, you can use a blockchain’s history as the source of truth for any information you want because no one can break those rules. Bitcoin’s rules define a currency: how are new tokens produced, how many are allowed, how they can be transferred from one person to another, etc. Ethereum’s rules define a process for defining new rules. This makes it a universal blockchain where rules for any interaction can be defined, and anyone can choose whether to treat its historical record as their source of truth. We're in the process of defining economic interactions—both existing and novel interactions—as entries in a digital historical record to eliminate the need for middlemen in much of our economy and give everyone access to financial tools that were once limited to the wealthy and their corporations. Social interactions that don't involve money can be built as well. Join us. Let's build software that users control.
- Anonobread 11y ago
  Users don't control cloud software.
  - natrius 11y ago
    Rules in blockchain-based software cannot change ex post facto. The only decision involved is the user's choice to use the application in the first place. These are user-controlled applications. (I've tried explaining these as applications that no one controls, but that has a wild west connotation that isn't applicable.)
    - Anonobread 11y ago
      My point is running all the nodes in the cloud means that the users of those nodes don't own them. > the user's choice to use the application in the first place. Right, but if none of the users can even run the so called "peer-to-peer" component, what's the difference between that and run-of-the-mill centralized DB software? Either way nobody but the chosen few can directly access the DB.

aminorex 11y ago

Great. More fools for the fire.

seymores 11y ago

Just want to mention RootStalk here, make bitcoin on par with ethereum in regards to smart contract.

test6435341 11y ago

Corporate handling bitcoin... Interesting.

qwtel 11y ago
I'd say this is corporate handling bitcoin: http://chain.com/ http://chain.com/

grapevines 11y ago

Ethereum could quickly outdate itself by defining a fixed language. How will the language adapt? Very slowly by consensus if Ethereum hopes to become a large market player. Bitcoin could be easily made Turing complete. If each transaction can store 80 bytes of information, then one could use 48 bytes to store code and the remaining 32 bytes to refer to another transaction storing the next block of code and thus chain together code. Unless I am missing something, a new currency is simply unnecessary, and will always be at a second-mover disadvantage. Soon, I am sure a prototype of what I described will be released on bitcoin thus obscuring Ethereum. A solid use-case for distributed computing would be distributed HTTP delivery. If ethereum could offer a product for decentralized web-hosting, then I would buy into their product, but until then the whole situation is just vaporware to me.

adrianmacneil 11y ago
> Ethereum offers nothing more than Bitcion It offers a more powerful scripting language to define contracts. > Ethereum could quickly outdate itself by defining a fixed language. If offers a "bytecode" type language which can be created by compiling contracts in >=2 languages already. Bitcoin currently lets you define contracts in the equivalent of assembly code, with no higher level languages available. So this statment seems to apply more to Bitcoin than Ethereum. > Bitcoin could be easily made Turing complete. Bitcoin developers can't even agree to a simple block size increase. What makes you think they would be able to do something as complex as adding turing-complete scripting capabilities? > Unless I am missing something, a new currency is simply unnecessary. Since bitcoin does not support 2-way pegged sidechains yet, it's not possible to launch a new blockchain without launching a new currency to power that blockchain. Besides, you need a way to reward the miners. > Soon, I am sure a prototype of what I described will be released on bitcion thus obscuring Ethereum. That's basically what Rootstock[0] is supposed to be. Although at present, it seems to be vaporware. A year ago I used to have a similar viewpoint to you, that Bitcoin had such a massive first mover advantage and network effects that it would remain the dominant public blockchain, and that even as new inventions appeared, they would be backported to bitcoin. But over the past 6 months I've realized how useless Bitcoin is without a genuine respected leader/BDFL, and now think that without a leader it's doomed to design by committee and stalemate on key decisions, which leaves the playing field wide open for competitors like Ethereum. [0] http://www.rootstock.io/ http://www.rootstock.io/

pmorici 11y ago

Ethereum boosters have really been taking advantage of the strife in the Bitcoin community over the past two months. There was a massive private message spam campaign on Reddit and then when classic didn't immediately win there were a ton of "I sold all my btc and bought ETH" posts many of which were probably spam. The Peak in ETH price was a few days ago around 14 and the price has been tanking since. These NYT pieces will probably give it another leg up though. The funny thing is that there are very few exchanges where you can buy ETH for USD directly instead you have to first buy BTC then exchange it for ETH.

qwtel 11y ago

The 'emperor has no close situation' with all blockchain technology is that they simply don't scale to any real-world capacity. What sets ethereum apart in that respect, is that they at least have a plan about how to solve it. It is far from clear if it will even work and if they will be able to switch out the engine of a running blockchain, but if they are able to pull it off, I guess it would be a big deal.

reddytowns 11y ago
Not true, bitshares (bitshares.org) can handle 100,000 transactions per second right now. Also, regarding bitcoin, there is the lightning network which can take most of the load off the main chain.
sgt101 11y ago
Blockchain technology is a big area, proof of stake vs proof of work debates are interesting but there are simple mechanisms that provide different levels of trust in different settings. For example a simple 2/3 membership vote implemented in a closed system can provide substantial trust - although not perfect. On the other hand if 60% of your proof of work capability lives behind a firewall and may in reality belong to one actor due to that actors track record of kidnapping anyone behind the firewall that disagrees with it then you have an imperfect situation as well.

bsurmanski 11y ago

One of the 'selling points' of Ethereum is the 'global computer' aspect. Essentially Ethereum is designed so that you can put programs on the block chain. Programs that can be called transactionally and where the result of the program is guaranteed to be correct. Why is this important? Well, lets imagine a dice game. If on a traditional server, the program can cheat and give an unnatural edge to the site-owner. With ethereum programs, you can look at the source and know that said dice program is 'fair'. At the same time, from the perspective of the programmer, the blockchain ensures the users can't cheat you, either. Now this sounds cool, but I can say from first hand experience that this is actually kinda trash. Last I looked into this (around October), programs were limited to a very low number of clock cycles before the program cancelled out. How long a program would be too long? Through experimentation I found that a program more than about 30-40 lines of their C-like language would regularly hit the limit. What happens when you hit the operations limit? the program rolls-back without any effect, eating your transaction fee. Now, you can pay for more operations, but there is a limit. Even with the max number of operations you can't do too much. You can store values on the block chain, but any write or update takes up an substantial amount of 'gas' (the unit of currency for computation and storage). So to imagine the limits, their 'global computer' acts like a coin-op machine where each quarter gets you 40-50 bytes of storage OR maybe 500 clock cycles on a virtual CPU. But, if the program tries to use more than a quarter, everything is rolled-back and your quarter is gone. (There is (last I checked), no way to know if your program will go over. Just trial and error). Not only that, but (last i checked), the programs were compiled to a bytecode and there was no dissembler. Meaning that if someone wants to verify a program, they need the exact source code and exact compiler the dev used, and must MD5 the results. Beyond that, there isn't really any good testing tools. Last i checked, the only way to run a program is to deploy it. So, you have to setup your own private chain to test on and continuously deploy and wait and test. There was a way to sort-of put debug prints in your program, but remember how I mentioned that a program that fails rolls-back? Well, it won't output anything either. And there were operations (some undocumented) that would simply crash the program. Index-out-of-bound? Silently crash program. AND the act of debug-printing would take up valuable storage (pushing your program over the edge of the limit). In summary, the 'global computer' is so limited to be practically useless and the development process is (currently) a fate worse than hell. /rant

Taek 11y ago

Proponents of Ethereum ignore the fact that Ethereum fails to address any of the most significant problems in Bitcoin. Bitcoin's major advantage is decentralization, and it's about the only thing that Bitcoin does better than anything else. Bitcoin is an extremely expensive way to build a financial system, and there's no reason to go through the trouble unless you are utilizing the decentralization. Bitcoin's major problems are scale, miner centralization, and developer centralization. Ethereum is worse than Bitcoin in all three respects. Transactions on Ethereum are heavier, develoepment is very heavily controlled by the Ethereum foundation and by Consensys, and the block algorithm in Ethereum more strongly favors larger miners as compared to Bitcoin (which already favors bigger miners). Further, the Ethereum develoepment team is under qualified. There have been several ametuer mistakes, including allowing negative balance, leaking private keys, and putting consensus at risk by advocating that different users should be running different consensus codebases. Most of the highly capable developers in the cryptocurrency ecosystem avoid Ethereum because it's not been constructed well, nor does it's design suggest strong resistance to adversarial environments. Bitcoin did go through similar growing pains. Bitcoin did have many ametuer mistakes when getting started. But those have all been fixed, and there is a positively enormous amount of competent mindshare powering Bitcoin, and the thoroughness of decentralization in Bitcoin is unmatched by any altcoin, including Ethereum. Ethereum has offered a lot of cool tricks with its turing complete scripting language, but is standing on a house of cards. It scales less well than Bitcoin, it's design more heavily promotes centralization, it's development is more ametuer, and the potential applications offered by its fancy scripting language are not actually that much stronger than what you can do with Bitcoin. The showcase applications such as Augur and Slockit suffer from weak cryptographic fundamentals and under-qualified developers even worse than Ethereum does.

kushti 11y ago
Bitcoin is highly centralized, 90% of mining power was in one room recently. Ethereum's Ethash is better protected against specialized hardware, but not well verified yet. In other aspects you've mentioned, especially scaling, Ethereum is surely nightmare.
- manigandham 11y ago

known 11y ago

You cease to exist as an Independent Nation if you can't print your own currency

joosters 11y ago

Ethereum becomes useless as soon as it interacts with the real world. Its brave new world of digital contracts works fine for creating simple gambling games or 'provably fair' Ponzi schemes, but as soon as a piece of code on the blockchain has to rely on a real world piece of data, you lose all of the benefits of the system. You want to write something related to (say) a share price, or property ownership? Then your code needs to trust an external system providing the data, and the users need to trust that other people will honour the 'facts' decided by your program on the blockchain. You want to create even a simple system that opens a lock when someone pays money? (The much-hyped Slock.it startup selling 'smart' locks) The blockchain makes no promise that a physical lock will operate based on bits in the blockchain. You have to trust that someone isn't cheating you. And why is this need for extra trust a problem? Because once you require trust, you are back into the real world where we already have real solutions to these Ethereum based problems, that rely on trust (e.g. Share dealing, property sales, etc). By moving onto the blockchain, you have gained nothing and only complicated matters. It's like the IoT: putting a blockchain into an existing system is just as helpful as wiring your fridge up to the Internet. For anyone getting seriously involved in Ethereum, sorry for your loss.

qwtel 11y ago
If you are sure that the Ethereum project will fail, I'd be happy to take on bets 1 : infinity. I pay you $1 if the project is no longer around, say 10 years from now, you pay me everything you have otherwise. It would only be rational for you to take this bet, since I'm offering you a free dollar according to your beliefs. EDIT: the intent here was to expose overconfidence and vague predictions, not pay fan service to ethereum or suggest an actual bet. if anybody is interested in how to make proper predictions, I recommend the books by Philip Tetlock, especially the latest called Superforecasting [1]. EDIT2: I wasn't aware my views are so controversial, so here is some more background: If somebody was convinced something couldn't happen, he'd assign a probability of 0 to that event. If that person wanted to act according to her believes, taking on bets, no matter the odds, would have positive expected utility. Since almost nobody takes on such bets, it suggests that we generally over-exaggerate when we say things like "impossible" or "sorry for you loss", hence we are being overconfident. The other is vagueness. By not being clear about what exactly we are predicting, we're leaving the door open to back out of it later. In fact, Tetlock has found that, by making vague predictions, experts could later convince themselves (and others) that they were "close", skewing their sense of accuracy. Unfortunately, when subject to a prediction tournament with strict rules, they would score no better than random [2]. [1]: http://www.amazon.com/Superforecasting-The-Art-Science-Prediction/dp/0804136696 http://www.amazon.com/Superforecasting-The-Art-Science-Predi... [2]: http://www.amazon.com/Expert-Political-Judgment-Good-Know/dp/0691128715 http://www.amazon.com/Expert-Political-Judgment-Good-Know/dp...

deleted 11y ago

[deleted]

Kiro 11y ago

So is it time to invest in ETH?

defgeneric 11y ago
yes

aserafini 11y ago

Although superficially 'almost' as large as Bitcoin in terms of market cap and transaction volume, the amount of hash power securing the Ethereum network is several orders of magnitude lower: Bitcoin: 1.2 Exahash / second Ethereum: 1.6 Terahash / second

onestone 11y ago
Comparing the two is completely meaningless. Ethereum's hash function (Ethash) is orders of magnitude more expensive than Bitcoin's SHA256. And also, it is ASIC-resistant.
- aserafini 11y ago
  Good point, a better way to compare would be the Watts consumed by each network: that gives you the minimum energy costs required for a 51% attack. Unfortunately I can't seem to find any typical "hashes per joule" numbers for Ethereum mining rigs that would allow us to extrapolate this. I still speculate it would be orders of magnitude more expensive to launch such an attack on the Bitcoin network.
  - tromp 11y ago
    The mining reward itself is a good estimator of the energy cost (an over-estimate in fact since the reward has to cover both energy costs as well as hardware investment/depreciation, but the former dominates the latter). So attacking bitcoin costs roughly 150BTC per hour, while attacking Ethereum costs roughly 1200ETH (worth about 30BTC currently) per hour. This suggests Bitcoin is 5 times more "secure".
    - aserafini 11y ago
      Mining reward and exchange rate gives us a strict upper bound on the cost of energy it's economical to spend on mining but I'm not sure it provides a good estimate of the actual energy being used. If energy_used = mining_reward * exchange_rate, an increase in hash power would be correlated positively with exchange rate. In reality, Bitcoin hashrate has increased over 30x in the last 2 years and the exchange rate in USD has actually decreased in the same period. That suggests we aren't using anywhere near the upper bound of energy that remains economical. Given that Bitcoin network performs 1 million x as many hashes per second than Ethereum, the energy cost per Ethash must be somewhere like 200,000x more expensive than SHA256 to compute if we are to assume Bitcoin is only 5x as 'secure'. I have't fired up an Ether mining rig to test whether that is the case or not, but it seems highly unlikely so I'm still maintaining a 51% attack against Bitcoin is orders of magnitude more costly to perform than the equivalent attack on Ether. Realistic 'energy use per hash' for SHA256 versus Ethash would be good numbers to have that either refure or back that up. UPDATE: found some numbers from mining rig data. We can use 'hashes per joule' numbers for the most efficient Bitcoin mining rig and Ethereum mining rig. Top Bitcoin mining rig performs 4000 Mhash/J according to [1] Top Ether mining rig performs 0.08 Mhash/J according to [2] So if every miner achieves those numbers, the Bitcoin network is currently running around 300,000,000W versus 20,000,000W on Ethereum network (15x). So, perhaps not orders of magnitude more secure, but probably at least one! (for the time being). [1] https://en.bitcoin.it/wiki/Mining_hardware_comparison https://en.bitcoin.it/wiki/Mining_hardware_comparison [2] http://www.vmxlabs.com/ http://www.vmxlabs.com/

jtwaleson 11y ago

Is it naive to think this NYT article will cause the ETH price to go up for the next few days? Suppose the article has 10M viewers, 1% decides to buy some ETH for investment, on average $500, that means $50M of extra demand in a matter of days. (These numbers are wild guesses.) Current daily trade volume is $25M.

wslh 11y ago
It's not naive, but there is no Coinbase for Ethereum so you need some knowledge to run the node (also, it is not just running it because sometimes it fails to work properly). Taking into account this friction less people will try.
- DennisP 11y ago
  People can buy ether on Bitfinex, Kraken, and Poloniex. The first two take dollars, the last only bitcoins.

tdkl 11y ago

Being honest sometimes results in being a jerk. No big deal, an emotionally mature adult can handle it.

ska 11y ago
Your last statement is true, but your first one couldn't be more wrong. Being honest never requires being a jerk. That is always a choice you make.
- nomercypercy 11y ago
  Can we all agree that saying sorry for your loss when people are obviously buying into a hype bubble is not "being a jerk". A lot of people will lose a lot of money here, just like with Bitcoin bubbles. "It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future." - Wikipedia, Economic Bubble (https://en.wikipedia.org/wiki/Economic_bubble https://en.wikipedia.org/wiki/Economic_bubble) That is exactly what is happening here and anyone denying it is probably a person who bought earlier than you.
- edo 11y ago
  I would like to argue that being a jerk even devalues the argument one is making. Because through being a jerk (which requires as much effort as bringing it in a more neutral way), one provides proof of subjective involvement. This subjective involvement detracts from your credibility as a source of reason.
  - ska 11y ago
    I agree, but think this is orthogonal to my point.
- randomnumber314 11y ago
  If I tell a fat person that they're fat, and they are, they can perceive that I'm being a jerk, but they're still fat, and my statement is still objectively true. The perception of the truth being spoken by me as negative comes from the receiver--it's their issue with the statement that attaches emotion, not mine. Remove context from his statement and surrogate anything we have objective knowledge of (e.g. housing market 2009) and the statement morphs from "arrogant prediction and condescension" to an appropriate comment on reality.

theworstshill 11y ago

Ethereum is a distrubuted JVM basically? Guess its alright if you wanna run a casino that can't get taken down, otherwise I dont know what kind of uses you can find for this thing.

nix_said 11y ago
Except much much more limited and every line of code costs way more money to run on one computer while only acting as if it was ran on a single computer in practice.
- theworstshill 11y ago
  Thats exactly why I mentioned an application such as a casino - the vm will provide guarantee of a payout. People will pay for that, but they won't pay for you to run 3D games on the thing.

babukumaran 11y ago

For anyone who wants to get into Ethereum or buy Ethers, here is some great info on getting started: http://www.blockgram.com http://www.blockgram.com

csomar 11y ago
You should mention if you are affiliated with this site.
- babukumaran 11y ago
  Yes, I wrote the tutorial. I am not associated with any of the companies providing the services I mentioned in the blog. Thanks for pointing it.