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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

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...
- mootothemax 11y ago
  >if the project is no longer around You're offering a nonsensical bet. We live a world where people often delight in keeping obscure things alive. Even http://nyan-coin.org http://nyan-coin.org still has a following! As an illustration of what I mean, I'll be incredibly surprised if bitcoin ever truly dies, and the price ever truly tanks. I'd expect coins to remain above $100, as a few people will flat-out refuse to sell for less, and minimal trading will still take place. Anything in the "real" world though? naaaaah.
  - qwtel 11y ago
    Yes, I have to admit it's vague. Price below $1 or not traded at all, would be a better condition. Maybe add some trade volume requirements as well.
    - mootothemax 11y ago
      >Price below $1 or not traded at all All it'd take is two bored people to stop this from happening, merrily trading just for their own delight. As with bitcoin, I'd be really surprised if any of these coins stopped being used entirely, thanks to tech enthusiasts keeping them alive.
      - qwtel 11y ago
        Generally, there has to be some condition on which to judge the success of a project.
        mootothemax 11y ago
        >Generally, there has to be some condition on which to judge the success of a project. So why not try offering a bet on the success of a project, rather than going through the horror of trying to prove a negative?
    - pavel_lishin 11y ago
      Debating the exact rules of this bet is already not worth a dollar of anyone's time.
jnbiche 11y ago
> For anyone getting seriously involved in Ethereum, sorry for your loss. I appreciate good criticism, and you bring up an important point (which the digital currency communities have solved so far in an ad-hoc manner using "oracles", look it up if you aren't already familiar with it. At best it's a half solution, but it's not quite as bad as you portray here). But why add that last statement? Just to be a jerk? Revel in your superior understanding/arrogance? I don't get it. Edit: And for the record, I own no Ethereum and a few cents or dollars worth of Bitcoin, not sure how much.
- riprowan 11y ago
  What you're looking at right there is the very high cost of the toxic environment being nurtured by Theymos and his supporters. For those who don't know, Theymos is the name of the person who controls the most important communication channels: /r/Bitcoin, Bitcoin.org, and others. He has a clear and stated agenda and makes no bones about his policies. In short he curates social media channels to reflect his point of view and hide opposition. The blatant censorship and the armies of trolls arguing their convoluted logic have ended most polite and reasoned conversation on the topic.
  - joosters 11y ago
    Which came first? The toxic discussion boards or the toxic blockchain scammers?
- joosters 11y ago
  Sorry if it sounded superior, it was not meant in that way. "sorry for your loss" seemed to become a very common phrase on most Bitcoin-related discussions where someone posted how they made a mistake, trusted a con, got scammed etc. There would always be someone saying sorry, perhaps someone tipping the poor unfortunate 0.5 cents out of sympathy, and an army of others revelling in pointing out which of the many hundreds of 'obvious' precautions they should have taken to avoid their misfortune. My prediction is that many many Ethereum users will be hearing the SFYL phrase when their promised 'trustless' system fails or the armies of scammers converge on a new blockchain.
varav 11y ago
> your code needs to trust an external system providing the data As for the reliability of external data sources to a contract running on Ethereum, there are multiple proposed solutions. One is to use some sort of reputation tokens similar to what Augur[1] - a prediction market built on Ethereum; employs. Another solution that was suggested by one of the co-founders of the Ethereum project is to use "Schelling points"[2] as guides since a large number of non-communicating reporters of events will most likely converge at what is closest to the truth[3]. > other people will honour the 'facts' decided by your program I don't really see that as a technical limitation of Ethereum. IANAL but, if the terms of the smart contract can be codified into a legal agreement, then the decisions of the program can be made enforceable by law. [1]: http://augur.link/augur.pdf http://augur.link/augur.pdf [2]: https://en.wikipedia.org/wiki/Focal_point_%28game_theory%29 https://en.wikipedia.org/wiki/Focal_point_%28game_theory%29 [3]: https://blog.ethereum.org/2014/03/28/schellingcoin-a-minimal-trust-universal-data-feed/ https://blog.ethereum.org/2014/03/28/schellingcoin-a-minimal...
jpereira 11y ago
To take your Slock.it example, isn't Ethereum still adding value to the interaction even if your trust is broken? You have a cryptographic proof with a timestamp that you transacted with the individual, who then failed to follow through. Suppose every user who "slocks" something has to put up a stake, or an account with some Ether in it. If there is then a dispute a user could submit it to a decentralized jury of some sort, also putting up their own stake, and which ever party loses has to pay damages from the linked account. Ethereum isn't interesting solely because it allows computations, but also because it provides a immutable datastore (as bitcoin does) that then can be used in Smart Contracts and systems. I see it as a platform for building trust, not a guarantee of trust.
- mootothemax 11y ago
  You have a cryptographic proof with a timestamp that you transacted with the individual, who then failed to follow through. Do you, though? One large problem with bitcoin is that you cannot prove that you don't own a given address. IF this is also true for Ethereum, all you really get is proof that you sent money to an address; not that the address necessarily belongs to anyone.
  - jpereira 11y ago
    Well the address would be registered into the Slock.it system, so you have proof that a certain lock belongs to a certain address. In a way though your point still stands, a user could always claim that someone else put the listing up or someother situation beyond their control, UNLESS there is previous history within the slock.it ecosystem, which would be very easy to see.
    - readysetmain 11y ago
      Slock.it sounds like brain crack. They spend all their time writing few paragraph blog posts and no code is produced. Even if it was produced, why would someone use an easy to game system over a centralized system with insurance and a dispute system?
    - 11y ago
tlrobinson 11y ago
Slock.it has a long way to go, but you could imagine tamper evident/resistant hardware where the integrity and origin can be externally validated. You'd still need to trust the manufacturer, and that an entity with significant (nation-state? Fortune 50?) resources hasn't successfully tampered with it, but that's a lot easier than trusting the average owner of a lock.
- joosters 11y ago
  1) No, you can't. Besides, am I really going to get to examine this tamper-evident lock on the front door of your decentralised-Airbnb rental before paying for it? Not a chance. 2) Locks could be connected to the Internet without any messy block chains getting in the way. It would really on trust, but you wouldn't need any nation-states behind it. (You can also rent locks without internet connectivity at all and without blockchains, so Slock.it is really a double layer of wasted complexity)
  - deleted 11y ago
    [deleted]
markkat 11y ago
I agree that oracles make many use-cases over-hyped, but IMO you shouldn't overlook that Ethereum is far better at transacting ETH than Bitcoin is for transacting BTC. ETH has a powerful use case as programmable money which settles faster and cheaper than any other, and has native support for payment channels and other complexities not only because of it's Turing complete language, but because it does not use bitcoin's UTXO architecture. Not all interested in Ethereum view smart contracts as the best use case.
- jerguismi 11y ago
  > Ethereum is far better at transacting ETH than Bitcoin is for transacting BTC. Care to elaborate the benefits of using ethereum for value transfers vs. bitcoin? Block size limit is an obvious advantage, but what are the others? > ETH has a powerful use case as programmable money which settles faster and cheaper than any other That is quite a claim, which makes me doubt if you know what you are talking about. In blockchain-based systems the costs are related to market dynamics. Eg. miners can decide what they put to blocks and at what price. Or is ethereum somehow fundamentally different in this aspect? > and has native support for payment channels and other complexities not only because of it's Turing complete language, but because it does not use bitcoin's UTXO architecture. Payment channels are perfectly supported by Bitcoin, what do you mean by "native"? Is it how much easier to use payment channels in ETH in practice, are people actually using them? Why is ethereums account-based architecture better than Bitcoin's UTXO architecture? Isn't really obvious to me.
  - woah 11y ago
    Take your head out of the sand. Everything is far easier to program with an actual programming language (even a somewhat mediocre one, like ethereum's solidity). It's always amusing to see the vast number of hoops that one must jump through to shoehorn functionality into bitcoin script (a non Turing complete assembly).
    - DickingAround 11y ago
      He asked a reasonable question; give a reasonable answer. For example 'bitcoin script' or 'non Turing complete assembly' is not a term that makes sense. Describe specifics.
radicalman 11y ago
This has been our conclusion as well. We were about to invest in a dozen etherium startups but ultimately decided against it for the same reason. Love the work behind it but it's just so utterly useless because not even engineers building on top of etherium trust it enough

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...

mootothemax 11y ago
>if the project is no longer around You're offering a nonsensical bet. We live a world where people often delight in keeping obscure things alive. Even http://nyan-coin.org http://nyan-coin.org still has a following! As an illustration of what I mean, I'll be incredibly surprised if bitcoin ever truly dies, and the price ever truly tanks. I'd expect coins to remain above $100, as a few people will flat-out refuse to sell for less, and minimal trading will still take place. Anything in the "real" world though? naaaaah.
- qwtel 11y ago
  Yes, I have to admit it's vague. Price below $1 or not traded at all, would be a better condition. Maybe add some trade volume requirements as well.
  - mootothemax 11y ago
    >Price below $1 or not traded at all All it'd take is two bored people to stop this from happening, merrily trading just for their own delight. As with bitcoin, I'd be really surprised if any of these coins stopped being used entirely, thanks to tech enthusiasts keeping them alive.
    - qwtel 11y ago
      Generally, there has to be some condition on which to judge the success of a project.
      - mootothemax 11y ago
        >Generally, there has to be some condition on which to judge the success of a project. So why not try offering a bet on the success of a project, rather than going through the horror of trying to prove a negative?
  - pavel_lishin 11y ago
    Debating the exact rules of this bet is already not worth a dollar of anyone's time.

jnbiche 11y ago

> For anyone getting seriously involved in Ethereum, sorry for your loss. I appreciate good criticism, and you bring up an important point (which the digital currency communities have solved so far in an ad-hoc manner using "oracles", look it up if you aren't already familiar with it. At best it's a half solution, but it's not quite as bad as you portray here). But why add that last statement? Just to be a jerk? Revel in your superior understanding/arrogance? I don't get it. Edit: And for the record, I own no Ethereum and a few cents or dollars worth of Bitcoin, not sure how much.

riprowan 11y ago
What you're looking at right there is the very high cost of the toxic environment being nurtured by Theymos and his supporters. For those who don't know, Theymos is the name of the person who controls the most important communication channels: /r/Bitcoin, Bitcoin.org, and others. He has a clear and stated agenda and makes no bones about his policies. In short he curates social media channels to reflect his point of view and hide opposition. The blatant censorship and the armies of trolls arguing their convoluted logic have ended most polite and reasoned conversation on the topic.
- joosters 11y ago
  Which came first? The toxic discussion boards or the toxic blockchain scammers?
joosters 11y ago
Sorry if it sounded superior, it was not meant in that way. "sorry for your loss" seemed to become a very common phrase on most Bitcoin-related discussions where someone posted how they made a mistake, trusted a con, got scammed etc. There would always be someone saying sorry, perhaps someone tipping the poor unfortunate 0.5 cents out of sympathy, and an army of others revelling in pointing out which of the many hundreds of 'obvious' precautions they should have taken to avoid their misfortune. My prediction is that many many Ethereum users will be hearing the SFYL phrase when their promised 'trustless' system fails or the armies of scammers converge on a new blockchain.

varav 11y ago

> your code needs to trust an external system providing the data As for the reliability of external data sources to a contract running on Ethereum, there are multiple proposed solutions. One is to use some sort of reputation tokens similar to what Augur[1] - a prediction market built on Ethereum; employs. Another solution that was suggested by one of the co-founders of the Ethereum project is to use "Schelling points"[2] as guides since a large number of non-communicating reporters of events will most likely converge at what is closest to the truth[3]. > other people will honour the 'facts' decided by your program I don't really see that as a technical limitation of Ethereum. IANAL but, if the terms of the smart contract can be codified into a legal agreement, then the decisions of the program can be made enforceable by law. [1]: http://augur.link/augur.pdf http://augur.link/augur.pdf [2]: https://en.wikipedia.org/wiki/Focal_point_%28game_theory%29 https://en.wikipedia.org/wiki/Focal_point_%28game_theory%29 [3]: https://blog.ethereum.org/2014/03/28/schellingcoin-a-minimal-trust-universal-data-feed/ https://blog.ethereum.org/2014/03/28/schellingcoin-a-minimal...

jpereira 11y ago

To take your Slock.it example, isn't Ethereum still adding value to the interaction even if your trust is broken? You have a cryptographic proof with a timestamp that you transacted with the individual, who then failed to follow through. Suppose every user who "slocks" something has to put up a stake, or an account with some Ether in it. If there is then a dispute a user could submit it to a decentralized jury of some sort, also putting up their own stake, and which ever party loses has to pay damages from the linked account. Ethereum isn't interesting solely because it allows computations, but also because it provides a immutable datastore (as bitcoin does) that then can be used in Smart Contracts and systems. I see it as a platform for building trust, not a guarantee of trust.

mootothemax 11y ago
You have a cryptographic proof with a timestamp that you transacted with the individual, who then failed to follow through. Do you, though? One large problem with bitcoin is that you cannot prove that you don't own a given address. IF this is also true for Ethereum, all you really get is proof that you sent money to an address; not that the address necessarily belongs to anyone.
- jpereira 11y ago
  Well the address would be registered into the Slock.it system, so you have proof that a certain lock belongs to a certain address. In a way though your point still stands, a user could always claim that someone else put the listing up or someother situation beyond their control, UNLESS there is previous history within the slock.it ecosystem, which would be very easy to see.
  - readysetmain 11y ago
    Slock.it sounds like brain crack. They spend all their time writing few paragraph blog posts and no code is produced. Even if it was produced, why would someone use an easy to game system over a centralized system with insurance and a dispute system?
  - 11y ago

tlrobinson 11y ago

Slock.it has a long way to go, but you could imagine tamper evident/resistant hardware where the integrity and origin can be externally validated. You'd still need to trust the manufacturer, and that an entity with significant (nation-state? Fortune 50?) resources hasn't successfully tampered with it, but that's a lot easier than trusting the average owner of a lock.

joosters 11y ago
1) No, you can't. Besides, am I really going to get to examine this tamper-evident lock on the front door of your decentralised-Airbnb rental before paying for it? Not a chance. 2) Locks could be connected to the Internet without any messy block chains getting in the way. It would really on trust, but you wouldn't need any nation-states behind it. (You can also rent locks without internet connectivity at all and without blockchains, so Slock.it is really a double layer of wasted complexity)
- deleted 11y ago
  [deleted]

markkat 11y ago

I agree that oracles make many use-cases over-hyped, but IMO you shouldn't overlook that Ethereum is far better at transacting ETH than Bitcoin is for transacting BTC. ETH has a powerful use case as programmable money which settles faster and cheaper than any other, and has native support for payment channels and other complexities not only because of it's Turing complete language, but because it does not use bitcoin's UTXO architecture. Not all interested in Ethereum view smart contracts as the best use case.

jerguismi 11y ago
> Ethereum is far better at transacting ETH than Bitcoin is for transacting BTC. Care to elaborate the benefits of using ethereum for value transfers vs. bitcoin? Block size limit is an obvious advantage, but what are the others? > ETH has a powerful use case as programmable money which settles faster and cheaper than any other That is quite a claim, which makes me doubt if you know what you are talking about. In blockchain-based systems the costs are related to market dynamics. Eg. miners can decide what they put to blocks and at what price. Or is ethereum somehow fundamentally different in this aspect? > and has native support for payment channels and other complexities not only because of it's Turing complete language, but because it does not use bitcoin's UTXO architecture. Payment channels are perfectly supported by Bitcoin, what do you mean by "native"? Is it how much easier to use payment channels in ETH in practice, are people actually using them? Why is ethereums account-based architecture better than Bitcoin's UTXO architecture? Isn't really obvious to me.
- woah 11y ago
  Take your head out of the sand. Everything is far easier to program with an actual programming language (even a somewhat mediocre one, like ethereum's solidity). It's always amusing to see the vast number of hoops that one must jump through to shoehorn functionality into bitcoin script (a non Turing complete assembly).
  - DickingAround 11y ago
    He asked a reasonable question; give a reasonable answer. For example 'bitcoin script' or 'non Turing complete assembly' is not a term that makes sense. Describe specifics.

radicalman 11y ago

This has been our conclusion as well. We were about to invest in a dozen etherium startups but ultimately decided against it for the same reason. Love the work behind it but it's just so utterly useless because not even engineers building on top of etherium trust it enough