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Coinbase Co-founder: Ethereum Is the Forefront of Digital Currency

340 points by sethbannon 10y ago

nameless912 10y ago
This is good for bitcoin.
aakilfernandes 10y ago
Glad to see Coinbase moving in this direction. I'm hoping they'll become a consumer friendly portal for the (hopefully many) assets that will trade on Ethereum.
nemild 10y ago
For anyone interested in getting started with Solidity in 20-30 mins, one of the languages that Ethereum contracts can be coded in (some analogize this language to JS, the other language is Serpent which is compared to Python), you can see a quick primer I put together: https://learnxinyminutes.com/docs/solidity/ https://learnxinyminutes.com/docs/solidity/ You can test your code here: https://ethereum.github.io/browser-solidity/#version=soljson-latest.js https://ethereum.github.io/browser-solidity/#version=soljson...
- Hortinstein 10y ago
  thanks for putting this together, I came here looking for exactly this.
Cyph0n 10y ago
I'm new to Bitcoin development and cryptocurrencies in general. Can anyone give a quick intro to Ethereum's scripting system and why it's such a big deal?
- nemild 10y ago
  See my two comments, and feel free to reach out if you want to learn more
  - Cyph0n 10y ago
    Great overview, thanks. I'll have to do some more reading and perhaps try it out myself.
- aakilfernandes 10y ago
  I'm not an expert on Bitcoin's scripting language, but here's a few main takeaways * Ethereum allows shared state between transactions, Bitcoin doesn't. That means one application can state "The price of Eth is $10USD" and a totally unrelated application can reference that value. The result is that each application provides an API that all other applications can call. * Both Bitcoin and Ethereum have a stack based scripting language. However Ethereum also has a higher level language that compiles to the stack based language. That means you can right reasonably readable code without OP codes. Functional program is so much mentally easier than writing a stack * Ethereum (unlike Bitcoin) is Turing complete. It can have code that loops and recurses based on the state of the chain
  - PeCaN 10y ago
    > Ethereum (unlike Bitcoin) is Turing complete. It can have code that loops and recurses based on the state of the chain Yikes. Turing-completeness is the last thing I want in a contract language. These things should be _provable_ and _total_. Allowing arbitrary computation opens up a whole new can of worms.
    - cdetrio 10y ago
      People are working on formal verification of solidity code: https://forum.ethereum.org/discussion/3779/formal-verification-for-solidity-contracts https://forum.ethereum.org/discussion/3779/formal-verificati...
    - cantankerous 10y ago
      This was my first reaction. Why does a contract language need to be Turing Complete? Trustless contracts + Turing tarpits seems like a big turn off to me.
- rabbyte 10y ago
  I'll give you this simplistic example. Proof of Burn in the Bitcoin world means making up an address (such as "1CounterpartyXXXXXXXXXXXXXXX...") which is essentially impossible to ever be associated with an actual key so there's no chance of recovering the funds sent there. Proof of Burn in the Ethereum world means writing a contract and publishing the source code such that it can be verified to match the contract address living on the chain. A minimal proof of burn would be this "contract Burn {}" an empty contract that does nothing but receive funds, can never be destroyed, is controlled by nobody and all of this can be verified publicly. The difference is subtle but important. edit- btw, yes you can also send funds to address 0x0 but this still leaves open the possibility of a hard fork giving new meaning to that address in the future. my example is meant to be a demo of the difference mostly.
pithic 10y ago
Might Fred Ehrsam have some personal interest in Etherium, being a former Goldman Sachs trader (Etherium having been co-founded by Goldman Sachs alum Joseph Lubin)?
- wyck 10y ago
  More likely Coinbase just started accepting ethereum trades because bitcoin is stalling and 2-3 other strong platforms(aka competitors) already offer it. His basic point was related to bitcoin being not great "beyond store of value and speculation.", and how etherium is magically going to avoid that with killer apps.... sure...that is bubble speak for solving problems that don't actually exist.
  - billions 10y ago
    I think you hit the nail on the head: he has a vested interest and ethereum presents a runway for coinbase. IMO Bitcoin's problem, as depicted by this thread, is complexity, which ethereum adds more of instead of less. Make money work first, then create specialized verticals after.
beaner 10y ago
I agree with the overall sentiment of the piece. The one thing I disagree on is the perception that there should be "killer apps" for bitcoin. I think this perspective views Bitcoin as the the technological breakthrough, looking for apps to be built on top of it. But really the technology is the Blockchain, and Bitcoin (decentralized currency) is the "killer app". Ethereum is different because in addition to being a currency, it is also a platform. It needs "killer apps" to differentiate itself, otherwise it's just a currency, and can be discarded like litecoin and doge. I think Fred has given us reason to believe it will succeed in providing the ability for killer apps to be built on top of it, but we still have to see. None exist yet. The DAO has yet to do anything real. Maybe just a detail, but it seemed like an important one to me.
- daoland 10y ago
  Ether is not a currency like Bitcoin. Ethereum is a pure platform play that enables multiple Bitcoin competitors to rapidly experiment and find the product-market fit of crypto-currencies in the real world. I believe there can be a crypto-currency with better properties than Bitcoin. Once one of these Ethereum apps finds their hockey stick, Ether will continue to play its role in securing the Ethereum network for this killer app which removes the need for both Ether and Bitcoin to play the role of crypto-currencies. While you are distracted by one DAO, there are many other DAOs successfully in operation on the Ethereum network. There is only one that made a lot of noise because it had to, the others are silently building their products after raising money from a passionate set of users.
  - dharma1 10y ago
    What other DAOs are there and how much have they raised? The thing with tokens is that because Ethereum is so young, the companies being built on top of it are by default super early stage, with no real traction or product market fit to show. So anyone buying tokens at this stage because they want a shared revenue stream of the companies profits, is making very risky bets which have a high likelihood of failure (on average). I think it's the lure of secondary markets for DAOs that is behind a lot of the interest in, at least, The DAO - people buy the tokens early because there is anticipation of the token prices going up relatively soon after the crowdsale, fear of missing out etc. I think a lot of it is driven by speculative motives rather than long term investment in Ethereum companies themselves.
zmanian 10y ago
Ethereum is an cryptocurrency retailer and exchange platform. Coinbase should support cryptocurrencies where there is customer demand and backed by credible technical teams. Bitcoin and Ethereum both meet that criteria. I wish Coinbase had a stronger set of technical advisors. Fred and Brian seem to rarely meet with the engineering and research community. Charlie Lee is pretty strongly on crytocurrency technology but just one person.
nemild 10y ago
Here are some general thoughts for those interested more in this topic: - Ethereum and Bitcoin both let you lock up the cryptocurrency and provide a series of rules that are required before the money can be unlocked; this has a lot of power, because unlocking can be done by a single party (a standard payment use case), but also by a series of other people/groups or external events (currency price, weather, etc) - The rules for unlocking cover a wide gamut from requiring several users to agree (e.g., multisig like a multi key safe deposit box to voting for a dividend), to requiring an external action to happen (e.g., unlocking if the temp is below a certain amount on a given day for weather based insurance contract); these actions replicate many current real world interactions like an insurance contract, a voting mechanism for corporate governance, and escrow (just to name a few); the OP has also written about Distributed Autonomous Orgs (DAOs) on TechCrunch - A key benefit for letting these be programmatic is that they can cut out a middle party (or at least reduce the dependence on this middle party with a network of oracles) - cutting costs and reducing dependence on this third party - Some key value props where this could help in the early days: 1) cross-country transactions, as the contract language is international (legal systems can be hard to enforce across geographies) 2) Small amount transactions (as fixed costs may be high in a real world contract today for each party) 3) contracts where middlemen have monopoly-based pricing 4) contracts where the middle parties have a low degree of trust (more likely today, certain markets don't exist due to this reason) 5) Contracts in a country where legal systems are weak/expensive - For Bitcoin vs. Ethereum, many Bitcoin enthusiasts will argue that Bitcoin provides a similar functionality, but Ethereum's high level languages are generally much easier to write (I'll likely get some push back by partisans, but Ethereum's Serpent and Solidity might be closer to JS/Python/C, while Bitcoin's Forth-inspired/stack-based language is closer to a higher-level assembly); there are also some specific differences like Bitcoin requires all or nothing unlocking, is not turing complete, has restrictions on the transaction byte size, and has some miners enforce transactions that only have a few of the contract op codes, not all; still, some Bitcoin devs (like Gavin) note that the surface area for security holes is significantly larger with Ethereum (See my other post for an introduction to the language)
- daoland 10y ago
  One key difference is Ethereum is not being built only for writing code for monetary transactions using Ether. Ethereum is being built to store and run code in the EVM. Ether main use is only to pay for gas so that any user of the network can execute the code. Although in Bitcoin there is no point in writing code other than encode conditions upon which monetary transfers can be done, this isn't Etheruem's main goal. An example of a non-monetary use case is - A concert ticket issuer could issue tickets on the Ethereum network. When users want to resell, they need not rely on a re-seller and instead can do a direct exchange on a decentralized exchange. They will pay a few cents worth of Ether as fees to run code that triggers this exchange to get the guarantee that the tickets are not counterfeit. After a quick confirmation the ownership of the tickets is updated on the blockchain. The exchange of money between these users can be in USD itself directly without any conversions to Ether. It is non-monetary consumer use cases like these that drives the Ethereum team to bring the transaction confirmation times to the current 15 seconds and even lower in the near future.
educar 10y ago
I am probably in the minority here on HN but I don't completely grok bitcoin (granted I have not put in much effort to understand it). I have asked many of my techie friends and none of them understand it either - I follow the Einstein (?) principle. If you cannot explain it, you probably don't understand it. On top of this, there is now Ethereum and DAO which are also completely incomprehensible to me. But the reason for this comment is that I totally blown away that there are people out there who understand it and are willing to fund this to record levels. The context for this comment is that I ask myself this question about products and startups all the time. Who uses them? Why are they gaining traction and nobody I know even knows about them let alone use them... To conclude, I find all this bitcoin talk very motivational - not everybody needs to understand what you are building. You just need a passionate following of people who do.
- curiousgal 10y ago
  >there are people out there who understand it Not to mention that the creator of Ethereum is 22 years old.
  - cloudjacker 10y ago
    22? when was his birthday?
    - curiousgal 10y ago
      31 January 1994
  - madeofpalk 10y ago
    What has his age got to do with it?
    - curiousgal 10y ago
      He proposed it in late 2013 so around 19-20 years old.
  - 10y ago
current_call 10y ago
This article is FUD, but then so is this post. People on both sides have huge incentives. And don't be deluded into thinking there aren't sides. The wealth at stake and the ability to dodge banks makes it impossible to be deeply invested in this and not have an agenda. Here are the paragraphs where I thought the FUD was most obvious. Worth looking over. Developer mindshare is the most important thing to have in digital currency. The only reason these networks (Bitcoin, Ethereum) and their tokens (bitcoin, ether) have value is because there is a future expectation that people will want to acquire those tokens to use the network. And developers create the applications which drive that demand. Without a reason to use the network, both the network and its currency are worth nothing. In contrast, Bitcoin has had a leadership vacuum since Gavin Andresen stepped aside after other core developers did not get on board with his (in my opinion rational and convincing) arguments to increase the block size. “Core developers” as they now stand are also relatively fragmented. Beyond a leadership vacuum, Bitcoin’s “leadership” is less clear and toxic. Greg Maxwell, technical leader of Blockstream which employs a solid chunk of core developers, recently referred to other core developers who were working with miners on a block size compromise as “well meaning dipss.” A second discussion board needed to form on reddit, /r/btc, because of censorship on the original /r/bitcoin. The content on the Bitcoin discussion boards feels like squabbling while Ethereum’s is talking about relevant issues and new ideas. In summary, Ethereum leadership (and as a result its community) is moving forward while things need to get worse before they can get better in Bitcoin.* What is very real, though, is the possibility that Ethereum blows past Bitcoin entirely. There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership, and has more developer mindshare. Developers → apps → users → network success. First mover advantage is challenging to overcome, but at current pace, it’s conceivable. Also, I still don't understand why I'd want a programming language in my currency.
- nemild 10y ago
  See my other comment for your question why you might want a programming language in your currency. An example of a real world "programming" language in your currency is a legal contract (e.g., insurance contract, escrow contract, corporate bylaws with dividend rules).
lukev 10y ago
I have been and remain intrigued by Ethereum, but there's one element that always struck me as impractical. All its advocates get very excited about all the complex automated things it can do, which is admittedly very cool. But for the real world, I'm skeptical that anything more complicated than a basic escrow could work. Once you're talking about real, complex applications (like a DAO), what if there's a bug? Even if bugs are rare, the potential implications when they do happen are so severe that it still diminishes the value of the platform. And the ability of members to "vote in" new code is no solution. Nobody in their right mind is going to do that without a thorough code audit, which is a pretty high friction interface to what is supposed to be a financial or business instrument. It would inevitably devolve to trusting a relatively small group of "experts", which rather defeats the point of the whole enterprise. Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update.
- newjersey 10y ago
  > Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update. Such is life though. It is not just ethereum. Bitcoin cannot survive a majority attack. In the long run, I can't see how even a government can survive a majority attack. One obvious solution to the problem is to try to prevent any one bloc from gaining majority status. I'm sure there are more elaborate solutions though and if any of them is elegant, I'd like to learn about it.
  - current_call 10y ago
    Bitcoin cannot survive a majority attack. Proof of work is a different kind of majority though.
  - lisper 10y ago
    > I can't see how even a government can survive a majority attack. https://en.wikipedia.org/wiki/Gerrymandering_in_the_United_States https://en.wikipedia.org/wiki/Gerrymandering_in_the_United_S...
bunkydoo 10y ago
Ethereum is definitely cool, but I stand by Bitcoin as the best solution for a "public sector" crypto
Animats 10y ago
Has DAO really raised $150M, or is that just the market cap of a pre-mined cryptocurrency after some limited buy-in?
- chejazi 10y ago
  That value is pegged to the value of Ethereum, whose market cap right now is $1B. If $150M worth of Ether were dumped on the market, the price would likely plummet.
- nadaviv 10y ago
  The DAO had $150m worth of ETH exchanged for DAO tokens "invested" in it. I say "invested" because there is no actual investment with "The DAO". "Investors" are free to withdraw their funding back at any point before a proposal voting takes place. This is basically a risk-free proposition - "invest" your funding now to join on the buzz train, and take your money back at any point if you don't like the proposals being proposed. A majority vote within "The DAO" cannot actually vote for an investment with the entire funding available for "The DAO". Technically speaking, until after some proposal wins a majority vote, no money actually changes hands... the investors are still in full control of their money and should still be considered the owners of it - not "The DAO". For this reason, I think that calling this "the biggest crowd-funding ever" is incredibly misleading. There is no commitment and no risk, unlike how crowdfunding usually works.
  - reddytowns 10y ago
    It's not as simple as you make out. In order to get their ether out they need to go through a complex process that takes 48 days: https://daowiki.atlassian.net/wiki/display/DAO/Step-by-Step%3A+Splitting+the+DAO https://daowiki.atlassian.net/wiki/display/DAO/Step-by-Step%... I think a large portion of the investors would be unwilling to do this and simply sell their The DAO tokens on an exchange, thereby keeping their ethereum locked up in The DAO
    - nadaviv 10y ago
      I was unaware of the 48 days delay. Thanks for the link. So, there is some risk in terms of temporarily lost liquidity, but I would still stay that comparing this to a traditional crowdfunding where investors actually lose control over their funds is nonsensical.
tommynicholas 10y ago
Everyone is 100% allowed to and encouraged to change their mind, but it's no surprise that this is penned by Fred not Brian given Brian's quite firm stance on non-btc digital currencies ~ a year ago. I felt it was out of line at the time, although his comment (which mostly mentioned Ripple and altcoins) has turned out technically to be true, the idea that innovation in digital currencies was "done" and Bitcoin needed to be the focus was pretty crazy. Ethereum is exciting - my dad, a lawyer who doesn't know you can use the internet at our house, is excited about it. It makes sense how you would use it. I hope it continues up and to the right!
- volker48 10y ago
  I think people get excited because they see the word contract and they know what that word means. In the case of Ethereum it probably doesn't mean what they think since smart contracts in Ethereum are a programming language.
  - tlrobinson 10y ago
    A non-smart contract is just written in a more ambiguous programming language that needs to be interpreted by $500/hour lawyers instead of CPUs.
Uptrenda 10y ago
I agree with mostly everything he said, to be honest. I've stuck with Bitcoin now for the last 3+ years and interestingly, that was only -because- Bitcoin made it so hard to do anything useful. I would need to learn how all kinds of niche areas of cryptography worked and the fun of hopelessly trying to outsmart Bitcoin's god-awful restrictions is what kept things fresh to me. Sure, it did teach me a lot of obscure things about crypto + game theory, and some of those things actually turned out to be quite useful. But I also can't deny how much longer it takes to do the most basic things in Bitcoin and I think that now we're progressing towards using blockchains to solve problems outside of Bitcoin -- Ethereum seems more up to the task than Bitcoin. That's not to put Bitcoin down though. There has definitely been some tremendous innovations there recently: segregated witnesses and sidechains are pretty cool. But I've also seen the community change significantly since I first got involved and I'd argue most of those changes have been bad. For example: /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing. Most of Bitcoin's current media is also controlled by only a handful of individuals so its very easy to manipulate the crowd into "consensus" but I won't even go there. I'll personally always love Bitcoin but I can't see that these problems can be fixed at this point. The Bitcoin project was largely hijacked as far as I can tell and since the crowd has been won there's no going back now.
- madeofpalk 10y ago
  > /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing. This is the main reason why I can't ever take bitcoin seriously - their community just seems to have so much unconstructive hatred towards anyone who ever says anything negative about bitcoin.
  - vertex-four 10y ago
    I can't take Bitcoin seriously because its community, at the same time, holds strong anarcho-capitalist ideals, and supports various companies which are trying to monopolise various forms of Bitcoin transaction. For example, a physical "Bitcoin payment card" which can only be used with terminals sold by one vendor with bitcoins stored on the same vendor's servers. If that had taken off, it would quickly become nearly impossible to replace - and yet Bitcoiners thought this was the best thing ever, instead of applying critical thinking and realising it'd be possible to create a similar system but open to any vendor you'd like. As long as it's not the Government restricting your choice, it's not bad, right?
smaili 10y ago
Are there any exchanges right now that allow purchasing of Ethereum?
- jarsin 10y ago
  gemini, coinbase exchange (gdax), kraken, poloniex, etc First 3 allow direct purschas with USD
  - pYQAJ6Zm 10y ago
    Kraken also carries ETH/EUR, with low SEPA fees. Quite handy.
melvinmt 10y ago
What a coincidence, I just bought ETH today with BTC from my Coinbase account. Does this mean I can hold ETH in a Coinbase wallet soon?
- adrianmacneil 10y ago
  You can hold ETH in a Coinbase exchange account today. Support in their consumer wallet is coming in the next few months.
kem 10y ago
So... honestly asking here, but why isn't the blockchain length a problem in the long run? Whenever I've read about this there's a bunch of handwaving and change of subject, but I admit I've not read that much.
- zaphar 10y ago
  Nothing about the merkle tree that blockchains are built on prevents you from truncating the chain in certain circumstances. The truncated piece can still be verified against an un-truncated chain for auditing purposes. So it would be possible for a smaller section of the network to keep the full chain while a larger segment of the network can keep truncated chains of a smaller size. You can configure the allowable size as well so any particular node on the network can decide how much of the chain they prefer to keep around.
- IkmoIkmo 10y ago
  Well two main reasons. One is because a lot of data is redundant, more on that later. And two because storage becomes abundant. i.e. in 1995 1mb of daily storage would be a big deal, it'd cost a few thousand dollars to store a year's worth of data. Today 365mb of storage hardware costs about 1 penny. Today the blockchain adds at most 50gb of annual data, which costs about $1.5 of retail harddrive hardware per year, in a few years that'll drop down dramatically, too. So abundance of storage, if it outpaces blockchain growth, isn't that big of a problem. The exact numbers are a bit hand-wavey, I agree, because a lot of this is new stuff and dependent on a lot of uncertainties. e.g. the growth of storage abundance is relatively known (although far from certain), but it must be compared to the rate of adoption and the rate of block size increases, both of which are relatively unknown, to know whether storage tech outpaces storage needs. But data redundancy is the main argument, not abundance of storage. i.e. if I have a list of transactions, where I send you $1 and you send me back $1 a trillion times, we could either store a trillion transactions in a trillion days, one per day, which would be a massive file... or we could store the last 10 years of transactions (just 3650 transactions) and have a for all intents and purposes 100% safe and accurate idea about our balances. Most of that data just isn't necessary to store. At some point you can say, 1 year ago there was a certain balance on the blockchain, this balance is correct, hasn't been contested, and would need billions of dollars spent on energy to 'correct' by double spending the transaction and then mining 1 year of blocks while keeping up with new blocks, i.e. a virtual impossibility, so we can trust that 'snapshot' of the blockchain. Then we can throw away all the data before that, use that snapshot as a sort of 'balance', and then build a new chain from there. This means that for practical purposes, you can keep the blockchain limited to say a year's worth of data, or say X transactions back in time, if you wanted to. So what'd happen is that a few parties, e.g. large businesses and universities, would store all data for posterity, research etc... while most participants would only store a small chunk of data. It's more complex that that but that's the basic gist of the story.
nickysielicki 10y ago
> Ethereum may attempt to move to proof of stake. [...] I believe this risk is manageable because there would be extensive testing beforehand. This is a really big cop-out. I follow Ethereum pretty closely and I believe that the biggest threat to Ethereum's future is an attempt to move to proof-of-stake. If you spend a bit of time in the ethereum community you'll find that everyone is very excited to reap the benefits for getting-in-early on ethereum, and they're very excited for the eventual switch to proof-of-stake so that they can collect money. Everyone who is invested in Ethereum is doing so in order to stake. This is terrible for the community, because who is ever going to get excited to invest in meme-powered internet money that they already missed the boat on? What kind of testing is able to account for that kind of social effect? (Or maybe I'm just a stupid mathless Austrian.) Anyhow, that's just to talk about the social effects, and I think there are many technical problems with proof-of-stake beyond that... Let's not forget that there hasn't been a single successful PoS cryptosystem yet. I also think that there are big problems looming within the EVM, and to give the article credit, that's mentioned and represented fairly in the article. (forward search for 'Bit-thereum' in OP) I'm prepared to be wrong about Ethereum, even excited at the prospect. but if I was invested in a cryptocurrency it would be Bitcoin. I think that there are currency wars looming and I think Bitcoin stands to gain a lot from that. Bitcoin's big problems are overstated and will be solved in due time. It just needs to live past the death of Moore's law.
- reddytowns 10y ago
  I don't see how Moore's law has anything to do with Bitcoin. Their biggest problem is the huge company owned miners that could easily collude to control the network.
  - nickysielicki 10y ago
    When the advantage provided by doing an in-house ASIC goes away, the limiting factor becomes cheap electricity, and the amount of people who are able to compete grows. Right now, a couple groups of people are trying to make the fastest ASIC so that they can convert electricity into money, using their proprietary efficient converter. But if everyone can get the same efficient converter, suddenly it's viable for anyone that can produce cheap electricity with a stable internet connection. And there are far more people/countries who are able to compete on the cost of electricity than there are people/companies who are able to compete on making the best SHA-256 ASIC. This tends towards decentralization.
andrewfromx 10y ago
i re-read http://techcrunch.com/2016/05/16/the-tao-of-the-dao-or-how-the-autonomous-corporation-is-already-here/ http://techcrunch.com/2016/05/16/the-tao-of-the-dao-or-how-t... to brush up on DAO before reading this one.
anonbanker 10y ago
Arcade City[0] created an Uber-killer in Ethereum, and shut it down, because the rocket ship took off too fast. Ethereum enables the killing of giant-killers. 0. http://arcade.city http://arcade.city
- mpeg 10y ago
  Never going to work. Who is going to invest millions in user acquisition in a decentralised system with low fees? What about customer service? Who mediates when there's a problem with the driver or rider? Who vets and background checks the drivers?
- dharma1 10y ago
  I really don't see Ethereum killing Uber or AirBnB, but I'd be happy to be proven wrong. The reason people use Uber or AirBnB is because of 1) trust 2) network effects (you need a LOT of users for these things to be useful) 3) great, fast, simple UX None of which Ethereum or Ethereum companies have yet, and even if Ethereum becomes popular, Uber clones on ETH face the same uphill battle as any other company trying to take on Uber. It doesn't really matter for the average user what the underlying tech is, if it's powered by a decentralised cryptocurrency or not.
drpancake 10y ago
I'm convinced that Ethereum is going to suffer the same fate as Bitcoin. Here's the cycle that will eventually play out: (1) Relatively interesting technological breakthrough comes along. Promising but questionable applicability to real-world problems. (2) It attracts early, idealistic developers, some of whom are genuinely talented. Rational debate is still possible at this point. (3) The hype builds up and in turn attracts various groups: raging anarcho-capitalists, developers of a mildly libertarian bent, get-rich-quick enthusiasts and teenagers. The price continually bubbles and spikes as fresh money comes in from speculators betting on the hype. (4) The spiking price is misinterpreted as a signal that the technology is going mainstream and is ready to be applied to real-world problems. Lots of half-baked apps and companies are built. No actual traction is found (with the notable exception of the dark web). (5) Repeat (3) and (4) until the press and wider community no longer believe the hype. Possibly rebrand to 'blockchains' or some other less toxic noun.
- billions 10y ago
  A cryptocurrency needs to happen. Today or in the future economic incentives will drive politics out of money.
- daoland 10y ago
  You've made a few jumps of imagination in there. I'm actually convinced that Ethereum has something unique to offer specifically to developers. Ethereum will be a common ground for a lot of high value code and data between organizations, people, etc. A lot is possible in a few lines of solidity, I've seen devs create working decentralized exchanges in a few weeks. As you can see, the use of Ether here is just to ensure that the code a user wants to execute on the EVM gets executed. Users need not have to use it as a currency. Ether's primary purpose is to secure the Ethereum network, not to be used as a "currency" like Bitcoin. If someone gave me an ether every time the Ethereum devs keep emphasizing this, I'd be very rich by now. If Bitcoin did a great job at transferring value in the network without being slow and full all the time, all the ancaps would have stuck to Bitcoin and would have left us in peace. The Bitcoin challenger is not Ethereum itself, it will be services like Maker that are currently being built on top of Ethereum. Ether purpose is to secure Ethereum so that services like Maker don't have to worry about the security and scalability of the underlying blockchain and can focus on the EVM abstraction and above.
daoland 10y ago
A few common misconceptions that I'd like to correct, Ether is not in the currency business. It was emphasized multiple times by the devs themselves. It so happens that Bitcoin is so slow and full that users are flocking to use Ether as a currency even when Ether's inflation is uncertain. This is an open network, we cant stop people from using it the way they want it to. Ethereum is not being built for financial apps only. It provides a VM that can run code and store data. This can be used for any purpose that requires code to be executed and data fields to be changed atomically in a secure way, the users need to pay a fraction of a cent worth of Ether to run this code. That means they dont have to be invested in Ether to be able to derive value from the Ethereum network. You have to be invested heavily in Bitcoin to get value from the Bitcoin network, especially after Bitcoin payments are such a dud. Please dont rush to type that Steam started accepting Bitcoin recently. Ether is not competition to Bitcoin. Bitcoin killer will be a new token on the Ethereum network. There could also be a AirBnb killer and a Uber killer built on the network too. These are companies that pride on being leaders in sectors by writing only code. What if this code and data can exist as commons in the Ethereum network that is global and has 100% uptime. Users pay a fraction of cent worth of Ether to run transactions instead of a percentage cut. And these users will transfer money between themselves for these transactions with the token that killed Bitcoin, not Ether. It will take a while to kickstart a reputation layer on Ethereum network but these usecases are a real possibility. There is a very good chance that these new tokens created on the Ethereum network will surpass the total market cap of Ether very soon :O
- DennisP 10y ago
  Ether's long-term inflation is uncertain, but its maximum inflation is known. It's 26% of the crowdsale amount per year, or about 22% of the initial supply (so as the supply increases, the rate decreases). The devs have reserved the right to lower the inflation rate when they transition to proof of stake, but they've guaranteed not to increase it. That guarantee is enforced by the community just like it is on Bitcoin, plus it's actually written in the legal documents for the crowdsale. Right now the ether inflation rate is under 20%. Bitcoin's inflation when it had a $1 billion market cap was 33%. As a currency, ether works just as well as bitcoin, but with higher throughput and much less latency.
miseg 10y ago
Is Ethereum a "dangerous" technology to play with? With regards to contracts that might be deemed illegal.
_pmf_ 10y ago
Bitcoin-Scammers need a new playing field; that's how I read everything related to crypto currencies now.
mrfusion 10y ago
I got excited and installed an etherum wallet. I transferred two BTC to it but now my etherum Wallet says my balance is two ether! That sucks I'm out 900$ on this thing. :-(. Any ideas?
- shawabawa3 10y ago
  Are you serious? I hope not. Bitcoin and Ethereum are not stored on the same blockchain and are not compatible or directly convertible. Your only chance of getting the bitcoins back is to try to create the same wallet address on the bitcoin network (I'm not sure if the backup seed strings are compatible, may not be possible)
  - mrfusion 10y ago
    I really don't understand how it happened. I used shapeshift.io. I put a ticket in with them at least. Waiting to hear back.
    - shawabawa3 10y ago
      Ah it sounded like you just tried to transfer bitcoin straight to the ether account. Hope their support sorts it out for you
  - mrfusion 10y ago
    I don't think it would have gone to a bitcoin address since I did get the two ether from somewhere.
- mrfusion 10y ago
  Update. Shapeshift refunded my overpayment. Apparently I read the instructions wrong. All good now.
aws_ls 10y ago
I respect Ethereum project and people behind it, but am not convinced. For loops: I am tired of seeing Turing complete, to mean just for loops, I thought, HN crowd busts jargon, so I am just going to say for loops. I think Bitcoin makes minimal use of the resources on the Blockchain, hence the minimalistic script, which can be used for multi-sig as a condition to move coins. Which the creators felt is sufficient, and the actual contract could live (run) outside. Now imagine if there are 1000 Dapps (distributed apps in Ethereum world) running and all of them have for loops. Now for every block which is written, it will have the overhead to run all these for loops. And each of these for loops are going to run on each of the full nodes. That is the ones which are trying to mine a block. I think, this is a huge overhead. As if PoW based mining is not a computing burden already. I know they are exploring PoS for mining. But I think PoS is better for closed Blockchains, with limited stake holders. Example the settlement layer which the Big Banks are exploring using a closed Blockchain, obviously can do with PoS as all blocks can be signed by all stake holders. Dapp: I don't clearly understand why Dapps need to live on the Blockchain. As there core logic is bound to be bloated, and should live outside the Blockchain, to conserve resources. Bitcoin being a single app on the Blockchain i.e a crypto currency app, is facing scaling issues. Imagine a diverse range of Dapps all living on the Blockchain! Scaling: Admittedly there is a dispute going on in Bitcoin land over scaling. And I have been gobbling up points on all sides for months now. And IMHO the issue is very complicated. When I started out, I shared the view point that they should increase the block size. But, I don't know, recently, I am beginning to see the point of the core developers. I see merits in the argument of decentralized nature being preserved. Also attempts like Seg-Wit (again note they are pushing things outside the block, again making it as minimal as possible, contrary to the Dapp philosophy). Look at it this way, if Ethereum had come first, Bitcoin would be a single Dapp on it. And with all its problems. Ethereum is just out, and most likely it will evolve in the direction of the first successful Dapp. As of now, IMHO, its an idealistic platform in search of a real (d)App. No disrespect. I trust Butarin & co are a sincere bunch of guys, but they have a long road ahead compared to Bitcoin. Not a ponzi scheme: Lastly, I really hate to see a lot of folks casually dismissing Bitcoin as a ponzi scheme. Kindly note that its creator has not moved a single coin. The second guy who joined him has passed away. And I think, Bitcoin has inherited the philosophy and spirit of its founder(s?) and early devs, who had no idea what they are getting into. And were mainly doing it to finally have a successful crypto currency, after many failed attempts. So overall, I don't buy the points of the Coinbase co-founder. He definitely makes some good points. But IMHO he gets a lot of it wrong, and based on presumptions (e.g. the world needs Dapps running on Blockchains), only some of which I have explained above. Edit: Typos & minor rephrase

340 points by sethbannon 10y ago

This is good for bitcoin.

Glad to see Coinbase moving in this direction. I'm hoping they'll become a consumer friendly portal for the (hopefully many) assets that will trade on Ethereum.

nemild 10y ago

For anyone interested in getting started with Solidity in 20-30 mins, one of the languages that Ethereum contracts can be coded in (some analogize this language to JS, the other language is Serpent which is compared to Python), you can see a quick primer I put together: https://learnxinyminutes.com/docs/solidity/ https://learnxinyminutes.com/docs/solidity/ You can test your code here: https://ethereum.github.io/browser-solidity/#version=soljson-latest.js https://ethereum.github.io/browser-solidity/#version=soljson...

Hortinstein 10y ago
thanks for putting this together, I came here looking for exactly this.

Cyph0n 10y ago

I'm new to Bitcoin development and cryptocurrencies in general. Can anyone give a quick intro to Ethereum's scripting system and why it's such a big deal?

nemild 10y ago
See my two comments, and feel free to reach out if you want to learn more
- Cyph0n 10y ago
  Great overview, thanks. I'll have to do some more reading and perhaps try it out myself.
aakilfernandes 10y ago
I'm not an expert on Bitcoin's scripting language, but here's a few main takeaways * Ethereum allows shared state between transactions, Bitcoin doesn't. That means one application can state "The price of Eth is $10USD" and a totally unrelated application can reference that value. The result is that each application provides an API that all other applications can call. * Both Bitcoin and Ethereum have a stack based scripting language. However Ethereum also has a higher level language that compiles to the stack based language. That means you can right reasonably readable code without OP codes. Functional program is so much mentally easier than writing a stack * Ethereum (unlike Bitcoin) is Turing complete. It can have code that loops and recurses based on the state of the chain
- PeCaN 10y ago
  > Ethereum (unlike Bitcoin) is Turing complete. It can have code that loops and recurses based on the state of the chain Yikes. Turing-completeness is the last thing I want in a contract language. These things should be _provable_ and _total_. Allowing arbitrary computation opens up a whole new can of worms.
  - cdetrio 10y ago
    People are working on formal verification of solidity code: https://forum.ethereum.org/discussion/3779/formal-verification-for-solidity-contracts https://forum.ethereum.org/discussion/3779/formal-verificati...
  - cantankerous 10y ago
    This was my first reaction. Why does a contract language need to be Turing Complete? Trustless contracts + Turing tarpits seems like a big turn off to me.
rabbyte 10y ago
I'll give you this simplistic example. Proof of Burn in the Bitcoin world means making up an address (such as "1CounterpartyXXXXXXXXXXXXXXX...") which is essentially impossible to ever be associated with an actual key so there's no chance of recovering the funds sent there. Proof of Burn in the Ethereum world means writing a contract and publishing the source code such that it can be verified to match the contract address living on the chain. A minimal proof of burn would be this "contract Burn {}" an empty contract that does nothing but receive funds, can never be destroyed, is controlled by nobody and all of this can be verified publicly. The difference is subtle but important. edit- btw, yes you can also send funds to address 0x0 but this still leaves open the possibility of a hard fork giving new meaning to that address in the future. my example is meant to be a demo of the difference mostly.

pithic 10y ago

Might Fred Ehrsam have some personal interest in Etherium, being a former Goldman Sachs trader (Etherium having been co-founded by Goldman Sachs alum Joseph Lubin)?

wyck 10y ago
More likely Coinbase just started accepting ethereum trades because bitcoin is stalling and 2-3 other strong platforms(aka competitors) already offer it. His basic point was related to bitcoin being not great "beyond store of value and speculation.", and how etherium is magically going to avoid that with killer apps.... sure...that is bubble speak for solving problems that don't actually exist.
- billions 10y ago
  I think you hit the nail on the head: he has a vested interest and ethereum presents a runway for coinbase. IMO Bitcoin's problem, as depicted by this thread, is complexity, which ethereum adds more of instead of less. Make money work first, then create specialized verticals after.

beaner 10y ago

I agree with the overall sentiment of the piece. The one thing I disagree on is the perception that there should be "killer apps" for bitcoin. I think this perspective views Bitcoin as the the technological breakthrough, looking for apps to be built on top of it. But really the technology is the Blockchain, and Bitcoin (decentralized currency) is the "killer app". Ethereum is different because in addition to being a currency, it is also a platform. It needs "killer apps" to differentiate itself, otherwise it's just a currency, and can be discarded like litecoin and doge. I think Fred has given us reason to believe it will succeed in providing the ability for killer apps to be built on top of it, but we still have to see. None exist yet. The DAO has yet to do anything real. Maybe just a detail, but it seemed like an important one to me.

daoland 10y ago
Ether is not a currency like Bitcoin. Ethereum is a pure platform play that enables multiple Bitcoin competitors to rapidly experiment and find the product-market fit of crypto-currencies in the real world. I believe there can be a crypto-currency with better properties than Bitcoin. Once one of these Ethereum apps finds their hockey stick, Ether will continue to play its role in securing the Ethereum network for this killer app which removes the need for both Ether and Bitcoin to play the role of crypto-currencies. While you are distracted by one DAO, there are many other DAOs successfully in operation on the Ethereum network. There is only one that made a lot of noise because it had to, the others are silently building their products after raising money from a passionate set of users.
- dharma1 10y ago
  What other DAOs are there and how much have they raised? The thing with tokens is that because Ethereum is so young, the companies being built on top of it are by default super early stage, with no real traction or product market fit to show. So anyone buying tokens at this stage because they want a shared revenue stream of the companies profits, is making very risky bets which have a high likelihood of failure (on average). I think it's the lure of secondary markets for DAOs that is behind a lot of the interest in, at least, The DAO - people buy the tokens early because there is anticipation of the token prices going up relatively soon after the crowdsale, fear of missing out etc. I think a lot of it is driven by speculative motives rather than long term investment in Ethereum companies themselves.

zmanian 10y ago

Ethereum is an cryptocurrency retailer and exchange platform. Coinbase should support cryptocurrencies where there is customer demand and backed by credible technical teams. Bitcoin and Ethereum both meet that criteria. I wish Coinbase had a stronger set of technical advisors. Fred and Brian seem to rarely meet with the engineering and research community. Charlie Lee is pretty strongly on crytocurrency technology but just one person.

nemild 10y ago

Here are some general thoughts for those interested more in this topic: - Ethereum and Bitcoin both let you lock up the cryptocurrency and provide a series of rules that are required before the money can be unlocked; this has a lot of power, because unlocking can be done by a single party (a standard payment use case), but also by a series of other people/groups or external events (currency price, weather, etc) - The rules for unlocking cover a wide gamut from requiring several users to agree (e.g., multisig like a multi key safe deposit box to voting for a dividend), to requiring an external action to happen (e.g., unlocking if the temp is below a certain amount on a given day for weather based insurance contract); these actions replicate many current real world interactions like an insurance contract, a voting mechanism for corporate governance, and escrow (just to name a few); the OP has also written about Distributed Autonomous Orgs (DAOs) on TechCrunch - A key benefit for letting these be programmatic is that they can cut out a middle party (or at least reduce the dependence on this middle party with a network of oracles) - cutting costs and reducing dependence on this third party - Some key value props where this could help in the early days: 1) cross-country transactions, as the contract language is international (legal systems can be hard to enforce across geographies) 2) Small amount transactions (as fixed costs may be high in a real world contract today for each party) 3) contracts where middlemen have monopoly-based pricing 4) contracts where the middle parties have a low degree of trust (more likely today, certain markets don't exist due to this reason) 5) Contracts in a country where legal systems are weak/expensive - For Bitcoin vs. Ethereum, many Bitcoin enthusiasts will argue that Bitcoin provides a similar functionality, but Ethereum's high level languages are generally much easier to write (I'll likely get some push back by partisans, but Ethereum's Serpent and Solidity might be closer to JS/Python/C, while Bitcoin's Forth-inspired/stack-based language is closer to a higher-level assembly); there are also some specific differences like Bitcoin requires all or nothing unlocking, is not turing complete, has restrictions on the transaction byte size, and has some miners enforce transactions that only have a few of the contract op codes, not all; still, some Bitcoin devs (like Gavin) note that the surface area for security holes is significantly larger with Ethereum (See my other post for an introduction to the language)

daoland 10y ago
One key difference is Ethereum is not being built only for writing code for monetary transactions using Ether. Ethereum is being built to store and run code in the EVM. Ether main use is only to pay for gas so that any user of the network can execute the code. Although in Bitcoin there is no point in writing code other than encode conditions upon which monetary transfers can be done, this isn't Etheruem's main goal. An example of a non-monetary use case is - A concert ticket issuer could issue tickets on the Ethereum network. When users want to resell, they need not rely on a re-seller and instead can do a direct exchange on a decentralized exchange. They will pay a few cents worth of Ether as fees to run code that triggers this exchange to get the guarantee that the tickets are not counterfeit. After a quick confirmation the ownership of the tickets is updated on the blockchain. The exchange of money between these users can be in USD itself directly without any conversions to Ether. It is non-monetary consumer use cases like these that drives the Ethereum team to bring the transaction confirmation times to the current 15 seconds and even lower in the near future.

educar 10y ago

I am probably in the minority here on HN but I don't completely grok bitcoin (granted I have not put in much effort to understand it). I have asked many of my techie friends and none of them understand it either - I follow the Einstein (?) principle. If you cannot explain it, you probably don't understand it. On top of this, there is now Ethereum and DAO which are also completely incomprehensible to me. But the reason for this comment is that I totally blown away that there are people out there who understand it and are willing to fund this to record levels. The context for this comment is that I ask myself this question about products and startups all the time. Who uses them? Why are they gaining traction and nobody I know even knows about them let alone use them... To conclude, I find all this bitcoin talk very motivational - not everybody needs to understand what you are building. You just need a passionate following of people who do.

curiousgal 10y ago
>there are people out there who understand it Not to mention that the creator of Ethereum is 22 years old.
- cloudjacker 10y ago
  22? when was his birthday?
  - curiousgal 10y ago
    31 January 1994
- madeofpalk 10y ago
  What has his age got to do with it?
  - curiousgal 10y ago
    He proposed it in late 2013 so around 19-20 years old.
- 10y ago

current_call 10y ago

This article is FUD, but then so is this post. People on both sides have huge incentives. And don't be deluded into thinking there aren't sides. The wealth at stake and the ability to dodge banks makes it impossible to be deeply invested in this and not have an agenda. Here are the paragraphs where I thought the FUD was most obvious. Worth looking over. Developer mindshare is the most important thing to have in digital currency. The only reason these networks (Bitcoin, Ethereum) and their tokens (bitcoin, ether) have value is because there is a future expectation that people will want to acquire those tokens to use the network. And developers create the applications which drive that demand. Without a reason to use the network, both the network and its currency are worth nothing. In contrast, Bitcoin has had a leadership vacuum since Gavin Andresen stepped aside after other core developers did not get on board with his (in my opinion rational and convincing) arguments to increase the block size. “Core developers” as they now stand are also relatively fragmented. Beyond a leadership vacuum, Bitcoin’s “leadership” is less clear and toxic. Greg Maxwell, technical leader of Blockstream which employs a solid chunk of core developers, recently referred to other core developers who were working with miners on a block size compromise as “well meaning dipss.” A second discussion board needed to form on reddit, /r/btc, because of censorship on the original /r/bitcoin. The content on the Bitcoin discussion boards feels like squabbling while Ethereum’s is talking about relevant issues and new ideas. In summary, Ethereum leadership (and as a result its community) is moving forward while things need to get worse before they can get better in Bitcoin.* What is very real, though, is the possibility that Ethereum blows past Bitcoin entirely. There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership, and has more developer mindshare. Developers → apps → users → network success. First mover advantage is challenging to overcome, but at current pace, it’s conceivable. Also, I still don't understand why I'd want a programming language in my currency.

nemild 10y ago
See my other comment for your question why you might want a programming language in your currency. An example of a real world "programming" language in your currency is a legal contract (e.g., insurance contract, escrow contract, corporate bylaws with dividend rules).

lukev 10y ago

I have been and remain intrigued by Ethereum, but there's one element that always struck me as impractical. All its advocates get very excited about all the complex automated things it can do, which is admittedly very cool. But for the real world, I'm skeptical that anything more complicated than a basic escrow could work. Once you're talking about real, complex applications (like a DAO), what if there's a bug? Even if bugs are rare, the potential implications when they do happen are so severe that it still diminishes the value of the platform. And the ability of members to "vote in" new code is no solution. Nobody in their right mind is going to do that without a thorough code audit, which is a pretty high friction interface to what is supposed to be a financial or business instrument. It would inevitably devolve to trusting a relatively small group of "experts", which rather defeats the point of the whole enterprise. Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update.

newjersey 10y ago
> Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update. Such is life though. It is not just ethereum. Bitcoin cannot survive a majority attack. In the long run, I can't see how even a government can survive a majority attack. One obvious solution to the problem is to try to prevent any one bloc from gaining majority status. I'm sure there are more elaborate solutions though and if any of them is elegant, I'd like to learn about it.
- current_call 10y ago
  Bitcoin cannot survive a majority attack. Proof of work is a different kind of majority though.
- lisper 10y ago
  > I can't see how even a government can survive a majority attack. https://en.wikipedia.org/wiki/Gerrymandering_in_the_United_States https://en.wikipedia.org/wiki/Gerrymandering_in_the_United_S...

bunkydoo 10y ago

Ethereum is definitely cool, but I stand by Bitcoin as the best solution for a "public sector" crypto

Animats 10y ago

Has DAO really raised $150M, or is that just the market cap of a pre-mined cryptocurrency after some limited buy-in?

chejazi 10y ago
That value is pegged to the value of Ethereum, whose market cap right now is $1B. If $150M worth of Ether were dumped on the market, the price would likely plummet.
nadaviv 10y ago
The DAO had $150m worth of ETH exchanged for DAO tokens "invested" in it. I say "invested" because there is no actual investment with "The DAO". "Investors" are free to withdraw their funding back at any point before a proposal voting takes place. This is basically a risk-free proposition - "invest" your funding now to join on the buzz train, and take your money back at any point if you don't like the proposals being proposed. A majority vote within "The DAO" cannot actually vote for an investment with the entire funding available for "The DAO". Technically speaking, until after some proposal wins a majority vote, no money actually changes hands... the investors are still in full control of their money and should still be considered the owners of it - not "The DAO". For this reason, I think that calling this "the biggest crowd-funding ever" is incredibly misleading. There is no commitment and no risk, unlike how crowdfunding usually works.
- reddytowns 10y ago
  It's not as simple as you make out. In order to get their ether out they need to go through a complex process that takes 48 days: https://daowiki.atlassian.net/wiki/display/DAO/Step-by-Step%3A+Splitting+the+DAO https://daowiki.atlassian.net/wiki/display/DAO/Step-by-Step%... I think a large portion of the investors would be unwilling to do this and simply sell their The DAO tokens on an exchange, thereby keeping their ethereum locked up in The DAO
  - nadaviv 10y ago
    I was unaware of the 48 days delay. Thanks for the link. So, there is some risk in terms of temporarily lost liquidity, but I would still stay that comparing this to a traditional crowdfunding where investors actually lose control over their funds is nonsensical.

tommynicholas 10y ago

Everyone is 100% allowed to and encouraged to change their mind, but it's no surprise that this is penned by Fred not Brian given Brian's quite firm stance on non-btc digital currencies ~ a year ago. I felt it was out of line at the time, although his comment (which mostly mentioned Ripple and altcoins) has turned out technically to be true, the idea that innovation in digital currencies was "done" and Bitcoin needed to be the focus was pretty crazy. Ethereum is exciting - my dad, a lawyer who doesn't know you can use the internet at our house, is excited about it. It makes sense how you would use it. I hope it continues up and to the right!

volker48 10y ago
I think people get excited because they see the word contract and they know what that word means. In the case of Ethereum it probably doesn't mean what they think since smart contracts in Ethereum are a programming language.
- tlrobinson 10y ago
  A non-smart contract is just written in a more ambiguous programming language that needs to be interpreted by $500/hour lawyers instead of CPUs.

Uptrenda 10y ago

I agree with mostly everything he said, to be honest. I've stuck with Bitcoin now for the last 3+ years and interestingly, that was only -because- Bitcoin made it so hard to do anything useful. I would need to learn how all kinds of niche areas of cryptography worked and the fun of hopelessly trying to outsmart Bitcoin's god-awful restrictions is what kept things fresh to me. Sure, it did teach me a lot of obscure things about crypto + game theory, and some of those things actually turned out to be quite useful. But I also can't deny how much longer it takes to do the most basic things in Bitcoin and I think that now we're progressing towards using blockchains to solve problems outside of Bitcoin -- Ethereum seems more up to the task than Bitcoin. That's not to put Bitcoin down though. There has definitely been some tremendous innovations there recently: segregated witnesses and sidechains are pretty cool. But I've also seen the community change significantly since I first got involved and I'd argue most of those changes have been bad. For example: /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing. Most of Bitcoin's current media is also controlled by only a handful of individuals so its very easy to manipulate the crowd into "consensus" but I won't even go there. I'll personally always love Bitcoin but I can't see that these problems can be fixed at this point. The Bitcoin project was largely hijacked as far as I can tell and since the crowd has been won there's no going back now.

madeofpalk 10y ago
> /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing. This is the main reason why I can't ever take bitcoin seriously - their community just seems to have so much unconstructive hatred towards anyone who ever says anything negative about bitcoin.
- vertex-four 10y ago
  I can't take Bitcoin seriously because its community, at the same time, holds strong anarcho-capitalist ideals, and supports various companies which are trying to monopolise various forms of Bitcoin transaction. For example, a physical "Bitcoin payment card" which can only be used with terminals sold by one vendor with bitcoins stored on the same vendor's servers. If that had taken off, it would quickly become nearly impossible to replace - and yet Bitcoiners thought this was the best thing ever, instead of applying critical thinking and realising it'd be possible to create a similar system but open to any vendor you'd like. As long as it's not the Government restricting your choice, it's not bad, right?

smaili 10y ago

Are there any exchanges right now that allow purchasing of Ethereum?

jarsin 10y ago
gemini, coinbase exchange (gdax), kraken, poloniex, etc First 3 allow direct purschas with USD
- pYQAJ6Zm 10y ago
  Kraken also carries ETH/EUR, with low SEPA fees. Quite handy.

melvinmt 10y ago

What a coincidence, I just bought ETH today with BTC from my Coinbase account. Does this mean I can hold ETH in a Coinbase wallet soon?

adrianmacneil 10y ago
You can hold ETH in a Coinbase exchange account today. Support in their consumer wallet is coming in the next few months.

kem 10y ago

So... honestly asking here, but why isn't the blockchain length a problem in the long run? Whenever I've read about this there's a bunch of handwaving and change of subject, but I admit I've not read that much.

zaphar 10y ago
Nothing about the merkle tree that blockchains are built on prevents you from truncating the chain in certain circumstances. The truncated piece can still be verified against an un-truncated chain for auditing purposes. So it would be possible for a smaller section of the network to keep the full chain while a larger segment of the network can keep truncated chains of a smaller size. You can configure the allowable size as well so any particular node on the network can decide how much of the chain they prefer to keep around.
IkmoIkmo 10y ago
Well two main reasons. One is because a lot of data is redundant, more on that later. And two because storage becomes abundant. i.e. in 1995 1mb of daily storage would be a big deal, it'd cost a few thousand dollars to store a year's worth of data. Today 365mb of storage hardware costs about 1 penny. Today the blockchain adds at most 50gb of annual data, which costs about $1.5 of retail harddrive hardware per year, in a few years that'll drop down dramatically, too. So abundance of storage, if it outpaces blockchain growth, isn't that big of a problem. The exact numbers are a bit hand-wavey, I agree, because a lot of this is new stuff and dependent on a lot of uncertainties. e.g. the growth of storage abundance is relatively known (although far from certain), but it must be compared to the rate of adoption and the rate of block size increases, both of which are relatively unknown, to know whether storage tech outpaces storage needs. But data redundancy is the main argument, not abundance of storage. i.e. if I have a list of transactions, where I send you $1 and you send me back $1 a trillion times, we could either store a trillion transactions in a trillion days, one per day, which would be a massive file... or we could store the last 10 years of transactions (just 3650 transactions) and have a for all intents and purposes 100% safe and accurate idea about our balances. Most of that data just isn't necessary to store. At some point you can say, 1 year ago there was a certain balance on the blockchain, this balance is correct, hasn't been contested, and would need billions of dollars spent on energy to 'correct' by double spending the transaction and then mining 1 year of blocks while keeping up with new blocks, i.e. a virtual impossibility, so we can trust that 'snapshot' of the blockchain. Then we can throw away all the data before that, use that snapshot as a sort of 'balance', and then build a new chain from there. This means that for practical purposes, you can keep the blockchain limited to say a year's worth of data, or say X transactions back in time, if you wanted to. So what'd happen is that a few parties, e.g. large businesses and universities, would store all data for posterity, research etc... while most participants would only store a small chunk of data. It's more complex that that but that's the basic gist of the story.

nickysielicki 10y ago

> Ethereum may attempt to move to proof of stake. [...] I believe this risk is manageable because there would be extensive testing beforehand. This is a really big cop-out. I follow Ethereum pretty closely and I believe that the biggest threat to Ethereum's future is an attempt to move to proof-of-stake. If you spend a bit of time in the ethereum community you'll find that everyone is very excited to reap the benefits for getting-in-early on ethereum, and they're very excited for the eventual switch to proof-of-stake so that they can collect money. Everyone who is invested in Ethereum is doing so in order to stake. This is terrible for the community, because who is ever going to get excited to invest in meme-powered internet money that they already missed the boat on? What kind of testing is able to account for that kind of social effect? (Or maybe I'm just a stupid mathless Austrian.) Anyhow, that's just to talk about the social effects, and I think there are many technical problems with proof-of-stake beyond that... Let's not forget that there hasn't been a single successful PoS cryptosystem yet. I also think that there are big problems looming within the EVM, and to give the article credit, that's mentioned and represented fairly in the article. (forward search for 'Bit-thereum' in OP) I'm prepared to be wrong about Ethereum, even excited at the prospect. but if I was invested in a cryptocurrency it would be Bitcoin. I think that there are currency wars looming and I think Bitcoin stands to gain a lot from that. Bitcoin's big problems are overstated and will be solved in due time. It just needs to live past the death of Moore's law.

reddytowns 10y ago
I don't see how Moore's law has anything to do with Bitcoin. Their biggest problem is the huge company owned miners that could easily collude to control the network.
- nickysielicki 10y ago
  When the advantage provided by doing an in-house ASIC goes away, the limiting factor becomes cheap electricity, and the amount of people who are able to compete grows. Right now, a couple groups of people are trying to make the fastest ASIC so that they can convert electricity into money, using their proprietary efficient converter. But if everyone can get the same efficient converter, suddenly it's viable for anyone that can produce cheap electricity with a stable internet connection. And there are far more people/countries who are able to compete on the cost of electricity than there are people/companies who are able to compete on making the best SHA-256 ASIC. This tends towards decentralization.

andrewfromx 10y ago

i re-read http://techcrunch.com/2016/05/16/the-tao-of-the-dao-or-how-the-autonomous-corporation-is-already-here/ http://techcrunch.com/2016/05/16/the-tao-of-the-dao-or-how-t... to brush up on DAO before reading this one.

anonbanker 10y ago

Arcade City[0] created an Uber-killer in Ethereum, and shut it down, because the rocket ship took off too fast. Ethereum enables the killing of giant-killers. 0. http://arcade.city http://arcade.city

mpeg 10y ago
Never going to work. Who is going to invest millions in user acquisition in a decentralised system with low fees? What about customer service? Who mediates when there's a problem with the driver or rider? Who vets and background checks the drivers?
dharma1 10y ago
I really don't see Ethereum killing Uber or AirBnB, but I'd be happy to be proven wrong. The reason people use Uber or AirBnB is because of 1) trust 2) network effects (you need a LOT of users for these things to be useful) 3) great, fast, simple UX None of which Ethereum or Ethereum companies have yet, and even if Ethereum becomes popular, Uber clones on ETH face the same uphill battle as any other company trying to take on Uber. It doesn't really matter for the average user what the underlying tech is, if it's powered by a decentralised cryptocurrency or not.

drpancake 10y ago

I'm convinced that Ethereum is going to suffer the same fate as Bitcoin. Here's the cycle that will eventually play out: (1) Relatively interesting technological breakthrough comes along. Promising but questionable applicability to real-world problems. (2) It attracts early, idealistic developers, some of whom are genuinely talented. Rational debate is still possible at this point. (3) The hype builds up and in turn attracts various groups: raging anarcho-capitalists, developers of a mildly libertarian bent, get-rich-quick enthusiasts and teenagers. The price continually bubbles and spikes as fresh money comes in from speculators betting on the hype. (4) The spiking price is misinterpreted as a signal that the technology is going mainstream and is ready to be applied to real-world problems. Lots of half-baked apps and companies are built. No actual traction is found (with the notable exception of the dark web). (5) Repeat (3) and (4) until the press and wider community no longer believe the hype. Possibly rebrand to 'blockchains' or some other less toxic noun.

billions 10y ago
A cryptocurrency needs to happen. Today or in the future economic incentives will drive politics out of money.
daoland 10y ago
You've made a few jumps of imagination in there. I'm actually convinced that Ethereum has something unique to offer specifically to developers. Ethereum will be a common ground for a lot of high value code and data between organizations, people, etc. A lot is possible in a few lines of solidity, I've seen devs create working decentralized exchanges in a few weeks. As you can see, the use of Ether here is just to ensure that the code a user wants to execute on the EVM gets executed. Users need not have to use it as a currency. Ether's primary purpose is to secure the Ethereum network, not to be used as a "currency" like Bitcoin. If someone gave me an ether every time the Ethereum devs keep emphasizing this, I'd be very rich by now. If Bitcoin did a great job at transferring value in the network without being slow and full all the time, all the ancaps would have stuck to Bitcoin and would have left us in peace. The Bitcoin challenger is not Ethereum itself, it will be services like Maker that are currently being built on top of Ethereum. Ether purpose is to secure Ethereum so that services like Maker don't have to worry about the security and scalability of the underlying blockchain and can focus on the EVM abstraction and above.

daoland 10y ago

A few common misconceptions that I'd like to correct, Ether is not in the currency business. It was emphasized multiple times by the devs themselves. It so happens that Bitcoin is so slow and full that users are flocking to use Ether as a currency even when Ether's inflation is uncertain. This is an open network, we cant stop people from using it the way they want it to. Ethereum is not being built for financial apps only. It provides a VM that can run code and store data. This can be used for any purpose that requires code to be executed and data fields to be changed atomically in a secure way, the users need to pay a fraction of a cent worth of Ether to run this code. That means they dont have to be invested in Ether to be able to derive value from the Ethereum network. You have to be invested heavily in Bitcoin to get value from the Bitcoin network, especially after Bitcoin payments are such a dud. Please dont rush to type that Steam started accepting Bitcoin recently. Ether is not competition to Bitcoin. Bitcoin killer will be a new token on the Ethereum network. There could also be a AirBnb killer and a Uber killer built on the network too. These are companies that pride on being leaders in sectors by writing only code. What if this code and data can exist as commons in the Ethereum network that is global and has 100% uptime. Users pay a fraction of cent worth of Ether to run transactions instead of a percentage cut. And these users will transfer money between themselves for these transactions with the token that killed Bitcoin, not Ether. It will take a while to kickstart a reputation layer on Ethereum network but these usecases are a real possibility. There is a very good chance that these new tokens created on the Ethereum network will surpass the total market cap of Ether very soon :O

DennisP 10y ago
Ether's long-term inflation is uncertain, but its maximum inflation is known. It's 26% of the crowdsale amount per year, or about 22% of the initial supply (so as the supply increases, the rate decreases). The devs have reserved the right to lower the inflation rate when they transition to proof of stake, but they've guaranteed not to increase it. That guarantee is enforced by the community just like it is on Bitcoin, plus it's actually written in the legal documents for the crowdsale. Right now the ether inflation rate is under 20%. Bitcoin's inflation when it had a $1 billion market cap was 33%. As a currency, ether works just as well as bitcoin, but with higher throughput and much less latency.

miseg 10y ago

Is Ethereum a "dangerous" technology to play with? With regards to contracts that might be deemed illegal.

_pmf_ 10y ago

Bitcoin-Scammers need a new playing field; that's how I read everything related to crypto currencies now.

mrfusion 10y ago

I got excited and installed an etherum wallet. I transferred two BTC to it but now my etherum Wallet says my balance is two ether! That sucks I'm out 900$ on this thing. :-(. Any ideas?

shawabawa3 10y ago
Are you serious? I hope not. Bitcoin and Ethereum are not stored on the same blockchain and are not compatible or directly convertible. Your only chance of getting the bitcoins back is to try to create the same wallet address on the bitcoin network (I'm not sure if the backup seed strings are compatible, may not be possible)
- mrfusion 10y ago
  I really don't understand how it happened. I used shapeshift.io. I put a ticket in with them at least. Waiting to hear back.
  - shawabawa3 10y ago
    Ah it sounded like you just tried to transfer bitcoin straight to the ether account. Hope their support sorts it out for you
- mrfusion 10y ago
  I don't think it would have gone to a bitcoin address since I did get the two ether from somewhere.
mrfusion 10y ago
Update. Shapeshift refunded my overpayment. Apparently I read the instructions wrong. All good now.

aws_ls 10y ago

I respect Ethereum project and people behind it, but am not convinced. For loops: I am tired of seeing Turing complete, to mean just for loops, I thought, HN crowd busts jargon, so I am just going to say for loops. I think Bitcoin makes minimal use of the resources on the Blockchain, hence the minimalistic script, which can be used for multi-sig as a condition to move coins. Which the creators felt is sufficient, and the actual contract could live (run) outside. Now imagine if there are 1000 Dapps (distributed apps in Ethereum world) running and all of them have for loops. Now for every block which is written, it will have the overhead to run all these for loops. And each of these for loops are going to run on each of the full nodes. That is the ones which are trying to mine a block. I think, this is a huge overhead. As if PoW based mining is not a computing burden already. I know they are exploring PoS for mining. But I think PoS is better for closed Blockchains, with limited stake holders. Example the settlement layer which the Big Banks are exploring using a closed Blockchain, obviously can do with PoS as all blocks can be signed by all stake holders. Dapp: I don't clearly understand why Dapps need to live on the Blockchain. As there core logic is bound to be bloated, and should live outside the Blockchain, to conserve resources. Bitcoin being a single app on the Blockchain i.e a crypto currency app, is facing scaling issues. Imagine a diverse range of Dapps all living on the Blockchain! Scaling: Admittedly there is a dispute going on in Bitcoin land over scaling. And I have been gobbling up points on all sides for months now. And IMHO the issue is very complicated. When I started out, I shared the view point that they should increase the block size. But, I don't know, recently, I am beginning to see the point of the core developers. I see merits in the argument of decentralized nature being preserved. Also attempts like Seg-Wit (again note they are pushing things outside the block, again making it as minimal as possible, contrary to the Dapp philosophy). Look at it this way, if Ethereum had come first, Bitcoin would be a single Dapp on it. And with all its problems. Ethereum is just out, and most likely it will evolve in the direction of the first successful Dapp. As of now, IMHO, its an idealistic platform in search of a real (d)App. No disrespect. I trust Butarin & co are a sincere bunch of guys, but they have a long road ahead compared to Bitcoin. Not a ponzi scheme: Lastly, I really hate to see a lot of folks casually dismissing Bitcoin as a ponzi scheme. Kindly note that its creator has not moved a single coin. The second guy who joined him has passed away. And I think, Bitcoin has inherited the philosophy and spirit of its founder(s?) and early devs, who had no idea what they are getting into. And were mainly doing it to finally have a successful crypto currency, after many failed attempts. So overall, I don't buy the points of the Coinbase co-founder. He definitely makes some good points. But IMHO he gets a lot of it wrong, and based on presumptions (e.g. the world needs Dapps running on Blockchains), only some of which I have explained above. Edit: Typos & minor rephrase