7 ms·

What does $100 Ether mean?

102 points by fabiant7t 9y ago

RichardHeart 9y ago
I think it means a lot of people are going to lose a lot more money than $1 Ether would have meant. 1. The halting problem states you can't predict what a turing complete program will do, until you run it. This means to some degree, that you can't predict what your "smart" contract will do, until it does it. Thus turing completeness causes security to be far, far harder than non turing completeness. This is how you lose the millions of dollars as the DAO did after it passed audits. 2. Competing implementations of consensus code in different languages greatly increases breakdown of consensus. (more millions have been lost over this, and it created a fork at about 10 percent the value of the old chain.) 3. You can buy things with bitcoin. What can you buy with ETH? If you can't buy anything with a currency, it's not a currency. Thus, human resolved chain rollbacks? Check. Failed consensus between implementations? Check. Passed audit yet totally failed smart contracts? Check. No place to spend them? Check. New tokens given out all the time forever? Check. Every dollar that goes into bad ideas is taken directly from the good ideas. Smart contracts can never be smart until oracles are solved. Oracles aren't solved. ETH has all the technical odds and history stacked against it, however some how, the people that bought them aren't dumping. There's a saying that the market can stay irrational longer than you can stay solvent.
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- geppeto 9y ago
  You can buy ICOs with eth. Did you ever consider that the currency part of cryptocurrency was a misnomer and has nothing to do with the value of the asset?
- m3ta 9y ago
  Theoretically ETH can easily replace bitcoin as a payment method for anything that can be bought with BTC currently. I would imagine some people investing in ETH are expecting that to happen.
- ellius 9y ago
  "3. You can buy things with bitcoin. What can you buy with ETH? If you can't buy anything with a currency, it's not a currency." This is the one that really sticks out to me. What do people need any of this for? I think they did a fine job pitching the value of smart contract / blockchain technology. But why do I, or a bank, or society need anything beyond those? The tech may be useful, but what 99% of these discussions come down to is whether you think a decentralized currency and disintermediated payments system have value. I don't really see the need for the vast majority of society to have the former in the long run, and I think the latter is actively harmful and impractical. Like you pointed out, you're inevitably going to have these code failures, disagreements, etc. Those are basic failures of any human-designed and human-negotiated system. As far as those go, I still prefer to wager my business on the time-worn technology of English common law. As far as the tech goes, yes, banks should get behind some of this. Their infrastructure is garbage and could well benefit from associations of private chains and the like.
  - rocqua 9y ago
    The main 'value' of ETH is in buying 'gas' for your smart contracts. Basically, you need ETH to use the Ethereum network. So it makes more sense to view it as a commodity.
  - erikpukinskis 9y ago
    > What do people need any of this for? I can write an app for managing a business, fund it, and then walk away forever. Ethereum is a platform for hosting autonomous corporations.
    - iamatworknow 9y ago
      Is that something we want? Because it doesn't sound like something I want. I like that there's some level of the human element in the personal transactions I conduct with businesses, and I don't think I'm alone given how hackneyed the joke about bypassing automated phone support systems has become. If something falls outside company procedures there's usually someone who can help me out by bending the rules or deferring to a superior who can make an exception, or at the very least explain why it can't be done. Empathy plays a role. If the entire business transaction is automated sure, maybe the more mundane everyday processes run smoother, but if there's an exception that wasn't accounted for you're shit out of luck.
- benchaney 9y ago
  > The halting problem states you can't predict what a turing complete program will do, until you run it. This means to some degree, that you can't predict what your "smart" contract will do, until it does it. Thus turing completeness causes security to be far, far harder than non turing completeness. This is how you lose the millions of dollars as the DAO did after it passed audits. The Halting Problem states that you can't create a general purpose algorithm for predicting what an arbitrary program in a Turing Complete language will do. This is very different.
  - MarkPNeyer 9y ago
    To elaborate: You can look at some programs with your mind, and tell quite clearly what they'll do. You can't write a _program_ that will look at other programs, and always give a correct answer.
  - RichardHeart 9y ago
    "The naïve Ethereum people think they've cleverly sidestepped this with the notion of "gas" but actually all they're doing is cheating with this messy kludge: because simply saying "we'll arbitrarily make the program stop running at some point" does not make "smart contracts" written in Ethereum "decidable" - as we've seen, these contracts can still blow up / go wrong in other ways before they run out of gas." https://www.reddit.com/r/btc/comments/4p0gq3/why_turingcomplete_smart_contracts_are_doomed/ https://www.reddit.com/r/btc/comments/4p0gq3/why_turingcompl...
    - benchaney 9y ago
      This comment is simply incorrect. The gas limits do make smart contracts decidable. It is a mathematical fact. Bringing the idea that things have gone wrong with Ethereum as proof to the contrary is completely absurd. Things have also gone wrong with Bitcoin [1]. Is it undecidable now too? [1] https://en.wikipedia.org/wiki/Mt._Gox https://en.wikipedia.org/wiki/Mt._Gox
      - jude- 9y ago
        > This comment is simply incorrect. The gas limits do make smart contracts decidable. It is a mathematical fact. This line of reasoning does not help me write better code, and does not address the parent's concerns. Using this argument, I can say that every single program I will ever run in my lifetime is also decidable, since eventually the computer I'm using to run it will stop working. This of course does not mean that I will write bug-free code, nor does it mean that I will write code that is feasible to prove correct. What I want is a decidable programming language where it is always feasible to reason about the smart contract's halting states for arbitrary input. Bitcoin and its derivatives let me do this. Ethereum does not.
- RichardHeart 9y ago
  I've been in crypto since 2011. If critical mass/adoption/press/uptime/wallets/ matter to you, then there's you know what. The problems ETH has had would be predicted by anyone looking at their choices. They will continue to have the same problems for the same core reasons. Good news for people long ETH though, it seems the market doesn't really care about the downtime, or forks, or risks of dual codebases or the halting problem of turing comleteness in smart contracts. Hell, they dont' even care about user wallet adoption, or retailer adoption, so, it would seem that the price can just keep going up without really hitting any of the metrics other crypto's have cared about.
- jaibot 9y ago
  I routinely pay for things with ethereum - and if the target only accepts btc, then I can just shapeshift. The "Halting Problem" is a red herring here - eth transactions are technically not Turing complete since they automatically halt when they run out of the finite supply of ether attached to the transaction. Saying that ethereum isn't feasible because of the halting problem is like saying cars aren't feasible because an object in motion stays in motion - there are countless practical ways to manage it, and if nothing else stops you, in the end you'll definitely run out of gas.
  - mikejarema 9y ago
    Here (and when I see people generally using the term) is the meaning of "shapeshift" simply that you go to shapeshift.io and exchange from one cryptocurrency to another?
    - jaibot 9y ago
      Yup!
- leashless 9y ago
  To be fair, BTC had a lot of problems in the early years too. And note I'm trying to be technology agnostic as we build out the VC firm and the Internet of Agreements organisation - I am not of the opinion any of these systems are going to scale cleanly. I think we will need to go back and build it from scratch on an abstraction like pi calculus and work it up from there, not try to accelerate the Proof of Work systems by increments. Only time will tell, though. I'm flexible on this.
- nicksdjohnson 9y ago
  > 1. The halting problem states you can't predict what a turing complete program will do, until you run it. This means to some degree, that you can't predict what your "smart" contract will do, until it does it. Thus turing completeness causes security to be far, far harder than non turing completeness. This is how you lose the millions of dollars as the DAO did after it passed audits. While others have pointed out that this is wrong, it's worth amplifying: Turing machines are deterministic. You can run the contract locally and observe how it behaves, and it will behave the same way in the same environment elsewhere. If this wasn't the case, you couldn't have consensus at all. > 2. Competing implementations of consensus code in different languages greatly increases breakdown of consensus. (more millions have been lost over this, and it created a fork at about 10 percent the value of the old chain.) The DAO hard fork had nothing to do with a consensus failure. There's been one single short-lived mainnet fork due to a consensus issue, which was quickly resolved with - to the best of my knowledge - no financial loss.
  - jude- 9y ago
    > While others have pointed out that this is wrong, it's worth amplifying: Turing machines are deterministic. You can run the contract locally and observe how it behaves, and it will behave the same way in the same environment elsewhere. If this wasn't the case, you couldn't have consensus at all. "Deterministic" != "feasible to reason about halting states for all inputs." Running it locally to see how it behaves for a handful of inputs is definitely not sufficient for claiming that the code behaves correctly (i.e. is "secure"). Recall that people lost money in the DAO not because they didn't test how the DAO behaved when they sent their Ether to it. They lost money because someone discovered the contract as implemented did not behave the way it was expected and advertised to behave. Had it been possible to reason about the DAO's halting states for all possible inputs, the re-entrance bug would have been caught and fixed before the DAO was released.
    - nmca 9y ago
      Formal analysis will help sort this out. Larry Paulson trained up these guys: https://www.imandra.ai/ https://www.imandra.ai/ And similar tech can be applied to smart contracts. Would have spotted the DAO bug. Not ready for prime time yet, but will be around the same time as sharding maybe...
- Jenya_ 9y ago
  Vitalik Buterin (founder of Ethereum) and his tweet about Turing completeness (now I only need to understand what a "rich statefulness" is): https://twitter.com/VitalikButerin/status/854271590804140033 https://twitter.com/VitalikButerin/status/854271590804140033
djtriptych 9y ago
This guy Vinay Gupta really has a gift for writing about technology. Lots of clear technical concepts without resorting to jargon, bright syntax and style, and never pedantic.
- leashless 9y ago
  Thank you! Much practice. I am old (45)
  - djtriptych 9y ago
    I'm getting old (36) but I don't write about tech enough. Time to start a blog :)
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cjslep 9y ago
They forgot the feature where if a smart contract doesn't go the way they want it, they create a default-opt-in hard fork of the currency. Sorry if I don't trust the "small group of legends" more than the government.
- jhildings 9y ago
  Can you provide a solution to force all miners to run the same software forever? Exactly
  - cjslep 9y ago
    Your hostile strawman/reducto-ad-absurdum is not appreciated. My criticism is a valid one, despite my mortal limitations.
- sf_rob 9y ago
  And in the same breath criticize Bitcoin for consolidation of mining power (which is a valid criticism).
  - leashless 9y ago
    There are cans of worms I could not open. I'm sorry.
- lawik 9y ago
  Was this around The DAO? Any good reading on it?
- nugget 9y ago
  I am a fan of Ethereum but I wish they (and other alt-coins) would be honest about the fact that there is very much a central authority at work; in Ethereum's case, it's a small network of developers and mining pools. That's not necessarily bad, but let's at least be honest about it. Admit that central authorities have a role to play (and may take many different forms). Recent events clearly reflect, to me at least, that the value of a blockchain doesn't depend upon the lack of a central authority (indeed, investors may feel safer with a steady hand on the wheel) or immutability (Ethereum violated supposed rule #1 and look at how the market has voted, i.e. ETH/ETC price variance).
djh_ 9y ago
The author talks about making Ethereum more humane and user-friendly, but jargon like "The Internet of Agreements" and "Humanizing the Singularity" makes me think he's mostly interested in becoming a thought-leader through Branding™. Those terms and his bombastic language in general will not help bring Ethereum to the masses like he claims to want to do. Also, the idea that Ethereum at $100 implies this amazing decentralized future is simply wrong, because that also implies that Ethereum at $1 didn't mean anything. Instead his argument should center around the many different businesses, products and experiments being built on the platform.
- RichardHeart 9y ago
  I think Vinay has great insights into gun control, the hexayurt, and some other topics, however, on ETH, I think he's totally in error. I'd be happy to livestream chat him about it.
  - leashless 9y ago
    What do you think I'm missing about ETH? Insufficient political radicalism?
    - RichardHeart 9y ago
      Crypto is a hard space. Most people's startups have lost them money compared to what they would have made had they just bought btc and held. Other's have left the btc ship with predictions of failure (Falkvinge, Hearn) and their doom predictions haven't yet and perhaps may not come true. I feel that many the great mind is lost to boredom with boring old BTC, the crypto you can actually buy things with. This makes me sad, for surely BTC is not yet where anyone would like it to be. The braindrain has a cost. Massive amounts of braindrain have funneled into ETH, and not just dev's but dollars. It's like 21 inc. They failed so hard that they pivoted into a payments layer. I literally paid them a 6 percent fee to send some BTC to their founder. I could have just sent him btc directly, but then they wouldn't have a profit model right? Thus. Time and money can be wasted. I believe that much of ETH is such a waste. And even worse, it's actually a risk magnet that convinces others to do unsafe things, like tie millions of dollars up in smart contracts, that are quite unsmart. Bitcoin's not exciting enough, so let's iterate all the xyz thing but with bitcoin ideas. They nearly all fail, so then we're on to, lets have shorter block times, or lets tie proof of work to something that's not electricity, like storage or selfies. Then there's the "smart" layers like colored coins, branded tokens, and mastercoin, and ETH which layers on itself. So the situation is, everyone wants to get rich, but you can only get rich in crypto if you A. start with lots or B. Get in really early. Since most people don't start with lots, and most people aren't "early" to BTC, they venture into altcoin land, also known by a diminutive term I won't use here. You could C. ico, pump and dump as well. Thus everyone wants to get in early, and get in on the pump, few want to work with boring, slow, nearly impossible to change BTC, corners get cut, and sheep get shaved. The growing pains BTC had cost a couple orders of magnitude less financial harm? Value comes from scarcity + demand. Open source software is by definition not scarce. Thus if a cryptocurrency has value, it's not it's code that its the value, it's the network effect of users using it that prevents other copies from outcompeting them at lower fees. Thus for any cryptocurrency token to have lasting value, it must derive that value from something external to it's bad ass code. Take a look at how many things you can buy with BTC that you can't with ETH, that is the value, that is hard to replicate, hard to penetrate. Even lower volatility due to giant order books is a plus. Thus, when I see open source projects try to make money on the quality of their code, they're missing out on where the value comes from. Now, could ETH be amazing, sure. Would it be amazing if the tokens were worth $1 or 10 cents, or 1 cent? Probably, the same way tcp packets are amazing, and worth pretty damn little. SO when people hop on the pump, on a currency that is only hitting 1 metric, the pump one, it's dangerous and risky. Then there's the risk that your'e enticing dev's to write smart contracts, when smart contracts are hard to write. And you're giving them all the tools they need to hang themselves. Then there's the risk that you say lots of things that are inaccurate, which I guess I'll just tackle in a giant post next, lol.
joeblau 9y ago
> On the head end of the blockchain there is a sort of roulette wheel. This is interesting. Where Bitcoin seems to reward miners based on solving NP hard problems, Etherium is just handed out randomly?
- wmf 9y ago
  No, Ethereum and Bitcoin both use proof of work (for now).
  - joeblau 9y ago
    But does BTC randomly reward the miners like ETH does as being described in this post?
    - rocqua 9y ago
      Both BTC and ETH don't actually reward randomly. Instead, everyone is just trying a large amount of 'solutions' until one works. The first to find and distribute such a solution is said to have 'mined' such a block and gets to add his reward into the record by modifying that block. Because there is no way to know the true solution, everyone is just guessing so in the end it is random chance that determines who gets to mine a block, but those who spent more effort have proportionally more chance to win.
      - leashless 9y ago
        Bigger computers equals faster search, which we could explain to non techies as buying more lottery tickets. I try never to explain mining to a general audience. It's too low level for a clean semantic mapping between what they want to know about, and how it all really works.
        count_zero 9y ago
        Maybe this analogy would work: Imaging a million haystacks with a million different keys scattered within them. There is a lock which only one of those keys can open; it is difficult to find the key, but when you do, anyone can easily verify it is correct by turning it in the lock. Once a key has been found, a new lock is created and the process starts again. The more robots (mining power) you have to search for the key, the more likely it is that you will find it before competing machines do.
mavdi 9y ago
Should've bought more last year... way more. But I guess everyone says that now.
- madamelic 9y ago
  Hey, I knew about Bitcoin when it was $20. You could buy now and dump it when it hits $900 - $1000. It will. As far as I am concerned, the current iteration of *coin are just pump and dump basically.
  - erikpukinskis 9y ago
    What do you think about the idea that people in failed states with unstable currencies would want to store their wealth in Bitcoin? Or the idea that people would want to use it for international money transfers? "Just pump and dump" implies you don't believe legitimate uses underlie the coin.
    - madamelic 9y ago
      I think there are legitimate uses, I don't have faith in the organizations behind them. Both Bitcoin and Ethereum have had fundamental differences in the orgs and fractured. Currencies isn't exactly like open-source orgs where fracturing the foundation is perfectly fine.
    - paulmd 9y ago
      > What do you think about the idea that people in failed states with unstable currencies would want to store their wealth in Bitcoin? It's a stupid idea because there's always two parties to any transaction. You know why they don't just store their wealth in dollars? Because nobody is insane enough to sell them dollars for a worthless piece of paper. Bitcoin works the same way. How much Bitcoin would you give for a Zimbabwe Dollar during hyperinflation? Obviously none. So you have yet another hard currency that nobody can get ahold of. What's the point, again? > Or the idea that people would want to use it for international money transfers? I buy things internationally all the time. It works pretty great, it costs me nothing and it costs the recipient 4.4% plus a fixed $0.30 per sale. Plus if they try and screw me over somehow I get all my money back and try someone else, and they get slapped with a big-ass chargeback fee for being an asshole. How much are the chargeback fees in the Bitcoin model? Who do I call to get my money back? Also, I can tell you for sure that Bitcoin costs quite a lot in fees to buy, sell, or trade. Each transaction is what, $0.50 in fees nowadays? Insofar as Bitcoin represents a single world currency, the problem is that on a macro level this isn't a good idea. Separate currencies that can inflate/deflate (i.e. "appreciate" and "depreciate") are a way to levellize structural imbalances, and without this relief valve you can end up with total collapse instead of just workers who are upset that an iPhone costs $1000. Inflation is good, it reflects a growing economy, it's only when it turns into hyperinflation that this is problematic. For a microcosm of this problem, you can see the ongoing problems with the structural imbalances between Greece and the high-earning German economies over the last 10 years. If they had currencies that could appreciate and depreciate, Greek labor would be very cheap on the international market. But since they're stuck in the Euro together, they can't do that. The growth function for the money supply probably isn't optimal either, for these reasons. The ability to adjust the supply is critical for controlling both inflation and deflation, under various circumstances.
45h34jh53k4j 9y ago
Bitcoin has had several drastic price corrections in its life. We are yet to see this from Ether. I suspect the fall will be greater if it starts >$100. Of course, we will look back on this in 5 years and think $100 ETHER was cheap!
- avaer 9y ago
  If everyone agreed this was "of course", Ether would be more than $100 today.
- Jabanga 9y ago
  Ether dropped from $20 to $6 post-DAO-hack.
lumberjack 9y ago
The problem with smart contracts is that they are only 100% trustless as long as all the input data is already present on the blockchain. Even something banally simple as "if such and such win the world cup deposit earnings there" cannot be 100% trustless. How does one overcome this problem? I don't think smart contracts can overcome this problem while remaining 100% trustless.
- kolinko 9y ago
  Trustlessness is not a requirement for having a robust system.
- 7373737373 9y ago
  "Trustless" is a terrible meme, as the term is misleading and the implementation of the concept is impossible. The truth is: There is no cloud, just other people's computers. Smart contracts can make trust relationships explicit. By using a blockchain system, you entrust a network - which you may have no control over - with application state. If you rely on such a network, you indirectly also rely on the network infrastructure and operators' social and economic incentives.
  - leashless 9y ago
    I agree that our terminology is often terrible. "Smart contract" could well have been "conditional payment" which for most purposes is clearer. Do you know about http://erights.org http://erights.org ? They are good - great - on terminology.
    - 7373737373 9y ago
      Yes, in fact this is one of the most interesting websites for me now, especially when looking at general purpose distributed computing beyond blockchains. See here for a few notes of mine: https://github.com/void4/notes/issues/5 https://github.com/void4/notes/issues/5
    - nicksdjohnson 9y ago
      I agree "smart contract" is a poor term, but they're way more than "conditional payment" - you can do a lot of things with them that have nothing to do with paying money.
akhilcacharya 9y ago
It means my Eth miner friends are filthy rich :) :(
leashless 9y ago
Hi I'm the original author of the piece and I'll be around for the next couple of hours to answer questions. Glad to see such a lot of debate here already!
erikpukinskis 9y ago
> By all and any standards, this is a success beyond anything dreamt of when the project started I doubt this is true. When Bitcoin came out I think a lot of people realized a whole new game was afoot. An autonomous ledger was demonstrated and the race was on to create the autonomous everything else. An autonomous application host was the obvious brass ring, and whoever got it seemed assured to spark a market at least as big as Bitcoin. I can't imagine Vitalik was thinking anything other than "if this works, it will be huge." That's a big if, but I think the stakes were clear.
evanvanness 9y ago
If you want to stay up to date on Ethereum, I've heard there's a fantastic weekly email newsletter that's worth reading: http://www.weekinethereum.com http://www.weekinethereum.com
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nexus9 9y ago
If you're wondering why there is so much negativity toward Ethereum on Hacker News, the answer is likely to be 1 of 7 things. The individual making the remark is 1) brainwashed by the Bitcoin or Altcoin propaganda machine, 2) trying to prop up their personal crypto portfolio, 3) a shill and/or troll paid to astroturf social media, 4) bitter or jealous for not getting in at the beginning, 5) afraid of Ethereum and what it might do to their industry or career, 6) angry that their existing skillset will be devalued or obsoleted by decentralized technologies, and/or 7) largely ignorant. Honestly, the criticism I read on these threads just reeks of desperation and stupidity. The same misinformed talking points are repeated over and over again, continuing a kind of misguided and most likely financially-motivated crusade against Ethereum. The Hacker News community has been at it for over 2 years now. And yet, Ethereum continues to prove itself. It continues to innovate and grow. It continues to attract more users, penetrate new markets, and realize its vision for a more decentralized internet. It's starting to look more and more like the so-called skeptics on here are just too arrogant to admit they were wrong, too disdainful to simply give the Ethereum project the credit it deserves and just too pretentious to recognize they don't know what they're even talking about. Seriously - get over yourself.
- bluesteel44 9y ago
  What has been the most useful application of ETH for you?
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brighton36 9y ago
This guy is a raving lunatic, you can see him spouting total gibberish here: https://www.youtube.com/watch?v=A3p-RUtGejI https://www.youtube.com/watch?v=A3p-RUtGejI
- rabbyte 9y ago
  This guy is an ad hominem attention seeker, you can see him spouting total gibberish anywhere he appears.
rabbyte 9y ago
as someone who's been involved since the beginning, the only thing $100 means is there are enough people invested that the real work can begin where developers and teams can take the time to learn how to build for it without worrying it'll disappear tomorrow. that assurance counts for something, but beyond that do -not- consider this a "production ready" platform. There will be failure. There will be losses. treat this as a place to experiment and dabble in the future but don't strive for world domination, let success build naturally. fuck the hype.

102 points by fabiant7t 9y ago

I think it means a lot of people are going to lose a lot more money than $1 Ether would have meant. 1. The halting problem states you can't predict what a turing complete program will do, until you run it. This means to some degree, that you can't predict what your "smart" contract will do, until it does it. Thus turing completeness causes security to be far, far harder than non turing completeness. This is how you lose the millions of dollars as the DAO did after it passed audits. 2. Competing implementations of consensus code in different languages greatly increases breakdown of consensus. (more millions have been lost over this, and it created a fork at about 10 percent the value of the old chain.) 3. You can buy things with bitcoin. What can you buy with ETH? If you can't buy anything with a currency, it's not a currency. Thus, human resolved chain rollbacks? Check. Failed consensus between implementations? Check. Passed audit yet totally failed smart contracts? Check. No place to spend them? Check. New tokens given out all the time forever? Check. Every dollar that goes into bad ideas is taken directly from the good ideas. Smart contracts can never be smart until oracles are solved. Oracles aren't solved. ETH has all the technical odds and history stacked against it, however some how, the people that bought them aren't dumping. There's a saying that the market can stay irrational longer than you can stay solvent.

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geppeto 9y ago
You can buy ICOs with eth. Did you ever consider that the currency part of cryptocurrency was a misnomer and has nothing to do with the value of the asset?
m3ta 9y ago
Theoretically ETH can easily replace bitcoin as a payment method for anything that can be bought with BTC currently. I would imagine some people investing in ETH are expecting that to happen.
ellius 9y ago
"3. You can buy things with bitcoin. What can you buy with ETH? If you can't buy anything with a currency, it's not a currency." This is the one that really sticks out to me. What do people need any of this for? I think they did a fine job pitching the value of smart contract / blockchain technology. But why do I, or a bank, or society need anything beyond those? The tech may be useful, but what 99% of these discussions come down to is whether you think a decentralized currency and disintermediated payments system have value. I don't really see the need for the vast majority of society to have the former in the long run, and I think the latter is actively harmful and impractical. Like you pointed out, you're inevitably going to have these code failures, disagreements, etc. Those are basic failures of any human-designed and human-negotiated system. As far as those go, I still prefer to wager my business on the time-worn technology of English common law. As far as the tech goes, yes, banks should get behind some of this. Their infrastructure is garbage and could well benefit from associations of private chains and the like.
- rocqua 9y ago
  The main 'value' of ETH is in buying 'gas' for your smart contracts. Basically, you need ETH to use the Ethereum network. So it makes more sense to view it as a commodity.
- erikpukinskis 9y ago
  > What do people need any of this for? I can write an app for managing a business, fund it, and then walk away forever. Ethereum is a platform for hosting autonomous corporations.
  - iamatworknow 9y ago
    Is that something we want? Because it doesn't sound like something I want. I like that there's some level of the human element in the personal transactions I conduct with businesses, and I don't think I'm alone given how hackneyed the joke about bypassing automated phone support systems has become. If something falls outside company procedures there's usually someone who can help me out by bending the rules or deferring to a superior who can make an exception, or at the very least explain why it can't be done. Empathy plays a role. If the entire business transaction is automated sure, maybe the more mundane everyday processes run smoother, but if there's an exception that wasn't accounted for you're shit out of luck.
benchaney 9y ago
> The halting problem states you can't predict what a turing complete program will do, until you run it. This means to some degree, that you can't predict what your "smart" contract will do, until it does it. Thus turing completeness causes security to be far, far harder than non turing completeness. This is how you lose the millions of dollars as the DAO did after it passed audits. The Halting Problem states that you can't create a general purpose algorithm for predicting what an arbitrary program in a Turing Complete language will do. This is very different.
- MarkPNeyer 9y ago
  To elaborate: You can look at some programs with your mind, and tell quite clearly what they'll do. You can't write a _program_ that will look at other programs, and always give a correct answer.
- RichardHeart 9y ago
  "The naïve Ethereum people think they've cleverly sidestepped this with the notion of "gas" but actually all they're doing is cheating with this messy kludge: because simply saying "we'll arbitrarily make the program stop running at some point" does not make "smart contracts" written in Ethereum "decidable" - as we've seen, these contracts can still blow up / go wrong in other ways before they run out of gas." https://www.reddit.com/r/btc/comments/4p0gq3/why_turingcomplete_smart_contracts_are_doomed/ https://www.reddit.com/r/btc/comments/4p0gq3/why_turingcompl...
  - benchaney 9y ago
    This comment is simply incorrect. The gas limits do make smart contracts decidable. It is a mathematical fact. Bringing the idea that things have gone wrong with Ethereum as proof to the contrary is completely absurd. Things have also gone wrong with Bitcoin [1]. Is it undecidable now too? [1] https://en.wikipedia.org/wiki/Mt._Gox https://en.wikipedia.org/wiki/Mt._Gox
    - jude- 9y ago
      > This comment is simply incorrect. The gas limits do make smart contracts decidable. It is a mathematical fact. This line of reasoning does not help me write better code, and does not address the parent's concerns. Using this argument, I can say that every single program I will ever run in my lifetime is also decidable, since eventually the computer I'm using to run it will stop working. This of course does not mean that I will write bug-free code, nor does it mean that I will write code that is feasible to prove correct. What I want is a decidable programming language where it is always feasible to reason about the smart contract's halting states for arbitrary input. Bitcoin and its derivatives let me do this. Ethereum does not.
RichardHeart 9y ago
I've been in crypto since 2011. If critical mass/adoption/press/uptime/wallets/ matter to you, then there's you know what. The problems ETH has had would be predicted by anyone looking at their choices. They will continue to have the same problems for the same core reasons. Good news for people long ETH though, it seems the market doesn't really care about the downtime, or forks, or risks of dual codebases or the halting problem of turing comleteness in smart contracts. Hell, they dont' even care about user wallet adoption, or retailer adoption, so, it would seem that the price can just keep going up without really hitting any of the metrics other crypto's have cared about.
jaibot 9y ago
I routinely pay for things with ethereum - and if the target only accepts btc, then I can just shapeshift. The "Halting Problem" is a red herring here - eth transactions are technically not Turing complete since they automatically halt when they run out of the finite supply of ether attached to the transaction. Saying that ethereum isn't feasible because of the halting problem is like saying cars aren't feasible because an object in motion stays in motion - there are countless practical ways to manage it, and if nothing else stops you, in the end you'll definitely run out of gas.
- mikejarema 9y ago
  Here (and when I see people generally using the term) is the meaning of "shapeshift" simply that you go to shapeshift.io and exchange from one cryptocurrency to another?
  - jaibot 9y ago
    Yup!
leashless 9y ago
To be fair, BTC had a lot of problems in the early years too. And note I'm trying to be technology agnostic as we build out the VC firm and the Internet of Agreements organisation - I am not of the opinion any of these systems are going to scale cleanly. I think we will need to go back and build it from scratch on an abstraction like pi calculus and work it up from there, not try to accelerate the Proof of Work systems by increments. Only time will tell, though. I'm flexible on this.
nicksdjohnson 9y ago
> 1. The halting problem states you can't predict what a turing complete program will do, until you run it. This means to some degree, that you can't predict what your "smart" contract will do, until it does it. Thus turing completeness causes security to be far, far harder than non turing completeness. This is how you lose the millions of dollars as the DAO did after it passed audits. While others have pointed out that this is wrong, it's worth amplifying: Turing machines are deterministic. You can run the contract locally and observe how it behaves, and it will behave the same way in the same environment elsewhere. If this wasn't the case, you couldn't have consensus at all. > 2. Competing implementations of consensus code in different languages greatly increases breakdown of consensus. (more millions have been lost over this, and it created a fork at about 10 percent the value of the old chain.) The DAO hard fork had nothing to do with a consensus failure. There's been one single short-lived mainnet fork due to a consensus issue, which was quickly resolved with - to the best of my knowledge - no financial loss.
- jude- 9y ago
  > While others have pointed out that this is wrong, it's worth amplifying: Turing machines are deterministic. You can run the contract locally and observe how it behaves, and it will behave the same way in the same environment elsewhere. If this wasn't the case, you couldn't have consensus at all. "Deterministic" != "feasible to reason about halting states for all inputs." Running it locally to see how it behaves for a handful of inputs is definitely not sufficient for claiming that the code behaves correctly (i.e. is "secure"). Recall that people lost money in the DAO not because they didn't test how the DAO behaved when they sent their Ether to it. They lost money because someone discovered the contract as implemented did not behave the way it was expected and advertised to behave. Had it been possible to reason about the DAO's halting states for all possible inputs, the re-entrance bug would have been caught and fixed before the DAO was released.
  - nmca 9y ago
    Formal analysis will help sort this out. Larry Paulson trained up these guys: https://www.imandra.ai/ https://www.imandra.ai/ And similar tech can be applied to smart contracts. Would have spotted the DAO bug. Not ready for prime time yet, but will be around the same time as sharding maybe...
Jenya_ 9y ago
Vitalik Buterin (founder of Ethereum) and his tweet about Turing completeness (now I only need to understand what a "rich statefulness" is): https://twitter.com/VitalikButerin/status/854271590804140033 https://twitter.com/VitalikButerin/status/854271590804140033

djtriptych 9y ago

This guy Vinay Gupta really has a gift for writing about technology. Lots of clear technical concepts without resorting to jargon, bright syntax and style, and never pedantic.

leashless 9y ago
Thank you! Much practice. I am old (45)
- djtriptych 9y ago
  I'm getting old (36) but I don't write about tech enough. Time to start a blog :)

deleted 9y ago

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cjslep 9y ago

They forgot the feature where if a smart contract doesn't go the way they want it, they create a default-opt-in hard fork of the currency. Sorry if I don't trust the "small group of legends" more than the government.

jhildings 9y ago
Can you provide a solution to force all miners to run the same software forever? Exactly
- cjslep 9y ago
  Your hostile strawman/reducto-ad-absurdum is not appreciated. My criticism is a valid one, despite my mortal limitations.
sf_rob 9y ago
And in the same breath criticize Bitcoin for consolidation of mining power (which is a valid criticism).
- leashless 9y ago
  There are cans of worms I could not open. I'm sorry.
lawik 9y ago
Was this around The DAO? Any good reading on it?
nugget 9y ago
I am a fan of Ethereum but I wish they (and other alt-coins) would be honest about the fact that there is very much a central authority at work; in Ethereum's case, it's a small network of developers and mining pools. That's not necessarily bad, but let's at least be honest about it. Admit that central authorities have a role to play (and may take many different forms). Recent events clearly reflect, to me at least, that the value of a blockchain doesn't depend upon the lack of a central authority (indeed, investors may feel safer with a steady hand on the wheel) or immutability (Ethereum violated supposed rule #1 and look at how the market has voted, i.e. ETH/ETC price variance).

djh_ 9y ago

The author talks about making Ethereum more humane and user-friendly, but jargon like "The Internet of Agreements" and "Humanizing the Singularity" makes me think he's mostly interested in becoming a thought-leader through Branding™. Those terms and his bombastic language in general will not help bring Ethereum to the masses like he claims to want to do. Also, the idea that Ethereum at $100 implies this amazing decentralized future is simply wrong, because that also implies that Ethereum at $1 didn't mean anything. Instead his argument should center around the many different businesses, products and experiments being built on the platform.

RichardHeart 9y ago
I think Vinay has great insights into gun control, the hexayurt, and some other topics, however, on ETH, I think he's totally in error. I'd be happy to livestream chat him about it.
- leashless 9y ago
  What do you think I'm missing about ETH? Insufficient political radicalism?
  - RichardHeart 9y ago
    Crypto is a hard space. Most people's startups have lost them money compared to what they would have made had they just bought btc and held. Other's have left the btc ship with predictions of failure (Falkvinge, Hearn) and their doom predictions haven't yet and perhaps may not come true. I feel that many the great mind is lost to boredom with boring old BTC, the crypto you can actually buy things with. This makes me sad, for surely BTC is not yet where anyone would like it to be. The braindrain has a cost. Massive amounts of braindrain have funneled into ETH, and not just dev's but dollars. It's like 21 inc. They failed so hard that they pivoted into a payments layer. I literally paid them a 6 percent fee to send some BTC to their founder. I could have just sent him btc directly, but then they wouldn't have a profit model right? Thus. Time and money can be wasted. I believe that much of ETH is such a waste. And even worse, it's actually a risk magnet that convinces others to do unsafe things, like tie millions of dollars up in smart contracts, that are quite unsmart. Bitcoin's not exciting enough, so let's iterate all the xyz thing but with bitcoin ideas. They nearly all fail, so then we're on to, lets have shorter block times, or lets tie proof of work to something that's not electricity, like storage or selfies. Then there's the "smart" layers like colored coins, branded tokens, and mastercoin, and ETH which layers on itself. So the situation is, everyone wants to get rich, but you can only get rich in crypto if you A. start with lots or B. Get in really early. Since most people don't start with lots, and most people aren't "early" to BTC, they venture into altcoin land, also known by a diminutive term I won't use here. You could C. ico, pump and dump as well. Thus everyone wants to get in early, and get in on the pump, few want to work with boring, slow, nearly impossible to change BTC, corners get cut, and sheep get shaved. The growing pains BTC had cost a couple orders of magnitude less financial harm? Value comes from scarcity + demand. Open source software is by definition not scarce. Thus if a cryptocurrency has value, it's not it's code that its the value, it's the network effect of users using it that prevents other copies from outcompeting them at lower fees. Thus for any cryptocurrency token to have lasting value, it must derive that value from something external to it's bad ass code. Take a look at how many things you can buy with BTC that you can't with ETH, that is the value, that is hard to replicate, hard to penetrate. Even lower volatility due to giant order books is a plus. Thus, when I see open source projects try to make money on the quality of their code, they're missing out on where the value comes from. Now, could ETH be amazing, sure. Would it be amazing if the tokens were worth $1 or 10 cents, or 1 cent? Probably, the same way tcp packets are amazing, and worth pretty damn little. SO when people hop on the pump, on a currency that is only hitting 1 metric, the pump one, it's dangerous and risky. Then there's the risk that your'e enticing dev's to write smart contracts, when smart contracts are hard to write. And you're giving them all the tools they need to hang themselves. Then there's the risk that you say lots of things that are inaccurate, which I guess I'll just tackle in a giant post next, lol.

joeblau 9y ago

> On the head end of the blockchain there is a sort of roulette wheel. This is interesting. Where Bitcoin seems to reward miners based on solving NP hard problems, Etherium is just handed out randomly?

wmf 9y ago
No, Ethereum and Bitcoin both use proof of work (for now).
- joeblau 9y ago
  But does BTC randomly reward the miners like ETH does as being described in this post?
  - rocqua 9y ago
    Both BTC and ETH don't actually reward randomly. Instead, everyone is just trying a large amount of 'solutions' until one works. The first to find and distribute such a solution is said to have 'mined' such a block and gets to add his reward into the record by modifying that block. Because there is no way to know the true solution, everyone is just guessing so in the end it is random chance that determines who gets to mine a block, but those who spent more effort have proportionally more chance to win.
    - leashless 9y ago
      Bigger computers equals faster search, which we could explain to non techies as buying more lottery tickets. I try never to explain mining to a general audience. It's too low level for a clean semantic mapping between what they want to know about, and how it all really works.
      - count_zero 9y ago
        Maybe this analogy would work: Imaging a million haystacks with a million different keys scattered within them. There is a lock which only one of those keys can open; it is difficult to find the key, but when you do, anyone can easily verify it is correct by turning it in the lock. Once a key has been found, a new lock is created and the process starts again. The more robots (mining power) you have to search for the key, the more likely it is that you will find it before competing machines do.

mavdi 9y ago

Should've bought more last year... way more. But I guess everyone says that now.

madamelic 9y ago
Hey, I knew about Bitcoin when it was $20. You could buy now and dump it when it hits $900 - $1000. It will. As far as I am concerned, the current iteration of *coin are just pump and dump basically.
- erikpukinskis 9y ago
  What do you think about the idea that people in failed states with unstable currencies would want to store their wealth in Bitcoin? Or the idea that people would want to use it for international money transfers? "Just pump and dump" implies you don't believe legitimate uses underlie the coin.
  - madamelic 9y ago
    I think there are legitimate uses, I don't have faith in the organizations behind them. Both Bitcoin and Ethereum have had fundamental differences in the orgs and fractured. Currencies isn't exactly like open-source orgs where fracturing the foundation is perfectly fine.
  - paulmd 9y ago
    > What do you think about the idea that people in failed states with unstable currencies would want to store their wealth in Bitcoin? It's a stupid idea because there's always two parties to any transaction. You know why they don't just store their wealth in dollars? Because nobody is insane enough to sell them dollars for a worthless piece of paper. Bitcoin works the same way. How much Bitcoin would you give for a Zimbabwe Dollar during hyperinflation? Obviously none. So you have yet another hard currency that nobody can get ahold of. What's the point, again? > Or the idea that people would want to use it for international money transfers? I buy things internationally all the time. It works pretty great, it costs me nothing and it costs the recipient 4.4% plus a fixed $0.30 per sale. Plus if they try and screw me over somehow I get all my money back and try someone else, and they get slapped with a big-ass chargeback fee for being an asshole. How much are the chargeback fees in the Bitcoin model? Who do I call to get my money back? Also, I can tell you for sure that Bitcoin costs quite a lot in fees to buy, sell, or trade. Each transaction is what, $0.50 in fees nowadays? Insofar as Bitcoin represents a single world currency, the problem is that on a macro level this isn't a good idea. Separate currencies that can inflate/deflate (i.e. "appreciate" and "depreciate") are a way to levellize structural imbalances, and without this relief valve you can end up with total collapse instead of just workers who are upset that an iPhone costs $1000. Inflation is good, it reflects a growing economy, it's only when it turns into hyperinflation that this is problematic. For a microcosm of this problem, you can see the ongoing problems with the structural imbalances between Greece and the high-earning German economies over the last 10 years. If they had currencies that could appreciate and depreciate, Greek labor would be very cheap on the international market. But since they're stuck in the Euro together, they can't do that. The growth function for the money supply probably isn't optimal either, for these reasons. The ability to adjust the supply is critical for controlling both inflation and deflation, under various circumstances.

45h34jh53k4j 9y ago

Bitcoin has had several drastic price corrections in its life. We are yet to see this from Ether. I suspect the fall will be greater if it starts >$100. Of course, we will look back on this in 5 years and think $100 ETHER was cheap!

avaer 9y ago
If everyone agreed this was "of course", Ether would be more than $100 today.
Jabanga 9y ago
Ether dropped from $20 to $6 post-DAO-hack.

lumberjack 9y ago

The problem with smart contracts is that they are only 100% trustless as long as all the input data is already present on the blockchain. Even something banally simple as "if such and such win the world cup deposit earnings there" cannot be 100% trustless. How does one overcome this problem? I don't think smart contracts can overcome this problem while remaining 100% trustless.

kolinko 9y ago
Trustlessness is not a requirement for having a robust system.
7373737373 9y ago
"Trustless" is a terrible meme, as the term is misleading and the implementation of the concept is impossible. The truth is: There is no cloud, just other people's computers. Smart contracts can make trust relationships explicit. By using a blockchain system, you entrust a network - which you may have no control over - with application state. If you rely on such a network, you indirectly also rely on the network infrastructure and operators' social and economic incentives.
- leashless 9y ago
  I agree that our terminology is often terrible. "Smart contract" could well have been "conditional payment" which for most purposes is clearer. Do you know about http://erights.org http://erights.org ? They are good - great - on terminology.
  - 7373737373 9y ago
    Yes, in fact this is one of the most interesting websites for me now, especially when looking at general purpose distributed computing beyond blockchains. See here for a few notes of mine: https://github.com/void4/notes/issues/5 https://github.com/void4/notes/issues/5
  - nicksdjohnson 9y ago
    I agree "smart contract" is a poor term, but they're way more than "conditional payment" - you can do a lot of things with them that have nothing to do with paying money.

akhilcacharya 9y ago

It means my Eth miner friends are filthy rich :) :(

leashless 9y ago

Hi I'm the original author of the piece and I'll be around for the next couple of hours to answer questions. Glad to see such a lot of debate here already!

erikpukinskis 9y ago

> By all and any standards, this is a success beyond anything dreamt of when the project started I doubt this is true. When Bitcoin came out I think a lot of people realized a whole new game was afoot. An autonomous ledger was demonstrated and the race was on to create the autonomous everything else. An autonomous application host was the obvious brass ring, and whoever got it seemed assured to spark a market at least as big as Bitcoin. I can't imagine Vitalik was thinking anything other than "if this works, it will be huge." That's a big if, but I think the stakes were clear.

evanvanness 9y ago

If you want to stay up to date on Ethereum, I've heard there's a fantastic weekly email newsletter that's worth reading: http://www.weekinethereum.com http://www.weekinethereum.com

deleted 9y ago

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nexus9 9y ago

If you're wondering why there is so much negativity toward Ethereum on Hacker News, the answer is likely to be 1 of 7 things. The individual making the remark is 1) brainwashed by the Bitcoin or Altcoin propaganda machine, 2) trying to prop up their personal crypto portfolio, 3) a shill and/or troll paid to astroturf social media, 4) bitter or jealous for not getting in at the beginning, 5) afraid of Ethereum and what it might do to their industry or career, 6) angry that their existing skillset will be devalued or obsoleted by decentralized technologies, and/or 7) largely ignorant. Honestly, the criticism I read on these threads just reeks of desperation and stupidity. The same misinformed talking points are repeated over and over again, continuing a kind of misguided and most likely financially-motivated crusade against Ethereum. The Hacker News community has been at it for over 2 years now. And yet, Ethereum continues to prove itself. It continues to innovate and grow. It continues to attract more users, penetrate new markets, and realize its vision for a more decentralized internet. It's starting to look more and more like the so-called skeptics on here are just too arrogant to admit they were wrong, too disdainful to simply give the Ethereum project the credit it deserves and just too pretentious to recognize they don't know what they're even talking about. Seriously - get over yourself.

bluesteel44 9y ago
What has been the most useful application of ETH for you?
- deleted 9y ago
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brighton36 9y ago

This guy is a raving lunatic, you can see him spouting total gibberish here: https://www.youtube.com/watch?v=A3p-RUtGejI https://www.youtube.com/watch?v=A3p-RUtGejI

rabbyte 9y ago
This guy is an ad hominem attention seeker, you can see him spouting total gibberish anywhere he appears.

rabbyte 9y ago

as someone who's been involved since the beginning, the only thing $100 means is there are enough people invested that the real work can begin where developers and teams can take the time to learn how to build for it without worrying it'll disappear tomorrow. that assurance counts for something, but beyond that do -not- consider this a "production ready" platform. There will be failure. There will be losses. treat this as a place to experiment and dabble in the future but don't strive for world domination, let success build naturally. fuck the hype.