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I liked your answer. But you didn't answer his/her other criticism: "...It's almost 10 years old and today it's actually less useful than it was a few years ago

by nora4 9y ago

I liked your answer. But you didn't answer his/her other criticism: "...It's almost 10 years old and today it's actually less useful than it was a few years ago due to runaway fee growth. The feedback system works in the wrong direction. Did the Internet get less useful the more people used it?" The fact that network effects to some extent works in the wrong direction for this technology is concerning. What happens when the current speculative cycle comes to an end and crypto needs to justify itself by its utility to end-users as opposed to investors? P.S. Beside this point but one thing that can work in favor of crypto is the conflation of investors & users. You essentially get so many evangelicals for your project from the investment perspective "for free". If you can turn them to users, then you are in a nice shape. Though issue is that most these investors are only summertime soldiers.

v64 9y ago
Cryptocurrency isn't blockchains anymore than AOL is the Internet. Bitcoin may be getting less useful, showing that a proof of work system that incentivizes miners the way it does may be broken, but this doesn't fundamentally cease to justify the use of blockchains as a data structure. It just means we need to figure out a way to keep blockchain security while improving/replacing proof of work.
- nora4 9y ago
  The problem is not PoW. The fundamental problem of cryptocurrency is scalability. In my understanding, a system is called scalable if adding 1 unit of resource to an existing amount of resource m, improves the performance by roughly (m+1)/m. This is not a property these systems possess. The computational power of the system remains is bounded by the computational power of weakest full-node.
- CryptoPunk 9y ago
  That's a totally inappropriate analogy. AOL was a company, not a class of technology like cryptocurrency. You could compare a specific instance of cryptocurrency, like Bitcoin, to AOL, but not the category as a whole. Cryptocurrency is a vital component of the distributed blockchain architecture. It provides the decentralized economic layer, without which blockchains would be centralized by virtue of their dependence on a centralized payment processor.
  - v64 9y ago
    > AOL was a company, not a class of technology like cryptocurrency. You know this, but many users of AOL didn't. To them, AOL was equal to the internet, like many people believe that cryptocurrency is the only application of blockchains as a data structure. > Cryptocurrency is a vital component of the distributed blockchain architecture. It is now, but that doesn't necessarily have to be the case. Cryptocurrency is one of many applications that can be built on top of a distributed ledger. There are many applications that have nothing to do with payment processing.
    - CryptoPunk 9y ago
      You didn't respond to the fact that cryptocurrency is a technology class or my reasoning for my cryptocurrency is vital for blockchains to have the property of being distributed.
      - v64 9y ago
        The way I view cryptocurrencies is that they're a service like HTTP or SMTP on top of a blockchain, which would be analogous to TCP/IP. Cryptocurrencies are only one of many uses of blockchains. I disagree with the notion that a cryptocurrency is a vital property of the distributed nature of blockchains. The purpose they serve now is to incentivize individuals to participate in the network who wouldn't otherwise participate by paying them a currency to represent the value of the service they've provided. But for instance, you could also have private blockchains where the incentive for running a node is access to that blockchain's data. There does have to be an incentive to run nodes, but it doesn't necessarily have to be monetary.
        CryptoPunk 9y ago
        >>But for instance, you could also have private blockchains where the incentive for running a node is access to that blockchain's data. That's not a decentralized blockchain. It's the decentralized consensus that is novel. Without decentralization, it's just an append only database.

by nora4 9y ago

v64 9y ago

Cryptocurrency isn't blockchains anymore than AOL is the Internet. Bitcoin may be getting less useful, showing that a proof of work system that incentivizes miners the way it does may be broken, but this doesn't fundamentally cease to justify the use of blockchains as a data structure. It just means we need to figure out a way to keep blockchain security while improving/replacing proof of work.

nora4 9y ago
The problem is not PoW. The fundamental problem of cryptocurrency is scalability. In my understanding, a system is called scalable if adding 1 unit of resource to an existing amount of resource m, improves the performance by roughly (m+1)/m. This is not a property these systems possess. The computational power of the system remains is bounded by the computational power of weakest full-node.
CryptoPunk 9y ago
That's a totally inappropriate analogy. AOL was a company, not a class of technology like cryptocurrency. You could compare a specific instance of cryptocurrency, like Bitcoin, to AOL, but not the category as a whole. Cryptocurrency is a vital component of the distributed blockchain architecture. It provides the decentralized economic layer, without which blockchains would be centralized by virtue of their dependence on a centralized payment processor.
- v64 9y ago
  > AOL was a company, not a class of technology like cryptocurrency. You know this, but many users of AOL didn't. To them, AOL was equal to the internet, like many people believe that cryptocurrency is the only application of blockchains as a data structure. > Cryptocurrency is a vital component of the distributed blockchain architecture. It is now, but that doesn't necessarily have to be the case. Cryptocurrency is one of many applications that can be built on top of a distributed ledger. There are many applications that have nothing to do with payment processing.
  - CryptoPunk 9y ago
    You didn't respond to the fact that cryptocurrency is a technology class or my reasoning for my cryptocurrency is vital for blockchains to have the property of being distributed.
    - v64 9y ago
      The way I view cryptocurrencies is that they're a service like HTTP or SMTP on top of a blockchain, which would be analogous to TCP/IP. Cryptocurrencies are only one of many uses of blockchains. I disagree with the notion that a cryptocurrency is a vital property of the distributed nature of blockchains. The purpose they serve now is to incentivize individuals to participate in the network who wouldn't otherwise participate by paying them a currency to represent the value of the service they've provided. But for instance, you could also have private blockchains where the incentive for running a node is access to that blockchain's data. There does have to be an incentive to run nodes, but it doesn't necessarily have to be monetary.
      - CryptoPunk 9y ago
        >>But for instance, you could also have private blockchains where the incentive for running a node is access to that blockchain's data. That's not a decentralized blockchain. It's the decentralized consensus that is novel. Without decentralization, it's just an append only database.