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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 min

by 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.
        v64 9y ago
        Just because it's private doesn't mean it's decentralized in a protocol sense. The nodes in the private blockchain would still be distrustful of each other and would still undergo decentralized consensus. As for compensation, rather than receiving a coin as a reward for doing proof of work mining, you would gain a key to enable you to read certain encrypted data on the blockchain, for instance.
        CryptoPunk 9y ago

by v64 9y ago

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.
      - v64 9y ago
        Just because it's private doesn't mean it's decentralized in a protocol sense. The nodes in the private blockchain would still be distrustful of each other and would still undergo decentralized consensus. As for compensation, rather than receiving a coin as a reward for doing proof of work mining, you would gain a key to enable you to read certain encrypted data on the blockchain, for instance.
        CryptoPunk 9y ago