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Disclaimer: I've co-founded a company building cryptographic protocols for existing cryptocurrencies. I'm also a cryptocurrency security researcher. I believe

Disclaimer: I've co-founded a company building cryptographic protocols for existing cryptocurrencies. I'm also a cryptocurrency security researcher. I believe in Bitcoin and the recent developments in both cryptography and distributed systems which are underlying many cryptocurrency projects. I think the skepticism of Hn is rational, valuable to the community and often correct. The cryptocurrency space is a great space to work in, but it requires a constant investment in skepticism and critical thought. I hope Hn always remains skeptical of technology. > The underlying technology is actually pretty worthwhile. Ethereum is providing a base layer protocol for apps that never go down, never fail, and are fully trusted. I disagree with this statement. Ethereum DApps can fail, Ethereum can be rendered unavailable via: scalability issues, forks, bugs or failures in the P2P network. Furthermore the additional infrastructure that many DApps rely on can fail as well. Ethereum is not a solution for achieving high-availability, high-availability is probably harder to achieve with a DApp. Ethereum is a solution for building and managing assets outside the control of a single party or company. This intentional loss of control comes with many costs and does not provide universal business benefits.

wtvanhest 8y ago
I cannot find a good analogy, but I am starting to look at Ethereum as a really good proof of concept, but one that probably won't survive. I cannot put my finger on exactly why, but I am starting to feel like nothing will survive that is not built on Bitcoin itself.
- EthanHeilman 8y ago
  Some projects will die in this during this current crash. The most likely force to kill off projects will be: 1. lack of developers to adapt to cheap 51% attacks, 2. cheap 51% attacks will lead to those coins getting delisted from exchanges since attacks will cheat exchanges via 51% double spending attacks (something which has happened a few times already) 3. With no ability for people to safely buy or sell coins those coins will die. I don't think this will happen to BTC or ETH. I think Ethereum will look very different in 5-10 years.
  - Animats 8y ago
    BTC may survive, but ETH is down more than 90% and it's not looking good.[1] [1] https://coinmarketcap.com/currencies/ethereum/ https://coinmarketcap.com/currencies/ethereum/
    - EthanHeilman 8y ago
      It is counter-intuitive but 90% drops in the price of a cryptocurrency don't result in that cryptocurrency dying. What kills a cryptocurrency is exchanges delisting it and/or having no developers. Price decreases are unlikely to directly cause either of these to happen to Ethereum.
      - wtvanhest 8y ago
        Isnt the price reduction what can lead to the 51% attack?
- roymurdock 8y ago
  there's no pressing need for ethereum, it's a cool experiment but it's much less efficient than the centralized databases that power 99.9% of the worlds computing needs today. it will die from lack of use once the hype and funding runs out. bitcoin will survive because people actually use it to evade currency control laws and launder money. not to mention traders will keep it alive as an alternative asset and good source of volatility
  - dahdum 8y ago
    Centralized databases power 99.9% because Ethereum like technologies aren’t ready for general use yet. My money is on Ethereum getting there first with sharding, proof of stake, and adoption but whichever one does will unlock many, many use cases.
    - nradov 8y ago
      Which use cases?
  - XorNot 8y ago
    Bitcoin will just die. The problem wit pretending it's an asset is you're doing exactly that - pretending. When you hold stocks you hold actual ownership of a productive corporation, when you hold bonds you hold repayment promises from productive corporations or governments which can tax their citizens etc. When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power. A bitcoin isn't a password which unlocks anything, it doesn't convert back into computing power - it can't do anything into the future.
    - handsomechad 8y ago
      I don't hold any bitcoin or cryptocurrency and am a crypto skeptic in general but isn't this argument commonly rebutted with the comparison to gold, to which all of the same criticisms apply but which has nonetheless maintained value for millenia?
- zby 8y ago
  I put my finger on it being too expensive. It works when it is subsidized by all these speculators - but eventually this cost needs to be paid.
- tomrod 8y ago
  Replication of fixed infrastructure and computing costs come to mind.
talawahdotnet 8y ago
Well said. Decentralization does not magically give you reliability or high availability. Sometimes it is quite the opposite. It is still just a bunch of software running on a bunch of miscellaneous computers over an unreliable network. To me there are strong parallels between the cryptocurrency boom and the previous P2P boom. P2P technology was exciting and super interesting, but people assumed that it would magically be the solution to a million problems just because the tech was awesome and decentralized. But that didn't happen, instead Netflix happened. Netflix found a way to solve the actual problems that people were having and at the end of the day the underlying technology didn't matter. I expect to see something similar happen with a lot of the current crypto use cases. More centralized solutions like Amazon QLDB[1] will provide the majority of the benefits that people really need: a transparent, immutable, and cryptographically verifiable transaction log, while also being performant and highly available. Many people see decentralization as the solution to all problems because it will finally make things fair, a level playing field for all. I just don't see it happening. Not because of some sinister world order trying to retain control, but simply because that is not how human interactions and trust tend to work. I think we can continue to move towards more decentralization, but it shouldn't be the end goal in and of itself and we should always be skeptical when there is more focus on that than there is on solving the problem at hand. 1. https://aws.amazon.com/qldb/ https://aws.amazon.com/qldb/
- EthanHeilman 8y ago
  >Netflix found a way to solve the actual problems that people were having and at the end of the day the underlying technology didn't matter. This, one thousand times this, it is always this. People have problems and they want solutions, they don't care about particular technology architectures.
  - CuriousSkeptic 8y ago
    To be fair p2p was, and still is, a better technical solution, and had it not been illegal, would probably have won. (p2p wasn’t illegal, but what people wanted out of it was)

wtvanhest 8y ago

I cannot find a good analogy, but I am starting to look at Ethereum as a really good proof of concept, but one that probably won't survive. I cannot put my finger on exactly why, but I am starting to feel like nothing will survive that is not built on Bitcoin itself.

EthanHeilman 8y ago
Some projects will die in this during this current crash. The most likely force to kill off projects will be: 1. lack of developers to adapt to cheap 51% attacks, 2. cheap 51% attacks will lead to those coins getting delisted from exchanges since attacks will cheat exchanges via 51% double spending attacks (something which has happened a few times already) 3. With no ability for people to safely buy or sell coins those coins will die. I don't think this will happen to BTC or ETH. I think Ethereum will look very different in 5-10 years.
- Animats 8y ago
  BTC may survive, but ETH is down more than 90% and it's not looking good.[1] [1] https://coinmarketcap.com/currencies/ethereum/ https://coinmarketcap.com/currencies/ethereum/
  - EthanHeilman 8y ago
    It is counter-intuitive but 90% drops in the price of a cryptocurrency don't result in that cryptocurrency dying. What kills a cryptocurrency is exchanges delisting it and/or having no developers. Price decreases are unlikely to directly cause either of these to happen to Ethereum.
    - wtvanhest 8y ago
      Isnt the price reduction what can lead to the 51% attack?
roymurdock 8y ago
there's no pressing need for ethereum, it's a cool experiment but it's much less efficient than the centralized databases that power 99.9% of the worlds computing needs today. it will die from lack of use once the hype and funding runs out. bitcoin will survive because people actually use it to evade currency control laws and launder money. not to mention traders will keep it alive as an alternative asset and good source of volatility
- dahdum 8y ago
  Centralized databases power 99.9% because Ethereum like technologies aren’t ready for general use yet. My money is on Ethereum getting there first with sharding, proof of stake, and adoption but whichever one does will unlock many, many use cases.
  - nradov 8y ago
    Which use cases?
- XorNot 8y ago
  Bitcoin will just die. The problem wit pretending it's an asset is you're doing exactly that - pretending. When you hold stocks you hold actual ownership of a productive corporation, when you hold bonds you hold repayment promises from productive corporations or governments which can tax their citizens etc. When you hold Bitcoin...you don't hold anything which can convert into something useful at the end of the day - you hold the useless result of expended computing power. A bitcoin isn't a password which unlocks anything, it doesn't convert back into computing power - it can't do anything into the future.
  - handsomechad 8y ago
    I don't hold any bitcoin or cryptocurrency and am a crypto skeptic in general but isn't this argument commonly rebutted with the comparison to gold, to which all of the same criticisms apply but which has nonetheless maintained value for millenia?
zby 8y ago
I put my finger on it being too expensive. It works when it is subsidized by all these speculators - but eventually this cost needs to be paid.
tomrod 8y ago
Replication of fixed infrastructure and computing costs come to mind.

talawahdotnet 8y ago

Well said. Decentralization does not magically give you reliability or high availability. Sometimes it is quite the opposite. It is still just a bunch of software running on a bunch of miscellaneous computers over an unreliable network. To me there are strong parallels between the cryptocurrency boom and the previous P2P boom. P2P technology was exciting and super interesting, but people assumed that it would magically be the solution to a million problems just because the tech was awesome and decentralized. But that didn't happen, instead Netflix happened. Netflix found a way to solve the actual problems that people were having and at the end of the day the underlying technology didn't matter. I expect to see something similar happen with a lot of the current crypto use cases. More centralized solutions like Amazon QLDB[1] will provide the majority of the benefits that people really need: a transparent, immutable, and cryptographically verifiable transaction log, while also being performant and highly available. Many people see decentralization as the solution to all problems because it will finally make things fair, a level playing field for all. I just don't see it happening. Not because of some sinister world order trying to retain control, but simply because that is not how human interactions and trust tend to work. I think we can continue to move towards more decentralization, but it shouldn't be the end goal in and of itself and we should always be skeptical when there is more focus on that than there is on solving the problem at hand. 1. https://aws.amazon.com/qldb/ https://aws.amazon.com/qldb/

EthanHeilman 8y ago
>Netflix found a way to solve the actual problems that people were having and at the end of the day the underlying technology didn't matter. This, one thousand times this, it is always this. People have problems and they want solutions, they don't care about particular technology architectures.
- CuriousSkeptic 8y ago
  To be fair p2p was, and still is, a better technical solution, and had it not been illegal, would probably have won. (p2p wasn’t illegal, but what people wanted out of it was)