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Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma

by snitko 7y ago

Whether or not you're aligned with Bitcoin political values and goals, please don't be duped by Ethereum. It may appear as something useful, without the stigma of Bitcoin being black market money. However, you ONLY need black market money. Everything else that's ok with being regulated, does not need a blockchain. The hard problem that Bitcoin solved was "How do we create money that wouldn't collapse and lose value once outlawed". The proof-of-work solution cannot be replicated (for reasons I won't go into here, homework for you). And that's a good thing. Ethereum is a scam and has always been a scam from its inception. Multiple reasons for that: 1) Overly complex, obfuscating its lack of problem to solve by having lots of features and code 2) Constantly coming up with new terms and features and "new hot thing" to try and pump the price and keep the interest going. 3) No real world use case. Only promises and cryptokittes. 4) Literally controlled by one guy (see the now famous "Can you guys stop trading" quote). 5) Only produced scam ICOs with 99.99% of ICO projects practically stealing money from investors with no repercussions whatsoever. There are many more, but the thing to remember is - Bitcoin solves a real problem: it allows people to escape and bypass existing financial system and continue doing business, save and not be subject to policies outside of their control. It is black market money which governments hate and will try to outlaw in some way. That is the real pain Bitcoin solves for people: not agreeing to unjust laws peacefully and quietly exiting the system.

seibelj 7y ago
Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum. I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of the good ones.
- snitko 7y ago
  What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.
  - EGreg 7y ago
    How about being able to raise money for a project, and whitelist investors, without people having to trust you to send them the securities after they send you the money, and them seeing exactly what is being done with dilution or whatever instead of having to trust? Or having a fair pricing model as investors buy in using a bonding curve, eliminating priced rounds and other crap, pg said that’s the “future” - Ethereum makes it possible. All this is only possible because enough gateways trade ETH that it can now be considered money. And it can be used as an input to tons of cool smart contract things. You couldn’t do this stuff 10 years ago, at best you’d have some sorta hookup to Stripe API and banks.
    - snitko 7y ago
      Explain the mechanism by which people who invest can exercise their rights as stakeholders, receive dividends etc? Who's to enforce they actually own anything? What's stopping this project from taking all the money and producing nothing (which is exactly what happened with pretty much every ICO out there)?
      - EGreg 7y ago
        What’s stopping a YC startup from going bankrupt after having disclosed tons of risks in a PPM? At least here we know exactly how much was invested. Why does everything have to be about voting and receiving dividends? Amazon’s shareholders don’t do either one but value the shares greatly. And dividends can be programmed into the smart contracts too. Want them in DAI, USDT, ETH? You can! One way would be for the company to put them into a new smart contract that refers to the other smart contract which stores who owns what share, at that particular time. You could also program tons of fancy rules like a UBI from the company or whatever. They would also be distributed fairly.
        snitko 7y ago
        Explain the mechanism. How do I know this organization made this much money and that the amount I'm being paid is fair in regards to their profits? How can this code track all the money the company is making? It's not like they're being paid with their tokens. And for minority of projects where indeed they're expected to be paid using their own token, how do I know the company owners don't run away with all the money they raised? Because this is exactly what happened with 99.99% of ICOs created on Ethereum. Now, of course scams happen in the traditional financial system too, but not to the same extent, because there's an enforcement mechanism in place. So, following your example, what stops a YC company from declaring bankruptcy and spending all the money on things founders want for themselves? Well, an investigation may be launched: founders are known, they can be found, prosecuted and sentenced. With tokens issued online, where you may not even have a company registered or have a company registered in some obscure jurisdiction, there is very little incentive NOT to steal the money. And, once again, that's exactly what happened during the ICO craze, which Ethereum is directly responsible for. A lot of people lost a lot of money funding scammers - and nobody blinks an eye! I don't argue that everything has to exist within the traditional financial system. On the contrary. But in order to provide real value and allow investors to have some level of certainty that at least their money won't be outright stolen, the solution MUST include an enforcement or incentive mechanism strong enough to deter scammers.
- jkhdigital 7y ago
  "a blockchain for general purpose computing" is precisely the problem. Nobody wanted or needed that. Bitcoin was created as digital money. A bunch of people mistakenly thought that the best "feature" of Bitcoin was its programmability, and doubled down on that by allowing arbitrary computations in transactions, which just opened up the Pandora's Box of attack vectors. And you can't really say "Ethereum is one of the good ones" if it literally enabled the wholesale defrauding of billions of dollars from ill-informed speculators by providing the platform for those fraudulent ICOs.
  - orbital-decay 7y ago
    >Nobody wanted or needed that. I'm sure everybody just wanted a faster horse, but I certainly do have some good uses for distributed computing (with a larger bandwidth than Ethereum can provide, though). And any new tech can be seen as the "Pandora's Box of attack vectors" and a fraud platform, including the internet itself. Not every experiment is a scam.
chx 7y ago
Obviously all cryptocurrencies are a scam. Previously: https://news.ycombinator.com/item?id=2107770 https://news.ycombinator.com/item?id=2107770 https://news.ycombinator.com/item?id=21145147 https://news.ycombinator.com/item?id=21145147
- snitko 7y ago
  Except Bitcoin. And the market justly reflects it via price.
  - chx 7y ago
    Erm, no, check my links. Remember: Markets can stay irrational longer than you can stay solvent.
  - hanniabu 7y ago
    Okay, now I think your comments endlessly calling ethereum a scam are starting to make sense. It seems like you're a bitcoin maximalist, no?
lostmsu 7y ago
Disclaimer: I hold positions in both, more in Ethereum. 1. Both are very complex. How did you compare? 2. "Constantly coming up with new terms and features and "new hot thing"" - this is a fact. "to try and pump the price" - this is a speculation. Even if it is not - I don't know why is it necessarily bad. That is one of the major goals of every company applying to YC, or doing any kind of innovation in business. 3. Technically, all the use cases for Bitcoin are the same as the use cases for Ethereum, AFAIK. 4. It has the same proof of work system with miners, so in the end Buterin has the same 0 direct control over it, as Nakamoto would over Bitcoin. True, a lot of influence. 5. "97.3% of all statistics are made up."
Proven 7y ago
Couldn't agree more. Especially on the importance of permissionless transactions - that indeed is the only use case that matters. I no longer want to hear what VB has to say (there was a time before Ethereum existed, when I did care). Elon Musk of Crypto... Even Bitcoin itself dropped the ball on permissionless because too many people in it (both devs and others) have a vested interest in government-approved use cases.
Zamicol 7y ago
Afraid of a little competition? This is the paradox of the bitcoin maximalist: The 'free market' is good but don't try to compete with my 'one true asset'! I heard about Bitcoin in 2010 a few days before MagicalTux announced Mt. Gox on the Bitcoin forums. Once graphic card mining became a thing I quickly started a small farm while in school. When I first understood PoW I immediately knew PoW must die for cryptocurrency to become sustainable. It is the single largest flaw with contemporary cryptocurrency. Bitcoin has become stale and unwilling to progress, instead choosing to retreat in maximalist dogma. This prevents bitcoin from solving some of these obvious technical issues. The block size debates is far more than enough to turn me away. For me the ethereum community has been a breath of fresh air and is far more progressive than those left in the bitcoin world. After seeing the ethereum community gracefully handle the 2016 DOA hack with a hard fork, I was sold. Ethereum's community understood technology serves us, not the other way around while acknowledging and actively working toward solving problems bitcoiners often simply ignore. I believe in the human spirit of solving problems through technology. Ethereum is not a panacea, but the ethereum project tries to remember that progressive spirit.
godzillabrennus 7y ago
Bitcoin is traceable. Bitcoin is slow. There are better alternatives out there.
Temasik 7y ago
dont know why you got downvoted, ethereum is a scam. only BitCoin matters and satoshi proves it scales on day one https://stn.satoshi.io/ https://stn.satoshi.io/ https://bitcoinblocks.live https://bitcoinblocks.live
nootropicat 7y ago
Ethereum has the first ever decentralized banking system based on on-chain smart contracts. I'm earning high interest on usd stablecoins for several months now. The interest rate was double digit until very recently, but even 5% is still very good for a completely anonymous system. DAI itself is a decentralized usd stablecoin, meaning it can't be confiscated by the issuer. It's overcollateralized by locked eth. Anyone can generate new dai after locking eth. Those two together make the previously impossible possible - an Iranian or Venezuelan citizen earning interest on a USD-denominated savings. This is all called DeFi. Once mortgages and other external assets are tokenized, it's going to allow fully decentralized mortgages. https://trade.dydx.exchange/markets https://trade.dydx.exchange/markets https://app.compound.finance/ https://app.compound.finance/ >Bitcoin solves a real problem: it allows people to escape and bypass existing financial system and continue doing business, save and not be subject to policies outside of their control. It is black market money which governments hate and will try to outlaw in some way. Bitcoin completely failed, as majority of its hashpower is located in China. The Chinese government can tell miners to censor transactions tomorrow and to orphan blocks from non-compliant miners and it would happen. There's no defense against this. Changing PoW via a hard fork would result in a gpu-secured network that's even more vulnerable than an asic-based one, as it's easier to a large entity to rent or buy enough gpus. PoS is the only defense against such centralization. Most hashpower is going to be an impossible to hide industrial facilities, while PoS only needs an internet connection, much harder to catch. More importantly, even if a determined attacker acquires a very big fraction of the tokens and attacks the network, a hard fork can just delete the hostile accounts. One a gpu based PoW network is attacked there's no solution, as it's not possible to make the attacker's mining hardware ineffective via a hard fork.
jl2718 7y ago
Let’s be clear about the problem with ETH. It has a 60% pre-mine, and the next 35% of the mining was done by just a small subset of the same people. Only 5% of the supply was ever “up for grabs”. A currency requires highly-decentralized float. ETH will always be speculative. Other than that (fatal problem), its a great technical project.

by snitko 7y ago

seibelj 7y ago

Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum. I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of the good ones.

snitko 7y ago
What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.
- EGreg 7y ago
  How about being able to raise money for a project, and whitelist investors, without people having to trust you to send them the securities after they send you the money, and them seeing exactly what is being done with dilution or whatever instead of having to trust? Or having a fair pricing model as investors buy in using a bonding curve, eliminating priced rounds and other crap, pg said that’s the “future” - Ethereum makes it possible. All this is only possible because enough gateways trade ETH that it can now be considered money. And it can be used as an input to tons of cool smart contract things. You couldn’t do this stuff 10 years ago, at best you’d have some sorta hookup to Stripe API and banks.
  - snitko 7y ago
    Explain the mechanism by which people who invest can exercise their rights as stakeholders, receive dividends etc? Who's to enforce they actually own anything? What's stopping this project from taking all the money and producing nothing (which is exactly what happened with pretty much every ICO out there)?
    - EGreg 7y ago
      What’s stopping a YC startup from going bankrupt after having disclosed tons of risks in a PPM? At least here we know exactly how much was invested. Why does everything have to be about voting and receiving dividends? Amazon’s shareholders don’t do either one but value the shares greatly. And dividends can be programmed into the smart contracts too. Want them in DAI, USDT, ETH? You can! One way would be for the company to put them into a new smart contract that refers to the other smart contract which stores who owns what share, at that particular time. You could also program tons of fancy rules like a UBI from the company or whatever. They would also be distributed fairly.
      - snitko 7y ago
        Explain the mechanism. How do I know this organization made this much money and that the amount I'm being paid is fair in regards to their profits? How can this code track all the money the company is making? It's not like they're being paid with their tokens. And for minority of projects where indeed they're expected to be paid using their own token, how do I know the company owners don't run away with all the money they raised? Because this is exactly what happened with 99.99% of ICOs created on Ethereum. Now, of course scams happen in the traditional financial system too, but not to the same extent, because there's an enforcement mechanism in place. So, following your example, what stops a YC company from declaring bankruptcy and spending all the money on things founders want for themselves? Well, an investigation may be launched: founders are known, they can be found, prosecuted and sentenced. With tokens issued online, where you may not even have a company registered or have a company registered in some obscure jurisdiction, there is very little incentive NOT to steal the money. And, once again, that's exactly what happened during the ICO craze, which Ethereum is directly responsible for. A lot of people lost a lot of money funding scammers - and nobody blinks an eye! I don't argue that everything has to exist within the traditional financial system. On the contrary. But in order to provide real value and allow investors to have some level of certainty that at least their money won't be outright stolen, the solution MUST include an enforcement or incentive mechanism strong enough to deter scammers.
jkhdigital 7y ago
"a blockchain for general purpose computing" is precisely the problem. Nobody wanted or needed that. Bitcoin was created as digital money. A bunch of people mistakenly thought that the best "feature" of Bitcoin was its programmability, and doubled down on that by allowing arbitrary computations in transactions, which just opened up the Pandora's Box of attack vectors. And you can't really say "Ethereum is one of the good ones" if it literally enabled the wholesale defrauding of billions of dollars from ill-informed speculators by providing the platform for those fraudulent ICOs.
- orbital-decay 7y ago
  >Nobody wanted or needed that. I'm sure everybody just wanted a faster horse, but I certainly do have some good uses for distributed computing (with a larger bandwidth than Ethereum can provide, though). And any new tech can be seen as the "Pandora's Box of attack vectors" and a fraud platform, including the internet itself. Not every experiment is a scam.

chx 7y ago

Obviously all cryptocurrencies are a scam. Previously: https://news.ycombinator.com/item?id=2107770 https://news.ycombinator.com/item?id=2107770 https://news.ycombinator.com/item?id=21145147 https://news.ycombinator.com/item?id=21145147

snitko 7y ago
Except Bitcoin. And the market justly reflects it via price.
- chx 7y ago
  Erm, no, check my links. Remember: Markets can stay irrational longer than you can stay solvent.
- hanniabu 7y ago
  Okay, now I think your comments endlessly calling ethereum a scam are starting to make sense. It seems like you're a bitcoin maximalist, no?

lostmsu 7y ago

Disclaimer: I hold positions in both, more in Ethereum. 1. Both are very complex. How did you compare? 2. "Constantly coming up with new terms and features and "new hot thing"" - this is a fact. "to try and pump the price" - this is a speculation. Even if it is not - I don't know why is it necessarily bad. That is one of the major goals of every company applying to YC, or doing any kind of innovation in business. 3. Technically, all the use cases for Bitcoin are the same as the use cases for Ethereum, AFAIK. 4. It has the same proof of work system with miners, so in the end Buterin has the same 0 direct control over it, as Nakamoto would over Bitcoin. True, a lot of influence. 5. "97.3% of all statistics are made up."

Proven 7y ago

Couldn't agree more. Especially on the importance of permissionless transactions - that indeed is the only use case that matters. I no longer want to hear what VB has to say (there was a time before Ethereum existed, when I did care). Elon Musk of Crypto... Even Bitcoin itself dropped the ball on permissionless because too many people in it (both devs and others) have a vested interest in government-approved use cases.

Zamicol 7y ago

Afraid of a little competition? This is the paradox of the bitcoin maximalist: The 'free market' is good but don't try to compete with my 'one true asset'! I heard about Bitcoin in 2010 a few days before MagicalTux announced Mt. Gox on the Bitcoin forums. Once graphic card mining became a thing I quickly started a small farm while in school. When I first understood PoW I immediately knew PoW must die for cryptocurrency to become sustainable. It is the single largest flaw with contemporary cryptocurrency. Bitcoin has become stale and unwilling to progress, instead choosing to retreat in maximalist dogma. This prevents bitcoin from solving some of these obvious technical issues. The block size debates is far more than enough to turn me away. For me the ethereum community has been a breath of fresh air and is far more progressive than those left in the bitcoin world. After seeing the ethereum community gracefully handle the 2016 DOA hack with a hard fork, I was sold. Ethereum's community understood technology serves us, not the other way around while acknowledging and actively working toward solving problems bitcoiners often simply ignore. I believe in the human spirit of solving problems through technology. Ethereum is not a panacea, but the ethereum project tries to remember that progressive spirit.

godzillabrennus 7y ago

Bitcoin is traceable. Bitcoin is slow. There are better alternatives out there.

Temasik 7y ago

dont know why you got downvoted, ethereum is a scam. only BitCoin matters and satoshi proves it scales on day one https://stn.satoshi.io/ https://stn.satoshi.io/ https://bitcoinblocks.live https://bitcoinblocks.live

nootropicat 7y ago

Ethereum has the first ever decentralized banking system based on on-chain smart contracts. I'm earning high interest on usd stablecoins for several months now. The interest rate was double digit until very recently, but even 5% is still very good for a completely anonymous system. DAI itself is a decentralized usd stablecoin, meaning it can't be confiscated by the issuer. It's overcollateralized by locked eth. Anyone can generate new dai after locking eth. Those two together make the previously impossible possible - an Iranian or Venezuelan citizen earning interest on a USD-denominated savings. This is all called DeFi. Once mortgages and other external assets are tokenized, it's going to allow fully decentralized mortgages. https://trade.dydx.exchange/markets https://trade.dydx.exchange/markets https://app.compound.finance/ https://app.compound.finance/ >Bitcoin solves a real problem: it allows people to escape and bypass existing financial system and continue doing business, save and not be subject to policies outside of their control. It is black market money which governments hate and will try to outlaw in some way. Bitcoin completely failed, as majority of its hashpower is located in China. The Chinese government can tell miners to censor transactions tomorrow and to orphan blocks from non-compliant miners and it would happen. There's no defense against this. Changing PoW via a hard fork would result in a gpu-secured network that's even more vulnerable than an asic-based one, as it's easier to a large entity to rent or buy enough gpus. PoS is the only defense against such centralization. Most hashpower is going to be an impossible to hide industrial facilities, while PoS only needs an internet connection, much harder to catch. More importantly, even if a determined attacker acquires a very big fraction of the tokens and attacks the network, a hard fork can just delete the hostile accounts. One a gpu based PoW network is attacked there's no solution, as it's not possible to make the attacker's mining hardware ineffective via a hard fork.

jl2718 7y ago

Let’s be clear about the problem with ETH. It has a 60% pre-mine, and the next 35% of the mining was done by just a small subset of the same people. Only 5% of the supply was ever “up for grabs”. A currency requires highly-decentralized float. ETH will always be speculative. Other than that (fatal problem), its a great technical project.