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Blockchains have a few problems that I think make them unsuitable for internet money, I know more about Bitcoin but I think this applies to Ethereum also: - Ea

Blockchains have a few problems that I think make them unsuitable for internet money, I know more about Bitcoin but I think this applies to Ethereum also: - Early adapter become extremely rich (Developers) - Transaction costs O(n) network complexity - Every operation in the network result in no more than O(polylog(n)) - Energy Issues (Proof of Work) - Speculative markets making the coins not usefull for day to day shopping - Scams - More Scams - Pseudo Decentralization (centralize around Ethereum Foundation... Blockstream, Miners, Dev environments (Github), ISPs) - Scams

premek 6y ago
ok
mhluongo 6y ago
Hard to know which piece of misinformation to respond to. If you skip all the subjective stuff and whether "works for shopping" is the goal.. both of your big-O comments have counter examples (check out Coda for 1) as does your energy comment (Eth2 is an effort to switch to Proof of Stake, amongst other upgrades).
- xoralkindi 6y ago
  > both of your big-O comments have counter examples (check out Coda for 1) That's the typical blockchain reply, suggest yet another ICO out of the ocean of ICOs out there. > as does your energy comment (Eth2 is an effort to switch to Proof of Stake, amongst other upgrades) I don't know muuch about Eth2 so I will give you that one.
  - mhluongo 6y ago
    > suggest yet another ICO out of the ocean of ICOs out there. I've been working in the space for 6 years. I give no craps about the asset, but yes, I think cutting edge cryptography is fascinating. I tend to agree that the vast majority of "work" in the space is garbage, as are the majority of assets.
- ishishkin 6y ago
  > ... both of your big-O comments have counter examples (check out Coda for 1) Have you ever checked on your own any such "counter example"?
jillesvangurp 6y ago
Most of these issues are non technical. Any technology that does anything with money will attract scammers, criminals, charlatans, etc. like a corpse attracts flies. That's not a fundamental problem with the underlying technology but actually a robustness test for it. The banking system fails this test regularly BTW. It too attracts the same variety of people and recent history is littered with people testing the limits of the system and causing minor and major financial incidents as a side effect. Our legal system actively protects these shady types too. You could say that blockchains are designed to function despite the presence of such people. So, their presence is a given but not necessarily a bug. Now specifically Ethereum 2 is proof of stake; not proof of work. So it has limited energy issues associated with v1 and Bitcoin. This also kills the mining use case and shifts power to those holding stake. Transaction complexity and throughput remain problematic compared to non block chain based systems but are probably good enough for most use cases and of course vastly better than v1, which I would argue was never really suitable for any serious use cases because of its slow transactions and uncertain outcomes when they spanned minutes to hours instead of seconds (which also stops any kind of interactive payment scenario dead in its tracks). Using side chains for micro transactions, payment channels, etc. is a common/practical workaround and probably also desirable from a privacy point of view. Pseudo decentralization is policy choice. Different blockchains make different trade-offs here. There's inherent friction between purists/utopioans on one hand and people to do real stuff on the other hand. Pure decentralization is mostly not very practical in a lot of domains and technically overkill for common requirements. In the case of a financial system, you in any case need the buy-in of legal entities and governments. There's an implied level of central control. That's why ripple and stellar are popular with fintechs. Good enough as a shared ledger and for implementing e.g. remittance networks and complex financial products. Enabling anarchists is not a design goal for them. In the end, a blockchain is just a tamper proof block chain. You use it in a legal system that may or may not allow you to use it and that may or may not provide you some legal protections against ripped off. Facebook found that out the hard way when they tried to compete with central banks last year and then realized that that would put them in the cross hairs of financial authorities, which is when they backtracked their position doing something weaker at some point later (probably never at this point). Stepping outside the common legal frameworks is only easy if you are not really a part of it to begin with.

premek 6y ago

mhluongo 6y ago

Hard to know which piece of misinformation to respond to. If you skip all the subjective stuff and whether "works for shopping" is the goal.. both of your big-O comments have counter examples (check out Coda for 1) as does your energy comment (Eth2 is an effort to switch to Proof of Stake, amongst other upgrades).

xoralkindi 6y ago
> both of your big-O comments have counter examples (check out Coda for 1) That's the typical blockchain reply, suggest yet another ICO out of the ocean of ICOs out there. > as does your energy comment (Eth2 is an effort to switch to Proof of Stake, amongst other upgrades) I don't know muuch about Eth2 so I will give you that one.
- mhluongo 6y ago
  > suggest yet another ICO out of the ocean of ICOs out there. I've been working in the space for 6 years. I give no craps about the asset, but yes, I think cutting edge cryptography is fascinating. I tend to agree that the vast majority of "work" in the space is garbage, as are the majority of assets.
ishishkin 6y ago
> ... both of your big-O comments have counter examples (check out Coda for 1) Have you ever checked on your own any such "counter example"?

jillesvangurp 6y ago

Most of these issues are non technical. Any technology that does anything with money will attract scammers, criminals, charlatans, etc. like a corpse attracts flies. That's not a fundamental problem with the underlying technology but actually a robustness test for it. The banking system fails this test regularly BTW. It too attracts the same variety of people and recent history is littered with people testing the limits of the system and causing minor and major financial incidents as a side effect. Our legal system actively protects these shady types too. You could say that blockchains are designed to function despite the presence of such people. So, their presence is a given but not necessarily a bug. Now specifically Ethereum 2 is proof of stake; not proof of work. So it has limited energy issues associated with v1 and Bitcoin. This also kills the mining use case and shifts power to those holding stake. Transaction complexity and throughput remain problematic compared to non block chain based systems but are probably good enough for most use cases and of course vastly better than v1, which I would argue was never really suitable for any serious use cases because of its slow transactions and uncertain outcomes when they spanned minutes to hours instead of seconds (which also stops any kind of interactive payment scenario dead in its tracks). Using side chains for micro transactions, payment channels, etc. is a common/practical workaround and probably also desirable from a privacy point of view. Pseudo decentralization is policy choice. Different blockchains make different trade-offs here. There's inherent friction between purists/utopioans on one hand and people to do real stuff on the other hand. Pure decentralization is mostly not very practical in a lot of domains and technically overkill for common requirements. In the case of a financial system, you in any case need the buy-in of legal entities and governments. There's an implied level of central control. That's why ripple and stellar are popular with fintechs. Good enough as a shared ledger and for implementing e.g. remittance networks and complex financial products. Enabling anarchists is not a design goal for them. In the end, a blockchain is just a tamper proof block chain. You use it in a legal system that may or may not allow you to use it and that may or may not provide you some legal protections against ripped off. Facebook found that out the hard way when they tried to compete with central banks last year and then realized that that would put them in the cross hairs of financial authorities, which is when they backtracked their position doing something weaker at some point later (probably never at this point). Stepping outside the common legal frameworks is only easy if you are not really a part of it to begin with.