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>Bitcoin is onto something What if it "was"? The "hate" people express against bitcoin especially here on HN is often towards the implementation. People clear

by noxer 6y ago

>Bitcoin is onto something What if it "was"? The "hate" people express against bitcoin especially here on HN is often towards the implementation. People clearly see the flaw in PoW if they are not emotionally attached to it because they have no money at stake. You should not misinterpret that as hate because they missed the train to richness. Objectively PoW does not scale. Objectively we have DLTs (blockchains) with Federated Byzantine Agreement (FBA) instead of PoW/PoS that can do everything Bitcoin can and more without the most severe downsides that come with PoW/PoS. The future will probably bring even better tech and if we learned something from the past then its that better solution always take over the old worse solutions. Bitcoin ultimately has to fail because its not a system that could be upgraded. Its most fundamental core properties are intentionally not changeable.

Erlich_Bachman 6y ago
But did you really include Lightning Network in your mental calculations? If so, care to elaborate on what exactly would stop it from working? (I mean it already works now, there is nothing technical that is going to stop it from scaling)?
- olah_1 6y ago
  Exactly. Lightning was anticipated from the very first email group conversation on Bitcoin. It is not ready for primetime usage, but it is rapidly approaching that point as Lightning improves. The "killer app" of Bitcoin is the shared CPU power / consensus, not necessarily the plain layer-1 transactions.
  - noxer 6y ago
    No clue where you got that from but satoshi expressed in his emails that he was under the impression that bitcoin would scale on its own in the early days. Just like he tough that millions of people would us their desktop to mine and therefore decentralization would only ever increase over time.
    - olah_1 6y ago
      > No clue where you got that from "Most transactions cancel out at the account level. The binks demand bitcoins of each other only because they don't want to hold account money for too long. So a relatively small amount of bitcoins infrequently transacted can support a somewhat larger amount of account money frequently transacted." https://satoshi.nakamotoinstitute.org/emails/cryptography/threads/1/#014834 https://satoshi.nakamotoinstitute.org/emails/cryptography/th... > satoshi expressed in his emails that he was under the impression that bitcoin would scale on its own in the early days And it did. I don't think today still classifies as "early". See above for people already thinking far ahead for longterm solutions to scaling.
      - noxer 6y ago
        This is simply not possible on bitcoin unless you have wallets holding money from many people. At which point you no longer own your wallet. There is no way Tx of average humans would significantly cancel out within the time of a block. Thats why LN just makes the time to settlement "infinite" and that's why it partially increases centralization again to cancel out more Tx. If that was the goal it could have been implemented in layer 1. Anyway all that aside, lets just assume LN would work as perfectly as the devs hope it will do one day. Its sill way worse than existing FBA solutions that can handle most of this on layer 1 directly and already have fully working second layer (payment channels) implemented. Even if bitcoin and LN could eventually provide a similar good solution, whats the point if it already exists and why would anyone assume the existing solutions stop evolving while bitcoin and LN slowly catches up? If we assume LN has reached all its goals in 10 years it also means the goals are outdated by 10 years. We can arguing about what LN may be capable of doing one day but its never gonna be a valid argument against solution that deliver today.
    - cyphertruck 6y ago
      Lightning network is just a brand name for the cryptography that was needed to make Satoshi’s payment channels work. So, while Satoshi’s opinion isnt really relevant to bitcoin’s future, since you brought it up, Satoshi clearly didn't think layer one was the inly way yo go.
- noxer 6y ago
  LN fundamentally changes nothing. Its still uses bitcoin Tx it just combines many Tx and does the on-chain settlement at a later point thus reducing the number of on-chain Tx increases speed and reduces fees. But if we reduce Tx on the chain we dont solve scalability we just bump into the limits a little later. LN on a global scale would still need orders or magnitude more on-chain Tx then possible. And if LN would actually reduce on chain Tx to a level where we would no longer need to worry about on-chain limits then we rendered bitcoin useless because we literally reduced the need for Tx to basically zero. Whos gonna pay for mining if block rewards vanish and LN makes on-chain Tx vanish as well? Bitcoins "goal" is that on-chain Tx should always be near the max so the fee per Tx is the lowest possible and reward are the highest While LNs "goal" would be to reduce the on-chain Tx to near zero because every on-chain Tx is extremely expensive. It probably meets somewhere in the middle. which means its still gets worse and worse the more Tx are made even if they are made over LN. Thats the definition of "not scaling well". LN and bitcoin are supposed to by a symbiosis but LN is the parasite that works best when it almost kills is own host. You can see it though the actions of large miners. They are not supporting LN. They could pour millions in the development and advertisement of LN but they dont want it, it reduces their profit. Its just very very deeply flawed overly complex system that only exist because some people would not accept that the layer 1 has deep flaws. Is rather obvious that building on top is not the right way forward. An since changing layer 1 is not possible in any meaningful way the only way forward is to abandon it. Which wont happen as long as people make money with it. >what exactly would stop it from working? The absolute end state is that hashrate drops or stops increasing due to the fact that it isn't profitable anymore which leads to double spend and essentially destroys any trust in the system and renders it useless. No one know at which point hashing will no longer be profitable for a long enough time to cause this cascading effect. But once it started the price crashes > pushes more miners out of businesses > further reducing hash rate > panic > price drop more > repeat All while mining hardware becomes cheap because demand goes to zero and supply increases, which makes a double spending attack cheaper. Then once a double spend has been observed its game over. There inst even a theoretical plan how to move on at that point. In simple words it would move the requirement for block conformations to infinite so there is no point in doing any Tx anymore. Everyone just has to wait which further reduces any rewards for miners.
  - 6y ago
cloakandswagger 6y ago
>People clearly see the flaw in PoW if they are not emotionally attached to it because they have no money at stake. You should not misinterpret that as hate because they missed the train to richness. The vitriol that Bitcoin evokes from HN commenters can really only be explained by jealousy, the environmental concern is just a cover for covetousness.
- solosoyokaze 6y ago
  This is true, because the vitriol was there prior to anyone complaining about Bitcoin's power usage (i.e. when it was too small to matter). I remember when I first heard of Bitcoin. I quite frankly found it technically intimidating. It was a totally new concept. I didn't get it. I took my own discomfort as a sort of signal that it was really important; something totally new. So I studied it. I had to put time and effort to read the books, play with the code... Eventually I got it and found it to be one of the most elegant pieces of technology and sociology of my lifetime. I think a lot of geeks never made that first push past the intimidation. As the value has gone up, the sour grapes have as well. This is a group of people that should have been first on the wagon, but instead many of us found out the hard way we weren't on the cutting edge as much as we liked to think. Myself included, I have some Bitcoin but I'm not a BTC millionaire, like I would have been had I pushed harder through my intimidation faster.
  - zepto 6y ago
    The problem is that there could easily be flaws in Bitcoin that have been there all along. We’ll know the answer to this if it eventually fails. I too wish I’d made more effort to buy it earlier. Presumably that sentiment applies to the majority of humans on earth, whether you are now a Bitcoin millionaire or not.
  - noxer 6y ago
    If you do the same kinda research about FBA you will "get it" too and you will know that PoW is useless. You probably wont make money form that but still I hope you dig into it. I myself saw "the beauty" in bitcoin once and later saw it in FBA again. After all it solves the same problem just in a very different way.
cyphertruck 6y ago
As an engineer with twenty years experience in this space and nearly as long studying the economics of it, I have yet to see a replacement for PoW that solves the problem that PoW solves. Proof of Work is trustless decentralization. Proof of stake is trusting the dudes who premined the coin and sold you a “fix for bitcoins inherent problem” to hype their ICO. If you were right, after 10 years one of those PoS currencies would be winning. Can you even remember the proof of stake currencies from 2011? Why did they fail? After all they had a huge economic advantage over bitcoin mining as they cost effectively zero electricity. Can you answer that question?
- noxer 6y ago
  Its right in the message above. FBA is the result of researching how to make a bitcoin like system without PoW. PoS however is based on the ideas of PoW, it just moves the flaws, its not a solution. FBA was "invented/discovered" before PoS coins even existed. Essentially FBA is a distributed voting solution. Instead of let the person who has solved the PoW write the Tx in a block, everyone just votes on Tx order. The threshold is rather arbitrary. Most systems use something around 80%. In practice every valid Tx has near 100% votes anyway because no one listens to dishonest nodes. But nodes can go offline or Tx propagation can be delayed so a Tx could have only reached part of the network and thus not reach 100% Not a big deal even if a Tx has less than 80%. Nodes just re-vote for the Tx for the next round. Double spend is solved by the ordering alone. If one Tx is first the second that moves the same funds somewhere else, breaks a fundamental Tx rule so nodes wont vote to include the second. Which one came first is irrelevant. Each node just votes for the one he got first and in a possible second round it votes for what the majority of other nodes said came first. So the distributes system can not reach a state where a Tx is stuck. This is all very very very much simplified ofc but you can easily lookup systems and dig into details if you are interested. There are real "blocklchains" running with FBA since many many years so it without any doubt works. Although like I said in my original post it can allays be improved.
  - cyphertruck 6y ago
    What you described doesn't even address the reason PoW exists. So, I’m sorry but it sounds like you are repeating something you heard without understanding the issues at hand. I suggest you read “There’s nothing cheaper than proof of work” by Paul Storzc

by noxer 6y ago

Erlich_Bachman 6y ago

But did you really include Lightning Network in your mental calculations? If so, care to elaborate on what exactly would stop it from working? (I mean it already works now, there is nothing technical that is going to stop it from scaling)?

olah_1 6y ago
Exactly. Lightning was anticipated from the very first email group conversation on Bitcoin. It is not ready for primetime usage, but it is rapidly approaching that point as Lightning improves. The "killer app" of Bitcoin is the shared CPU power / consensus, not necessarily the plain layer-1 transactions.
- noxer 6y ago
  No clue where you got that from but satoshi expressed in his emails that he was under the impression that bitcoin would scale on its own in the early days. Just like he tough that millions of people would us their desktop to mine and therefore decentralization would only ever increase over time.
  - olah_1 6y ago
    > No clue where you got that from "Most transactions cancel out at the account level. The binks demand bitcoins of each other only because they don't want to hold account money for too long. So a relatively small amount of bitcoins infrequently transacted can support a somewhat larger amount of account money frequently transacted." https://satoshi.nakamotoinstitute.org/emails/cryptography/threads/1/#014834 https://satoshi.nakamotoinstitute.org/emails/cryptography/th... > satoshi expressed in his emails that he was under the impression that bitcoin would scale on its own in the early days And it did. I don't think today still classifies as "early". See above for people already thinking far ahead for longterm solutions to scaling.
    - noxer 6y ago
      This is simply not possible on bitcoin unless you have wallets holding money from many people. At which point you no longer own your wallet. There is no way Tx of average humans would significantly cancel out within the time of a block. Thats why LN just makes the time to settlement "infinite" and that's why it partially increases centralization again to cancel out more Tx. If that was the goal it could have been implemented in layer 1. Anyway all that aside, lets just assume LN would work as perfectly as the devs hope it will do one day. Its sill way worse than existing FBA solutions that can handle most of this on layer 1 directly and already have fully working second layer (payment channels) implemented. Even if bitcoin and LN could eventually provide a similar good solution, whats the point if it already exists and why would anyone assume the existing solutions stop evolving while bitcoin and LN slowly catches up? If we assume LN has reached all its goals in 10 years it also means the goals are outdated by 10 years. We can arguing about what LN may be capable of doing one day but its never gonna be a valid argument against solution that deliver today.
  - cyphertruck 6y ago
    Lightning network is just a brand name for the cryptography that was needed to make Satoshi’s payment channels work. So, while Satoshi’s opinion isnt really relevant to bitcoin’s future, since you brought it up, Satoshi clearly didn't think layer one was the inly way yo go.
noxer 6y ago
LN fundamentally changes nothing. Its still uses bitcoin Tx it just combines many Tx and does the on-chain settlement at a later point thus reducing the number of on-chain Tx increases speed and reduces fees. But if we reduce Tx on the chain we dont solve scalability we just bump into the limits a little later. LN on a global scale would still need orders or magnitude more on-chain Tx then possible. And if LN would actually reduce on chain Tx to a level where we would no longer need to worry about on-chain limits then we rendered bitcoin useless because we literally reduced the need for Tx to basically zero. Whos gonna pay for mining if block rewards vanish and LN makes on-chain Tx vanish as well? Bitcoins "goal" is that on-chain Tx should always be near the max so the fee per Tx is the lowest possible and reward are the highest While LNs "goal" would be to reduce the on-chain Tx to near zero because every on-chain Tx is extremely expensive. It probably meets somewhere in the middle. which means its still gets worse and worse the more Tx are made even if they are made over LN. Thats the definition of "not scaling well". LN and bitcoin are supposed to by a symbiosis but LN is the parasite that works best when it almost kills is own host. You can see it though the actions of large miners. They are not supporting LN. They could pour millions in the development and advertisement of LN but they dont want it, it reduces their profit. Its just very very deeply flawed overly complex system that only exist because some people would not accept that the layer 1 has deep flaws. Is rather obvious that building on top is not the right way forward. An since changing layer 1 is not possible in any meaningful way the only way forward is to abandon it. Which wont happen as long as people make money with it. >what exactly would stop it from working? The absolute end state is that hashrate drops or stops increasing due to the fact that it isn't profitable anymore which leads to double spend and essentially destroys any trust in the system and renders it useless. No one know at which point hashing will no longer be profitable for a long enough time to cause this cascading effect. But once it started the price crashes > pushes more miners out of businesses > further reducing hash rate > panic > price drop more > repeat All while mining hardware becomes cheap because demand goes to zero and supply increases, which makes a double spending attack cheaper. Then once a double spend has been observed its game over. There inst even a theoretical plan how to move on at that point. In simple words it would move the requirement for block conformations to infinite so there is no point in doing any Tx anymore. Everyone just has to wait which further reduces any rewards for miners.
- 6y ago

cloakandswagger 6y ago

>People clearly see the flaw in PoW if they are not emotionally attached to it because they have no money at stake. You should not misinterpret that as hate because they missed the train to richness. The vitriol that Bitcoin evokes from HN commenters can really only be explained by jealousy, the environmental concern is just a cover for covetousness.

solosoyokaze 6y ago
This is true, because the vitriol was there prior to anyone complaining about Bitcoin's power usage (i.e. when it was too small to matter). I remember when I first heard of Bitcoin. I quite frankly found it technically intimidating. It was a totally new concept. I didn't get it. I took my own discomfort as a sort of signal that it was really important; something totally new. So I studied it. I had to put time and effort to read the books, play with the code... Eventually I got it and found it to be one of the most elegant pieces of technology and sociology of my lifetime. I think a lot of geeks never made that first push past the intimidation. As the value has gone up, the sour grapes have as well. This is a group of people that should have been first on the wagon, but instead many of us found out the hard way we weren't on the cutting edge as much as we liked to think. Myself included, I have some Bitcoin but I'm not a BTC millionaire, like I would have been had I pushed harder through my intimidation faster.
- zepto 6y ago
  The problem is that there could easily be flaws in Bitcoin that have been there all along. We’ll know the answer to this if it eventually fails. I too wish I’d made more effort to buy it earlier. Presumably that sentiment applies to the majority of humans on earth, whether you are now a Bitcoin millionaire or not.
- noxer 6y ago
  If you do the same kinda research about FBA you will "get it" too and you will know that PoW is useless. You probably wont make money form that but still I hope you dig into it. I myself saw "the beauty" in bitcoin once and later saw it in FBA again. After all it solves the same problem just in a very different way.

cyphertruck 6y ago

As an engineer with twenty years experience in this space and nearly as long studying the economics of it, I have yet to see a replacement for PoW that solves the problem that PoW solves. Proof of Work is trustless decentralization. Proof of stake is trusting the dudes who premined the coin and sold you a “fix for bitcoins inherent problem” to hype their ICO. If you were right, after 10 years one of those PoS currencies would be winning. Can you even remember the proof of stake currencies from 2011? Why did they fail? After all they had a huge economic advantage over bitcoin mining as they cost effectively zero electricity. Can you answer that question?

noxer 6y ago
Its right in the message above. FBA is the result of researching how to make a bitcoin like system without PoW. PoS however is based on the ideas of PoW, it just moves the flaws, its not a solution. FBA was "invented/discovered" before PoS coins even existed. Essentially FBA is a distributed voting solution. Instead of let the person who has solved the PoW write the Tx in a block, everyone just votes on Tx order. The threshold is rather arbitrary. Most systems use something around 80%. In practice every valid Tx has near 100% votes anyway because no one listens to dishonest nodes. But nodes can go offline or Tx propagation can be delayed so a Tx could have only reached part of the network and thus not reach 100% Not a big deal even if a Tx has less than 80%. Nodes just re-vote for the Tx for the next round. Double spend is solved by the ordering alone. If one Tx is first the second that moves the same funds somewhere else, breaks a fundamental Tx rule so nodes wont vote to include the second. Which one came first is irrelevant. Each node just votes for the one he got first and in a possible second round it votes for what the majority of other nodes said came first. So the distributes system can not reach a state where a Tx is stuck. This is all very very very much simplified ofc but you can easily lookup systems and dig into details if you are interested. There are real "blocklchains" running with FBA since many many years so it without any doubt works. Although like I said in my original post it can allays be improved.
- cyphertruck 6y ago
  What you described doesn't even address the reason PoW exists. So, I’m sorry but it sounds like you are repeating something you heard without understanding the issues at hand. I suggest you read “There’s nothing cheaper than proof of work” by Paul Storzc