5 ms·

This is not the case. In Ethereum's PoS model, you put value at risk when you sign up to be a validator. You have to lock funds up to play a part in consensus.

by narush 5y ago

This is not the case. In Ethereum's PoS model, you put value at risk when you sign up to be a validator. You have to lock funds up to play a part in consensus. This means that if you start acting maliciously, or even just not fulfilling your responsibilities (e.g. you let your computer go offline), then you are punished for it (depending on the severity of your offense, obviously). Aka, you can't just wait for the money to roll in. You have to run a node, you have to verify blocks, and you have to make sure you're acting in the best interest of the network + keeping things running smoothly.

secondcoming 5y ago
Who gets these funds? This is beginning to sound suspicious.
- thebean11 5y ago
  The other actors in the network running validators. Specifically you are punished for: - Being offline (the penalty is small, and roughly equal to the rewards earned by being online - Running the same validator twice (huge penalty, be careful!)
  - secondcoming 5y ago
    Are the funds paid in fiat or ETH?
    - bidirectional 5y ago
      ETH of course, this is an automated part of how the system works, not some behind-the-scenes deal based on reputation or whatever.
f38zf5vdt 5y ago
This is something I don't understand. You lock the funds on a chain and you lose them on the chain. But what happens if two groups decide to split the chain, and both chains lock the opposing chains funds? It seems like there's no way to prevent social forks in the longer term, just a lot of hand-waving about that if the current social contract stays in place, some minority malicious group will be punished for secession. It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?
- nightpool 5y ago
  Ethereum has already proven that there's no way to prevent social forks, correct? The DAO incident comes to mind as a very controversial instance, but there are others. Ultimately, it's up to the individual nodes to decide what code they want to run and what rules they want to use to decide what the chain is. I'm not sure I understand how PoS makes this worse (although maybe there's something I'm missing)
  - f38zf5vdt 5y ago
    Right, but then the model is not trustless but is instead a complex implementation of the current system of international banking. Maybe I don't understand the point of cryptocurrencies. Most applications of cryptography are trustless.
    - nightpool 5y ago
      "Trustless" is relative. In this case, the protocols are still trustless—the trust lies one meta level up, where you decide which protocols to use. In this situation, there are network effects as well—you can come up with your own perfect protocol in a vacuum, but if nobody uses it, who cares? In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
  - pamplemoose 5y ago
    I found the following article to be helpful in understanding some of these processes https://haseebq.com/ethereum-is-now-unforkable-thanks-to-defi/ https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
    - nightpool 5y ago
      This article makes a good point about the fragility of DeFi, but it fails to demonstrate that the broader Ethereum community cares enough about DeFi to let it influence their decisions. It makes a general, hand-wavey gesture to other parts of ETH ("All websites, interfaces, block explorers, and wallets ultimately point to the majority chain. Game operators like CryptoKitties lock their D-ETH contracts so as not to confuse their users."), but it fails to justify this point—it already says "a civil war is brewing" and that individual developers (presumably including CryptoKitties) would have reason to support one or the other. So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.
micropresident 5y ago
This is largely done by software. If you are not mucking around with the software, there is zero risk.

by narush 5y ago

secondcoming 5y ago

Who gets these funds? This is beginning to sound suspicious.

thebean11 5y ago
The other actors in the network running validators. Specifically you are punished for: - Being offline (the penalty is small, and roughly equal to the rewards earned by being online - Running the same validator twice (huge penalty, be careful!)
- secondcoming 5y ago
  Are the funds paid in fiat or ETH?
  - bidirectional 5y ago
    ETH of course, this is an automated part of how the system works, not some behind-the-scenes deal based on reputation or whatever.

f38zf5vdt 5y ago

This is something I don't understand. You lock the funds on a chain and you lose them on the chain. But what happens if two groups decide to split the chain, and both chains lock the opposing chains funds? It seems like there's no way to prevent social forks in the longer term, just a lot of hand-waving about that if the current social contract stays in place, some minority malicious group will be punished for secession. It would seem that if some participants on the network can't abide by their national laws while running some contracts, the outcome would be inevitable. And then you would just get multiple chains running under multiple governments. This seems like a reinvention of the international banking system?

nightpool 5y ago
Ethereum has already proven that there's no way to prevent social forks, correct? The DAO incident comes to mind as a very controversial instance, but there are others. Ultimately, it's up to the individual nodes to decide what code they want to run and what rules they want to use to decide what the chain is. I'm not sure I understand how PoS makes this worse (although maybe there's something I'm missing)
- f38zf5vdt 5y ago
  Right, but then the model is not trustless but is instead a complex implementation of the current system of international banking. Maybe I don't understand the point of cryptocurrencies. Most applications of cryptography are trustless.
  - nightpool 5y ago
    "Trustless" is relative. In this case, the protocols are still trustless—the trust lies one meta level up, where you decide which protocols to use. In this situation, there are network effects as well—you can come up with your own perfect protocol in a vacuum, but if nobody uses it, who cares? In this case, you can think about it as one person saying "I think it's a good idea if we do this" and a few hundred other people saying "I agree with you". Obviously, they're more likely to agree with the first person if they have some sort of institutional legitimacy. But is that "trust"? That's very different from the definition of "trust" that's generally used in protocol design.
- pamplemoose 5y ago
  I found the following article to be helpful in understanding some of these processes https://haseebq.com/ethereum-is-now-unforkable-thanks-to-defi/ https://haseebq.com/ethereum-is-now-unforkable-thanks-to-def...
  - nightpool 5y ago
    This article makes a good point about the fragility of DeFi, but it fails to demonstrate that the broader Ethereum community cares enough about DeFi to let it influence their decisions. It makes a general, hand-wavey gesture to other parts of ETH ("All websites, interfaces, block explorers, and wallets ultimately point to the majority chain. Game operators like CryptoKitties lock their D-ETH contracts so as not to confuse their users."), but it fails to justify this point—it already says "a civil war is brewing" and that individual developers (presumably including CryptoKitties) would have reason to support one or the other. So while this article is a (good?) argument for why all DeFi operators must follow USDC, it fails to make the case for why anyone else should care about the fate of centralized stablecoins. Maybe these reasons are obvious! But I don't know them.

micropresident 5y ago

This is largely done by software. If you are not mucking around with the software, there is zero risk.