23 ms·

The Web3 Fraud

102 points by masterof0 5y ago

jepler 5y ago
Correct URL appears to be https://www.usenix.org/publications/loginonline/web3-fraud https://www.usenix.org/publications/loginonline/web3-fraud
lekevicius 5y ago
This is not a good article. Or at least, very intellectually dishonest. I could go point by point, but instead, just one will do. The comparison of ETH block vs Raspberry Pi. It is presented as if it’s some kind overlooked, unsolved issue by silly Ethereum developers. In reality, Ethereum is slower than Raspberry Pi by design, on purpose. It is meant to be runnable by a laptop and not taking the whole CPU. The whole space becomes a lot more interesting once you begin to question, hmmm, WHY do these supposedly smart engineers make decisions I don’t get? There is almost always a WHY. And that is a lot more curious outlook than crypto-bro bashing. And as a sidenote: why do we keep seeing these cheap shots at web3 and crypto regularly rising on HN? They rarely present any new insights.
- phphphphp 5y ago
  > There is almost always a WHY. Right: to get rich. We (engineers) are just as hungry for capital at any cost as everybody else, there’s no nobility.
  - lekevicius 5y ago
    Sure, “to get rich”. Not a very productive discussion. The WHY I meant was “why these technical choices”. Even if we take a cynical view that all of crypto is purely a money extraction machine, we can still learn something new by looking at technical decision reasoning.
  - coffeefirst 5y ago
    Also, it’s fun. Seriously some of these people seem to be having a fantastic time. And that’s fine, but that’s separate from it being practical to anyone else.
- claytonjy 5y ago
  As someone who generally agrees with the authors' "this system is silly" viewpoint, I completely agree about this article. It's very "preaching to the choir", while also having the sort of mean tone that would have undermined strong arguments, let alone the weak ones here. Quite disappointing from a well-credentialed voice.
  - magicjosh 5y ago
    I mean imagine this same person writing an article about Raspberry Pi: "you could buy a faster PC for only a few bucks more. These little computers are a waste of time." This kind of dismissal is perplexing. In pursuit of crushing web3 do we stifle curiosity itself?
- osrec 5y ago
  Whether the criticism is justified or not, anything new is usually given the same treatment.
- Ar-Curunir 5y ago
  Nick is also woefully out-of-date regarding scaling solutions; he still thinks lightning channels are SotA.
- miracle2k 5y ago
  > supposedly smart engineers Imo its clear that a lot of the critical discourse has radicalized to such a degree that it is essentially taken as a given that there are no smart engineers in crypto. You then obviously don't need to ask yourself this question.
  - codeflo 5y ago
    No, the critics’ claim is that there are no ethical smart engineers in crypto. Quite an important distinction.
    - exdsq 5y ago
      Sam Bankman-Fried is the perfect argument against this. He went into crypto because of ethical reasons (to make a shit ton of money and donate it to the most effective charities and organizations, he's prominent in Effective Altruism circles). I think he's the richest 29 year old ever? Maybe Zuckerberg beat him, but $22.5Bn isn't bad in 3.5 years!
      - ineedasername 5y ago
        I'm not so sure. When, as currently, that wealth is generated based on the losses of speculators, the conned, or simply poorly informed, then I'd class Bankman-Fried into the robber-baron class who sought to cement their legacies with philanthropic endeavors instead of their ruthless practices. The means by which they accumulate their wealth are the lens through which we should view their "good works".
        exdsq 5y ago
        I'm pretty sure - he was donating 50% of his salary at Jane Street prior to starting his current crypto endeavors and has pledged to donate basically everything over the next few years, of which he's already started. Initially staff at his companies had to donate regularly, 1% of fees from his companies are donated, and he advocates others in the space to do the same. The guy basically lives in his office eating fried veg and rice playing League of Legends in his downtime. That money is being made for charities and predominantly comes by enabling trading, which I don't believe is ethically wrong (his general good, in a utilitarian sense, is definitely higher than any qualms one might have against crypto anyway).
- manigandham 5y ago
  Average laptops are many times more powerful than a Raspberry Pi, and distributed computing with proof-of-work means nodes can contribute as much power as they have/want; no arbitrary design limits are needed. Also the comparison was instructions-per-second between Ethereum's network and a raw CPU. Of course this trade-off in speed comes at the gain of decentralization and other features, however it remains to be seen whether that has really provided any net benefit overall.
  - smoldesu 5y ago
    Yeah, I think the truth lies somewhere in the middle. You're correct in that we have yet to see if there are any tangible benefits from a "social computer" as it were, and comparing Ethereum to any computer is like comparing a tree to an apple. They're fundamentally different things that exist to solve fundamentally different problems. The "interesting" part of it comes from how we can benefit from small-scale, distributed computing in the long run. The fields history isn't very promising (NFTs had a lot of potential from a logistics standpoint; all we got were lousy thousand-dollar apes), but if people are able to align their incentives properly then I can still see a way forward for smart contracts. The issue is that there is an infinitesimally small chance that we will be able to agree on what it should be used for, and it's likely to languish in the same stupidity/scam hell that other crypto projects have fallen into. We'll either make a revolutionary step forward in trustless computing, or receive a rather expensive lesson about how cool technology does not a desirable product make.
- magicjosh 5y ago
  > So I still need a DNS name False. You can use Ethereum Name Service. ENS is an on-chain version of DNS that is not controlled by a centralized gatekeeper. >I still need a server, I still need storage False. You can use IPFS and Filecoin to store and serve files not controlled by a centralized gatekeeper. That all said, this article is embarrassing. If you want a some critical ideas of web3, read Moxie's piece: https://moxie.org/2022/01/07/web3-first-impressions.html https://moxie.org/2022/01/07/web3-first-impressions.html
  - gaadd33 5y ago
    I don't know anything about ENS and was wondering does it work if DNS is down or unavailable in your location?
    - magicjosh 5y ago
      I'm curious about this as well. Here's my simple mental model. DNS lives on the core DNS servers and is replicated elsewhere. DNS being "down" would mean that the core DNS servers were taken down. ENS [1] lives on the Ethereum blockchain. ENS being "down" would mean that Ethereum itself was down. ENS names (.eth) resolve to address hashes on the Ethereum blockchain. So to answer your question, they are parallel systems, so one going down doesn't affect the other. However, the thing I'm wondering is if DNS goes down, does it take ENS with it? I'm not sure how the whole ".eth" part works, is that on DNS. [1] https://docs.ens.domains/ https://docs.ens.domains/
      - gaadd33 5y ago
        Or even as simple as you don't have a working local resolver. But yeah, that's my basic question, is ethereum (and by extension ENS) dependent on DNS or could you run it all without any problems?
  - jagger27 5y ago
    Why would anyone want to spend deflationary currency renting an ENS domain today when no one outside the echo chamber space cares about them and DNS is ~10x cheaper? The gas fees alone are brutal.
- jokethrowaway 5y ago
  Well, I'm more than happy to overcomplicate an architecture if it will make me a millionaire. If I had a better audience and contacts I'd certainly do a shitcoin and retire.
- civilized 5y ago
  You didn't really show anything intellectually dishonest about the article. You just made a contradictory claim with no evidence. And I'm not sure how "crypto is inefficient and slow" is contradicted by "it's inefficient and slow by design".
  - lekevicius 5y ago
    Yes, sorry about that. I really wanted to find one conference talk that went into a lot of details about picking gas limit and why (sync catching up, etc), but after googling for a couple of minutes, couldn’t find it.
    - ineedasername 5y ago
      If a strong explanation is difficult to find by a proponent of crypto already familiar with the issues then Ethereum, Web3, and crypto in general have a serious communications issue.
      - lekevicius 5y ago
        No disagreement on this point: everything is so decentralized, with very limited “official” content, that providing “authoritative” resources is quite difficult. That talk wasn’t even in Devcon, if I remember correctly.
- codeflo 5y ago
  It’s true that these limitations are known to the in-crowd, and also to everyone with some CS knowledge that bothered to understand a bit about the technical details. But pro-crypto articles/posts/tweets usually fail to mention any of that, or hand-wave it away with an incorrect reference to Moore’s law. “World computer” is a specific phrase I’ve seen many times referencing Ethereum, and I personally find comparisons with the Raspberry Pi a very effective way to contextualize that. As a consequence of all the selective information going around, some people are drawn into crypto that don’t really understand the limits of the technology’s capabilities. It’s important for the protection of those people to explain, in detail but in plain English, the gap between hype and reality.
- inlined 5y ago
  They persist because there’s a lot of skeptics who only see the harms that crypto causes: making money laundering trivial with tumblers, making a safe haven for criminal activity by bypassing kYC laws, deriving much of its value from speculators who have no intention to actually use it as a currency, screwing over these customers with market manipulation that is illegal in most markets, making goods like graphics cards impossible to buy, putting a floor on the price of energy to be whatever can be mined, and contributing to global warming by spending the energy of a country on a silly number of transactions. But if you have a good article on why web3 is good For all parties involved, I will read that too.
  - DennisP 5y ago
    Your last three points will be solved on Ethereum by proof of stake. It's been in the works for a long time, but now the proof of stake network has been running in production for over a year, with $30 billion in ETH deposited. It's running in parallel to the main network, which is still mining, but the code to merge the networks is running on a public testnet. All their previous upgrades have gone live within a year of their public testnets.
    - inlined 5y ago
      How many joules per transaction is the proof of stake network? How many tps can it perform?
      - DennisP 5y ago
        Based on observations, it looks like the proof of stake network will drop Ethereum's energy usage by about 99.95%. https://blog.ethereum.org/2021/05/18/country-power-no-more/ https://blog.ethereum.org/2021/05/18/country-power-no-more/ It can do this because it doesn't rely on any sort of "work." It's just another internet protocol. Proof of stake doesn't have anything to do with tps, so that won't change significantly. The solutions to that are rollups (second layers that inherit the full security of the main chain) and sharding (which multiplies the capacity of rollups). Some rollup systems are in production today, capable of a couple thousand tps. According to the most recent plan I saw, sharding would multiply that by twenty, initially.
- deleted 5y ago
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- ineedasername 5y ago
  Saying it's slow on purpose does not address the author's criticism unless you elaborate by explaining why that was the design decision and how the tradeoff is better than the author's alternative.
- magicjosh 5y ago
  Re: cheap shots at web3 and crypto regularly rising on HN? I started a thread here to collect well-aimed shots at web3 and crypto: https://news.ycombinator.com/item?id=30132617 https://news.ycombinator.com/item?id=30132617
- deleted 5y ago
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- 8note 5y ago
  The why is that they introduced a ton of problems by choosing a bad model to implement their systems. Their problems would go away if they switched to a tool built for the job instead of using crypto. It's fun building around a fundental design flaw, but it's only for toy projects
- tialaramex 5y ago
  > They rarely present any new insights. I feel like pretty often there's a new "crypto" toy, claiming that this time it's all different, this isn't a scam, and we need to stop talking about whatever was hot last week and grasp that this latest thing is definitely the future. We get plenty of those on HN too. So you'd expect a counter-balancing flow of cynicism, and yeah, it's not going to have a lot of new insight because scams are more the same than they are different. If you fell for a pyramid scheme where you're supposedly involved in property investment, and then years later fell for a different pyramid scheme where you're supposedly selling nutritional supplements based on organic fruits, you might feel like these are completely different business, why are the posts saying "This is a pyramid scheme" just reciting the same things each time when the property investment and the fruit pills were so different? Well because that's just window dressing, it didn't matter, the essence of the pyramid scheme was the incentive structure, the fact that, honestly, you couldn't make money from the actual "business" only from the pyramid. How the "business" supposedly worked was irrelevant.
- analognoise 5y ago
  "WHY do these supposedly smart engineers make decisions I don’t get?" There's a quote: engineers can do for $1 what any fool can do for $2 (https://www.goodreads.com/quotes/1009994-an-engineer-can-do-for-a-dollar-what-any-fool https://www.goodreads.com/quotes/1009994-an-engineer-can-do-...) So an engineer that made a system that was 1/5000 the speed and thousands of times the cost of a $45 computer wouldn't be a smart engineer. They'd be history's shittiest engineer ever. Web3 people aren't good engineers. At all.
mwilcox 5y ago
web3 is just a javascript file
exdsq 5y ago
As per usual, someone loosely understands one part of blockchain and - using the craziness that is "Web 3" at the moment - attacks the entire technology. > The cryptocurrency web3 starts with all our existing infrastructure. So I still need a DNS name, I still need a server, I still need storage, and I still have a distributed computation occurring between the browser and the server. No, you could work off of static IP addresses or indeed decentralized naming services like ENS, use smart contracts, use IPFS, but I agree you do still need to use the internet. > When a user wants to use my service they will pay some amount of cryptocurrency to perform the cryptocurrency-side computation, with any remaining transferred to me as a fee for my service. This is one case for one business model yes, but none of these are required. > Put bluntly, the Ethereum “world computer” has roughly 1/5,000 of the compute power of a Raspberry Pi 4! Yes, if we completely ignore recent developments in Layer 2 technologies and chains. > What about the storage? The entire Ethereum blockchain is just 1 terabyte of data and adds a total of a few hundred kilobytes a minute. Storing the Ethereum blockchain using a robust commercial service like Amazon S3 costs just $20 a month. Yes, if we completely ignore recent developments in off-chain storage or Layer 2 technologies and chains. Also, different use cases - I don't think anyone sold Ethereum as a replacement to storage. > I know some cryptocurrency enthusiasts will protest that their favorite blockchain is cheaper than Ethereum. And it’s true, underutilized cryptocurrencies may be one or two orders of magnitude less expensive to use in the “web 3” vision when compared with Ethereum. Nope, this difference in fees is down to other factors like PoW vs PoS, a topic the author didn't mention once (and might not actually know about). > So why this hype? Because the cryptocurrency space, at heart, is simply a giant ponzi scheme where the only way early participants make money is if there are further suckers entering the space. The only “utility” for a cryptocurrency (outside criminal transactions and financial frauds) is what someone else will pay for it and anything to pretend a possible real-word utility exists to help find new suckers. No, this is true for some of the public cases you see mentioned 50 times a day and I understand why people think this but it isn't true. One obvious area where it isn't some Ponzi scheme is the developments in inter-bank trading, such as https://en.wikipedia.org/wiki/Central_bank_digital_currency https://en.wikipedia.org/wiki/Central_bank_digital_currency. Goldman Sachs has been trading Digital Treasury Bonds with JP Morgan on JPM's Onyx blockchain, Visa is working on an international payment system using a blockchain, Swift is building projects on blockchains https://www.swift.com/your-needs/data-and-technology/distributed-ledger-technology-dlt https://www.swift.com/your-needs/data-and-technology/distrib..., etc... > After all, a programmer doing the most basic test of a web3 prototype is going to need to get the cryptocurrency, spend the cryptocurrency, and any application will require all users to get the cryptocurrency as well. A programmer would need testnet currency to test it and then a couple dollars to deploy it on mainnet. Some apps don't require users to use cryptocurrency. FIDE has an official online chess app built on Algorand that you wouldn't realize was a blockchain unless you know who Algorand are. > If this gets abandoned quickly due to the inevitable technical failure “web3” still accomplished its goal of getting more suckers in and extracting their money. "Web 3" is a term used more by media and people complaining than the people building products but, as someone who's been in the blockchain space for years, can promise has never once had to work with someone like this. I'm sure they exist - you see crap projects every day that are scams and yes it's a murky space because of this - but labelling everyone with this brush is unfair to the rest of us. If you want to put a moral hat on, maybe start looking at the damage being done in all the other areas of tech too, such as addictive applications, social medias impact on democracy and mental health, etc... > So in the end web3 is a con job, a technological edifice that is beyond useless as anyone who attempts to deploy a real application will quickly discover. Real projects in the wild doing real things mentioned above - sadly interbank trading of digital treasury bonds is just pretty boring so aren't as publicized as a 1000x JPG someone laundered. Just please stop assuming that covers everyone and everything in the blockchain space.
teddyh 5y ago
Clifford Stoll should write a new book dismissing cryptocurrencies and NFTs, etc. You know, like he did for home computers and the internet in Silicon Snake Oil (1995).
- acdha 5y ago
  Stoll wrote that book in 1995 after the internet was noticeably changing the world. People were flocking to sign up with ISPs; businesses were seeing the benefits for product information, sales, support; people were using the web to research and book travel plans; email and chat were becoming quite popular (people had been meeting and getting married online since the BBS era); etc. It’s also important to remember that computers cost a lot more, network connectivity was even pricier, the software was primitive, and all three were incredibly slow by modern standards. In contrast, we’re over a decade into the cryptocurrency push and the primary marketing hook is “buy now so you can sell it to someone else” with nothing anyone would miss if it disappeared. Unlike the internet, it’s been globally available to most of the world so you’d expect uptake to be faster rather than slower.
  - koonsolo 5y ago
    Your claim that the internet was noticable changing the world in 1995 is not accurate at all. For example, if you look at the history of Elon's Zip2, the success of an online yellow pages wasn't obvious. Quote itself: "“At that point, very few people were in the internet [business], so it was really a question of, ‘Is the internet going to succeed?’ Which we were huge believers in, and these guys were not.” " https://www.cnbc.com/2020/04/03/elon-musk-pitched-the-head-of-yellow-pages-before-the-internet-boom.html https://www.cnbc.com/2020/04/03/elon-musk-pitched-the-head-o... So basically in 1995, you had a lot of believers and non-believers. Exactly what crypto is today.
    - MattPalmer1086 5y ago
      In 1995, I don't recall a lot of people actively against the internet. It's true that most businesses didn't believe it was relevant to them.
zaguios 5y ago
The author is confused. The point isn't to have every little thing decentralized (though there are plenty of tools in the space to do this if you desire). The point is so that different centralized entities can build on top on the decentralized data in a way that can be trusted. If I want to build my own decentralized exchange allowing people to trade their tokens I can without the permission of anyone. If I want to create my own NFT marketplace to compete with Opensea I can without the permission of anyone. Yes, it costs money to do things on chain. That's the part you sacrifice, the benefit you receive is the fact there is no single point of failure. If a crypto exchange goes down it doesn't make the price of cryptos go to 0. Even if they were all taken down simultaneously you could easily spin one back up pretty quickly. Web3 is simply a tradeoff of cost vs openness & robustness. Most things have no need for Web3, but it certainly has it's place for certain types of projects.
pdimitar 5y ago
These keep popping all the time on HN recently and I don't like it. We had our fun taking jabs at people buying virtual receipts but nowadays it feels everyone wants to join the smug train. I'd appreciate some moderation on these articles (as in having much less of them around here). Yeah, we know: people basically give money for a small receipt that says "this thing is mine", ignoring the fact that the paper of that receipt might spontaneously disappear one day. We got it. So what? People literally bought paper strips absolving them from their sins some mere centuries ago. People do all sorts of stuff we don't immediately relate to. IMO the pertinent question around the NFT (and the general Web3 / dapps etc.) frenzy is just one: "If people want to buy stuff you don't like, well, let them, how does it harm you?" If that's not properly answered and if you can't prove to me that's going to hit me in my wallet later on (and I mean no later than the next 2-3 years) then we're just taking turns of making fun of people whose needs we don't understand. Example: I am not bashing anyone who is buying a Bentley. To me that's unnecessary and expensive but to them it's likely super important and that's the salient point here: you don't know these other people's needs and you don't understand WHAT exactly they are buying with their money. I would think they are buying an ugly overpriced car but they might be buying it e.g. so they are allowed in new circles which need demonstration of status? I am posting this comment as a guy who single-handedly coded the entire backend of a Web3 app some mere 3 months ago and has seen the absurdity of people flocking to buy NFTs due to a good slogan on a website (hosted on Web 1.0 / 2.0 no less). But in the end I get it; a lot of NFTs are presented in the form of campaigns to support or champion a cause, and others are marketed at being unique and deserving of status, etc. Good marketing, appealing to certain human traits, and people open up their wallets. Why not? Not for me personally but I am not judging. In the end I am the guy who bought Airpods Max ($540) just so he can use them 2-3 times a week to listen to the occasional song or a podcast, so who am I to judge? We all do things that are weird to others. Live and let live. As for technical merit, the article is correct but IMO that discussion has been beaten to death already.
- magicjosh 5y ago
  Well said. Is there some area of the internet / web / tech that's full of curiosity and exploration today? My answer 10 years ago was MAKE magazine, but that era is over now. Maybe people are just smug about everything these days.
mwattsun 5y ago
This article was previously discussed 43 days ago with 366 comments https://news.ycombinator.com/item?id=29587469 https://news.ycombinator.com/item?id=29587469
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rexstjohn 5y ago
This article came up on twitter last month. I remember finding it very interesting and taking the time to systematically untangle it. I will try to do a good job of explaining all the problems here. This article is interesting to analyze regardless. First; the author is correct across several dimensions. The Ethereum virtual machine is non optimal as a computer (currently). Blockchain is also not a great way to store data (currently). Let’s agree with the author on these points. However, no one is saying anywhere that Ethereum is meant to replace AWS or that it’s primary purpose is to replace AWS S3. The nomenclature of “world computer” is not currently meant to be understood in the sense of “AWS killer.” Ethereum was not designed to be a super fast computer to calculate things. It was designed to decentralized money and enable smart contracts. Right now, Ethereum and crypto primarily replacing money, first and foremost. There are numerous people working on subsequent innovations called “Decentralized Web Services” which WILL have the intent to compete with AWS. So this angle of attack on Ethereum is unjustified. It makes sense to me that all compute resources are ultimately listed on an open marketplace where people can bid for them. That structure might compete with AWS. I don’t think that is the first thing Ethereum is designed to do, but Ethereum and technologies like it will enable that use case later. Author goes in to leap to a conclusion which can’t be justified Aka Web3 is all a scam. Wrong. Every problem he identifies is well understood by leading folks and in the process of being solved across multiple dimensions. Just read Vitalik’s blog. Vitalik has talked about solutions for years. Author just points out a couple known problems in Ethereum that are being solved actively and goes “see, it’s all a scam,” not a good angle. So intent of author feels disingenuous. Or lazy? Author also points out that Web3 relies extensively on existing internet infrastructure and then makes the conclusion that “it’s not decentralized and has gatekeepers.” He calls reliance on DNS, browsers, mobile phones and AWS as being “gatekeepers.” The reality is that those things are truly only “gates” if you can’t transition away from them or substitute them immediately. Aka: Even if you have some aspects of your infrastructure which rely on “web2,” if you can substitute them for alternatives s then one could point out that there is no fundamental blocker to building decentralized systems on top of that. My view is that crypto / Web3 are internet phenomena and internet technologies. Not replacements for the internet. So obviously they need to use internet stuff like DNS. I have heard people talking about building private internets before, but I don’t think anyone in Web3 / crypto are claiming that they are going to replace the internet anytime soon. There are also many discussions around how to decentralize databases via IPFS, and replace DNS with something else. Compute marketplaces such as GridCoin, Akash Network, etc are under development. So those “gatekeepers” are getting eroded in real time, but browser and phone likely to remain. The virtual machine is also under “improvement.” Folks are actively innovating new approaches to application specific VMs which will speed things up for specific use cases. Furthermore, sovereign blockchains and subnets will allow much higher performance use cases for Web3 at the edge. Put all this together and most of the criticisms fall away. My personal opinion is that we are going to see all tech stacks rebased around wallets as the core construct and this is going to force a rewrite of nearly everything. This is happening and it’s not a scam.
dannyocean 5y ago
Web3 is full of hype, ponzis and fraud, but as a builder it's easy to get excited about what can be built with permissionless, programmable money and tokens. "The only “utility” for a cryptocurrency (outside criminal transactions and financial frauds) is what someone else will pay for it and anything to pretend a possible real-word utility exists to help find new suckers." This is simply incorrect. Just as a simple example: Being able to accept money for freelance work (whichever country you reside in) without paying Upwork 10-20% of your pay or relying on other intermediaries is "utility" no matter how you twist or turn it. People who categorically dismiss cryptocurrencies or web3 as useful technology should probably check their biases.
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okwubodu 5y ago
Front page of HN yesterday: Facebook/Google/PayPal/Apple/Whatever took down my page/email/account/app and irreparably harmed my business. Front page of HN today: Why Web3 is a scam and has zero real world use cases beside grifting. Surely this is getting old? Can we get an article about Ethereum straying from it’s mission of accessibility? About “low-fee” blockchains consistently grinding under load? If blockchains are low bandwidth by nature how can the DeFi movement claim to be the future of finance? Do large VC allocations of projects purporting to be infrastructure threaten the future legitimacy of Web3? I don’t know, but it seems the only people that care about these questions are the frauds and suckers referred to in the article.
- deleted 5y ago
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102 points by masterof0 5y ago

Correct URL appears to be https://www.usenix.org/publications/loginonline/web3-fraud https://www.usenix.org/publications/loginonline/web3-fraud

lekevicius 5y ago

This is not a good article. Or at least, very intellectually dishonest. I could go point by point, but instead, just one will do. The comparison of ETH block vs Raspberry Pi. It is presented as if it’s some kind overlooked, unsolved issue by silly Ethereum developers. In reality, Ethereum is slower than Raspberry Pi by design, on purpose. It is meant to be runnable by a laptop and not taking the whole CPU. The whole space becomes a lot more interesting once you begin to question, hmmm, WHY do these supposedly smart engineers make decisions I don’t get? There is almost always a WHY. And that is a lot more curious outlook than crypto-bro bashing. And as a sidenote: why do we keep seeing these cheap shots at web3 and crypto regularly rising on HN? They rarely present any new insights.

phphphphp 5y ago
> There is almost always a WHY. Right: to get rich. We (engineers) are just as hungry for capital at any cost as everybody else, there’s no nobility.
- lekevicius 5y ago
  Sure, “to get rich”. Not a very productive discussion. The WHY I meant was “why these technical choices”. Even if we take a cynical view that all of crypto is purely a money extraction machine, we can still learn something new by looking at technical decision reasoning.
- coffeefirst 5y ago
  Also, it’s fun. Seriously some of these people seem to be having a fantastic time. And that’s fine, but that’s separate from it being practical to anyone else.
claytonjy 5y ago
As someone who generally agrees with the authors' "this system is silly" viewpoint, I completely agree about this article. It's very "preaching to the choir", while also having the sort of mean tone that would have undermined strong arguments, let alone the weak ones here. Quite disappointing from a well-credentialed voice.
- magicjosh 5y ago
  I mean imagine this same person writing an article about Raspberry Pi: "you could buy a faster PC for only a few bucks more. These little computers are a waste of time." This kind of dismissal is perplexing. In pursuit of crushing web3 do we stifle curiosity itself?
osrec 5y ago
Whether the criticism is justified or not, anything new is usually given the same treatment.
Ar-Curunir 5y ago
Nick is also woefully out-of-date regarding scaling solutions; he still thinks lightning channels are SotA.
miracle2k 5y ago
> supposedly smart engineers Imo its clear that a lot of the critical discourse has radicalized to such a degree that it is essentially taken as a given that there are no smart engineers in crypto. You then obviously don't need to ask yourself this question.
- codeflo 5y ago
  No, the critics’ claim is that there are no ethical smart engineers in crypto. Quite an important distinction.
  - exdsq 5y ago
    Sam Bankman-Fried is the perfect argument against this. He went into crypto because of ethical reasons (to make a shit ton of money and donate it to the most effective charities and organizations, he's prominent in Effective Altruism circles). I think he's the richest 29 year old ever? Maybe Zuckerberg beat him, but $22.5Bn isn't bad in 3.5 years!
    - ineedasername 5y ago
      I'm not so sure. When, as currently, that wealth is generated based on the losses of speculators, the conned, or simply poorly informed, then I'd class Bankman-Fried into the robber-baron class who sought to cement their legacies with philanthropic endeavors instead of their ruthless practices. The means by which they accumulate their wealth are the lens through which we should view their "good works".
      - exdsq 5y ago
        I'm pretty sure - he was donating 50% of his salary at Jane Street prior to starting his current crypto endeavors and has pledged to donate basically everything over the next few years, of which he's already started. Initially staff at his companies had to donate regularly, 1% of fees from his companies are donated, and he advocates others in the space to do the same. The guy basically lives in his office eating fried veg and rice playing League of Legends in his downtime. That money is being made for charities and predominantly comes by enabling trading, which I don't believe is ethically wrong (his general good, in a utilitarian sense, is definitely higher than any qualms one might have against crypto anyway).
manigandham 5y ago
Average laptops are many times more powerful than a Raspberry Pi, and distributed computing with proof-of-work means nodes can contribute as much power as they have/want; no arbitrary design limits are needed. Also the comparison was instructions-per-second between Ethereum's network and a raw CPU. Of course this trade-off in speed comes at the gain of decentralization and other features, however it remains to be seen whether that has really provided any net benefit overall.
- smoldesu 5y ago
  Yeah, I think the truth lies somewhere in the middle. You're correct in that we have yet to see if there are any tangible benefits from a "social computer" as it were, and comparing Ethereum to any computer is like comparing a tree to an apple. They're fundamentally different things that exist to solve fundamentally different problems. The "interesting" part of it comes from how we can benefit from small-scale, distributed computing in the long run. The fields history isn't very promising (NFTs had a lot of potential from a logistics standpoint; all we got were lousy thousand-dollar apes), but if people are able to align their incentives properly then I can still see a way forward for smart contracts. The issue is that there is an infinitesimally small chance that we will be able to agree on what it should be used for, and it's likely to languish in the same stupidity/scam hell that other crypto projects have fallen into. We'll either make a revolutionary step forward in trustless computing, or receive a rather expensive lesson about how cool technology does not a desirable product make.
magicjosh 5y ago
> So I still need a DNS name False. You can use Ethereum Name Service. ENS is an on-chain version of DNS that is not controlled by a centralized gatekeeper. >I still need a server, I still need storage False. You can use IPFS and Filecoin to store and serve files not controlled by a centralized gatekeeper. That all said, this article is embarrassing. If you want a some critical ideas of web3, read Moxie's piece: https://moxie.org/2022/01/07/web3-first-impressions.html https://moxie.org/2022/01/07/web3-first-impressions.html
- gaadd33 5y ago
  I don't know anything about ENS and was wondering does it work if DNS is down or unavailable in your location?
  - magicjosh 5y ago
    I'm curious about this as well. Here's my simple mental model. DNS lives on the core DNS servers and is replicated elsewhere. DNS being "down" would mean that the core DNS servers were taken down. ENS [1] lives on the Ethereum blockchain. ENS being "down" would mean that Ethereum itself was down. ENS names (.eth) resolve to address hashes on the Ethereum blockchain. So to answer your question, they are parallel systems, so one going down doesn't affect the other. However, the thing I'm wondering is if DNS goes down, does it take ENS with it? I'm not sure how the whole ".eth" part works, is that on DNS. [1] https://docs.ens.domains/ https://docs.ens.domains/
    - gaadd33 5y ago
      Or even as simple as you don't have a working local resolver. But yeah, that's my basic question, is ethereum (and by extension ENS) dependent on DNS or could you run it all without any problems?
- jagger27 5y ago
  Why would anyone want to spend deflationary currency renting an ENS domain today when no one outside the echo chamber space cares about them and DNS is ~10x cheaper? The gas fees alone are brutal.
jokethrowaway 5y ago
Well, I'm more than happy to overcomplicate an architecture if it will make me a millionaire. If I had a better audience and contacts I'd certainly do a shitcoin and retire.
civilized 5y ago
You didn't really show anything intellectually dishonest about the article. You just made a contradictory claim with no evidence. And I'm not sure how "crypto is inefficient and slow" is contradicted by "it's inefficient and slow by design".
- lekevicius 5y ago
  Yes, sorry about that. I really wanted to find one conference talk that went into a lot of details about picking gas limit and why (sync catching up, etc), but after googling for a couple of minutes, couldn’t find it.
  - ineedasername 5y ago
    If a strong explanation is difficult to find by a proponent of crypto already familiar with the issues then Ethereum, Web3, and crypto in general have a serious communications issue.
    - lekevicius 5y ago
      No disagreement on this point: everything is so decentralized, with very limited “official” content, that providing “authoritative” resources is quite difficult. That talk wasn’t even in Devcon, if I remember correctly.
codeflo 5y ago
It’s true that these limitations are known to the in-crowd, and also to everyone with some CS knowledge that bothered to understand a bit about the technical details. But pro-crypto articles/posts/tweets usually fail to mention any of that, or hand-wave it away with an incorrect reference to Moore’s law. “World computer” is a specific phrase I’ve seen many times referencing Ethereum, and I personally find comparisons with the Raspberry Pi a very effective way to contextualize that. As a consequence of all the selective information going around, some people are drawn into crypto that don’t really understand the limits of the technology’s capabilities. It’s important for the protection of those people to explain, in detail but in plain English, the gap between hype and reality.
inlined 5y ago
They persist because there’s a lot of skeptics who only see the harms that crypto causes: making money laundering trivial with tumblers, making a safe haven for criminal activity by bypassing kYC laws, deriving much of its value from speculators who have no intention to actually use it as a currency, screwing over these customers with market manipulation that is illegal in most markets, making goods like graphics cards impossible to buy, putting a floor on the price of energy to be whatever can be mined, and contributing to global warming by spending the energy of a country on a silly number of transactions. But if you have a good article on why web3 is good For all parties involved, I will read that too.
- DennisP 5y ago
  Your last three points will be solved on Ethereum by proof of stake. It's been in the works for a long time, but now the proof of stake network has been running in production for over a year, with $30 billion in ETH deposited. It's running in parallel to the main network, which is still mining, but the code to merge the networks is running on a public testnet. All their previous upgrades have gone live within a year of their public testnets.
  - inlined 5y ago
    How many joules per transaction is the proof of stake network? How many tps can it perform?
    - DennisP 5y ago
      Based on observations, it looks like the proof of stake network will drop Ethereum's energy usage by about 99.95%. https://blog.ethereum.org/2021/05/18/country-power-no-more/ https://blog.ethereum.org/2021/05/18/country-power-no-more/ It can do this because it doesn't rely on any sort of "work." It's just another internet protocol. Proof of stake doesn't have anything to do with tps, so that won't change significantly. The solutions to that are rollups (second layers that inherit the full security of the main chain) and sharding (which multiplies the capacity of rollups). Some rollup systems are in production today, capable of a couple thousand tps. According to the most recent plan I saw, sharding would multiply that by twenty, initially.
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ineedasername 5y ago
Saying it's slow on purpose does not address the author's criticism unless you elaborate by explaining why that was the design decision and how the tradeoff is better than the author's alternative.
magicjosh 5y ago
Re: cheap shots at web3 and crypto regularly rising on HN? I started a thread here to collect well-aimed shots at web3 and crypto: https://news.ycombinator.com/item?id=30132617 https://news.ycombinator.com/item?id=30132617
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8note 5y ago
The why is that they introduced a ton of problems by choosing a bad model to implement their systems. Their problems would go away if they switched to a tool built for the job instead of using crypto. It's fun building around a fundental design flaw, but it's only for toy projects
tialaramex 5y ago
> They rarely present any new insights. I feel like pretty often there's a new "crypto" toy, claiming that this time it's all different, this isn't a scam, and we need to stop talking about whatever was hot last week and grasp that this latest thing is definitely the future. We get plenty of those on HN too. So you'd expect a counter-balancing flow of cynicism, and yeah, it's not going to have a lot of new insight because scams are more the same than they are different. If you fell for a pyramid scheme where you're supposedly involved in property investment, and then years later fell for a different pyramid scheme where you're supposedly selling nutritional supplements based on organic fruits, you might feel like these are completely different business, why are the posts saying "This is a pyramid scheme" just reciting the same things each time when the property investment and the fruit pills were so different? Well because that's just window dressing, it didn't matter, the essence of the pyramid scheme was the incentive structure, the fact that, honestly, you couldn't make money from the actual "business" only from the pyramid. How the "business" supposedly worked was irrelevant.
analognoise 5y ago
"WHY do these supposedly smart engineers make decisions I don’t get?" There's a quote: engineers can do for $1 what any fool can do for $2 (https://www.goodreads.com/quotes/1009994-an-engineer-can-do-for-a-dollar-what-any-fool https://www.goodreads.com/quotes/1009994-an-engineer-can-do-...) So an engineer that made a system that was 1/5000 the speed and thousands of times the cost of a $45 computer wouldn't be a smart engineer. They'd be history's shittiest engineer ever. Web3 people aren't good engineers. At all.

mwilcox 5y ago

web3 is just a javascript file

exdsq 5y ago

As per usual, someone loosely understands one part of blockchain and - using the craziness that is "Web 3" at the moment - attacks the entire technology. > The cryptocurrency web3 starts with all our existing infrastructure. So I still need a DNS name, I still need a server, I still need storage, and I still have a distributed computation occurring between the browser and the server. No, you could work off of static IP addresses or indeed decentralized naming services like ENS, use smart contracts, use IPFS, but I agree you do still need to use the internet. > When a user wants to use my service they will pay some amount of cryptocurrency to perform the cryptocurrency-side computation, with any remaining transferred to me as a fee for my service. This is one case for one business model yes, but none of these are required. > Put bluntly, the Ethereum “world computer” has roughly 1/5,000 of the compute power of a Raspberry Pi 4! Yes, if we completely ignore recent developments in Layer 2 technologies and chains. > What about the storage? The entire Ethereum blockchain is just 1 terabyte of data and adds a total of a few hundred kilobytes a minute. Storing the Ethereum blockchain using a robust commercial service like Amazon S3 costs just $20 a month. Yes, if we completely ignore recent developments in off-chain storage or Layer 2 technologies and chains. Also, different use cases - I don't think anyone sold Ethereum as a replacement to storage. > I know some cryptocurrency enthusiasts will protest that their favorite blockchain is cheaper than Ethereum. And it’s true, underutilized cryptocurrencies may be one or two orders of magnitude less expensive to use in the “web 3” vision when compared with Ethereum. Nope, this difference in fees is down to other factors like PoW vs PoS, a topic the author didn't mention once (and might not actually know about). > So why this hype? Because the cryptocurrency space, at heart, is simply a giant ponzi scheme where the only way early participants make money is if there are further suckers entering the space. The only “utility” for a cryptocurrency (outside criminal transactions and financial frauds) is what someone else will pay for it and anything to pretend a possible real-word utility exists to help find new suckers. No, this is true for some of the public cases you see mentioned 50 times a day and I understand why people think this but it isn't true. One obvious area where it isn't some Ponzi scheme is the developments in inter-bank trading, such as https://en.wikipedia.org/wiki/Central_bank_digital_currency https://en.wikipedia.org/wiki/Central_bank_digital_currency. Goldman Sachs has been trading Digital Treasury Bonds with JP Morgan on JPM's Onyx blockchain, Visa is working on an international payment system using a blockchain, Swift is building projects on blockchains https://www.swift.com/your-needs/data-and-technology/distributed-ledger-technology-dlt https://www.swift.com/your-needs/data-and-technology/distrib..., etc... > After all, a programmer doing the most basic test of a web3 prototype is going to need to get the cryptocurrency, spend the cryptocurrency, and any application will require all users to get the cryptocurrency as well. A programmer would need testnet currency to test it and then a couple dollars to deploy it on mainnet. Some apps don't require users to use cryptocurrency. FIDE has an official online chess app built on Algorand that you wouldn't realize was a blockchain unless you know who Algorand are. > If this gets abandoned quickly due to the inevitable technical failure “web3” still accomplished its goal of getting more suckers in and extracting their money. "Web 3" is a term used more by media and people complaining than the people building products but, as someone who's been in the blockchain space for years, can promise has never once had to work with someone like this. I'm sure they exist - you see crap projects every day that are scams and yes it's a murky space because of this - but labelling everyone with this brush is unfair to the rest of us. If you want to put a moral hat on, maybe start looking at the damage being done in all the other areas of tech too, such as addictive applications, social medias impact on democracy and mental health, etc... > So in the end web3 is a con job, a technological edifice that is beyond useless as anyone who attempts to deploy a real application will quickly discover. Real projects in the wild doing real things mentioned above - sadly interbank trading of digital treasury bonds is just pretty boring so aren't as publicized as a 1000x JPG someone laundered. Just please stop assuming that covers everyone and everything in the blockchain space.

teddyh 5y ago

Clifford Stoll should write a new book dismissing cryptocurrencies and NFTs, etc. You know, like he did for home computers and the internet in Silicon Snake Oil (1995).

acdha 5y ago
Stoll wrote that book in 1995 after the internet was noticeably changing the world. People were flocking to sign up with ISPs; businesses were seeing the benefits for product information, sales, support; people were using the web to research and book travel plans; email and chat were becoming quite popular (people had been meeting and getting married online since the BBS era); etc. It’s also important to remember that computers cost a lot more, network connectivity was even pricier, the software was primitive, and all three were incredibly slow by modern standards. In contrast, we’re over a decade into the cryptocurrency push and the primary marketing hook is “buy now so you can sell it to someone else” with nothing anyone would miss if it disappeared. Unlike the internet, it’s been globally available to most of the world so you’d expect uptake to be faster rather than slower.
- koonsolo 5y ago
  Your claim that the internet was noticable changing the world in 1995 is not accurate at all. For example, if you look at the history of Elon's Zip2, the success of an online yellow pages wasn't obvious. Quote itself: "“At that point, very few people were in the internet [business], so it was really a question of, ‘Is the internet going to succeed?’ Which we were huge believers in, and these guys were not.” " https://www.cnbc.com/2020/04/03/elon-musk-pitched-the-head-of-yellow-pages-before-the-internet-boom.html https://www.cnbc.com/2020/04/03/elon-musk-pitched-the-head-o... So basically in 1995, you had a lot of believers and non-believers. Exactly what crypto is today.
  - MattPalmer1086 5y ago
    In 1995, I don't recall a lot of people actively against the internet. It's true that most businesses didn't believe it was relevant to them.

zaguios 5y ago

The author is confused. The point isn't to have every little thing decentralized (though there are plenty of tools in the space to do this if you desire). The point is so that different centralized entities can build on top on the decentralized data in a way that can be trusted. If I want to build my own decentralized exchange allowing people to trade their tokens I can without the permission of anyone. If I want to create my own NFT marketplace to compete with Opensea I can without the permission of anyone. Yes, it costs money to do things on chain. That's the part you sacrifice, the benefit you receive is the fact there is no single point of failure. If a crypto exchange goes down it doesn't make the price of cryptos go to 0. Even if they were all taken down simultaneously you could easily spin one back up pretty quickly. Web3 is simply a tradeoff of cost vs openness & robustness. Most things have no need for Web3, but it certainly has it's place for certain types of projects.

pdimitar 5y ago

These keep popping all the time on HN recently and I don't like it. We had our fun taking jabs at people buying virtual receipts but nowadays it feels everyone wants to join the smug train. I'd appreciate some moderation on these articles (as in having much less of them around here). Yeah, we know: people basically give money for a small receipt that says "this thing is mine", ignoring the fact that the paper of that receipt might spontaneously disappear one day. We got it. So what? People literally bought paper strips absolving them from their sins some mere centuries ago. People do all sorts of stuff we don't immediately relate to. IMO the pertinent question around the NFT (and the general Web3 / dapps etc.) frenzy is just one: "If people want to buy stuff you don't like, well, let them, how does it harm you?" If that's not properly answered and if you can't prove to me that's going to hit me in my wallet later on (and I mean no later than the next 2-3 years) then we're just taking turns of making fun of people whose needs we don't understand. Example: I am not bashing anyone who is buying a Bentley. To me that's unnecessary and expensive but to them it's likely super important and that's the salient point here: you don't know these other people's needs and you don't understand WHAT exactly they are buying with their money. I would think they are buying an ugly overpriced car but they might be buying it e.g. so they are allowed in new circles which need demonstration of status? I am posting this comment as a guy who single-handedly coded the entire backend of a Web3 app some mere 3 months ago and has seen the absurdity of people flocking to buy NFTs due to a good slogan on a website (hosted on Web 1.0 / 2.0 no less). But in the end I get it; a lot of NFTs are presented in the form of campaigns to support or champion a cause, and others are marketed at being unique and deserving of status, etc. Good marketing, appealing to certain human traits, and people open up their wallets. Why not? Not for me personally but I am not judging. In the end I am the guy who bought Airpods Max ($540) just so he can use them 2-3 times a week to listen to the occasional song or a podcast, so who am I to judge? We all do things that are weird to others. Live and let live. As for technical merit, the article is correct but IMO that discussion has been beaten to death already.

magicjosh 5y ago
Well said. Is there some area of the internet / web / tech that's full of curiosity and exploration today? My answer 10 years ago was MAKE magazine, but that era is over now. Maybe people are just smug about everything these days.

mwattsun 5y ago

This article was previously discussed 43 days ago with 366 comments https://news.ycombinator.com/item?id=29587469 https://news.ycombinator.com/item?id=29587469

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rexstjohn 5y ago

This article came up on twitter last month. I remember finding it very interesting and taking the time to systematically untangle it. I will try to do a good job of explaining all the problems here. This article is interesting to analyze regardless. First; the author is correct across several dimensions. The Ethereum virtual machine is non optimal as a computer (currently). Blockchain is also not a great way to store data (currently). Let’s agree with the author on these points. However, no one is saying anywhere that Ethereum is meant to replace AWS or that it’s primary purpose is to replace AWS S3. The nomenclature of “world computer” is not currently meant to be understood in the sense of “AWS killer.” Ethereum was not designed to be a super fast computer to calculate things. It was designed to decentralized money and enable smart contracts. Right now, Ethereum and crypto primarily replacing money, first and foremost. There are numerous people working on subsequent innovations called “Decentralized Web Services” which WILL have the intent to compete with AWS. So this angle of attack on Ethereum is unjustified. It makes sense to me that all compute resources are ultimately listed on an open marketplace where people can bid for them. That structure might compete with AWS. I don’t think that is the first thing Ethereum is designed to do, but Ethereum and technologies like it will enable that use case later. Author goes in to leap to a conclusion which can’t be justified Aka Web3 is all a scam. Wrong. Every problem he identifies is well understood by leading folks and in the process of being solved across multiple dimensions. Just read Vitalik’s blog. Vitalik has talked about solutions for years. Author just points out a couple known problems in Ethereum that are being solved actively and goes “see, it’s all a scam,” not a good angle. So intent of author feels disingenuous. Or lazy? Author also points out that Web3 relies extensively on existing internet infrastructure and then makes the conclusion that “it’s not decentralized and has gatekeepers.” He calls reliance on DNS, browsers, mobile phones and AWS as being “gatekeepers.” The reality is that those things are truly only “gates” if you can’t transition away from them or substitute them immediately. Aka: Even if you have some aspects of your infrastructure which rely on “web2,” if you can substitute them for alternatives s then one could point out that there is no fundamental blocker to building decentralized systems on top of that. My view is that crypto / Web3 are internet phenomena and internet technologies. Not replacements for the internet. So obviously they need to use internet stuff like DNS. I have heard people talking about building private internets before, but I don’t think anyone in Web3 / crypto are claiming that they are going to replace the internet anytime soon. There are also many discussions around how to decentralize databases via IPFS, and replace DNS with something else. Compute marketplaces such as GridCoin, Akash Network, etc are under development. So those “gatekeepers” are getting eroded in real time, but browser and phone likely to remain. The virtual machine is also under “improvement.” Folks are actively innovating new approaches to application specific VMs which will speed things up for specific use cases. Furthermore, sovereign blockchains and subnets will allow much higher performance use cases for Web3 at the edge. Put all this together and most of the criticisms fall away. My personal opinion is that we are going to see all tech stacks rebased around wallets as the core construct and this is going to force a rewrite of nearly everything. This is happening and it’s not a scam.

dannyocean 5y ago

Web3 is full of hype, ponzis and fraud, but as a builder it's easy to get excited about what can be built with permissionless, programmable money and tokens. "The only “utility” for a cryptocurrency (outside criminal transactions and financial frauds) is what someone else will pay for it and anything to pretend a possible real-word utility exists to help find new suckers." This is simply incorrect. Just as a simple example: Being able to accept money for freelance work (whichever country you reside in) without paying Upwork 10-20% of your pay or relying on other intermediaries is "utility" no matter how you twist or turn it. People who categorically dismiss cryptocurrencies or web3 as useful technology should probably check their biases.

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okwubodu 5y ago

Front page of HN yesterday: Facebook/Google/PayPal/Apple/Whatever took down my page/email/account/app and irreparably harmed my business. Front page of HN today: Why Web3 is a scam and has zero real world use cases beside grifting. Surely this is getting old? Can we get an article about Ethereum straying from it’s mission of accessibility? About “low-fee” blockchains consistently grinding under load? If blockchains are low bandwidth by nature how can the DeFi movement claim to be the future of finance? Do large VC allocations of projects purporting to be infrastructure threaten the future legitimacy of Web3? I don’t know, but it seems the only people that care about these questions are the frauds and suckers referred to in the article.

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