25 ms·

Ethereum Has Issues

352 points by danso 5y ago

jasfi 5y ago
Crypto is far bigger than any one coin, just keep that in mind. Many coins were started to overcome the limitations of Bitcoin and Ethereum. They typically issue whitepapers to go over these details and make comparisons. Another perspective is that of investing or trading. Ignoring the practical use cases of coins and buying low and selling high. That's why I'm working on TradeCast: https://tradecast.carrd.co/ https://tradecast.carrd.co/
n-i-g-g-e-r 5y ago
ypeterholmes 5y ago
"Because Ethereum transactions are programs, the halting problem means that it isn't possible to accurately predict the resources needed to execute them." Cardano fixes this with deterministic execution and fees.
necovek 5y ago
Something like: https://github.com/ethereum/go-ethereum/issues https://github.com/ethereum/go-ethereum/issues? (Sorry, couldn't resist)
- deleted 5y ago
  [deleted]
delaaxe 5y ago
Isn't this solved by PBS (Proposer-Builder Separation)?
Barrera 5y ago
This article goes off the rails for me with this statement: > Their starting point was the observation that Ethereum "smart contract" execution is order-dependent within a block, unlike transaction execution in Bitcoin and similar systems: ... First, Bitcoin runs smart contracts [1]. The lie to the contrary has seeped into almost every discussion of Bitcoin vs. Ethereum, and this author appears to have taken the bait. Second, Bitcoin transactions are order-dependent within a block. The entire point of the Bitcoin network is to impose a global, unique order on all transactions and the only way to do that is if order within blocks matters. I'm not sure about the rest of this article, but the failure on these two points does not inspire confidence to continue. [1] https://wiki.bitcoinsv.io/index.php/Opcodes_used_in_Bitcoin_Script https://wiki.bitcoinsv.io/index.php/Opcodes_used_in_Bitcoin_...
- polyomino 5y ago
  You're citing bitcoin sv? Is this a joke?
  - Arnavion 5y ago
    Bitcoin had script opcodes before any forks, so it doesn't matter which fork they cite.
    - Stevvo 5y ago
      Citing a scam from the most famous con artist in the industry is never a good form.
      - mateuszf 5y ago
        Seems like an unintentional mistake though.
  - stale2002 5y ago
    The source is suspect for sure, but the information is true on this specific point. Bitcoin does have smart contracts, and op codes. Thats correct, regardless of your disagreements with the source.
    - polyomino 5y ago
      opcodes that are almost all disabled in the real bitcoin
      - kova12 5y ago
        that wasn't the point
        sandwichinvest 5y ago
        So the point is to be technically correct but practically irrelevant?
vmception 5y ago
> We found two blocks in our 12 day span, 14,217,123 and 14,241,282, for which miner profits from MEV exceeded four times the block reward. I hope this becomes more common knowledge! All mining calculators are wrong as they predict earnings that are upwards of 80% lower than reality, for some people. There have been extended periods of time (weeks, months) where this has been true. This is also one of the promises of the blockchain concept, in the Satoshi paper for Bitcoin, the idea is for transaction fees to exceed the block reward subsidy, in Bitcoin the hope is that it occurs before the year 2140, in Ethereum it has been occurring for several years, which is a great big deal. But it doesnt mean the outcome is good, we just dont have to wait to see how it plays out.
- delaaxe 5y ago
  Rocket Pool, a decentralized Ethereum staking protocol, distributes MEV profits to stakers
carlosdp 5y ago
> The long-term effort to implement "sharding" in Ethereum 2.0, which in effect parallelizes the operation of the blockchain. This effort is effectively dead, for what it's worth. We've moved beyond this, it was going to over-complicate things and Layer 2 is a much better scaling solution that is already starting to work in production.
- drcode 5y ago
  It's not dead, data sharding (not execution sharding) is very much part of the plan https://notes.ethereum.org/@vbuterin/proto_danksharding_faq https://notes.ethereum.org/@vbuterin/proto_danksharding_faq Execution sharding is also still planned, though right now it is in the hazy distant future
Animats 5y ago
The system is functioning as designed. The suckers are being fleeced. It is in the nature of markets to move money from the many to the few.
- chrisco255 5y ago
  What kind of quote is that? Markets are clearly many-to-many by definition. Money doesn't even have a meaning or value without markets. It's just paper without markets.
  - grafs50 5y ago
    I think the idea is that "more capable" participants tend to make money off of "less capable" participants. And there are a lot more of the "less capable" ones.
    - chrisco255 5y ago
      Markets are like ecosystems, they are an emergent property of the aggregated activity of many participants. Yes, some of those participants will end up at the top of the food chain. But that's going to happen regardless of what you do.
  - 1991g 5y ago
- capableweb 5y ago
  Not sure if you're arguing against Ethereum, cryptocurrencies as a whole, or capitalism as a whole? Your point would be better understood if you explained what you mean a bit more.
  - jamwt 5y ago
    Unregulated capitalism. Regulation limits how much information/expertise disparity can tip the scales. It doesn't prevent it altogether (nor is that a constructive objective), but limits it so the distribution between the winners and losers ensures still reasonable outcomes for the loser. All that's happening in crypto is the same exploitative games/vehicles that happened in other markets before regulation protected the least informed and least Machiavellian players from the worst outcomes. There's no real innovation in that respect.
jrsj 5y ago
There’s really no need to post yet another “crypto is a scam” comment on every single one of these posts. I mostly agree but it adds nothing to discussion and we’ve all heard it a million times already.
MichaelRazum 5y ago
Have to agree. Just curios what happens to the whole thing if Ethereum switches to POS.
- undersuit 5y ago
  I don't think Ethereum will ever switch. The miners control the chain now, POS will disrupt that. The miners can't make an orderly exit of resources or to a new coin so they will persist on the dominant PoW-Eth while PoS-Eth loses all chain resources.
  - thebean11 5y ago
    > while PoS-Eth loses all chain resources What do you mean by this? Miners are not needed on the PoS chain, and the PoS chain cannot be attacked with PoW resources. The end users (people transacting in ETH and launching smart contracts) will decide which chain is valuable and which isn't.
  - delaaxe 5y ago
    If the POW miners continue mining, that’ll create a fork which will quickly become unprofitable because of the difficulty bomb, and all of the stable coins on the fork will become valueless rendering the fork useless.
    - cinntaile 5y ago
      It's just code, what is stopping them from removing the difficulty bomb?
      - delaaxe 5y ago
        Nothing, but that'll just create yet another fork, just like Ethereum Classic, which is completely worthless
  - latchkey 5y ago
    > The miners control the chain now "difficulty bomb"
bulbosaur123 5y ago
What useful has Ethereum created apart from providing an ever-bloating platform for generation of infinite digital-only tokens? As of 2022 the oracle problem still hasn't been solved, so actual decentralized, objective real life object-to-blockchain interaction is impossible. Monero added fully anonymous crypto that is used by most of the dark web. USDT, USDC provided stablecoins that can circumvent what fiat can't. Bitcoin is first mover, largest liquidity, organic distribution, most decentralised and most tested (least chance of bugs compared to other projects). What legitimate use apart from creation of infinite, meaningless tokens has Ethereum provided?
- mw888 5y ago
  Not an Eth shill but you literally called out Eth’s biggest use case throughout its history and today: where do you think those stablecoins primarily settle? Dai as an algorithmic and decentralized stable coin is also a terribly under rated achievement. Eth has serious problems, as do all proof of work/stake platforms attempting to move around large amounts of data, but it’s not entirely useless in its current state. You seem to have a god critical eye for crypto (as opposed to wholly for or against, or tied to a single project), I’d be interested to hear your thoughts on Saito providing you took the time to grok it.
- Stevvo 5y ago
  I spent a year working on open source projects through gitcoin.co. I would wake up in the morning, choose an issue from the list, bash out the solution and tests in a few hours, code review after lunch and by the end of the day I would have ~$500 in ETH or DAI sent from Gitcoin's smart contracts to my Ethereum address. It's not really feasible anymore due to high gas fees, but there is a real use case for you.
- cetxcz 5y ago
  USDT uses Ethereum.
  - thinkmassive 5y ago
    It didn't launch on ethereum, and the largest issuance hasn't been on ethereum for a long time https://tether.to/en/transparency https://tether.to/en/transparency
jqpabc123 5y ago
Without regulation, the marketplace --- any marketplace --- becomes a platform for scams and extortion. Show me a marketplace without regulation and I will show you a marketplace best avoided if possible.
- chrisco255 5y ago
  Show me a regulated market that is free of front-running. It doesn't exist.
  - BobbyJo 5y ago
    Lesser evil?
    - viro 5y ago
      are you saying that front running is better than regulation?
      - ironSkillet 5y ago
        They are saying the occurrence of front running in a regulated market is a lesser evil compared to the absolute shitshow of scams and con games that play out in an unregulated market.
  - rurp 5y ago
    There are varying degrees of front running and a well regulated market will generally have much less of it. It's kind of like saying "show me a market without corruption". Obviously all markets have some amount of shady behavior, but it hardly means every market is equally corrupt.
    - tootie 5y ago
      Show me a human endeavor of any kind free of corruption.
  - 5y ago
deleted 5y ago
[deleted]
jmyeet 5y ago
So Crypto Andys like to hand-wave about the risk of a 51% attack but consider this: > This is in addition to the long-standing concentration of Ethereum mining power, with normally three and sometimes only two mining pools controlling over 50% of the mining power. There is further hand-waving about how Proof-of-Stake (over Proof-of-Waste) will magically fix these problems. But it's actually this PoW computing power that makes the network more resilient to hostile takeover. I've heard it described that the attraction of Crypto is the essence of the American Dream: by getting rich by doing nothing while lauding how smart you are over other people. So much of Crytpo can be explained by Bitcoin FOMO. Everyone just jumps on the latest shitcoin or NFT because "I'm not missing out this time". Ultimately something has to create value or it will come crashing down. The only use case we really have is illegal activity. Some of that is justified on ethics grounds (eg bypassing capital controls in Venezuela). A lot of it is just shady. There's a ton of talk about the "potential". So far the offshots (eg NFTs, Web3) are just ludicrous boondoggles in finding problems for a solution. I have doubts this will ever create value for the masses.
- gbersac 5y ago
  Here's a good explanation of why blockchain is the future with real world utility: https://markmanson.net/newsletters/mindfck-monthly-97 https://markmanson.net/newsletters/mindfck-monthly-97
- mw888 5y ago
  Your comment is two points with no direct connection, and both are underdeveloped. Bitcoin as a settlement layer is useful. The idea that it needs to do anything more than securely manage a trillion dollar market cap digitally with no hacks, and no avenues for a profitable hack in the medium term is just common ignorance of what’s valuable.
- thebean11 5y ago
  I think there's at least some value that can potentially be created. The fact that you can take out a loan or buy insurance and your counterparty is a smart contract is pretty interesting. It could seriously bring down insurance margins if you no longer have drones of people administering policies. Obviously remains to be seen how practical it is.
pshc 5y ago
While many contracts within Ethereum have clear flaws, that doesn't mean Eth as a whole is broken. Time bandit attacks go away once proof of stake finality arrives. Also, trading ought to be done in Layer 2s. Does MEV work on L2s? Re: certain token drops wasting lots of gas, it's up to the token authors to use an implementation that avoids gas wars. Once you go into claiming equivalences with P = NP, you've lost me. Theoretical optimums are an academic game, in reality you can get 95% of the way there with heuristics. > Because Ethereum transactions are programs, the halting problem means that it isn't possible to accurately predict the resources needed to execute them. Ah, more appeals to theory. They're programs with a low ceiling on the number of steps and possible codepaths. They barely even have loops half the time. Estimating isn't that hard in practice.
- pavel_lishin 5y ago
  > once proof of stake finality arrives Which it hasn't, despite being six months away for years now. You cannot handwave away problems by promising you'll fix them with X in Y months, when you consistently fail to deliver X.
  - pshc 5y ago
    I keep seeing this "eternal six months away" FUD, but no one wants to admit the devs delivered on the Beacon Chain which has been running smoothly for 1.5 years, and the Merge testnets are working quite well. Bitcoin maximalists are out there all day grousing about made-up deadlines promised by strawmen and laundered through hearsay. It has nothing to do with reality.
    - recursive 5y ago
      I understand the arguments about how cryptocurrencies use too much electricity, but I understand none of what you've just said.
      - pshc 5y ago
        I can try to contextualize this... at least explain my understanding of the history. Bitcoin grows popular and its proof of work burns increasing amounts of electricity. Ethereum devs do not want to see Eth go the same way, and prioritize Proof of Stake, which will not require any more waste. The devs sketch out new roadmaps, do research, and make slow but steady progress; software always takes longer than you think. Meanwhile, Bitcoin has completely fossilized for political reasons and basically cannot be improved at this point. Bitcoin maximalists (diehards) recognize Eth as an existential threat and start pushing this meme of PoS being always 6 months away, despite the actual Eth devs never promising such things.
px43 5y ago
Ha, Flash Boys 2.0 was from 2019. This blog post is literally "I read a thing from three years ago and have lost faith in something that I never believed in in the first place". As someone who knows and has worked with all the people involved with the write-ups referenced in this blog post, I can pretty confidently say that the author is way way behind here. There have been some insane advancements in recent years that would blow his mind. MEV harvesting is actually an insanely fascinating field of study, and it comes down to consensus in a world where information can only move as fast as the speed of light. Front-running is a general problem where, if you can find out that someone wants to buy something, and can buy it first and sell it to the person who actually want it at a premium. This gets really interesting in the blockchain space, because Miners (Validators) decide the order of transactions, and in some cases validators can be incentivized/coerced to move around transactions in a way that might be beneficial for certain users. This is what is referred to as "Miner Extractable Value". Yes it's a problem, yes there are mitigations, yes there are fun and weird ways around those mitigations, etc. This is what happens when people are incentivized to take a really good hard look at what global consensus really means. At a high level, most users don't really need to know or care about any of it, but it exists as a parasitic force constantly extracting value from the network. Still, IMO the parasites that feed off MEV are at a significant disadvantage compared with those who feed of legacy financial networks (for more on that, you can read the actual Flash Boys book https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599/ https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...).
- otterley 5y ago
  Can you elaborate on some of these “insane advancements”?
  - crazypython 5y ago
    It means they worked on it and acknowledge it now. The fundamental problem is still very much there.
    - repomies69 5y ago
bulbosaur123 5y ago
Let me guess. "It's still early". No it's not. "Still early" is the laggard's cope. We are in late stage of adoption, entire countries (El Salvador) have adopted Bitcoin, to what effect is up for discussion. One thing is clear, it's no longer "early".
- maupin 5y ago
  Maybe not early, but saying that we are in the "late stages of adoption" is laughable.
  - whymauri 5y ago
    This might get me crucified on HN, since many here are from developed countries, but I would argue we're just cresting the hill of late stage adoption for the Internet. Like, 40% of the world still does not have Internet!
    - thallium205 5y ago
      Those folks aren't going to push the needle in any meaningful way.
      - whymauri 5y ago
        I disagree. This will be one of Silicon Valley's missed opportunities. Anyone who unlocks the potential of those users and of developing economies has the potential to create immense value. By the way, my point is not that they will contribute to crypto, but rather that their integration into the Internet ecosystem will require new technologies, new platforms, and new solutions to social problems so far divorced from what SV is used to dealing with... that there will be a market and a need for platforms and technology in those regions/demographics. To ignore that is to ignore billions, potentially trillions, of dollars of value.
hitovst 5y ago
Ethereum is an anti-CC bribe. I get how traders might not have realized this, but the principled people who were drawn to Bitcoin should have realized this a long time ago.
rufusroflpunch 5y ago
This is not directly related to the content of the post but is about Ethereum. I have been putting this hypothesis out there on twitter for a while now, looking for someone to refute me, but no one has yet. This seems like a place where I might be able to find someone who understand Ethereum enough tell my grasp of the protocol is wrong (or right): Ethereum is going deflationary. Not disinflationary like Bitcoin, but actually deflationary, with token burn. Whether you think deflationary money is bad or good is not germane to the problem I'm about to explain, as I see it. Ethereum makes a claim at decentralization. However, by moving to a Proof of Stake system, they have set a fixed amount to be staked (32 ETH in this case, though the number itself does not matter). With the token going deflationary, that means that the opportunity cost to stake will always be increasing, mathematically, in ETH terms. The staking requirement does not adjust to changing token supply. For argument's sake, if there are 100 ETH on the network, and you stake 1 ETH, you effectively need to lock away 1/100 of all wealth on the network. However, if 10 tokens get burned, now you lock away 1/90 wealth on the network. Staking that 1 ETH just got 10% more expensive because the opportunity cost of staking that ETH increased relative to spending it. Economically, this means that the system is going to drive out marginal stakers, by design. The only response I have gotten from ETH holders is about staking pools, but staking pools don't fix the underlying economic incentive brought about by deflation: increasingly holders will find it less worthwhile to stake their ETH. It seems to me that ETH is headed right for some kind of centralization death spiral, as only increasingly wealthier holders will be able to justify staking.
- mw888 5y ago
  This isn’t the exact paper I had skimmed before and thought of while reading this, but it makes the same point, taking yours and going further. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988 Really deflation is the tip of the iceberg. When lending is competitive to staking network security will suffer, and deflation makes it worse.
- pshc 5y ago
  Staking pays all stakers out proportional to their stake, which is as fair as is possible, and more fair than PoW. Distributed staking pools lower the barrier to entry to 0.01 ETH. Ethereum will still be printing ETH in perpetuity; it only becomes deflationary whenever more is burned than printed.
nathias 5y ago
These posts are like horse sheppards talking how cars suck without ever seeing one.
flatearth22 5y ago
throwaway98797 5y ago
sure does, but has value too a public registry of txns is sweet
nootropicat 5y ago
>To some extent, the Ethereum project has just given up on scaling the main blockchain. “For Ethereum to scale and keep up with demand, it has required rollups” — do the work somewhere else and send back the result. The blockchain is only usable if you work around actually using it. Zk-rollups are fundamentally superior to direct scaling because they move execution and proof generation cost to only one node (entity, could be a server farm) that only has to do it once, while ensuring correctness is verifiable by anyone cheaply forever. No more scalable solution exists from a purely theoretical level. This in theory allows even running complicated multiplayer games on a blockchain (turn based directly, realtime by dropping state snapshots). In principle, this should be implemented directly - but it's so early that a solution that can last for decades simply doesn't exist. In addition, decentralizing zkrollup implementations to third party teams allows for much faster innovation. Optimistic rollups are more questionable.
joshu 5y ago
a) i think that continuous auctions have a bunch of vulnerabilities and that for exchanges, a periodic crossing might be a better mechanism. this works better for high volume instruments. it does come at the expense of immediate trading b) is it possible to make all the transactions in a block go "at once"? ie if any tx have some sequential interdependence, kick one and make it wait for the next block?
Geee 5y ago
Ethereum is a dead man walking at this point. I hope it dies as soon as possible. Ethereum is the worst thing that happened to cryptocurrency. It diverted attention from what's actually important, brought all the scamming in the space, and hasn't provided anything of value.
cryptica 5y ago
That's why DEXs should rely on order books, not AMMs. Front running can be avoided by allowing traders to place limit orders. AMM orders are even worse than market orders because slippage provides more room for manipulation.
eachro 5y ago
I've always found it odd that basic arbitrage (ex: buy asset A on some exchange and sell it immediately on a different exchange and earn the delta as profit) and sandwich attacks (place a buy order before a whale places a big order and place a sell order immediately afterwards) were under the umbrella of MEV. These are trades that are possible in tradfi too. I suppose it's possible that arb trades and sandwich attacks are more of a concern here where miners can insert their own transactions into the mempool but I don't know if we actually see miners engaging in this behavior.
elif 5y ago
This style of idea presentation is terrible. Block quotations long enough to be articles separated by one or two sentences of overessentialization, with no concise thesis or conclusion.. It strikes me that the author is employing deliberately excessive verbiage and appeal to authority to mask the confused nature of his core conjecture.
AMerePotato 5y ago
Ha, it's fun seeing this topic on hacker news. I've been in the extracting MEV for a while now. It's really fun and complex. MEV isn't going anywhere and not all MEV is bad. Some protocol owners solicit us to make bots for their protocol. In regards to the negative aspects of it, there's a lot that individuals can do to avoid their trades from being exploited. Flashbots has also done a lot to mitigate the MEV related problems on Eth (some other chains are in way worse shape). Finally, there's some amount of common decency to not fuck up the network. If you break Eth to the point where everyone decides to leave, you've broken your toy so to speak.
_57jb 5y ago
The biggest issue that is upstream is the centralization that is caused via GPU and asic. It's fairly obvious in hindsight but the idea that everyone running a general purpose computer wouldn't recognize enough value to try and take over the network. Running your own node would be more realistic and the "user" and the "miner" would be on a much more equal footing (and likely one in the same). Arbitrage and all of the boiler room tricks of the stock market were applied instantly. Add this the centralized power of mining farms increasing incentives and the race for lightning chains creating these black box dark pools and we are just getting up to speed with similar problems we face today in public markets. The biggest difference is that we can dig into the details in a very convenient way which is the constant balancing act of getting people to care enough to look. Front-running on a consensus based system where transactions are public... almost like they took a look at every system to date and picked the low hanging fruit for exploitation.
everfree 5y ago
> The DataFinnovation post shows that the problem of implementing an Ethereum-like system whose performance in all cases is guaranteed to be faster than any single node in the network can be reduced to 3-SAT, which is a canonical problem in class NP. All of that math to prove such an inconsequential point. In practice, scalability limitations of blockchains don't come from the limitations of a single node's processing power, they come from the overhead of the current naive methods of maintaining consensus over contract state and execution. By lifting the execution overhead using optimistic fraud proofs or zero knowledge proofs, and lifting the state overhead using state sharding and state/history expiry, you end up with a protocol that can come to consensus on arbitrarily complex computations with little more overhead than the computation's resulting state change. In simple terms, the quoted author misses the forest for the trees. They hold that blockchain protocols can't scale further than the processing power of a single node, but miss that when contract transaction execution verification requirements are reduced by proof schemes to mere state changes, one node could crank through as many transactions as their state changes could saturate a modern CPU/memory/disk pipeline, which it's safe to say is easily upwards of tens of thousands per second - plenty enough to satisfy global demand and enough to stand shoulder to shoulder with the traditional payment processors.

352 points by danso 5y ago

Crypto is far bigger than any one coin, just keep that in mind. Many coins were started to overcome the limitations of Bitcoin and Ethereum. They typically issue whitepapers to go over these details and make comparisons. Another perspective is that of investing or trading. Ignoring the practical use cases of coins and buying low and selling high. That's why I'm working on TradeCast: https://tradecast.carrd.co/ https://tradecast.carrd.co/

n-i-g-g-e-r 5y ago

ypeterholmes 5y ago

"Because Ethereum transactions are programs, the halting problem means that it isn't possible to accurately predict the resources needed to execute them." Cardano fixes this with deterministic execution and fees.

necovek 5y ago

Something like: https://github.com/ethereum/go-ethereum/issues https://github.com/ethereum/go-ethereum/issues? (Sorry, couldn't resist)

deleted 5y ago
[deleted]

delaaxe 5y ago

Isn't this solved by PBS (Proposer-Builder Separation)?

Barrera 5y ago

This article goes off the rails for me with this statement: > Their starting point was the observation that Ethereum "smart contract" execution is order-dependent within a block, unlike transaction execution in Bitcoin and similar systems: ... First, Bitcoin runs smart contracts [1]. The lie to the contrary has seeped into almost every discussion of Bitcoin vs. Ethereum, and this author appears to have taken the bait. Second, Bitcoin transactions are order-dependent within a block. The entire point of the Bitcoin network is to impose a global, unique order on all transactions and the only way to do that is if order within blocks matters. I'm not sure about the rest of this article, but the failure on these two points does not inspire confidence to continue. [1] https://wiki.bitcoinsv.io/index.php/Opcodes_used_in_Bitcoin_Script https://wiki.bitcoinsv.io/index.php/Opcodes_used_in_Bitcoin_...

polyomino 5y ago
You're citing bitcoin sv? Is this a joke?
- Arnavion 5y ago
  Bitcoin had script opcodes before any forks, so it doesn't matter which fork they cite.
  - Stevvo 5y ago
    Citing a scam from the most famous con artist in the industry is never a good form.
    - mateuszf 5y ago
      Seems like an unintentional mistake though.
- stale2002 5y ago
  The source is suspect for sure, but the information is true on this specific point. Bitcoin does have smart contracts, and op codes. Thats correct, regardless of your disagreements with the source.
  - polyomino 5y ago
    opcodes that are almost all disabled in the real bitcoin
    - kova12 5y ago
      that wasn't the point
      - sandwichinvest 5y ago
        So the point is to be technically correct but practically irrelevant?

vmception 5y ago

> We found two blocks in our 12 day span, 14,217,123 and 14,241,282, for which miner profits from MEV exceeded four times the block reward. I hope this becomes more common knowledge! All mining calculators are wrong as they predict earnings that are upwards of 80% lower than reality, for some people. There have been extended periods of time (weeks, months) where this has been true. This is also one of the promises of the blockchain concept, in the Satoshi paper for Bitcoin, the idea is for transaction fees to exceed the block reward subsidy, in Bitcoin the hope is that it occurs before the year 2140, in Ethereum it has been occurring for several years, which is a great big deal. But it doesnt mean the outcome is good, we just dont have to wait to see how it plays out.

delaaxe 5y ago
Rocket Pool, a decentralized Ethereum staking protocol, distributes MEV profits to stakers

carlosdp 5y ago

> The long-term effort to implement "sharding" in Ethereum 2.0, which in effect parallelizes the operation of the blockchain. This effort is effectively dead, for what it's worth. We've moved beyond this, it was going to over-complicate things and Layer 2 is a much better scaling solution that is already starting to work in production.

drcode 5y ago
It's not dead, data sharding (not execution sharding) is very much part of the plan https://notes.ethereum.org/@vbuterin/proto_danksharding_faq https://notes.ethereum.org/@vbuterin/proto_danksharding_faq Execution sharding is also still planned, though right now it is in the hazy distant future

Animats 5y ago

The system is functioning as designed. The suckers are being fleeced. It is in the nature of markets to move money from the many to the few.

chrisco255 5y ago
What kind of quote is that? Markets are clearly many-to-many by definition. Money doesn't even have a meaning or value without markets. It's just paper without markets.
- grafs50 5y ago
  I think the idea is that "more capable" participants tend to make money off of "less capable" participants. And there are a lot more of the "less capable" ones.
  - chrisco255 5y ago
    Markets are like ecosystems, they are an emergent property of the aggregated activity of many participants. Yes, some of those participants will end up at the top of the food chain. But that's going to happen regardless of what you do.
- 1991g 5y ago
capableweb 5y ago
Not sure if you're arguing against Ethereum, cryptocurrencies as a whole, or capitalism as a whole? Your point would be better understood if you explained what you mean a bit more.
- jamwt 5y ago
  Unregulated capitalism. Regulation limits how much information/expertise disparity can tip the scales. It doesn't prevent it altogether (nor is that a constructive objective), but limits it so the distribution between the winners and losers ensures still reasonable outcomes for the loser. All that's happening in crypto is the same exploitative games/vehicles that happened in other markets before regulation protected the least informed and least Machiavellian players from the worst outcomes. There's no real innovation in that respect.

jrsj 5y ago

There’s really no need to post yet another “crypto is a scam” comment on every single one of these posts. I mostly agree but it adds nothing to discussion and we’ve all heard it a million times already.

MichaelRazum 5y ago

Have to agree. Just curios what happens to the whole thing if Ethereum switches to POS.

undersuit 5y ago
I don't think Ethereum will ever switch. The miners control the chain now, POS will disrupt that. The miners can't make an orderly exit of resources or to a new coin so they will persist on the dominant PoW-Eth while PoS-Eth loses all chain resources.
- thebean11 5y ago
  > while PoS-Eth loses all chain resources What do you mean by this? Miners are not needed on the PoS chain, and the PoS chain cannot be attacked with PoW resources. The end users (people transacting in ETH and launching smart contracts) will decide which chain is valuable and which isn't.
- delaaxe 5y ago
  If the POW miners continue mining, that’ll create a fork which will quickly become unprofitable because of the difficulty bomb, and all of the stable coins on the fork will become valueless rendering the fork useless.
  - cinntaile 5y ago
    It's just code, what is stopping them from removing the difficulty bomb?
    - delaaxe 5y ago
      Nothing, but that'll just create yet another fork, just like Ethereum Classic, which is completely worthless
- latchkey 5y ago
  > The miners control the chain now "difficulty bomb"

bulbosaur123 5y ago

What useful has Ethereum created apart from providing an ever-bloating platform for generation of infinite digital-only tokens? As of 2022 the oracle problem still hasn't been solved, so actual decentralized, objective real life object-to-blockchain interaction is impossible. Monero added fully anonymous crypto that is used by most of the dark web. USDT, USDC provided stablecoins that can circumvent what fiat can't. Bitcoin is first mover, largest liquidity, organic distribution, most decentralised and most tested (least chance of bugs compared to other projects). What legitimate use apart from creation of infinite, meaningless tokens has Ethereum provided?

mw888 5y ago
Not an Eth shill but you literally called out Eth’s biggest use case throughout its history and today: where do you think those stablecoins primarily settle? Dai as an algorithmic and decentralized stable coin is also a terribly under rated achievement. Eth has serious problems, as do all proof of work/stake platforms attempting to move around large amounts of data, but it’s not entirely useless in its current state. You seem to have a god critical eye for crypto (as opposed to wholly for or against, or tied to a single project), I’d be interested to hear your thoughts on Saito providing you took the time to grok it.
Stevvo 5y ago
I spent a year working on open source projects through gitcoin.co. I would wake up in the morning, choose an issue from the list, bash out the solution and tests in a few hours, code review after lunch and by the end of the day I would have ~$500 in ETH or DAI sent from Gitcoin's smart contracts to my Ethereum address. It's not really feasible anymore due to high gas fees, but there is a real use case for you.
cetxcz 5y ago
USDT uses Ethereum.
- thinkmassive 5y ago
  It didn't launch on ethereum, and the largest issuance hasn't been on ethereum for a long time https://tether.to/en/transparency https://tether.to/en/transparency

jqpabc123 5y ago

Without regulation, the marketplace --- any marketplace --- becomes a platform for scams and extortion. Show me a marketplace without regulation and I will show you a marketplace best avoided if possible.

chrisco255 5y ago
Show me a regulated market that is free of front-running. It doesn't exist.
- BobbyJo 5y ago
  Lesser evil?
  - viro 5y ago
    are you saying that front running is better than regulation?
    - ironSkillet 5y ago
      They are saying the occurrence of front running in a regulated market is a lesser evil compared to the absolute shitshow of scams and con games that play out in an unregulated market.
- rurp 5y ago
  There are varying degrees of front running and a well regulated market will generally have much less of it. It's kind of like saying "show me a market without corruption". Obviously all markets have some amount of shady behavior, but it hardly means every market is equally corrupt.
  - tootie 5y ago
    Show me a human endeavor of any kind free of corruption.
- 5y ago

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jmyeet 5y ago

So Crypto Andys like to hand-wave about the risk of a 51% attack but consider this: > This is in addition to the long-standing concentration of Ethereum mining power, with normally three and sometimes only two mining pools controlling over 50% of the mining power. There is further hand-waving about how Proof-of-Stake (over Proof-of-Waste) will magically fix these problems. But it's actually this PoW computing power that makes the network more resilient to hostile takeover. I've heard it described that the attraction of Crypto is the essence of the American Dream: by getting rich by doing nothing while lauding how smart you are over other people. So much of Crytpo can be explained by Bitcoin FOMO. Everyone just jumps on the latest shitcoin or NFT because "I'm not missing out this time". Ultimately something has to create value or it will come crashing down. The only use case we really have is illegal activity. Some of that is justified on ethics grounds (eg bypassing capital controls in Venezuela). A lot of it is just shady. There's a ton of talk about the "potential". So far the offshots (eg NFTs, Web3) are just ludicrous boondoggles in finding problems for a solution. I have doubts this will ever create value for the masses.

gbersac 5y ago
Here's a good explanation of why blockchain is the future with real world utility: https://markmanson.net/newsletters/mindfck-monthly-97 https://markmanson.net/newsletters/mindfck-monthly-97
mw888 5y ago
Your comment is two points with no direct connection, and both are underdeveloped. Bitcoin as a settlement layer is useful. The idea that it needs to do anything more than securely manage a trillion dollar market cap digitally with no hacks, and no avenues for a profitable hack in the medium term is just common ignorance of what’s valuable.
thebean11 5y ago
I think there's at least some value that can potentially be created. The fact that you can take out a loan or buy insurance and your counterparty is a smart contract is pretty interesting. It could seriously bring down insurance margins if you no longer have drones of people administering policies. Obviously remains to be seen how practical it is.

pshc 5y ago

While many contracts within Ethereum have clear flaws, that doesn't mean Eth as a whole is broken. Time bandit attacks go away once proof of stake finality arrives. Also, trading ought to be done in Layer 2s. Does MEV work on L2s? Re: certain token drops wasting lots of gas, it's up to the token authors to use an implementation that avoids gas wars. Once you go into claiming equivalences with P = NP, you've lost me. Theoretical optimums are an academic game, in reality you can get 95% of the way there with heuristics. > Because Ethereum transactions are programs, the halting problem means that it isn't possible to accurately predict the resources needed to execute them. Ah, more appeals to theory. They're programs with a low ceiling on the number of steps and possible codepaths. They barely even have loops half the time. Estimating isn't that hard in practice.

pavel_lishin 5y ago
> once proof of stake finality arrives Which it hasn't, despite being six months away for years now. You cannot handwave away problems by promising you'll fix them with X in Y months, when you consistently fail to deliver X.
- pshc 5y ago
  I keep seeing this "eternal six months away" FUD, but no one wants to admit the devs delivered on the Beacon Chain which has been running smoothly for 1.5 years, and the Merge testnets are working quite well. Bitcoin maximalists are out there all day grousing about made-up deadlines promised by strawmen and laundered through hearsay. It has nothing to do with reality.
  - recursive 5y ago
    I understand the arguments about how cryptocurrencies use too much electricity, but I understand none of what you've just said.
    - pshc 5y ago
      I can try to contextualize this... at least explain my understanding of the history. Bitcoin grows popular and its proof of work burns increasing amounts of electricity. Ethereum devs do not want to see Eth go the same way, and prioritize Proof of Stake, which will not require any more waste. The devs sketch out new roadmaps, do research, and make slow but steady progress; software always takes longer than you think. Meanwhile, Bitcoin has completely fossilized for political reasons and basically cannot be improved at this point. Bitcoin maximalists (diehards) recognize Eth as an existential threat and start pushing this meme of PoS being always 6 months away, despite the actual Eth devs never promising such things.

px43 5y ago

Ha, Flash Boys 2.0 was from 2019. This blog post is literally "I read a thing from three years ago and have lost faith in something that I never believed in in the first place". As someone who knows and has worked with all the people involved with the write-ups referenced in this blog post, I can pretty confidently say that the author is way way behind here. There have been some insane advancements in recent years that would blow his mind. MEV harvesting is actually an insanely fascinating field of study, and it comes down to consensus in a world where information can only move as fast as the speed of light. Front-running is a general problem where, if you can find out that someone wants to buy something, and can buy it first and sell it to the person who actually want it at a premium. This gets really interesting in the blockchain space, because Miners (Validators) decide the order of transactions, and in some cases validators can be incentivized/coerced to move around transactions in a way that might be beneficial for certain users. This is what is referred to as "Miner Extractable Value". Yes it's a problem, yes there are mitigations, yes there are fun and weird ways around those mitigations, etc. This is what happens when people are incentivized to take a really good hard look at what global consensus really means. At a high level, most users don't really need to know or care about any of it, but it exists as a parasitic force constantly extracting value from the network. Still, IMO the parasites that feed off MEV are at a significant disadvantage compared with those who feed of legacy financial networks (for more on that, you can read the actual Flash Boys book https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393351599/ https://www.amazon.com/Flash-Boys-Wall-Street-Revolt/dp/0393...).

otterley 5y ago
Can you elaborate on some of these “insane advancements”?
- crazypython 5y ago
  It means they worked on it and acknowledge it now. The fundamental problem is still very much there.
  - repomies69 5y ago

bulbosaur123 5y ago

Let me guess. "It's still early". No it's not. "Still early" is the laggard's cope. We are in late stage of adoption, entire countries (El Salvador) have adopted Bitcoin, to what effect is up for discussion. One thing is clear, it's no longer "early".

maupin 5y ago
Maybe not early, but saying that we are in the "late stages of adoption" is laughable.
- whymauri 5y ago
  This might get me crucified on HN, since many here are from developed countries, but I would argue we're just cresting the hill of late stage adoption for the Internet. Like, 40% of the world still does not have Internet!
  - thallium205 5y ago
    Those folks aren't going to push the needle in any meaningful way.
    - whymauri 5y ago
      I disagree. This will be one of Silicon Valley's missed opportunities. Anyone who unlocks the potential of those users and of developing economies has the potential to create immense value. By the way, my point is not that they will contribute to crypto, but rather that their integration into the Internet ecosystem will require new technologies, new platforms, and new solutions to social problems so far divorced from what SV is used to dealing with... that there will be a market and a need for platforms and technology in those regions/demographics. To ignore that is to ignore billions, potentially trillions, of dollars of value.

hitovst 5y ago

Ethereum is an anti-CC bribe. I get how traders might not have realized this, but the principled people who were drawn to Bitcoin should have realized this a long time ago.

rufusroflpunch 5y ago

This is not directly related to the content of the post but is about Ethereum. I have been putting this hypothesis out there on twitter for a while now, looking for someone to refute me, but no one has yet. This seems like a place where I might be able to find someone who understand Ethereum enough tell my grasp of the protocol is wrong (or right): Ethereum is going deflationary. Not disinflationary like Bitcoin, but actually deflationary, with token burn. Whether you think deflationary money is bad or good is not germane to the problem I'm about to explain, as I see it. Ethereum makes a claim at decentralization. However, by moving to a Proof of Stake system, they have set a fixed amount to be staked (32 ETH in this case, though the number itself does not matter). With the token going deflationary, that means that the opportunity cost to stake will always be increasing, mathematically, in ETH terms. The staking requirement does not adjust to changing token supply. For argument's sake, if there are 100 ETH on the network, and you stake 1 ETH, you effectively need to lock away 1/100 of all wealth on the network. However, if 10 tokens get burned, now you lock away 1/90 wealth on the network. Staking that 1 ETH just got 10% more expensive because the opportunity cost of staking that ETH increased relative to spending it. Economically, this means that the system is going to drive out marginal stakers, by design. The only response I have gotten from ETH holders is about staking pools, but staking pools don't fix the underlying economic incentive brought about by deflation: increasingly holders will find it less worthwhile to stake their ETH. It seems to me that ETH is headed right for some kind of centralization death spiral, as only increasingly wealthier holders will be able to justify staking.

mw888 5y ago
This isn’t the exact paper I had skimmed before and thought of while reading this, but it makes the same point, taking yours and going further. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988 Really deflation is the tip of the iceberg. When lending is competitive to staking network security will suffer, and deflation makes it worse.
pshc 5y ago
Staking pays all stakers out proportional to their stake, which is as fair as is possible, and more fair than PoW. Distributed staking pools lower the barrier to entry to 0.01 ETH. Ethereum will still be printing ETH in perpetuity; it only becomes deflationary whenever more is burned than printed.

nathias 5y ago

These posts are like horse sheppards talking how cars suck without ever seeing one.

flatearth22 5y ago

throwaway98797 5y ago

sure does, but has value too a public registry of txns is sweet

nootropicat 5y ago

>To some extent, the Ethereum project has just given up on scaling the main blockchain. “For Ethereum to scale and keep up with demand, it has required rollups” — do the work somewhere else and send back the result. The blockchain is only usable if you work around actually using it. Zk-rollups are fundamentally superior to direct scaling because they move execution and proof generation cost to only one node (entity, could be a server farm) that only has to do it once, while ensuring correctness is verifiable by anyone cheaply forever. No more scalable solution exists from a purely theoretical level. This in theory allows even running complicated multiplayer games on a blockchain (turn based directly, realtime by dropping state snapshots). In principle, this should be implemented directly - but it's so early that a solution that can last for decades simply doesn't exist. In addition, decentralizing zkrollup implementations to third party teams allows for much faster innovation. Optimistic rollups are more questionable.

joshu 5y ago

a) i think that continuous auctions have a bunch of vulnerabilities and that for exchanges, a periodic crossing might be a better mechanism. this works better for high volume instruments. it does come at the expense of immediate trading b) is it possible to make all the transactions in a block go "at once"? ie if any tx have some sequential interdependence, kick one and make it wait for the next block?

Geee 5y ago

Ethereum is a dead man walking at this point. I hope it dies as soon as possible. Ethereum is the worst thing that happened to cryptocurrency. It diverted attention from what's actually important, brought all the scamming in the space, and hasn't provided anything of value.

cryptica 5y ago

That's why DEXs should rely on order books, not AMMs. Front running can be avoided by allowing traders to place limit orders. AMM orders are even worse than market orders because slippage provides more room for manipulation.

eachro 5y ago

I've always found it odd that basic arbitrage (ex: buy asset A on some exchange and sell it immediately on a different exchange and earn the delta as profit) and sandwich attacks (place a buy order before a whale places a big order and place a sell order immediately afterwards) were under the umbrella of MEV. These are trades that are possible in tradfi too. I suppose it's possible that arb trades and sandwich attacks are more of a concern here where miners can insert their own transactions into the mempool but I don't know if we actually see miners engaging in this behavior.

elif 5y ago

This style of idea presentation is terrible. Block quotations long enough to be articles separated by one or two sentences of overessentialization, with no concise thesis or conclusion.. It strikes me that the author is employing deliberately excessive verbiage and appeal to authority to mask the confused nature of his core conjecture.

AMerePotato 5y ago

Ha, it's fun seeing this topic on hacker news. I've been in the extracting MEV for a while now. It's really fun and complex. MEV isn't going anywhere and not all MEV is bad. Some protocol owners solicit us to make bots for their protocol. In regards to the negative aspects of it, there's a lot that individuals can do to avoid their trades from being exploited. Flashbots has also done a lot to mitigate the MEV related problems on Eth (some other chains are in way worse shape). Finally, there's some amount of common decency to not fuck up the network. If you break Eth to the point where everyone decides to leave, you've broken your toy so to speak.

_57jb 5y ago

The biggest issue that is upstream is the centralization that is caused via GPU and asic. It's fairly obvious in hindsight but the idea that everyone running a general purpose computer wouldn't recognize enough value to try and take over the network. Running your own node would be more realistic and the "user" and the "miner" would be on a much more equal footing (and likely one in the same). Arbitrage and all of the boiler room tricks of the stock market were applied instantly. Add this the centralized power of mining farms increasing incentives and the race for lightning chains creating these black box dark pools and we are just getting up to speed with similar problems we face today in public markets. The biggest difference is that we can dig into the details in a very convenient way which is the constant balancing act of getting people to care enough to look. Front-running on a consensus based system where transactions are public... almost like they took a look at every system to date and picked the low hanging fruit for exploitation.

everfree 5y ago

> The DataFinnovation post shows that the problem of implementing an Ethereum-like system whose performance in all cases is guaranteed to be faster than any single node in the network can be reduced to 3-SAT, which is a canonical problem in class NP. All of that math to prove such an inconsequential point. In practice, scalability limitations of blockchains don't come from the limitations of a single node's processing power, they come from the overhead of the current naive methods of maintaining consensus over contract state and execution. By lifting the execution overhead using optimistic fraud proofs or zero knowledge proofs, and lifting the state overhead using state sharding and state/history expiry, you end up with a protocol that can come to consensus on arbitrarily complex computations with little more overhead than the computation's resulting state change. In simple terms, the quoted author misses the forest for the trees. They hold that blockchain protocols can't scale further than the processing power of a single node, but miss that when contract transaction execution verification requirements are reduced by proof schemes to mere state changes, one node could crank through as many transactions as their state changes could saturate a modern CPU/memory/disk pipeline, which it's safe to say is easily upwards of tens of thousands per second - plenty enough to satisfy global demand and enough to stand shoulder to shoulder with the traditional payment processors.