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Another unimaginative researcher who thinks databases can do everything blockchains can. Tell me, how do you build a better Alchemix with a centralized databas

Another unimaginative researcher who thinks databases can do everything blockchains can. Tell me, how do you build a better Alchemix with a centralized database? How about Uniswap? Balancer? Aave? Curve? So far nobody has been able to answer this. Maybe one day those who parrot this trope will learn about DeFi and understand the purpose of blockchains. Or maybe they'll continue to live in ignorance. Note: not picking on this guy, because when this video was recorded these apps and DeFi didn't exist. But I am critiquing anyone who still agrees with him in 2022.

SilasX 4y ago
I’m an avid Uniswap and Compound user, but I don’t get your point. What is it about a centralized database that breaks protocols like Uniswap? They can provided the same transactions according to the same rules.
- TimJRobinson 4y ago
  They lose the most important property of being trustless and miss out on all the composability that comes along with being on the same chain. It can be done but not in a better way, a centralized equvilent is strictly worse than these.
  - SilasX 4y ago
    Okay: So it comes down to whether you think decentralization is some epically awesome feature to have in a financial platform? Great, but that wasn't your original claim, and it wasn't the part I found dubious. The part I replied to, rather, was the claim that you can't build a better Uniswap et al, for any reasonable definition of "better", and that nobody is able to propose such a mechanism despite their efforts[1], and that finding the centralization tradeoff good makes you unimaginative. Even as an avid cryptocurrency/smartcontract enthusiast, I consider this unjustified hyperbole. Decentralization has costs and benefits. You gain resilience and verifiability, but at the cost of having to pay the overhead to ensure the decentralization. So you can absolutely have a centralized version of Uniswap et al. It would look exactly like Uniswap does today, but cheaper, and without (some of) the guarantees against corruption and verifiability. You dislike that tradeoff. That's fair! But that doesn't justify the conclusion that "no one can imagine a centralized Uniswap". [1] Before you call strawman, please look at your comment: https://news.ycombinator.com/item?id=31160906 https://news.ycombinator.com/item?id=31160906
    - TimJRobinson 4y ago
      That's fair. Uniswap was a poor choice because people do use centralized exchanges, though I don't know of a single one that allows you to earn returns by providing liquidity. There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. My argument is merely a counter to his "databases are faster therefore they are better" when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: - Trades complete in < 2s - Trades cost less than 1c - There is no external party risk, you are in complete control of your funds. - You can provide liquidity for a return - playing the part of the house. - Any app can integrate without permission and all API uptime, permissions, latency, etc is handled by the Blockchain. - Many hundreds of apps have already integrated with it and you can use them alongside it for a better UI, or multiple trades, or routing through many exchanges. The advantages you get of centralization: - a small increase in speed - save 1c on every trade For that you take on custody risk, they could run off with your funds or they could be hacked. You don't have the chance to earn income, you get no or few integrations, you get no choice of UI, you can't fork it if the company turns evil, and you can be banned or restricted at any time. It's night and day difference in the experience. I'm going to write an article on DeFi composability because it's super underrated.
      - SilasX 4y ago
        >Uniswap was a poor choice ... There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. The choice of protocol here doesn't matter. There's nothing difficult about any of the other ones. They're just code that executes on the EVM[1]; anyone can pick up that same code and process transactions on a centralized database instead. Doing so does not introduce any inherent implementation difficulty, only the normal tradeoffs related to centralization. >My argument is merely a counter to his "databases are faster therefore they are better" And on that point, you're correct -- you can't simply say that centralized databases are better, since they give up the (very real) benefits of decentralization, and I'm glad you raised that point. I'm only objecting to the more dubious bits about how you "can't" do uniswap on a centralized DB. >when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: That's also not a fair comparison. Many cryptos show good figures merely because they haven't had to scale up to the volume of Ethereum L1. And Ethereum L1 is much worse on those dimensions. >I'm going to write an article on DeFi composability because it's super underrated. But you can have the composability with centralization, it just isn't currently offered. (Although if you imagine centralization as a continuum, then the Ethereum L2s are more in that direction.) [1] And code that has to severely economize on cycles executed because you have to pay for each one.
- aeternum 4y ago
  Using a centralized database for a DAO or decentralized exchange is like creating a democracy but still having the king hold the ballot box and count the votes. Sure it's possible, but is it a good idea?
McLaren_Ferrari 4y ago
> Note: not picking on this guy, because when this video was recorded these apps and DeFi didn't exist. But I am critiquing anyone who still agrees with him in 2022. Finance is not a product. In every society in human history finance came way after companies making products and services. Blockchains and crypto have been around for 12 years and could not find a usage which isn't speculation, swapping assets or some variation of that. The guys who tried to use blockchain for real world products such as "THE_DAO" guys who were gonna use it for smart locks ended up in smoke. Same for those who wanted to track food, luggage, containers and essentially everybody who tried to apply blockchain to the real world. Those who didn't end up in smoke are losing money (literally) or in terms of opportunity cost because a blockchain is inferior to a database and doesn't solve the main problems of garbage_in garbage_out as well as how true the data input is. If you are using a sensor you'd still be relying on the validity and integrity of the sensor, so at that point why not use a database? Of course I only say these things on here, out there in the real world I act like Blockchain is the second coming because in SV truth doesn't matter anymore, if you don't have irrational exhuberance about anything and everything and don't drink the kool-aid produced by cult members of Tesla, Bitcoin and Ethereum then you are not allowed with the in_crowd. On the bright side it enabled me to polish my acting skills. > Another unimaginative researcher Every person who doesn't drink the kool-aid = unimaginative Next on the setlist if I remember correctly there are attacks on evil shortsellers.
- TimJRobinson 4y ago
  If you don't understand the value of finance then of course you're not going to understand the value in decentralized finance. Finance is still a multi trillion dollar industry, and will continue to grow and be useful to millions of people regardless of your opinion.
  - McLaren_Ferrari 4y ago
    Right...what is the revenue of Uniswap? Zero, because the point is not to make revenues but to bake in any form of perceived utility into the appreciation of a token. Again only use is speculation Also how many lives would be disrupted if Uniswap disappeared tomorrow? None, those who hang out on there would simply download Robinhood go to Vegas to satisfy their need to bet compulsively What if Exxon, Shell, Microsoft, Walmart or Amazon disappeared overnight? What about Xiaomi a company founded in 2010 , 2 years after BTC whitepaper? If your goal is to make revenue and improve the quality of life of people 10 years are a whole lot to get somewhere and have your product become a vital improvement in their lives. Crypto got nowhere in therm of real world use because the goal was never to make a difference in the real world. It's all about pumps and dumps, hype, kool-aid and build virtual casinos for compulsive gamblers. The goalposts of adoption are always moved into the future because as long as there is the hope of adoption the general perception is that people will come flowing into the ecosystem in the hope of striking it rich. Just like Tesla. If you ask people it's a startup, in reality it's a 22 years old company. Standard Oil managed to achieve total domination in the oil business and be broken up by the govt. in the same timeframe and we are talking about the 1800s

SilasX 4y ago

I’m an avid Uniswap and Compound user, but I don’t get your point. What is it about a centralized database that breaks protocols like Uniswap? They can provided the same transactions according to the same rules.

TimJRobinson 4y ago
They lose the most important property of being trustless and miss out on all the composability that comes along with being on the same chain. It can be done but not in a better way, a centralized equvilent is strictly worse than these.
- SilasX 4y ago
  Okay: So it comes down to whether you think decentralization is some epically awesome feature to have in a financial platform? Great, but that wasn't your original claim, and it wasn't the part I found dubious. The part I replied to, rather, was the claim that you can't build a better Uniswap et al, for any reasonable definition of "better", and that nobody is able to propose such a mechanism despite their efforts[1], and that finding the centralization tradeoff good makes you unimaginative. Even as an avid cryptocurrency/smartcontract enthusiast, I consider this unjustified hyperbole. Decentralization has costs and benefits. You gain resilience and verifiability, but at the cost of having to pay the overhead to ensure the decentralization. So you can absolutely have a centralized version of Uniswap et al. It would look exactly like Uniswap does today, but cheaper, and without (some of) the guarantees against corruption and verifiability. You dislike that tradeoff. That's fair! But that doesn't justify the conclusion that "no one can imagine a centralized Uniswap". [1] Before you call strawman, please look at your comment: https://news.ycombinator.com/item?id=31160906 https://news.ycombinator.com/item?id=31160906
  - TimJRobinson 4y ago
    That's fair. Uniswap was a poor choice because people do use centralized exchanges, though I don't know of a single one that allows you to earn returns by providing liquidity. There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. My argument is merely a counter to his "databases are faster therefore they are better" when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: - Trades complete in < 2s - Trades cost less than 1c - There is no external party risk, you are in complete control of your funds. - You can provide liquidity for a return - playing the part of the house. - Any app can integrate without permission and all API uptime, permissions, latency, etc is handled by the Blockchain. - Many hundreds of apps have already integrated with it and you can use them alongside it for a better UI, or multiple trades, or routing through many exchanges. The advantages you get of centralization: - a small increase in speed - save 1c on every trade For that you take on custody risk, they could run off with your funds or they could be hacked. You don't have the chance to earn income, you get no or few integrations, you get no choice of UI, you can't fork it if the company turns evil, and you can be banned or restricted at any time. It's night and day difference in the experience. I'm going to write an article on DeFi composability because it's super underrated.
    - SilasX 4y ago
      >Uniswap was a poor choice ... There are far more complex DeFi products that are much harder to replicate but people here wouldn't understand them. The choice of protocol here doesn't matter. There's nothing difficult about any of the other ones. They're just code that executes on the EVM[1]; anyone can pick up that same code and process transactions on a centralized database instead. Doing so does not introduce any inherent implementation difficulty, only the normal tradeoffs related to centralization. >My argument is merely a counter to his "databases are faster therefore they are better" And on that point, you're correct -- you can't simply say that centralized databases are better, since they give up the (very real) benefits of decentralization, and I'm glad you raised that point. I'm only objecting to the more dubious bits about how you "can't" do uniswap on a centralized DB. >when in reality decentralized finance is better on almost every dimension. Take Uniswap on polygon: That's also not a fair comparison. Many cryptos show good figures merely because they haven't had to scale up to the volume of Ethereum L1. And Ethereum L1 is much worse on those dimensions. >I'm going to write an article on DeFi composability because it's super underrated. But you can have the composability with centralization, it just isn't currently offered. (Although if you imagine centralization as a continuum, then the Ethereum L2s are more in that direction.) [1] And code that has to severely economize on cycles executed because you have to pay for each one.
aeternum 4y ago
Using a centralized database for a DAO or decentralized exchange is like creating a democracy but still having the king hold the ballot box and count the votes. Sure it's possible, but is it a good idea?

McLaren_Ferrari 4y ago

> Note: not picking on this guy, because when this video was recorded these apps and DeFi didn't exist. But I am critiquing anyone who still agrees with him in 2022. Finance is not a product. In every society in human history finance came way after companies making products and services. Blockchains and crypto have been around for 12 years and could not find a usage which isn't speculation, swapping assets or some variation of that. The guys who tried to use blockchain for real world products such as "THE_DAO" guys who were gonna use it for smart locks ended up in smoke. Same for those who wanted to track food, luggage, containers and essentially everybody who tried to apply blockchain to the real world. Those who didn't end up in smoke are losing money (literally) or in terms of opportunity cost because a blockchain is inferior to a database and doesn't solve the main problems of garbage_in garbage_out as well as how true the data input is. If you are using a sensor you'd still be relying on the validity and integrity of the sensor, so at that point why not use a database? Of course I only say these things on here, out there in the real world I act like Blockchain is the second coming because in SV truth doesn't matter anymore, if you don't have irrational exhuberance about anything and everything and don't drink the kool-aid produced by cult members of Tesla, Bitcoin and Ethereum then you are not allowed with the in_crowd. On the bright side it enabled me to polish my acting skills. > Another unimaginative researcher Every person who doesn't drink the kool-aid = unimaginative Next on the setlist if I remember correctly there are attacks on evil shortsellers.

TimJRobinson 4y ago
If you don't understand the value of finance then of course you're not going to understand the value in decentralized finance. Finance is still a multi trillion dollar industry, and will continue to grow and be useful to millions of people regardless of your opinion.
- McLaren_Ferrari 4y ago
  Right...what is the revenue of Uniswap? Zero, because the point is not to make revenues but to bake in any form of perceived utility into the appreciation of a token. Again only use is speculation Also how many lives would be disrupted if Uniswap disappeared tomorrow? None, those who hang out on there would simply download Robinhood go to Vegas to satisfy their need to bet compulsively What if Exxon, Shell, Microsoft, Walmart or Amazon disappeared overnight? What about Xiaomi a company founded in 2010 , 2 years after BTC whitepaper? If your goal is to make revenue and improve the quality of life of people 10 years are a whole lot to get somewhere and have your product become a vital improvement in their lives. Crypto got nowhere in therm of real world use because the goal was never to make a difference in the real world. It's all about pumps and dumps, hype, kool-aid and build virtual casinos for compulsive gamblers. The goalposts of adoption are always moved into the future because as long as there is the hope of adoption the general perception is that people will come flowing into the ecosystem in the hope of striking it rich. Just like Tesla. If you ask people it's a startup, in reality it's a 22 years old company. Standard Oil managed to achieve total domination in the oil business and be broken up by the govt. in the same timeframe and we are talking about the 1800s