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This is probably a use-case for crypto currency I could actually support... except the gas fees make it worse than the MC/Visa rails

mertd 4y ago
Does proof of stake take care of this scalability issue? There are POS based coins. I'm curious why they haven't entertained this use case yet.
- syntheticcdo 4y ago
  Transaction fees are a market-based mechanism to allocate a scarce resource (limited amount of block space on a given block chain). Moving from POW to POS will not reduce transaction fees in any appreciable amount, instead the fees previously paid to miners will instead be paid to stakeholders.
  - mertd 4y ago
    Doesn't the block generation become faster with PoS and thereby increase the supply?
    - x-complexity 4y ago
      > Doesn't the block generation become faster with PoS and thereby increase the supply? In the most technically-correct sense: No, switching out PoW with PoS does not guarantee faster block times. There can exist a PoS chain with 10 minute block times, just like there can exist PoW chains with <1 min block times. I'm guessing that this opinion came from the early days of Ethereum, where the roadmap for the transition to PoS was still unclear. Now, as ETH's switching system is being tested on its testnets & is more or less finalized, it's been made clear that the block times will only decrease from 14 seconds to 12 seconds - A ~14% decrease, which is significant, but not by much. https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#validators https://ethereum.org/en/developers/docs/consensus-mechanisms... > Whereas under proof-of-work, the timing of blocks is determined by the mining difficulty, in proof-of-stake, the tempo is fixed. Time in proof-of-stake Ethereum is divided into slots (12 seconds) and epochs (32 slots). The truth of the matter is that an increase in block speed will compromise on either decentralization or security/finality: Increasing ETH's TPS will compromise on one of the two. As such, there's been a shift in focus from relying on ETH for everything, & instead towards allowing ETH to focus on security & decentralization, while the L2 solutions (Arbitrum, Optimism, zkSync, etc.) focus on scaling the TPS, utilizing/renting ETH's security for their own benefit. This way, ETH's overall ecosystem gets to scale up, while still maintaining its security & decentralization.
- ChadNauseam 4y ago
  Moving to PoS is a necessary but not sufficient criteria for reducing transaction fees. The Ethereum merge will reduce them slightly (as it will reduce the block time from 16 seconds to 12 seconds, or something like that) but it won't make any big difference. In the coming year, there probably will also be general ZK-rollups on Ethereum mainnet that will reduce transaction fees substantially. (You can already use ZK-rollups for some limited things like transactions, but not for arbitrary Ethereum operations.) Also, way out in the future, there will be data sharding which will reduce fees on mainnet significantly, look up "proto-danksharding".
towaway15463 4y ago
It wouldn’t even need crypto, you just need a company with a ledger that has some big partners in news and entertainment. Apple could do it with their existing Apple Pay system. It makes me think the real difficulty might be regulatory.
- joshspankit 4y ago
  This suggesting is frightening. The whole point of decentralization is to stop centralized power from abusing their ledgers. Yes crypto is a record of transactions (a ledger) and yes any single company can provide the same service by “simply” recording transactions in a digital ledger, but then you end up with exactly the situation we’re in: companies devaluing balances or making them expire (air miles), companies freezing accounts to save themselves (paypal), and all sorts of other feckery. At their best, regulations stop the outright theft that companies are capable of (let’s not talk about the worst of regulations). The point is that any central authority can and will use their position to further their own profit margins at the cost of their “customers”.
x-complexity 4y ago
The gas fees can be mitigated by moving the process over to a rollup scaling solution like Arbitrum or Optimism, or to a sidechain like Polygon PoS: I mentioned it as a necessity for cheap transactions with ETH-level security in another child comment to GP. https://news.ycombinator.com/item?id=31646936#31648768 https://news.ycombinator.com/item?id=31646936#31648768
joshspankit 4y ago
Is there a proposed solution that’s both low/no-fee (like $0.0001 for a transaction of $0.01, and <$0.01 for a transaction of $100) AND properly sustainable? That’s where I think we’ll start opening the door for all the transformative microtransactions.

mertd 4y ago

Does proof of stake take care of this scalability issue? There are POS based coins. I'm curious why they haven't entertained this use case yet.

syntheticcdo 4y ago
Transaction fees are a market-based mechanism to allocate a scarce resource (limited amount of block space on a given block chain). Moving from POW to POS will not reduce transaction fees in any appreciable amount, instead the fees previously paid to miners will instead be paid to stakeholders.
- mertd 4y ago
  Doesn't the block generation become faster with PoS and thereby increase the supply?
  - x-complexity 4y ago
    > Doesn't the block generation become faster with PoS and thereby increase the supply? In the most technically-correct sense: No, switching out PoW with PoS does not guarantee faster block times. There can exist a PoS chain with 10 minute block times, just like there can exist PoW chains with <1 min block times. I'm guessing that this opinion came from the early days of Ethereum, where the roadmap for the transition to PoS was still unclear. Now, as ETH's switching system is being tested on its testnets & is more or less finalized, it's been made clear that the block times will only decrease from 14 seconds to 12 seconds - A ~14% decrease, which is significant, but not by much. https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#validators https://ethereum.org/en/developers/docs/consensus-mechanisms... > Whereas under proof-of-work, the timing of blocks is determined by the mining difficulty, in proof-of-stake, the tempo is fixed. Time in proof-of-stake Ethereum is divided into slots (12 seconds) and epochs (32 slots). The truth of the matter is that an increase in block speed will compromise on either decentralization or security/finality: Increasing ETH's TPS will compromise on one of the two. As such, there's been a shift in focus from relying on ETH for everything, & instead towards allowing ETH to focus on security & decentralization, while the L2 solutions (Arbitrum, Optimism, zkSync, etc.) focus on scaling the TPS, utilizing/renting ETH's security for their own benefit. This way, ETH's overall ecosystem gets to scale up, while still maintaining its security & decentralization.
ChadNauseam 4y ago
Moving to PoS is a necessary but not sufficient criteria for reducing transaction fees. The Ethereum merge will reduce them slightly (as it will reduce the block time from 16 seconds to 12 seconds, or something like that) but it won't make any big difference. In the coming year, there probably will also be general ZK-rollups on Ethereum mainnet that will reduce transaction fees substantially. (You can already use ZK-rollups for some limited things like transactions, but not for arbitrary Ethereum operations.) Also, way out in the future, there will be data sharding which will reduce fees on mainnet significantly, look up "proto-danksharding".

towaway15463 4y ago

It wouldn’t even need crypto, you just need a company with a ledger that has some big partners in news and entertainment. Apple could do it with their existing Apple Pay system. It makes me think the real difficulty might be regulatory.

joshspankit 4y ago
This suggesting is frightening. The whole point of decentralization is to stop centralized power from abusing their ledgers. Yes crypto is a record of transactions (a ledger) and yes any single company can provide the same service by “simply” recording transactions in a digital ledger, but then you end up with exactly the situation we’re in: companies devaluing balances or making them expire (air miles), companies freezing accounts to save themselves (paypal), and all sorts of other feckery. At their best, regulations stop the outright theft that companies are capable of (let’s not talk about the worst of regulations). The point is that any central authority can and will use their position to further their own profit margins at the cost of their “customers”.

x-complexity 4y ago

The gas fees can be mitigated by moving the process over to a rollup scaling solution like Arbitrum or Optimism, or to a sidechain like Polygon PoS: I mentioned it as a necessity for cheap transactions with ETH-level security in another child comment to GP. https://news.ycombinator.com/item?id=31646936#31648768 https://news.ycombinator.com/item?id=31646936#31648768

joshspankit 4y ago

Is there a proposed solution that’s both low/no-fee (like $0.0001 for a transaction of $0.01, and <$0.01 for a transaction of $100) AND properly sustainable? That’s where I think we’ll start opening the door for all the transformative microtransactions.