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I think this misses the elephant in the room: the tech may have flaws, but there's far worse flaws. Who is it that actually has control and influence in crypto

I think this misses the elephant in the room: the tech may have flaws, but there's far worse flaws. Who is it that actually has control and influence in crypto? 1. The developers. 2. The miners. 3. Everyone else (very distant from the rest) The developers aren't decentralized at all, they typically are a single, small team with some sort of leader. They can make a lot of decisions almost unilaterally. Then very close below are the miners. The miners have serious economic concerns, so they can do things like refusing to run the software the developers provide. So we can expect devs and miners to be in close contact in most cryptocurrencies. And very far below that is everyone else. You can run your "full node", but most nobody cares. Miners decide what goes or doesn't on the network. And that's why Bitcoin is the way it is. Back when fees rose to $50/transaction because the capacity was overwhelmed... Did the devs have a problem? No, because they had ideas how to sell add-on products to deal with that issue, and such products are much easier to sell when there's a problem that needs fixing. Did the miners have a problem? No, because the network was still heavily used and they were reaping all those juicy fees coming their way. Did the users have a problem? Yes, their experience sucked badly. But for both parties actually in control solving those problems would require losing money. And thus crypto ends up being controlled by a small cabal of elites, while the normal users get screwed.

loopdoend 4y ago
I was wondering how Ethereum founder Vitalik Buterin is able to walk around without a security detail, going on extensive backpacking trips, what if someone steals his keys? He’d just fork the entire blockchain. Normal users don’t have that luxury.
- q-big 4y ago
  > He’d just fork the entire blockchain. > Normal users don’t have that luxury. Everybody else can fork the entire blockchain, too. The difference is that if a "normal user" does such a fork, hardly anyone does care. The central difference rather is that the trust and authority that Vitalik Buterin holds - if he does a decision, it is accepted by and large. The question that you should rather ask is: why do so many people involved in Ethereum have so much trust in Vitalik Buterin's authority and decisions?
  - chrisco255 4y ago
    Main reason is Vitalik is one of the brightest minds in crypto. He's a 10 year veteran of the space and a genius. But no, even Vitalik could not get a split off fork done unless it was something with major security implications for the whole Ethereum ecosystem.
    - UncleMeat 4y ago
      So genius that both EVM and Solidity have huge unforced footguns that have caused gazillions of dollars in damage.
      - chrisco255 4y ago
        It's not that bad. Solidity does not protect against crypto economic errors. No language does.
        UncleMeat 4y ago
        Yeah but most languages don't handle things like exceptions, inheritance, and reentrancy so incredibly weirdly that people consistently write basic logical errors when using these concepts.
  - yokem55 4y ago
    There are numerous instances where Buterin's suggestions have not been just accepted at face value. He's an influential voice, but is no dictator.
- faraggi 4y ago
  This is such an ignorant and factually wrong comment.
  - walls 4y ago
    He literally did this after the DAO hack.
    - jjulius 4y ago
      I'm as "fuck cryptocurrency/NFTs" as the next guy, but that's not accurate. As others have said, forks require community consensus, not just the decision of a single individual. Regarding the specific fork you're referring to (italicized emphasis is mine): >It was initially unclear as to whether the fork would be executed. Though it was proposed by Ethereum developers, they did not have the unilateral power to implement the change. Miners, exchanges, and node operators also had to agree to update their software. After more heated debate in public forums, on July 20, 2016, at block 192,000, the Ethereum hard fork was implemented. https://www.gemini.com/cryptopedia/the-dao-hack-makerdao#section-the-dao-hack-remedy-forks-ethereum https://www.gemini.com/cryptopedia/the-dao-hack-makerdao#sec...
      - walls 4y ago
        The crucial question, to me, is: would the fork have happened if Vitalik had not been part of the DAO? I don't think there's any chance he would have entertained that. There have been many large ETH compromises since then, and the idea of forking for any of them would be considered outrageous.
        yokem55 4y ago
        One of the main reasons it went through is because there was 'only' one losing party - the hacker, and multiple winning parties (developers and investors in the DAO). A couple years later when the parity mutlisig was hacked such that the funds (150K eth from an ICO) were 'permanently locked', the proposal to unlock the funds via hardfork was rejected. More or less specifically because it would only benefit a very small subset of parties, while leaving the frozen funds in place meant the rest of the chain benefited from the effective reduction of eth supply. Since then no one else has seriously proposed forks to move funds out of protocol.
- chrisco255 4y ago
  No. Any fork requires a consensus among the community. While it was possible to fork Ethereum for the DAO hack in 2016 (note the DAO hack had affected 30% of all ETH in circulation), a lot has changed in the Ethereum ecosystem since then and break-off forks do not happen willy nilly. Besides all of the applications that need consistent state to make sense (such as USD-backed stable coins), you need a coalition of developers, miners, and community members to back it. No one in their right mind carries their private keys on a backpacking trip.
q-big 4y ago
Everybody who is insanely dissatisfied about the direction some blockchain develops into can drum up a following and do a hard fork of the blockchain if they desire.
- zaphar 4y ago
  This is theoretically true and in practice false. It comes up every time and every time no one has an answer for what the little guy can in-practice actually do that will be successful.
  - landemva 4y ago
    There are several facets of 'success', and they compete with each other. If a user defines success as cheap transactions, there are blockchains for that.
    - johannes1234321 4y ago
      Great if transaction s are cheap ... but if you don't have anybody to receive transactions from kr sending to it isn't really useful. And the single person rarely has the ability to move a network of people over.
- dale_glass 4y ago
  It doesn't really solve the problem satisfactorily. Somebody still has to develop the software. The end result is a single download, produced by some form of authority. And typically there's one project, with one group controlling it. And miners are more or less the same everywhere, they want to make a profit. You can get somewhat better. You can find a dev group that aligns with your interests. Maybe you can even find a cryptocurrency where there are multiple independent implementations led by multiple groups with none being the clear winner. But that's an unstable situation. The dynamics of a dev team can shift as people come and go. Balance is easily broken, if a project loses steam, or one becomes the default and gains overwhelming popularity, and you're back to having a single group in effective control. You can migrate from one system to another, but any conversion has costs to it, both in terms of money and knowledge, attention and time resources. This libertarian utopia seems very much like some sort of bureaucratic hell to me. To exist in such a society without getting royally screwed you have to invest immense amounts of your time to pay attention to everything and correctly and prompty react to it. You go on vacation for a couple weeks, and oops, suddenly the dev team is changing the rules from under you.
samatman 4y ago
> You can run your "full node", but most nobody cares. Miners decide what goes or doesn't on the network. Limiting myself to BTC, this is not how it works. Miners can emit as much nonsense, noise, malformed information as they want. Full nodes perform validation: they decide what a compliant chain looks like, and only accept contributions from miners which have that shape. This is why there was such a vicious fight about block size: the side which won the mindshare and economic value fought for a small blockchain so that running a full node remains feasible forever. Validation is a huge problem with more profligate blockchains, some/many of which are de-facto centralized due to the excessive hardware requirements. It is on an architecture and algorithm level a critical part of the decentralization of bitcoin, something I expect HN to get right regardless of their position on bitcoin's worth to civilization. Edit for more detail: an object-level example is that miners cannot unilaterally start issuing larger blocks. These will fail validation by the full nodes, ergo, it is the full nodes which determine what Bitcoin is or isn't. Miners merely construct data which has that shape.
- simiones 4y ago
  Sure, but it is very easy for the miners to also run full nodes and validate whatever they want - much easier than it is for someone running a full node to also mine (at any realistic hash rate). So miners can more or less trivially flood the network with full nodes that validate their preferred chains. > This is why there was such a vicious fight about block size: the side which won the mindshare and economic value fought for a small blockchain so that running a full node remains feasible forever. This is a tangent, but I wonder how this squares with the people claiming that Bitcoin's (terrible, horrible, no good, very bad) transaction rate is not limited by design, just by some temporary politics.
  - samatman 4y ago
    What you're describing is a fork, clearly. The assertion that miners can unilaterally fork and get away with it hasn't been backed up in practice. The creation of a whole bunch of brand-new full nodes which do something besides validate Bitcoin is the creation of something other than Bitcoin. Happens with reasonable frequency, just not the way you've described it.
jrm4 4y ago
Your analysis seems correct in theory -- but in practice, in terms of "the things that actually affect people," you're overwhelmingly missing that group that is in "3" that's easily number one -- which is the whales who control the price?
DennisP 4y ago
Ethereum has five independent execution clients, five independent staking clients, and an open community of researchers.
- eldenwrong 4y ago
  And one Infura node to bind them all
  - DennisP 4y ago
    Any Ethereum node can talk to the network, and runs on a modest home computer. Infura is popular but not everyone uses it, and it's easy to replace.
    - eldenwrong 4y ago
      Not even Vitalik runs a full node lol. He checks Infura nodes to verify shit. That was a hilarious moment
carlosdp 4y ago
> The developers aren't decentralized at all, they typically are a single, small team with some sort of leader. They can make a lot of decisions almost unilaterally. That's painting everyone with the same brush... It may be true for many projects, but the second largest blockchain (by marketcap), Ethereum, has like 10 independent client teams and a strong concentration on client diversity [1]. The media likes to paint Vitalik (one of the original founders) as the "leader" of Ethereum, but everyone that's actually working in Ethereum knows that he's at best an advisor these days, and has intentionally taken a back seat in terms of leadership to avoid the very effect you are describing. > And very far below that is everyone else. You can run your "full node", but most nobody cares. Miners decide what goes or doesn't on the network. > And that's why Bitcoin is the way it is. Back when fees rose to $50/transaction because the capacity was overwhelmed... That is not why transaction fees are high... and miners do not decide what goes or doesn't on the network. That's a huge misconception. Transaction fees are driven by demand, plain and simple. Demand is high in a scarce blockspace, so the fee goes up to keep the network stable. Also, miners can't decide to just change the rules, that's a big misconception of the Sybil problem further driven by popular media. The rules are the rules, if miners don't follow them, clients (full or light) won't follow that chain, period. Even if 50%+ of miners colluded, all they could do is prevent a consensus from forming (called "censorship"), so basically a DDoS. They cannot change the rules and "trick" clients into following them, as it is often portrayed! If you're referring to miners having influence on what the rules are, as in influence over development, that's been tried and failed multiple times on multiple networks. In reality, devs and companies/user sentiment drives the majority of "social consensus". If you need evidence of that, Ethereum's switch to PoS will eliminate mining, and yet it's still happening. For a past example, EIP-1559 was opposed by many large mining pools, still happened (because it improved user experience by making gas fees more predictable / reducing failed transactions -- in direct contradiction to your point). [1] https://clientdiversity.org/ https://clientdiversity.org/
- georgeecollins 4y ago
  >> If you need evidence of that, Ethereum's switch to PoS will eliminate mining, and yet it's still happening. This has been delayed, and sometimes people say it is delayed because the miners are against it. It seems very important to people who are thinking about doing projects with Etherium because it will be based on PoS. Hoenstly, I don't know anything about this. Here is my question(s) to the smart people on HN: Could miners or others with financial interest slow the switch to PoS for Etherium? How would I be able to judge if that is happening?
Melatonic 4y ago
This is assuming the developers are willing to act in the way you are describing but with our ability to audit their work I am not convinced that will necessarily happen.
tmalsburg2 4y ago
Yanis Varoufakis recently called crypto currencies “oligarchic” which is very fitting. Quote: “I do not believe that the… ‘oligarchic,’ by definition, cryptocurrency like Bitcoin is ever going to replace [conventional currency]. It shouldn’t, it can’t, and it would be a nightmare if it did.” Full interview in which he also discusses his proposal for cryptocurrencies run by central banks and why that’s (according to him) the way to go: https://www.kitco.com/news/2022-05-27/Gold-and-Bitcoin-won-t-protect-against-tyranny-all-money-is-political-Yanis-Varoufakis.html https://www.kitco.com/news/2022-05-27/Gold-and-Bitcoin-won-t...
- boc 4y ago
  There's not really a word for it that I'm aware of, but Crypto IMO is best described as an "Initialarchy", or rule by the first people on the scene. Since almost every crypto project starts with dirt cheap prices, the first people who create or invest end up controlling the entire project given that they have millions of coins or access to the devs. Being first to the next hot project is almost all the matters in the Crypto world.
  - sudosysgen 4y ago
    People that have billions of dollars can always break in. And the first adopters also happen to have billions of dollars. So oligarchy seems fitting.

loopdoend 4y ago

I was wondering how Ethereum founder Vitalik Buterin is able to walk around without a security detail, going on extensive backpacking trips, what if someone steals his keys? He’d just fork the entire blockchain. Normal users don’t have that luxury.

q-big 4y ago
> He’d just fork the entire blockchain. > Normal users don’t have that luxury. Everybody else can fork the entire blockchain, too. The difference is that if a "normal user" does such a fork, hardly anyone does care. The central difference rather is that the trust and authority that Vitalik Buterin holds - if he does a decision, it is accepted by and large. The question that you should rather ask is: why do so many people involved in Ethereum have so much trust in Vitalik Buterin's authority and decisions?
- chrisco255 4y ago
  Main reason is Vitalik is one of the brightest minds in crypto. He's a 10 year veteran of the space and a genius. But no, even Vitalik could not get a split off fork done unless it was something with major security implications for the whole Ethereum ecosystem.
  - UncleMeat 4y ago
    So genius that both EVM and Solidity have huge unforced footguns that have caused gazillions of dollars in damage.
    - chrisco255 4y ago
      It's not that bad. Solidity does not protect against crypto economic errors. No language does.
      - UncleMeat 4y ago
        Yeah but most languages don't handle things like exceptions, inheritance, and reentrancy so incredibly weirdly that people consistently write basic logical errors when using these concepts.
- yokem55 4y ago
  There are numerous instances where Buterin's suggestions have not been just accepted at face value. He's an influential voice, but is no dictator.
faraggi 4y ago
This is such an ignorant and factually wrong comment.
- walls 4y ago
  He literally did this after the DAO hack.
  - jjulius 4y ago
    I'm as "fuck cryptocurrency/NFTs" as the next guy, but that's not accurate. As others have said, forks require community consensus, not just the decision of a single individual. Regarding the specific fork you're referring to (italicized emphasis is mine): >It was initially unclear as to whether the fork would be executed. Though it was proposed by Ethereum developers, they did not have the unilateral power to implement the change. Miners, exchanges, and node operators also had to agree to update their software. After more heated debate in public forums, on July 20, 2016, at block 192,000, the Ethereum hard fork was implemented. https://www.gemini.com/cryptopedia/the-dao-hack-makerdao#section-the-dao-hack-remedy-forks-ethereum https://www.gemini.com/cryptopedia/the-dao-hack-makerdao#sec...
    - walls 4y ago
      The crucial question, to me, is: would the fork have happened if Vitalik had not been part of the DAO? I don't think there's any chance he would have entertained that. There have been many large ETH compromises since then, and the idea of forking for any of them would be considered outrageous.
      - yokem55 4y ago
        One of the main reasons it went through is because there was 'only' one losing party - the hacker, and multiple winning parties (developers and investors in the DAO). A couple years later when the parity mutlisig was hacked such that the funds (150K eth from an ICO) were 'permanently locked', the proposal to unlock the funds via hardfork was rejected. More or less specifically because it would only benefit a very small subset of parties, while leaving the frozen funds in place meant the rest of the chain benefited from the effective reduction of eth supply. Since then no one else has seriously proposed forks to move funds out of protocol.
chrisco255 4y ago
No. Any fork requires a consensus among the community. While it was possible to fork Ethereum for the DAO hack in 2016 (note the DAO hack had affected 30% of all ETH in circulation), a lot has changed in the Ethereum ecosystem since then and break-off forks do not happen willy nilly. Besides all of the applications that need consistent state to make sense (such as USD-backed stable coins), you need a coalition of developers, miners, and community members to back it. No one in their right mind carries their private keys on a backpacking trip.

q-big 4y ago

Everybody who is insanely dissatisfied about the direction some blockchain develops into can drum up a following and do a hard fork of the blockchain if they desire.

zaphar 4y ago
This is theoretically true and in practice false. It comes up every time and every time no one has an answer for what the little guy can in-practice actually do that will be successful.
- landemva 4y ago
  There are several facets of 'success', and they compete with each other. If a user defines success as cheap transactions, there are blockchains for that.
  - johannes1234321 4y ago
    Great if transaction s are cheap ... but if you don't have anybody to receive transactions from kr sending to it isn't really useful. And the single person rarely has the ability to move a network of people over.
dale_glass 4y ago
It doesn't really solve the problem satisfactorily. Somebody still has to develop the software. The end result is a single download, produced by some form of authority. And typically there's one project, with one group controlling it. And miners are more or less the same everywhere, they want to make a profit. You can get somewhat better. You can find a dev group that aligns with your interests. Maybe you can even find a cryptocurrency where there are multiple independent implementations led by multiple groups with none being the clear winner. But that's an unstable situation. The dynamics of a dev team can shift as people come and go. Balance is easily broken, if a project loses steam, or one becomes the default and gains overwhelming popularity, and you're back to having a single group in effective control. You can migrate from one system to another, but any conversion has costs to it, both in terms of money and knowledge, attention and time resources. This libertarian utopia seems very much like some sort of bureaucratic hell to me. To exist in such a society without getting royally screwed you have to invest immense amounts of your time to pay attention to everything and correctly and prompty react to it. You go on vacation for a couple weeks, and oops, suddenly the dev team is changing the rules from under you.

samatman 4y ago

> You can run your "full node", but most nobody cares. Miners decide what goes or doesn't on the network. Limiting myself to BTC, this is not how it works. Miners can emit as much nonsense, noise, malformed information as they want. Full nodes perform validation: they decide what a compliant chain looks like, and only accept contributions from miners which have that shape. This is why there was such a vicious fight about block size: the side which won the mindshare and economic value fought for a small blockchain so that running a full node remains feasible forever. Validation is a huge problem with more profligate blockchains, some/many of which are de-facto centralized due to the excessive hardware requirements. It is on an architecture and algorithm level a critical part of the decentralization of bitcoin, something I expect HN to get right regardless of their position on bitcoin's worth to civilization. Edit for more detail: an object-level example is that miners cannot unilaterally start issuing larger blocks. These will fail validation by the full nodes, ergo, it is the full nodes which determine what Bitcoin is or isn't. Miners merely construct data which has that shape.

simiones 4y ago
Sure, but it is very easy for the miners to also run full nodes and validate whatever they want - much easier than it is for someone running a full node to also mine (at any realistic hash rate). So miners can more or less trivially flood the network with full nodes that validate their preferred chains. > This is why there was such a vicious fight about block size: the side which won the mindshare and economic value fought for a small blockchain so that running a full node remains feasible forever. This is a tangent, but I wonder how this squares with the people claiming that Bitcoin's (terrible, horrible, no good, very bad) transaction rate is not limited by design, just by some temporary politics.
- samatman 4y ago
  What you're describing is a fork, clearly. The assertion that miners can unilaterally fork and get away with it hasn't been backed up in practice. The creation of a whole bunch of brand-new full nodes which do something besides validate Bitcoin is the creation of something other than Bitcoin. Happens with reasonable frequency, just not the way you've described it.

jrm4 4y ago

Your analysis seems correct in theory -- but in practice, in terms of "the things that actually affect people," you're overwhelmingly missing that group that is in "3" that's easily number one -- which is the whales who control the price?

DennisP 4y ago

Ethereum has five independent execution clients, five independent staking clients, and an open community of researchers.

eldenwrong 4y ago
And one Infura node to bind them all
- DennisP 4y ago
  Any Ethereum node can talk to the network, and runs on a modest home computer. Infura is popular but not everyone uses it, and it's easy to replace.
  - eldenwrong 4y ago
    Not even Vitalik runs a full node lol. He checks Infura nodes to verify shit. That was a hilarious moment

carlosdp 4y ago

> The developers aren't decentralized at all, they typically are a single, small team with some sort of leader. They can make a lot of decisions almost unilaterally. That's painting everyone with the same brush... It may be true for many projects, but the second largest blockchain (by marketcap), Ethereum, has like 10 independent client teams and a strong concentration on client diversity [1]. The media likes to paint Vitalik (one of the original founders) as the "leader" of Ethereum, but everyone that's actually working in Ethereum knows that he's at best an advisor these days, and has intentionally taken a back seat in terms of leadership to avoid the very effect you are describing. > And very far below that is everyone else. You can run your "full node", but most nobody cares. Miners decide what goes or doesn't on the network. > And that's why Bitcoin is the way it is. Back when fees rose to $50/transaction because the capacity was overwhelmed... That is not why transaction fees are high... and miners do not decide what goes or doesn't on the network. That's a huge misconception. Transaction fees are driven by demand, plain and simple. Demand is high in a scarce blockspace, so the fee goes up to keep the network stable. Also, miners can't decide to just change the rules, that's a big misconception of the Sybil problem further driven by popular media. The rules are the rules, if miners don't follow them, clients (full or light) won't follow that chain, period. Even if 50%+ of miners colluded, all they could do is prevent a consensus from forming (called "censorship"), so basically a DDoS. They cannot change the rules and "trick" clients into following them, as it is often portrayed! If you're referring to miners having influence on what the rules are, as in influence over development, that's been tried and failed multiple times on multiple networks. In reality, devs and companies/user sentiment drives the majority of "social consensus". If you need evidence of that, Ethereum's switch to PoS will eliminate mining, and yet it's still happening. For a past example, EIP-1559 was opposed by many large mining pools, still happened (because it improved user experience by making gas fees more predictable / reducing failed transactions -- in direct contradiction to your point). [1] https://clientdiversity.org/ https://clientdiversity.org/

georgeecollins 4y ago
>> If you need evidence of that, Ethereum's switch to PoS will eliminate mining, and yet it's still happening. This has been delayed, and sometimes people say it is delayed because the miners are against it. It seems very important to people who are thinking about doing projects with Etherium because it will be based on PoS. Hoenstly, I don't know anything about this. Here is my question(s) to the smart people on HN: Could miners or others with financial interest slow the switch to PoS for Etherium? How would I be able to judge if that is happening?

Melatonic 4y ago

This is assuming the developers are willing to act in the way you are describing but with our ability to audit their work I am not convinced that will necessarily happen.

tmalsburg2 4y ago

Yanis Varoufakis recently called crypto currencies “oligarchic” which is very fitting. Quote: “I do not believe that the… ‘oligarchic,’ by definition, cryptocurrency like Bitcoin is ever going to replace [conventional currency]. It shouldn’t, it can’t, and it would be a nightmare if it did.” Full interview in which he also discusses his proposal for cryptocurrencies run by central banks and why that’s (according to him) the way to go: https://www.kitco.com/news/2022-05-27/Gold-and-Bitcoin-won-t-protect-against-tyranny-all-money-is-political-Yanis-Varoufakis.html https://www.kitco.com/news/2022-05-27/Gold-and-Bitcoin-won-t...

boc 4y ago
There's not really a word for it that I'm aware of, but Crypto IMO is best described as an "Initialarchy", or rule by the first people on the scene. Since almost every crypto project starts with dirt cheap prices, the first people who create or invest end up controlling the entire project given that they have millions of coins or access to the devs. Being first to the next hot project is almost all the matters in the Crypto world.
- sudosysgen 4y ago
  People that have billions of dollars can always break in. And the first adopters also happen to have billions of dollars. So oligarchy seems fitting.