5 ms·

Sure, I'll take it a step further. Any storage of your money that doesn't involve you fully controlling your own keys is stupid because it is literally antithet

by jrm4 4y ago

Sure, I'll take it a step further. Any storage of your money that doesn't involve you fully controlling your own keys is stupid because it is literally antithetical to the entire purpose of crypto. If you want to let someone else hold on to your money for yield, great. Use something already established, ensured, and proven. But not crypto. Not your keys, not your crypto. How many times must it be said?

tsimionescu 4y ago
This only works if you use crypto as a store of value and even then it doesn't scale to any significant fraction of the population, for most coins. BTC and Eth, at least, are simply too slow for everyone to have their own wallet and do their own on-chain transactions, even if rarely, if we imagine they will ever reach some significant portion of the population. And LN doesn't solve this in any way, before anyone claims otherwise.
- TimJRobinson 4y ago
  Layer 2's do solve it, and will reach 14M TPS by 2030 [0], which is more than enough for the world. He has explanations of how the different components work in different posts on the site. 0: https://polynya.medium.com/conjecture-how-far-can-rollups-data-shards-scale-in-2030-14-million-tps-933b87ca622e https://polynya.medium.com/conjecture-how-far-can-rollups-da...
  - tsimionescu 4y ago
    The problem is that you need at the very least 1 on-chain transaction for every human participant, to get money into one wallet that they control. But BTC barely manages 5 TPS and ETH maybe 20. This means that BTC would need about 115 days to add 50M new people onto the block chain, and ETH could manage it in a month - only to have 1 wallet with some amount of coins in it (of course, assuming nothing else whatsoever is happening on the block chain in that time). Only after you get past this hurdle do you even have access to a L2. Of course, you then need extra transactions on the L1 chain to gain access to the L2 - with LN at least, this scales even worse, as you need some fraction of the number of pairs of people to communicate - so some fraction of (50M)² transactions - which fraction depending on how centralized the network will be. Then of course, L2s offer little in terms of guarantees for your money unless you can quickly and often close the channel and get the L1 guarantee. So no, BTC and ETH fundamentally can't scale to a large number of people using them, regardless of how many trillions of transactions per second L2s can do. They are failed technologies for anything similar to their original goals. It's barely even worth mentionibg that with 1 wallet per real person, you get worse privacy for your transactions than VISA offers you - as many have shown, for any kind of practical privacy you need many temporary wallets, bringing the total number of transactions required just to have a single Satoshi in those wallets to many times more.
    - whatisweb3 4y ago
      I am not sure any of this is accurate since you can directly on-ramp to L2s and also purchase L1 and L2 assets off-chain. An L2 like zk-rollup - assuming the protocol is implemented correctly - has same security guarantees as Ethereum since the validity proof is posted to L1. Most of them include an escape hatch, a L1 function that lets users withdraw funds in a permissionless way. Ethereum can certainly theoretically scale to millions of users and a far higher order of magnitude than VISA. It presents an open source, verifiable, and permissionless alternative with better programmability and cryptographic primitives. Regarding privacy: see zk proof based L2s such as Aztec.
      - tsimionescu 4y ago
        To be fair, I've only really looked at Lightning Network in the L2 space, and you can't on-board directly on LN while controlling your own keys. Also, not sure what the point about off-chain assets is. I can buy cheese off-chain, even denominated in BTC maybe, but that doesn't mean I'm using BTC or LN when giving the seller 10,000 sat worth of cash. > An L2 like zk-rollup - assuming the protocol is implemented correctly - has same security guarantees as Ethereum since the validity proof is posted to L1. zk-rollup seems to be a technology, not a specific L2 implementation as far as I could find, so I couldn't see more details. How would you transact with it without an ETH wallet? If it's posting to L1, how does it avoid L1's slowness. > Ethereum can certainly theoretically scale to millions of users and a far higher order of magnitude than VISA. I'll believe it when it's a little closer. Currently, the difference is so huge this seems like a comical statement.
        TimJRobinson 4y ago
        Yea the lightning network is terrible technology and Bitcoin maximalists proclaiming it's the future are doing a disservice to the whole industry. It is only state channels - peer to peer links, and then making it work requires clients to figure out routes over those links themselves, which won't scale beyond a few million users. Ethereum L2s are their own network and usually EVM compatible so work exactly the same as Ethereum. They use the same wallet, tooling etc. Then every N minutes they post a proof of what happened + compressed transactions needed to reproduce what happened to Ethereum L1. It's easiest to think of them like zipping a bunch of transactions to post them to Ethereum. Currently they are about 10x as performant as Ethereum so cost 1/10th as much while still being fully secured by Ethereum. They are still super new only coming out less than a year ago. Optimism and Arbitrum are the biggest and currently they only have one sequencer which orders the transactions and posts batches to L1. Because there is only one sequencer transactions are basically instant and then are secured by Ethereum when the next batch of transactions is posted to it. Most of the major exchanges let you and ETH or stablecoins directly onto Optimism and Arbitrum. Zk-rollups are next gen tech where they post a zk proof of what happened to the layer 1 + compressed transaction data. They are more efficient than current L2s and more secure. The biggest ones coming soon are zkSync, Starknet, and Scroll. You can see all the L2s at https://l2beat.com https://l2beat.com and their current tps at https://ethtps.info https://ethtps.info Once Ethereum has data shards and nodes mostly store large blobs of L2 transaction data + check proofs instead of running all transactions this will be 100x - 1000x more efficient than today.
- jrm4 4y ago
  This flavor of criticism is odd to me, it seems to have a very rigid definition of "how many people" using as a measure of success and perhaps more perplexingly, presumes "the network will always be too slow," as if tech improvements on these networks isn't likely. It may not be BTC or ETH, but given fungibility (and perhaps, clever airdrops) it seems at least plausible, if not likely, that people will come up with "a fast enough network to get stuff done." There may be one in the works now, I do have literal money on Pulsechain/PRC-20.
  - tsimionescu 4y ago
    The thing is - the network being too slow is not a technical problem. We already have much much much faster networks, which is why VISA is used by so many more people than BTC for their money. Also, unlike other technologies that can sit very comfortably in their niches, payment & more generally monetary technology needs to be used by the vast majority of people in order to be useful. I was pointing out that BTC or ETH will never be successful as a monetary technology, the way gold or fiat are, because they are impossible to access by the vast majority of people by their very design. Can there be other designs of cryptocurrency that can solve this? Perhaps - time will tell.

by jrm4 4y ago

tsimionescu 4y ago

This only works if you use crypto as a store of value and even then it doesn't scale to any significant fraction of the population, for most coins. BTC and Eth, at least, are simply too slow for everyone to have their own wallet and do their own on-chain transactions, even if rarely, if we imagine they will ever reach some significant portion of the population. And LN doesn't solve this in any way, before anyone claims otherwise.

TimJRobinson 4y ago
Layer 2's do solve it, and will reach 14M TPS by 2030 [0], which is more than enough for the world. He has explanations of how the different components work in different posts on the site. 0: https://polynya.medium.com/conjecture-how-far-can-rollups-data-shards-scale-in-2030-14-million-tps-933b87ca622e https://polynya.medium.com/conjecture-how-far-can-rollups-da...
- tsimionescu 4y ago
  The problem is that you need at the very least 1 on-chain transaction for every human participant, to get money into one wallet that they control. But BTC barely manages 5 TPS and ETH maybe 20. This means that BTC would need about 115 days to add 50M new people onto the block chain, and ETH could manage it in a month - only to have 1 wallet with some amount of coins in it (of course, assuming nothing else whatsoever is happening on the block chain in that time). Only after you get past this hurdle do you even have access to a L2. Of course, you then need extra transactions on the L1 chain to gain access to the L2 - with LN at least, this scales even worse, as you need some fraction of the number of pairs of people to communicate - so some fraction of (50M)² transactions - which fraction depending on how centralized the network will be. Then of course, L2s offer little in terms of guarantees for your money unless you can quickly and often close the channel and get the L1 guarantee. So no, BTC and ETH fundamentally can't scale to a large number of people using them, regardless of how many trillions of transactions per second L2s can do. They are failed technologies for anything similar to their original goals. It's barely even worth mentionibg that with 1 wallet per real person, you get worse privacy for your transactions than VISA offers you - as many have shown, for any kind of practical privacy you need many temporary wallets, bringing the total number of transactions required just to have a single Satoshi in those wallets to many times more.
  - whatisweb3 4y ago
    I am not sure any of this is accurate since you can directly on-ramp to L2s and also purchase L1 and L2 assets off-chain. An L2 like zk-rollup - assuming the protocol is implemented correctly - has same security guarantees as Ethereum since the validity proof is posted to L1. Most of them include an escape hatch, a L1 function that lets users withdraw funds in a permissionless way. Ethereum can certainly theoretically scale to millions of users and a far higher order of magnitude than VISA. It presents an open source, verifiable, and permissionless alternative with better programmability and cryptographic primitives. Regarding privacy: see zk proof based L2s such as Aztec.
    - tsimionescu 4y ago
      To be fair, I've only really looked at Lightning Network in the L2 space, and you can't on-board directly on LN while controlling your own keys. Also, not sure what the point about off-chain assets is. I can buy cheese off-chain, even denominated in BTC maybe, but that doesn't mean I'm using BTC or LN when giving the seller 10,000 sat worth of cash. > An L2 like zk-rollup - assuming the protocol is implemented correctly - has same security guarantees as Ethereum since the validity proof is posted to L1. zk-rollup seems to be a technology, not a specific L2 implementation as far as I could find, so I couldn't see more details. How would you transact with it without an ETH wallet? If it's posting to L1, how does it avoid L1's slowness. > Ethereum can certainly theoretically scale to millions of users and a far higher order of magnitude than VISA. I'll believe it when it's a little closer. Currently, the difference is so huge this seems like a comical statement.
      - TimJRobinson 4y ago
        Yea the lightning network is terrible technology and Bitcoin maximalists proclaiming it's the future are doing a disservice to the whole industry. It is only state channels - peer to peer links, and then making it work requires clients to figure out routes over those links themselves, which won't scale beyond a few million users. Ethereum L2s are their own network and usually EVM compatible so work exactly the same as Ethereum. They use the same wallet, tooling etc. Then every N minutes they post a proof of what happened + compressed transactions needed to reproduce what happened to Ethereum L1. It's easiest to think of them like zipping a bunch of transactions to post them to Ethereum. Currently they are about 10x as performant as Ethereum so cost 1/10th as much while still being fully secured by Ethereum. They are still super new only coming out less than a year ago. Optimism and Arbitrum are the biggest and currently they only have one sequencer which orders the transactions and posts batches to L1. Because there is only one sequencer transactions are basically instant and then are secured by Ethereum when the next batch of transactions is posted to it. Most of the major exchanges let you and ETH or stablecoins directly onto Optimism and Arbitrum. Zk-rollups are next gen tech where they post a zk proof of what happened to the layer 1 + compressed transaction data. They are more efficient than current L2s and more secure. The biggest ones coming soon are zkSync, Starknet, and Scroll. You can see all the L2s at https://l2beat.com https://l2beat.com and their current tps at https://ethtps.info https://ethtps.info Once Ethereum has data shards and nodes mostly store large blobs of L2 transaction data + check proofs instead of running all transactions this will be 100x - 1000x more efficient than today.
jrm4 4y ago
This flavor of criticism is odd to me, it seems to have a very rigid definition of "how many people" using as a measure of success and perhaps more perplexingly, presumes "the network will always be too slow," as if tech improvements on these networks isn't likely. It may not be BTC or ETH, but given fungibility (and perhaps, clever airdrops) it seems at least plausible, if not likely, that people will come up with "a fast enough network to get stuff done." There may be one in the works now, I do have literal money on Pulsechain/PRC-20.
- tsimionescu 4y ago
  The thing is - the network being too slow is not a technical problem. We already have much much much faster networks, which is why VISA is used by so many more people than BTC for their money. Also, unlike other technologies that can sit very comfortably in their niches, payment & more generally monetary technology needs to be used by the vast majority of people in order to be useful. I was pointing out that BTC or ETH will never be successful as a monetary technology, the way gold or fiat are, because they are impossible to access by the vast majority of people by their very design. Can there be other designs of cryptocurrency that can solve this? Perhaps - time will tell.