3 ms·

If Ethereum is inflationary, and there is a minimum cost to staking, why would I ever begin to stake if I know that the cost can only go down in the future?

rglullis 4y ago
For starters, Ethereum is not inflationary. ETH is minted and burned according to network activity. The more people making transactions (and paying for them) the less ETH will be created. It can even get to the point where some blocks lead to a net burn of ETH. Why would you stake? Even if the returns were low (compared to what?), people like me are interested in staking merely to help secure the chain at a (relatively low) cost compared to PoW chains, and having an efficient and secure blockchain opens up other opportunities for profit. In my case, I am less interested in speculating with tokens and I am more interested in seeing a blockchain that can be an actual alternative for cross-border payments. I feel like by becoming a staker (and by working in projects that leverage layer-2 scaling networks [0]) I am contributing to that becoming a reality with a (relatively) low opportunity cost. [0]: https://hub20.io https://hub20.io
- meltyness 4y ago
  I won't beat around the bush. What is an ETH worth? There are not details about the economics, just the ecosystem, which is replicated across more thoughtful platforms. I personally prefer Cardano, since the software itself has a better foundation, and the fixed supply implies some urgency in adoption. $53,731.20 is enough USD for me to keep my t2.micro up for 300 years, so is there some mathematical guarantee that means there's any value in adopting ETH immediately?
  - rglullis 4y ago
    Just so you know, plenty of people locked their ETH when it was well below $100. And for those that are joining now, but worry that the investment would be too big, consider the possibility of pooling resources with other people and stake using your own node. This is one the things that I would like to do next with Hub20, to help instance operators to pool together resources with their friends and to manage their validators... > so is there some mathematical guarantee that means there's any value in adopting ETH immediately? Guarantee? No, of course not.
    - meltyness 4y ago
      What you seem to be suggesting is that, there's some collective with an immutable interest in maintaining ETH-stability, ETH-usefulness?
      - rglullis 4y ago
        1) Not specific to Ethereum, but to its goals. For me, turning a profit is secondary to the goal of having a permissionless and censorship-resistant way for cross-border payments. At the moment, I believe that Ethereum (as an ecosystem) is the closest to make that a reality because it has the largest developer mindshare and the Foundation seems to be the only one playing the long game. 2) I am not speaking as a "collective". I am speaking for myself, and I believe that there are others like me.
        meltyness 4y ago
        I did some digging and the principles are elucidated by vitalik on his blog.[0] The principles are based on the fact that proof of work is antisocial, impractical or unrealistic. The 6 times this was discussed last year[1] in the ethereum devs meeting on zoom might also be of-interest. [0]: https://vitalik.ca/general/2016/12/29/pos_design.html https://vitalik.ca/general/2016/12/29/pos_design.html [1]: https://github.com/ethereum/pm/issues/361 https://github.com/ethereum/pm/issues/361
  - pcthrowaway 4y ago
    > I personally prefer Cardano, since the software itself has a better foundation, and the fixed supply implies some urgency in adoption. I really liked Cardano, until I started trying to learn more about it and develop for it. It's way behind Ethereum in developer experience. The way funds are shuffled around between addresses for a wallet also makes it much harder to reason about (even though in theory the UTXO model is better than account-based for parallel processing of transactions). In actuality, I don't think it's more scalable than Ethereum, and the scaling solutions they're working on (which are years out IMO) are L2s, like with Ethereum. The tooling is also way behind Ethereum, and running a full wallet is incredibly resource-intensive. I'm still staking a lot of Cardano, but I think it's unlikely it will overtake Ethereum in value at this point.

rglullis 4y ago

For starters, Ethereum is not inflationary. ETH is minted and burned according to network activity. The more people making transactions (and paying for them) the less ETH will be created. It can even get to the point where some blocks lead to a net burn of ETH. Why would you stake? Even if the returns were low (compared to what?), people like me are interested in staking merely to help secure the chain at a (relatively low) cost compared to PoW chains, and having an efficient and secure blockchain opens up other opportunities for profit. In my case, I am less interested in speculating with tokens and I am more interested in seeing a blockchain that can be an actual alternative for cross-border payments. I feel like by becoming a staker (and by working in projects that leverage layer-2 scaling networks [0]) I am contributing to that becoming a reality with a (relatively) low opportunity cost. [0]: https://hub20.io https://hub20.io

meltyness 4y ago
I won't beat around the bush. What is an ETH worth? There are not details about the economics, just the ecosystem, which is replicated across more thoughtful platforms. I personally prefer Cardano, since the software itself has a better foundation, and the fixed supply implies some urgency in adoption. $53,731.20 is enough USD for me to keep my t2.micro up for 300 years, so is there some mathematical guarantee that means there's any value in adopting ETH immediately?
- rglullis 4y ago
  Just so you know, plenty of people locked their ETH when it was well below $100. And for those that are joining now, but worry that the investment would be too big, consider the possibility of pooling resources with other people and stake using your own node. This is one the things that I would like to do next with Hub20, to help instance operators to pool together resources with their friends and to manage their validators... > so is there some mathematical guarantee that means there's any value in adopting ETH immediately? Guarantee? No, of course not.
  - meltyness 4y ago
    What you seem to be suggesting is that, there's some collective with an immutable interest in maintaining ETH-stability, ETH-usefulness?
    - rglullis 4y ago
      1) Not specific to Ethereum, but to its goals. For me, turning a profit is secondary to the goal of having a permissionless and censorship-resistant way for cross-border payments. At the moment, I believe that Ethereum (as an ecosystem) is the closest to make that a reality because it has the largest developer mindshare and the Foundation seems to be the only one playing the long game. 2) I am not speaking as a "collective". I am speaking for myself, and I believe that there are others like me.
      - meltyness 4y ago
        I did some digging and the principles are elucidated by vitalik on his blog.[0] The principles are based on the fact that proof of work is antisocial, impractical or unrealistic. The 6 times this was discussed last year[1] in the ethereum devs meeting on zoom might also be of-interest. [0]: https://vitalik.ca/general/2016/12/29/pos_design.html https://vitalik.ca/general/2016/12/29/pos_design.html [1]: https://github.com/ethereum/pm/issues/361 https://github.com/ethereum/pm/issues/361
- pcthrowaway 4y ago
  > I personally prefer Cardano, since the software itself has a better foundation, and the fixed supply implies some urgency in adoption. I really liked Cardano, until I started trying to learn more about it and develop for it. It's way behind Ethereum in developer experience. The way funds are shuffled around between addresses for a wallet also makes it much harder to reason about (even though in theory the UTXO model is better than account-based for parallel processing of transactions). In actuality, I don't think it's more scalable than Ethereum, and the scaling solutions they're working on (which are years out IMO) are L2s, like with Ethereum. The tooling is also way behind Ethereum, and running a full wallet is incredibly resource-intensive. I'm still staking a lot of Cardano, but I think it's unlikely it will overtake Ethereum in value at this point.