3 ms·

Essentially yes. Bitcoins scalability issue should have killed off al notions that it could ever gain widespread usage as an alternative to traditional currenc

Essentially yes. Bitcoins scalability issue should have killed off al notions that it could ever gain widespread usage as an alternative to traditional currency for regular payments and after that it became yet another speculative derivative without any real backing in real world assets. It was never actually going to replace fiat currencies for most people and the industry is absolutely dominated by exotic financial instruments(mostly of the ponzi variant), run by a mixture of fools and scammers.

iskander 4y ago
On the other hand, people chasing the dream of crypto scalability have actually invented a remarkable amount of math and tooling around large scale proof construction, summarization and validation. The Zero Knowledge proof ecosystem (and its relatives in multi-party computation and fully homomorphic encryption) might be the only useful thing that is left after the current incarnation of crypto fully implodes.
- Stranger43 4y ago
  And yet their fundamental lack of functional economic theory means that all of that is currently being completely wasted on crypto projects that's often little more then window dressing for what is basically very unimaginative financial scams. There is probably scenario's where a temporary blockchain can solve some synchronization issues but the idea that a single static blockchain will replace traditional dynamic structures for organizing the economy is basically not viable.
  - iskander 4y ago
    I think you'll see the ZK stuff used increasingly for non-financial applications, it's a legitimately novel and powerful area of mathematical primitives for verifiable computation. FHE is also very cool and just starting to be usable for privacy preserving ML.
- _jal 4y ago
  > might be the only useful thing that is left That's a good point. If nothing else, the stupid money caused more practical exploration of ZKP and other exotic math constructs than we'd seen in decades previously. I'd like to see more "toy" exploration of this stuff as the money drains out. That's where interesting things are going to come from, for a while. Time for a zero-knowledge app to select lunch destinations, a dating matcher that doesn't leak before the reveal, secret agent spy communicators for kids...
danuker 4y ago
I agree that Bitcoin has chosen some trade-offs against mass adoption, like limiting block size. I think this is a bad move, since security is more than enough. Lightning is not viable, because it requires "watchtowers" to check for early state commit attacks. Not everyone will be able to run such a server. But, for instance, Bitcoin Cash has larger blocks (the reason for the first fork of Bitcoin). However, in spite of its technical advantages, adoption severely lagged compared to Bitcoin. I wonder why that is.
- throw101010 4y ago
  > I think this is a bad move, since security is more than enough. Security isn't/wasn't the concern, the trade-offs exist to ensure verifiability in the most trustless way possible (low hardware and bandwidth requirements). This enables a decentralized system which is open to any participant and keeps miners accountable. If running a node is limited to miners and exchanges and requires a renting server racks there is just no point. > Lightning is not viable, because it requires "watchtowers" to check for early state commit attacks This is inaccurate. LN has shortcomings currently but this isn't one. Without a watchtower your peer in a channel can force close it while you are offline by publishing an outdated state on-chain and attempt to defraud you, but if at any point before the end of the grace period (usually ~2 weeks) you are online and you produce a more recent state you get the whole balance of this channel back (this is how dishonest peers are punished). This is one channel mechanism (Poon-Dryja), another mechanism (Eltoo) which doesn't require as much monitoring/penalties will eventually come but depends on changes to Bitcoin protocol which are still pending. Secondly theses optional watchtowers which automate this process minimize trust a lot as they can only publish the most updated state IF and ONLY IF the counterparty in your channel published their outdated state. So they have no real custody of your funds. Lastly solutions like local federations (Fedi to name one) can address your concern of people not being able to run servers, if the users aren't content with the public offers of existing watchtowers. > But, for instance, Bitcoin Cash has larger blocks (the reason for the first fork of Bitcoin). However, in spite of its technical advantages, adoption severely lagged compared to Bitcoin. I wonder why that is. Because having larger blocks is not a technical advantage if your goals are the principles mentioned in the first paragraph. If you intent to compromise on these then just build a centralized database, it will be more efficient and at least you won't lie to people pretending that your system is open/decentralized (like Bcash supporters do).

iskander 4y ago

On the other hand, people chasing the dream of crypto scalability have actually invented a remarkable amount of math and tooling around large scale proof construction, summarization and validation. The Zero Knowledge proof ecosystem (and its relatives in multi-party computation and fully homomorphic encryption) might be the only useful thing that is left after the current incarnation of crypto fully implodes.

Stranger43 4y ago
And yet their fundamental lack of functional economic theory means that all of that is currently being completely wasted on crypto projects that's often little more then window dressing for what is basically very unimaginative financial scams. There is probably scenario's where a temporary blockchain can solve some synchronization issues but the idea that a single static blockchain will replace traditional dynamic structures for organizing the economy is basically not viable.
- iskander 4y ago
  I think you'll see the ZK stuff used increasingly for non-financial applications, it's a legitimately novel and powerful area of mathematical primitives for verifiable computation. FHE is also very cool and just starting to be usable for privacy preserving ML.
_jal 4y ago
> might be the only useful thing that is left That's a good point. If nothing else, the stupid money caused more practical exploration of ZKP and other exotic math constructs than we'd seen in decades previously. I'd like to see more "toy" exploration of this stuff as the money drains out. That's where interesting things are going to come from, for a while. Time for a zero-knowledge app to select lunch destinations, a dating matcher that doesn't leak before the reveal, secret agent spy communicators for kids...

danuker 4y ago

I agree that Bitcoin has chosen some trade-offs against mass adoption, like limiting block size. I think this is a bad move, since security is more than enough. Lightning is not viable, because it requires "watchtowers" to check for early state commit attacks. Not everyone will be able to run such a server. But, for instance, Bitcoin Cash has larger blocks (the reason for the first fork of Bitcoin). However, in spite of its technical advantages, adoption severely lagged compared to Bitcoin. I wonder why that is.

throw101010 4y ago
> I think this is a bad move, since security is more than enough. Security isn't/wasn't the concern, the trade-offs exist to ensure verifiability in the most trustless way possible (low hardware and bandwidth requirements). This enables a decentralized system which is open to any participant and keeps miners accountable. If running a node is limited to miners and exchanges and requires a renting server racks there is just no point. > Lightning is not viable, because it requires "watchtowers" to check for early state commit attacks This is inaccurate. LN has shortcomings currently but this isn't one. Without a watchtower your peer in a channel can force close it while you are offline by publishing an outdated state on-chain and attempt to defraud you, but if at any point before the end of the grace period (usually ~2 weeks) you are online and you produce a more recent state you get the whole balance of this channel back (this is how dishonest peers are punished). This is one channel mechanism (Poon-Dryja), another mechanism (Eltoo) which doesn't require as much monitoring/penalties will eventually come but depends on changes to Bitcoin protocol which are still pending. Secondly theses optional watchtowers which automate this process minimize trust a lot as they can only publish the most updated state IF and ONLY IF the counterparty in your channel published their outdated state. So they have no real custody of your funds. Lastly solutions like local federations (Fedi to name one) can address your concern of people not being able to run servers, if the users aren't content with the public offers of existing watchtowers. > But, for instance, Bitcoin Cash has larger blocks (the reason for the first fork of Bitcoin). However, in spite of its technical advantages, adoption severely lagged compared to Bitcoin. I wonder why that is. Because having larger blocks is not a technical advantage if your goals are the principles mentioned in the first paragraph. If you intent to compromise on these then just build a centralized database, it will be more efficient and at least you won't lie to people pretending that your system is open/decentralized (like Bcash supporters do).