5 ms·

In blockchain, choose 2/3: security, performance, decentralization. BTC = security, decentralization ETH PoW = security, decentralization ETH PoS = security,

In blockchain, choose 2/3: security, performance, decentralization. BTC = security, decentralization ETH PoW = security, decentralization ETH PoS = security, performance It also applies to real world tech. For example, Visa is performance and security. This means if Bitcoin or ETH ever wants to process as many transactions as Visa, it'll slowly morph into a centralized Oracle database.

solumunus 4y ago
You choose security and decentralization for the main chain and then use layer 2 for performance. This is the clear path forward, pretty well established by now.
- ohgodplsno 4y ago
  So you can securely prove that your centralized and insecure layer 2 has indeed transfered all of your money away to them? Great plan.
  - miracle2k 4y ago
    No, the layer 2 inherits the trust-assumptions and security of the L1.
    - lawn 4y ago
      This is ridiculos and false. For instance, with LN you have to be online to secure your funds, otherwise you might lose them. L2 only inherits the security of L1 when it settles, which by definition is not that often (that's the whole point!).
      - DennisP 4y ago
        LN's shortcomings are not issues for zkrollups on Ethereum. Transactions are stored on chain, just in compressed form. A contract checks the validity of all transactions before storing them. The proofs are expensive to generate, but so cheap to verify that a contract can do it on chain.
      - everfree 4y ago
        Some types of L2, like roll-ups, settle to L1 every block. The "whole point" of L2 is to reduce the amount of resources used to settle its transactions on L1. Some L2s, like Lightning Network, achieve this by settling infrequently. But other L2s, like roll-ups, achieve it by batching transactions in clever ways so that less L1 resources are used on a per-transaction basis.
    - ohgodplsno 4y ago
      If your L2 has the same security and decentralization of the L1, then it's another L1. Since it has the performance part of things, it can only have either security (but then it's centralized, so it could fully securely write bullshit, which then gets written to L1), or decentralization (and then you get to write unsecure bullshit, which has no reason to either be trusted or true, and you can write that to your L1). It could write to L1 immediately, but your writes can still not be trusted or right.
      - miracle2k 4y ago
        The trilemma is not a law of mathematics with binary outcomes. It's an attempt to describe certain tensions inherent in building blockchains. A great deal of work as been done on Ethereum to balance these tensions. Rollups increase throughput because they move execution off L1, while requiring proof on L1 that L2 executed correctly. https://www.paradigm.xyz/2021/01/almost-everything-you-need-to-know-about-optimistic-rollup https://www.paradigm.xyz/2021/01/almost-everything-you-need-...
- conorcleary 4y ago
  See loopring.io
  - tick_tock_tick 4y ago
    Aren't they just a failed product at this point? They were building an application specific L2 and then full general purpose L2s have beat them to market. I know they are trying desperately to pivot but they have to be years behind at this point.
    - conorcleary 4y ago
      Incorrect on all counts.
- ogogmad 4y ago
  I don't know about rollups stuff, but Lightning Network-type 2nd-layers are prone to flood and loot attacks. I don't see a way to make them secure. I'm happy to be enlightened.
  - TimJRobinson 4y ago
    The lightning network is not a good example of an L2, it's extremely basic state channels and won't scale because of routing / liquidity issues. Look into Optimism and Arbitrum for current technology, or zkSync, Starknet, Polygon zkEVM for next gen L2's coming soon. There's a big list of all the current L2's and their tradeoffs at https://l2beat.com https://l2beat.com
  - hanniabu 4y ago
    Lightning is more of a sidechain than an L2. And it's definitely not a rollup.
- lawn 4y ago
  It's only established by Bitcoin maxis. You need performance on layer 1 too, the world isn't black or white.
- monodeldiablo 4y ago
  How is that any different than old school banking and finance? Using layer 2 for performance requires essentially opening an account with a trusted party. I don't understand what we've gained here.
rglullis 4y ago
Let's forget "ETH PoW" as it is completely irrelevant. All of the community has moved on to PoS, all the relevant projects were kept on the fork, etc. To talk about "ETH PoW" on the same footing as ETH or BTC shows that you are basing your arguments on ideology and not objective truth. Besides that, your breakdown has other problems: - None of these three criteria you presented are binary attributes. How decentralized and secure are BTC vs ETH? How performant is ETH vs BTC? - One could easily argue that PoS is more decentralized than BTC ever will. The capital and resources to start a viable node on Ethereum is a lot lower than it is to get a sustaninable/profitable BTC miner.
- DSingularity 4y ago
  BTC is centralized — power lies with the miners. ETH is centralized — power lies with the large coin holders.
  - rglullis 4y ago
    > power lies with the large coin holders. That is not true. This shows a terrible misunderstanding of how PoS works. Stakers are only rewarded in proportion to their stake. "Power" in PoS comes from being a validator node, which requires the minimum stake of 32 ETH. Having more ETH on a node does not give them any power. Yeah, whales could try to create many nodes, but they would need 66% of the nodes to even consider the possibility of blocking a transaction or making a double spend.
    - DSingularity 4y ago
      So you are saying that by some crypto-magic it is technically impossible for groups which collectively own more than 2/3 the coins to create enough nodes to dominate the protocol? Because that would be news to me and if so I would be misunderstanding things. But my bet is that you are dismissing the threat of whales splitting their holdings to maximize their influence. Don’t know why though.
      - rglullis 4y ago
shudza 4y ago
ETH PoS = security, performance and security (as in finance)
nailer 4y ago
Solana is the busiest blockchain by active wallets and now has a higher Nakamoto coefficient (decentralisation score, currently about 31) than most of the Eth L2s. > because the stake amount remained stable while validator count increased, it improved to 27 in Q2 and 31 in Q3. The improvement continues to put Solana above the industry average compared to other L1 networks. https://messari.io/report/state-of-solana-q3-2022 https://messari.io/report/state-of-solana-q3-2022 Way more at: https://youtu.be/5NDs3Il2J3Q?t=303 https://youtu.be/5NDs3Il2J3Q?t=303 Re: Visa, Sol's hit peaks above Visa's global average of 7,500 TPS recently too. Not boosting Sol, but if you're going to build, you should seriously consider it.
- senttoschool 4y ago
  It sacrifices decentralization and it has poor reliability.
  - nailer 4y ago
    The post you’re replying to discusses and measures centralisation. I’m happy to discuss reliability but it doesn’t appear we’re having a conversation.
    - vlovich123 4y ago
      I have no horse in this game but the Wikipedia page [1] doesn’t line up with the story you’re painting: > On 30 April and 1 May, 2022, Solana experienced major outages due to being taken offline by bots.[18] On 1 June, 2022 Solana reportedly[19] suffered another outage due to a bug in how the blockchain processes offline transactions. On 1 October, 2022, the Solana network went down for 6 hours due to a single misconfigured node. In a properly decentralized system, how does 1 misconfigured node take down the entire system? That looks like a single point of failure to me, something decentralized systems aren’t supposed to have. Can you elaborate how your distinguishing reliability and centralization in the context of single node failures? [1]: https://en.m.wikipedia.org/wiki/Solana_(blockchain_platform) https://en.m.wikipedia.org/wiki/Solana_(blockchain_platform)
janandonly 4y ago
> In blockchain, choose 2/3: security, performance, decentralization. > BTC = security, decentralization The brilliant thing is that you can stack. In other words, why would I want every transaction to be on the blockchain? I could just as easily use one of the more than 50 2nd-layer "Lightning" wallets and seldom touch the layer 1 blockchain. So with very little risk you get: BTC = security, performance, decentralization.
- derivagral 4y ago
  > why would I want every transaction to be on the blockchain I think some of the recent events around FTX and similar are exactly why you would want on-chain records, fees or not. Actors in this space are (imo) not fully trustworthy. How does the second layer handle this?
  - DennisP 4y ago
    In the case of Ethereum's zkrollups, all transactions are on-chain in compressed form and fully validated. You're not trusting anyone to custody your funds.
- polygamous_bat 4y ago
  No, with layer 2 you get Layer 2 = security, performance Layer 1 = security, decentralization Just because you added a horse to a cart doesn't make the cart neigh nor the horse to have wheels.
DennisP 4y ago
Some other PoS systems are focused on high performance on chain, but ETH PoS is security and decentralization. There are over 400,000 nodes staking and validating, and the protocol supports quite a bit more. It doesn't have that much of a performance advantage over PoW, but that's what rollups and danksharding are for. Combined, they should support 100K tx/sec, while inheriting base-layer security properties.
RetpolineDrama 4y ago
ETH PoS is more decentralized than ETH PoW was, and more decentralized than BTC PoW currently is.

solumunus 4y ago

You choose security and decentralization for the main chain and then use layer 2 for performance. This is the clear path forward, pretty well established by now.

ohgodplsno 4y ago
So you can securely prove that your centralized and insecure layer 2 has indeed transfered all of your money away to them? Great plan.
- miracle2k 4y ago
  No, the layer 2 inherits the trust-assumptions and security of the L1.
  - lawn 4y ago
    This is ridiculos and false. For instance, with LN you have to be online to secure your funds, otherwise you might lose them. L2 only inherits the security of L1 when it settles, which by definition is not that often (that's the whole point!).
    - DennisP 4y ago
      LN's shortcomings are not issues for zkrollups on Ethereum. Transactions are stored on chain, just in compressed form. A contract checks the validity of all transactions before storing them. The proofs are expensive to generate, but so cheap to verify that a contract can do it on chain.
    - everfree 4y ago
      Some types of L2, like roll-ups, settle to L1 every block. The "whole point" of L2 is to reduce the amount of resources used to settle its transactions on L1. Some L2s, like Lightning Network, achieve this by settling infrequently. But other L2s, like roll-ups, achieve it by batching transactions in clever ways so that less L1 resources are used on a per-transaction basis.
  - ohgodplsno 4y ago
    If your L2 has the same security and decentralization of the L1, then it's another L1. Since it has the performance part of things, it can only have either security (but then it's centralized, so it could fully securely write bullshit, which then gets written to L1), or decentralization (and then you get to write unsecure bullshit, which has no reason to either be trusted or true, and you can write that to your L1). It could write to L1 immediately, but your writes can still not be trusted or right.
    - miracle2k 4y ago
      The trilemma is not a law of mathematics with binary outcomes. It's an attempt to describe certain tensions inherent in building blockchains. A great deal of work as been done on Ethereum to balance these tensions. Rollups increase throughput because they move execution off L1, while requiring proof on L1 that L2 executed correctly. https://www.paradigm.xyz/2021/01/almost-everything-you-need-to-know-about-optimistic-rollup https://www.paradigm.xyz/2021/01/almost-everything-you-need-...
conorcleary 4y ago
See loopring.io
- tick_tock_tick 4y ago
  Aren't they just a failed product at this point? They were building an application specific L2 and then full general purpose L2s have beat them to market. I know they are trying desperately to pivot but they have to be years behind at this point.
  - conorcleary 4y ago
    Incorrect on all counts.
ogogmad 4y ago
I don't know about rollups stuff, but Lightning Network-type 2nd-layers are prone to flood and loot attacks. I don't see a way to make them secure. I'm happy to be enlightened.
- TimJRobinson 4y ago
  The lightning network is not a good example of an L2, it's extremely basic state channels and won't scale because of routing / liquidity issues. Look into Optimism and Arbitrum for current technology, or zkSync, Starknet, Polygon zkEVM for next gen L2's coming soon. There's a big list of all the current L2's and their tradeoffs at https://l2beat.com https://l2beat.com
- hanniabu 4y ago
  Lightning is more of a sidechain than an L2. And it's definitely not a rollup.
lawn 4y ago
It's only established by Bitcoin maxis. You need performance on layer 1 too, the world isn't black or white.
monodeldiablo 4y ago
How is that any different than old school banking and finance? Using layer 2 for performance requires essentially opening an account with a trusted party. I don't understand what we've gained here.

rglullis 4y ago

Let's forget "ETH PoW" as it is completely irrelevant. All of the community has moved on to PoS, all the relevant projects were kept on the fork, etc. To talk about "ETH PoW" on the same footing as ETH or BTC shows that you are basing your arguments on ideology and not objective truth. Besides that, your breakdown has other problems: - None of these three criteria you presented are binary attributes. How decentralized and secure are BTC vs ETH? How performant is ETH vs BTC? - One could easily argue that PoS is more decentralized than BTC ever will. The capital and resources to start a viable node on Ethereum is a lot lower than it is to get a sustaninable/profitable BTC miner.

DSingularity 4y ago
BTC is centralized — power lies with the miners. ETH is centralized — power lies with the large coin holders.
- rglullis 4y ago
  > power lies with the large coin holders. That is not true. This shows a terrible misunderstanding of how PoS works. Stakers are only rewarded in proportion to their stake. "Power" in PoS comes from being a validator node, which requires the minimum stake of 32 ETH. Having more ETH on a node does not give them any power. Yeah, whales could try to create many nodes, but they would need 66% of the nodes to even consider the possibility of blocking a transaction or making a double spend.
  - DSingularity 4y ago
    So you are saying that by some crypto-magic it is technically impossible for groups which collectively own more than 2/3 the coins to create enough nodes to dominate the protocol? Because that would be news to me and if so I would be misunderstanding things. But my bet is that you are dismissing the threat of whales splitting their holdings to maximize their influence. Don’t know why though.
    - rglullis 4y ago

shudza 4y ago

ETH PoS = security, performance and security (as in finance)

nailer 4y ago

Solana is the busiest blockchain by active wallets and now has a higher Nakamoto coefficient (decentralisation score, currently about 31) than most of the Eth L2s. > because the stake amount remained stable while validator count increased, it improved to 27 in Q2 and 31 in Q3. The improvement continues to put Solana above the industry average compared to other L1 networks. https://messari.io/report/state-of-solana-q3-2022 https://messari.io/report/state-of-solana-q3-2022 Way more at: https://youtu.be/5NDs3Il2J3Q?t=303 https://youtu.be/5NDs3Il2J3Q?t=303 Re: Visa, Sol's hit peaks above Visa's global average of 7,500 TPS recently too. Not boosting Sol, but if you're going to build, you should seriously consider it.

senttoschool 4y ago
It sacrifices decentralization and it has poor reliability.
- nailer 4y ago
  The post you’re replying to discusses and measures centralisation. I’m happy to discuss reliability but it doesn’t appear we’re having a conversation.
  - vlovich123 4y ago
    I have no horse in this game but the Wikipedia page [1] doesn’t line up with the story you’re painting: > On 30 April and 1 May, 2022, Solana experienced major outages due to being taken offline by bots.[18] On 1 June, 2022 Solana reportedly[19] suffered another outage due to a bug in how the blockchain processes offline transactions. On 1 October, 2022, the Solana network went down for 6 hours due to a single misconfigured node. In a properly decentralized system, how does 1 misconfigured node take down the entire system? That looks like a single point of failure to me, something decentralized systems aren’t supposed to have. Can you elaborate how your distinguishing reliability and centralization in the context of single node failures? [1]: https://en.m.wikipedia.org/wiki/Solana_(blockchain_platform) https://en.m.wikipedia.org/wiki/Solana_(blockchain_platform)

janandonly 4y ago

> In blockchain, choose 2/3: security, performance, decentralization. > BTC = security, decentralization The brilliant thing is that you can stack. In other words, why would I want every transaction to be on the blockchain? I could just as easily use one of the more than 50 2nd-layer "Lightning" wallets and seldom touch the layer 1 blockchain. So with very little risk you get: BTC = security, performance, decentralization.

derivagral 4y ago
> why would I want every transaction to be on the blockchain I think some of the recent events around FTX and similar are exactly why you would want on-chain records, fees or not. Actors in this space are (imo) not fully trustworthy. How does the second layer handle this?
- DennisP 4y ago
  In the case of Ethereum's zkrollups, all transactions are on-chain in compressed form and fully validated. You're not trusting anyone to custody your funds.
polygamous_bat 4y ago
No, with layer 2 you get Layer 2 = security, performance Layer 1 = security, decentralization Just because you added a horse to a cart doesn't make the cart neigh nor the horse to have wheels.

DennisP 4y ago

Some other PoS systems are focused on high performance on chain, but ETH PoS is security and decentralization. There are over 400,000 nodes staking and validating, and the protocol supports quite a bit more. It doesn't have that much of a performance advantage over PoW, but that's what rollups and danksharding are for. Combined, they should support 100K tx/sec, while inheriting base-layer security properties.

RetpolineDrama 4y ago

ETH PoS is more decentralized than ETH PoW was, and more decentralized than BTC PoW currently is.