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> many new applications have limited use today due to limitations in tech The Ethereum foundation has been focusing on technical problems since its inception,

by hiq 4y ago

> many new applications have limited use today due to limitations in tech The Ethereum foundation has been focusing on technical problems since its inception, and your conclusion has always been the official motto: once we solve the "technical problems", users will come. But there will always be technical problems, and as each year passes with still no meaningful democratization of this tech, it's becoming doubtful that these limitations are the real issue. Applications such as decentralized finance are only as interesting as the tokens they allow users to trade, but in turn these tokens are either shady (the world of FTT, USDT, etc.) or legal (requiring KYC, AML, etc.) so just like traditional finance. Once the former have fallen enough in disgrace, it's unclear what benefit there is to trade the latter (centralized tokens) on decentralized platforms. It's easy to stack layers of abstractions, thinking the next one will be the one gathering users, and focusing on what we think is the last technical hurdle before mass adoption. After the 3rd or 4th iteration, one could start asking: what makes you think it'll make a difference this time? Not much has changed since ICOs: same kind of ambitious claims with very little to show for it years after.

kybernetikos 4y ago
One example of things that have changed is zero knowledge roll ups. When I first used ethereum, transacting with it was free and fairly quick. The QR code approach meant that it was easier, faster, cheaper and safer to transfer money with it than with my bank account. That changed dramatically for the worse once the systems started getting popular (and traditional banks upped their game too). With L2 systems like zksync, we're back to cheap and fast, and we don't have to give up the central security properties. Another example of something that has changed for ethereum is Proof Of Stake. Some years ago, I worked for a large financial organisation, and we had a use case that would have saved a lot of internal work to move onto a public blockchain. Given the organisations eco aspirations, using a POW based system was never going to be acceptable. Now that ethereum is on Proof Of Stake, it's actually conceivable that these kinds of applications could be deployed by large financial institutions.
- hiq 4y ago
  > we had a use case that would have saved a lot of internal work to move onto a public blockchain If anything, large financial institutions have by now realized that they're not interested in public blockchains[0], one notable example as of late being the Australian Securities Exchange[1]. These technical improvements are a bit as if a salesman reduced the price of a product, on top of free delivery. That's nice, sure, but that doesn't mean you need the product any more than before. There are more fundamental reasons why smart contracts are not widely used, and they're not addressed by these technical improvements. [0]: as defined in https://www.schneier.com/essays/archives/2019/02/theres_no_good_reaso.html https://www.schneier.com/essays/archives/2019/02/theres_no_g... [1]: https://www.reuters.com/technology/australian-securities-exchange-cut-up-200-jobs-blockchain-project-2022-12-02/ https://www.reuters.com/technology/australian-securities-exc...
  - kybernetikos 4y ago
    My example was a situation where we would benefit from a public blockchain solution in terms of more efficient administration, but were unable to use it because of ecological concerns. In that situation we already needed the product, and the improvement removes a barrier.
    - hiq 4y ago
      > a situation where we would benefit from a public blockchain solution in terms of more efficient administration That's what I'm doubting. Ecological concerns etc. are a problem, but in my experience public blockchain solutions fail earlier, at the stage where one asks "would there be any benefit" before asking what the costs might be.
      - kybernetikos 4y ago
        Then we have different experiences.
spir 4y ago
The argument that use cases aren't developing is quite brittle when you dig into it a bit. Take the use case of global stablecoin transfers. The ability to send cash point-to-point anywhere in the world is obviously valuable and novel. But for global stablecoin transfers to be generally useful 1) everybody needs crypto wallets, 2) crypto wallets need to be increasingly safe and easy to use, 3) transaction fees need to be sufficiently low, 4) stablecoin on/off-ramps to integration with the traditional financial system must be widely available, and 5) stablecoins in a variety of popular global currencies must be available and liquid. The industry has made progress in all five of the above areas in the past few years, and so good progress has been made on the greater goal of generally available point-to-point global cash transfers. Saying crypto "has no use cases" is lazy, uncurious, and intellectually bankrupt.
- hiq 4y ago
  > Take the use case of global stablecoin transfers. The ability to send cash point-to-point anywhere in the world is obviously valuable and novel. You're not sending "cash" though, you're most likely sending USDT or some other centralized stablecoin backed by a shady company ("stablecoin" is a very misleading term in this context given the counterparty risk). That's one point about trust being moved instead of removed, you need to trust the issuer to some extent. To this day I still haven't heard of a centralized stablecoin being fully audited, you merely get attestations, meaning that you can't treat them as "cash", you have a big risk just holding them. Transferring / converting currencies from most countries to most other countries is easy and way cheaper via centralized means, e.g. https://en.wikipedia.org/wiki/Wise_(company) https://en.wikipedia.org/wiki/Wise_(company) has been around for 11 years and was probably not first, and the fees are lower than what a blockchain transaction on BTC/ETH would cost. This is not even an apple to apple comparison, since in most cases you still need to convert your USDT back to USD to actually use them, incurring more fees in the process. What ETH does allow you to do which you can't do with Wise and others is sending USDT without censorship. That's probably the best way to bypass US regulations if you want to send USD where the US government doesn't want you to. And some people suggest that this is how things should be, which is an interesting point. Whether you agree or disagree about the morals of it, it'll remain marginal compared with the amounts transferred via centralized entities for reasons listed above. In particular, this is incompatible with your 4.: > 4) stablecoin on/off-ramps to integration with the traditional financial system must be widely available, and 5) stablecoins in a variety of popular global currencies must be available and liquid. As soon as you integrate with the traditional financial system, you have the same legal requirements. But as explained above, skirting regulations is actually the only one thing that you could do more easily with Ethereum. Once you've accepted to deal with the law, you're better off using centralized platforms all the way. If I have EUR and want to send you USD legally, why would I go through USDT or whatever blockchain token and pay higher fees? In this space, there's still very little in terms of products with actual impact, to the point that it's hard to tell what will be left once (if ever) the noise from the blockchain-related scams disappears. I was debating these points 5 years ago already. The fundamental problems I'm mentioning now were already there (the decentralization of a blockchain-based system breaking at its boundaries with the real-world, the oracle problem). The hype has evolved, but retains the same fundamental flaws.
redox99 4y ago
> and as each year passes with still no meaningful democratization of this tech, it's becoming doubtful that these limitations are the real issue. I think it's pretty easy to see that each transaction costing a few bucks (or tens of bucks at it's peak) is a huge issue if you want more adoption.
- michaelsbradley 4y ago
  Gas prices (determine costs of transactions) haven’t been too high lately, though there can still be spikes when transaction volume surges. Gas prices will become less sensitive to such surges once the mainnet is sharded (plus L2s) because the chain will be able to handle a much higher max volume of transactions at any given time. https://www.gasprice.io/ https://www.gasprice.io/
hanniabu 4y ago
A lot of the past few years has been spent on research. The move to PoS is now complete and rollups are under active development. For a lot of use cases scaling is a prerequisite and that's coming soon, likely 2-3 years of progressive improvements. Transactions on rollups are as low as 2 cents and EIP 4488 is expected to bring that down about 100x. You should really take a look at the roadmap: https://notes.ethereum.org/@domothy/roadmap https://notes.ethereum.org/@domothy/roadmap
dang 4y ago
(This comment was originally a reply to https://news.ycombinator.com/item?id=33878419 https://news.ycombinator.com/item?id=33878419. Hence the "your conclusion".)

by hiq 4y ago

kybernetikos 4y ago

One example of things that have changed is zero knowledge roll ups. When I first used ethereum, transacting with it was free and fairly quick. The QR code approach meant that it was easier, faster, cheaper and safer to transfer money with it than with my bank account. That changed dramatically for the worse once the systems started getting popular (and traditional banks upped their game too). With L2 systems like zksync, we're back to cheap and fast, and we don't have to give up the central security properties. Another example of something that has changed for ethereum is Proof Of Stake. Some years ago, I worked for a large financial organisation, and we had a use case that would have saved a lot of internal work to move onto a public blockchain. Given the organisations eco aspirations, using a POW based system was never going to be acceptable. Now that ethereum is on Proof Of Stake, it's actually conceivable that these kinds of applications could be deployed by large financial institutions.

hiq 4y ago
> we had a use case that would have saved a lot of internal work to move onto a public blockchain If anything, large financial institutions have by now realized that they're not interested in public blockchains[0], one notable example as of late being the Australian Securities Exchange[1]. These technical improvements are a bit as if a salesman reduced the price of a product, on top of free delivery. That's nice, sure, but that doesn't mean you need the product any more than before. There are more fundamental reasons why smart contracts are not widely used, and they're not addressed by these technical improvements. [0]: as defined in https://www.schneier.com/essays/archives/2019/02/theres_no_good_reaso.html https://www.schneier.com/essays/archives/2019/02/theres_no_g... [1]: https://www.reuters.com/technology/australian-securities-exchange-cut-up-200-jobs-blockchain-project-2022-12-02/ https://www.reuters.com/technology/australian-securities-exc...
- kybernetikos 4y ago
  My example was a situation where we would benefit from a public blockchain solution in terms of more efficient administration, but were unable to use it because of ecological concerns. In that situation we already needed the product, and the improvement removes a barrier.
  - hiq 4y ago
    > a situation where we would benefit from a public blockchain solution in terms of more efficient administration That's what I'm doubting. Ecological concerns etc. are a problem, but in my experience public blockchain solutions fail earlier, at the stage where one asks "would there be any benefit" before asking what the costs might be.
    - kybernetikos 4y ago
      Then we have different experiences.

spir 4y ago

The argument that use cases aren't developing is quite brittle when you dig into it a bit. Take the use case of global stablecoin transfers. The ability to send cash point-to-point anywhere in the world is obviously valuable and novel. But for global stablecoin transfers to be generally useful 1) everybody needs crypto wallets, 2) crypto wallets need to be increasingly safe and easy to use, 3) transaction fees need to be sufficiently low, 4) stablecoin on/off-ramps to integration with the traditional financial system must be widely available, and 5) stablecoins in a variety of popular global currencies must be available and liquid. The industry has made progress in all five of the above areas in the past few years, and so good progress has been made on the greater goal of generally available point-to-point global cash transfers. Saying crypto "has no use cases" is lazy, uncurious, and intellectually bankrupt.

hiq 4y ago
> Take the use case of global stablecoin transfers. The ability to send cash point-to-point anywhere in the world is obviously valuable and novel. You're not sending "cash" though, you're most likely sending USDT or some other centralized stablecoin backed by a shady company ("stablecoin" is a very misleading term in this context given the counterparty risk). That's one point about trust being moved instead of removed, you need to trust the issuer to some extent. To this day I still haven't heard of a centralized stablecoin being fully audited, you merely get attestations, meaning that you can't treat them as "cash", you have a big risk just holding them. Transferring / converting currencies from most countries to most other countries is easy and way cheaper via centralized means, e.g. https://en.wikipedia.org/wiki/Wise_(company) https://en.wikipedia.org/wiki/Wise_(company) has been around for 11 years and was probably not first, and the fees are lower than what a blockchain transaction on BTC/ETH would cost. This is not even an apple to apple comparison, since in most cases you still need to convert your USDT back to USD to actually use them, incurring more fees in the process. What ETH does allow you to do which you can't do with Wise and others is sending USDT without censorship. That's probably the best way to bypass US regulations if you want to send USD where the US government doesn't want you to. And some people suggest that this is how things should be, which is an interesting point. Whether you agree or disagree about the morals of it, it'll remain marginal compared with the amounts transferred via centralized entities for reasons listed above. In particular, this is incompatible with your 4.: > 4) stablecoin on/off-ramps to integration with the traditional financial system must be widely available, and 5) stablecoins in a variety of popular global currencies must be available and liquid. As soon as you integrate with the traditional financial system, you have the same legal requirements. But as explained above, skirting regulations is actually the only one thing that you could do more easily with Ethereum. Once you've accepted to deal with the law, you're better off using centralized platforms all the way. If I have EUR and want to send you USD legally, why would I go through USDT or whatever blockchain token and pay higher fees? In this space, there's still very little in terms of products with actual impact, to the point that it's hard to tell what will be left once (if ever) the noise from the blockchain-related scams disappears. I was debating these points 5 years ago already. The fundamental problems I'm mentioning now were already there (the decentralization of a blockchain-based system breaking at its boundaries with the real-world, the oracle problem). The hype has evolved, but retains the same fundamental flaws.

redox99 4y ago

> and as each year passes with still no meaningful democratization of this tech, it's becoming doubtful that these limitations are the real issue. I think it's pretty easy to see that each transaction costing a few bucks (or tens of bucks at it's peak) is a huge issue if you want more adoption.

michaelsbradley 4y ago
Gas prices (determine costs of transactions) haven’t been too high lately, though there can still be spikes when transaction volume surges. Gas prices will become less sensitive to such surges once the mainnet is sharded (plus L2s) because the chain will be able to handle a much higher max volume of transactions at any given time. https://www.gasprice.io/ https://www.gasprice.io/

hanniabu 4y ago

A lot of the past few years has been spent on research. The move to PoS is now complete and rollups are under active development. For a lot of use cases scaling is a prerequisite and that's coming soon, likely 2-3 years of progressive improvements. Transactions on rollups are as low as 2 cents and EIP 4488 is expected to bring that down about 100x. You should really take a look at the roadmap: https://notes.ethereum.org/@domothy/roadmap https://notes.ethereum.org/@domothy/roadmap

dang 4y ago

(This comment was originally a reply to https://news.ycombinator.com/item?id=33878419 https://news.ycombinator.com/item?id=33878419. Hence the "your conclusion".)