5 ms·

> It's what their proponent claim that they are useful for, yet there's no single instance of a successful blockchain project actually achieving this kind of re

> It's what their proponent claim that they are useful for, yet there's no single instance of a successful blockchain project actually achieving this kind of resource-sharing goal Sia and Filecoin already work in this way to for people to share storage. > In fact, it's likely that trying to add money into the mix will just break the system instead of improving it This depends on the amount of money people are willing to pay for processing power. Volunteer contributions would be reduced, but the paid contributions could make up for it if the people who want to train their model pay enough to attract more people into the system and if those people can compete with conventional commercial offerings.

littlestymaar 3y ago
> Sia and Filecoin already work in this way to for people to share storage. You'll notice that I said “successful” in my original sentence. > This depends on the amount of money people are willing to pay for processing power. Volunteer contributions would be reduced, but the paid contributions could make up for it if the people who want to train their model pay enough to attract more people into the system and if those people can compete with conventional commercial offerings. That's a very big “if”: the distributed nature of things is always going to make it more expensive than a traditional solution, especially if you need byzantine fault tolerance (which you need as soon as their monetary value to earn by cheating), the same way that a blockchain is orders of magnitude more expensive than a cloud KV store database, and by pushing the volunteers away you'll end up with a small pool of for-profit actors and these actors themselves likely would be better off if they provided their own cloud offering. For instance filecoin only has a low thousands nodes, the average filecoin node has something like 10PB of available storage, the top three having 90PB each and making barely $1600 a day, which is $6.4 a year per TB.
- AnthonyMouse 3y ago
  > the distributed nature of things is always going to make it more expensive than a traditional solution > especially if you need byzantine fault tolerance For storage this can be done much more efficiently with erasure coding and hashing. For compute, reputation. A node with no reputation has all of its output verified (and so gets paid less). A node with a good reputation history only gets random spot checks, but fail a spot check and you're back to getting paid less, maybe even retroactively. > For instance filecoin only has a low thousands nodes, the average filecoin node has something like 10PB of available storage, the top three having 90PB each and making barely $1600 a day, which is $6.4 a year per TB. So it costs too much and it's too cheap? The nature of something like this is low barrier to entry, so the high competitiveness is going to result in low prices. That's kind of the idea. The result is going to be two main categories of supplier. One, huge nodes with economies of scale. These might take lower prices than some retail cloud offering, but they also don't have customer acquisition or support costs. Two, nodes with "free" storage, e.g. you built a media center which is already on 24/7 but still has a few TB of free space, so until you get around to using it yourself you'll take the however much in free money. In both cases because they have lower costs than competing providers. It sounds like the network is providing several exabytes of storage for an extremely competitive price. How is that not a success?
  - littlestymaar 3y ago
    > For storage this can be done much more efficiently with erasure coding and hashing. More efficient that what exactly? It's still far less efficient than not having to hash and run erasure coding… > For compute, reputation. A node with no reputation has all of its output verified (and so gets paid less). A node with a good reputation history only gets random spot checks, but fail a spot check and you're back to getting paid less, maybe even retroactively. That only works if the attacker cannot make big gains from a single cheat after a period of building reputation. There's a reason why this isn't being used in the wild by blockchains… > So it costs too much and it's too cheap? Yes, it costs too much to operate, and it's too cheap as a product so operators are losing money. The only reason why there's an offering at all is that some people invested lots of money on hardware in 2021 when the token price was 50 times higher (but then the storage cost was prohibitive). > It sounds like the network is providing several exabytes of storage for an extremely competitive price. How is that not a success? Barely anyone using it despite a price so low that it doesn't even allow operators to break even, how is that supposed to be a success?
    - AnthonyMouse 3y ago
      > More efficient that what exactly? It's still far less efficient than not having to hash and run erasure coding... Large storage systems already do this. RAID is a type of erasure coding. Various enterprise storage systems use hashing for data integrity. Distributing the data over a larger number of systems can actually be more efficient because the percentage of erasure blocks you need goes down as the number of independent devices increases. For example, if you only have two devices and want redundancy, you need a mirror and lose 50% of your capacity. If you spread the data across 200 devices you might achieve an even higher level of resilience by sacrificing only 25% of capacity so you can lose any 50 devices without data loss. You may get this down even further by periodically checking if a device is still available and replacing it, so the number of devices you can lose can be as low as the maximum number of devices you expect to lose simultaneously. > That only works if the attacker cannot make big gains from a single cheat after a period of building reputation. There's a reason why this isn't being used in the wild by blockchains... Blockchains are a different thing. If you have a GPU and to start out with everything you produce is checked, you get 50% of what the customer pays. If you have a good reputation then only e.g. 1 in 10 of your output is checked, so you get ~90% of what the customer pays, but to do that you have to accept 50% for e.g. 100 transactions. You can now defect, but you have a 10% chance of being detected each time, so you can expect to only get to do it 10 times. So you get a 90% payment ten times without doing work, then have to go back to getting a 50% payment 100 times. 10 times 90% is way less than 100 times 40%, so if you do this you lose money. > Yes, it costs too much to operate, and it's too cheap as a product so operators are losing money. Do you know what the overhead of the network actually is? Trying to put it together from multiple sources seems to imply that miners get paid ~$8/TB/year but storage costs ~$2/TB/year. Which I assume I'm doing wrong somehow, because it would imply negative overhead and therefore a huge arbitrage opportunity. I'm guessing the real number is less than 50% overhead, because there are obvious ways to do it at least that efficiently, but even that isn't huge when you can avoid expenses for marketing and customer support. Which implies that the problem is this: > The only reason why there's an offering at all is that some people invested lots of money on hardware in 2021 when the token price was 50 times higher (but then the storage cost was prohibitive). Which is a self-solving problem. The unprofitable providers go out of business until the price makes it profitable. But that seems like it should happen quicker than this if the profitability isn't there, because storage is fungible. Even if you bought a bunch of drives to do this when the price was higher, you could sell them and go put the money in a traditional investment. Or if you're speculating on the value of Filecoin going up, sell your storage and use the money to buy Filecoin. So the people still doing it are presumably turning a profit even at current prices, whether through economies of scale or because they had "free" storage to use. > Barely anyone using it despite a price so low that it doesn't even allow operators to break even, how is that supposed to be a success? It causes very inexpensive storage to be available, which is useful.

littlestymaar 3y ago

> Sia and Filecoin already work in this way to for people to share storage. You'll notice that I said “successful” in my original sentence. > This depends on the amount of money people are willing to pay for processing power. Volunteer contributions would be reduced, but the paid contributions could make up for it if the people who want to train their model pay enough to attract more people into the system and if those people can compete with conventional commercial offerings. That's a very big “if”: the distributed nature of things is always going to make it more expensive than a traditional solution, especially if you need byzantine fault tolerance (which you need as soon as their monetary value to earn by cheating), the same way that a blockchain is orders of magnitude more expensive than a cloud KV store database, and by pushing the volunteers away you'll end up with a small pool of for-profit actors and these actors themselves likely would be better off if they provided their own cloud offering. For instance filecoin only has a low thousands nodes, the average filecoin node has something like 10PB of available storage, the top three having 90PB each and making barely $1600 a day, which is $6.4 a year per TB.

AnthonyMouse 3y ago
> the distributed nature of things is always going to make it more expensive than a traditional solution > especially if you need byzantine fault tolerance For storage this can be done much more efficiently with erasure coding and hashing. For compute, reputation. A node with no reputation has all of its output verified (and so gets paid less). A node with a good reputation history only gets random spot checks, but fail a spot check and you're back to getting paid less, maybe even retroactively. > For instance filecoin only has a low thousands nodes, the average filecoin node has something like 10PB of available storage, the top three having 90PB each and making barely $1600 a day, which is $6.4 a year per TB. So it costs too much and it's too cheap? The nature of something like this is low barrier to entry, so the high competitiveness is going to result in low prices. That's kind of the idea. The result is going to be two main categories of supplier. One, huge nodes with economies of scale. These might take lower prices than some retail cloud offering, but they also don't have customer acquisition or support costs. Two, nodes with "free" storage, e.g. you built a media center which is already on 24/7 but still has a few TB of free space, so until you get around to using it yourself you'll take the however much in free money. In both cases because they have lower costs than competing providers. It sounds like the network is providing several exabytes of storage for an extremely competitive price. How is that not a success?
- littlestymaar 3y ago
  > For storage this can be done much more efficiently with erasure coding and hashing. More efficient that what exactly? It's still far less efficient than not having to hash and run erasure coding… > For compute, reputation. A node with no reputation has all of its output verified (and so gets paid less). A node with a good reputation history only gets random spot checks, but fail a spot check and you're back to getting paid less, maybe even retroactively. That only works if the attacker cannot make big gains from a single cheat after a period of building reputation. There's a reason why this isn't being used in the wild by blockchains… > So it costs too much and it's too cheap? Yes, it costs too much to operate, and it's too cheap as a product so operators are losing money. The only reason why there's an offering at all is that some people invested lots of money on hardware in 2021 when the token price was 50 times higher (but then the storage cost was prohibitive). > It sounds like the network is providing several exabytes of storage for an extremely competitive price. How is that not a success? Barely anyone using it despite a price so low that it doesn't even allow operators to break even, how is that supposed to be a success?
  - AnthonyMouse 3y ago
    > More efficient that what exactly? It's still far less efficient than not having to hash and run erasure coding... Large storage systems already do this. RAID is a type of erasure coding. Various enterprise storage systems use hashing for data integrity. Distributing the data over a larger number of systems can actually be more efficient because the percentage of erasure blocks you need goes down as the number of independent devices increases. For example, if you only have two devices and want redundancy, you need a mirror and lose 50% of your capacity. If you spread the data across 200 devices you might achieve an even higher level of resilience by sacrificing only 25% of capacity so you can lose any 50 devices without data loss. You may get this down even further by periodically checking if a device is still available and replacing it, so the number of devices you can lose can be as low as the maximum number of devices you expect to lose simultaneously. > That only works if the attacker cannot make big gains from a single cheat after a period of building reputation. There's a reason why this isn't being used in the wild by blockchains... Blockchains are a different thing. If you have a GPU and to start out with everything you produce is checked, you get 50% of what the customer pays. If you have a good reputation then only e.g. 1 in 10 of your output is checked, so you get ~90% of what the customer pays, but to do that you have to accept 50% for e.g. 100 transactions. You can now defect, but you have a 10% chance of being detected each time, so you can expect to only get to do it 10 times. So you get a 90% payment ten times without doing work, then have to go back to getting a 50% payment 100 times. 10 times 90% is way less than 100 times 40%, so if you do this you lose money. > Yes, it costs too much to operate, and it's too cheap as a product so operators are losing money. Do you know what the overhead of the network actually is? Trying to put it together from multiple sources seems to imply that miners get paid ~$8/TB/year but storage costs ~$2/TB/year. Which I assume I'm doing wrong somehow, because it would imply negative overhead and therefore a huge arbitrage opportunity. I'm guessing the real number is less than 50% overhead, because there are obvious ways to do it at least that efficiently, but even that isn't huge when you can avoid expenses for marketing and customer support. Which implies that the problem is this: > The only reason why there's an offering at all is that some people invested lots of money on hardware in 2021 when the token price was 50 times higher (but then the storage cost was prohibitive). Which is a self-solving problem. The unprofitable providers go out of business until the price makes it profitable. But that seems like it should happen quicker than this if the profitability isn't there, because storage is fungible. Even if you bought a bunch of drives to do this when the price was higher, you could sell them and go put the money in a traditional investment. Or if you're speculating on the value of Filecoin going up, sell your storage and use the money to buy Filecoin. So the people still doing it are presumably turning a profit even at current prices, whether through economies of scale or because they had "free" storage to use. > Barely anyone using it despite a price so low that it doesn't even allow operators to break even, how is that supposed to be a success? It causes very inexpensive storage to be available, which is useful.