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One of the things that made me less skeptical of Ethereum was that Vitalik has consistently argued based on his view of "Ether as digital oil to power the block

One of the things that made me less skeptical of Ethereum was that Vitalik has consistently argued based on his view of "Ether as digital oil to power the blockchain", which is to say that the point is not to just hodl, but to create a core technology that can enable different applications. I still think that we should not forget the "I need a censorship-proof way to send money to someone overseas" story, but mostly as a hedge against the existing institutions, not as an immediate need.

pavlov 3y ago
> “Ether as digital oil to power the blockchain” This has made you less skeptical of what he’s peddling? That slogan is a series of red flags in only eight words. He could be selling actual snake oil.
- pazimzadeh 3y ago
  Actual snake oil has actual benefits. It's fake snake oil you want to avoid. Effect of Erabu Sea Snake (Laticauda semifasciata) Lipids on the Swimming Endurance of Mice https://karger.com/anm/article-abstract/51/3/281/41756/Effect-of-Erabu-Sea-Snake-Laticauda-semifasciata?redirectedFrom=fulltext https://karger.com/anm/article-abstract/51/3/281/41756/Effec...
  - bloppe 3y ago
    This is an all-time HN comment
  - arcticbull 3y ago
    The origin story of the snake oil trope is kinda cool. Apparently the concept was brought over to the US by Chinese railroad workers. It was made from the oil of the Chinese water snake which is high in omega-3's that actually do reduce inflammation. Unfortunately there were no Chinese water snakes in America, and the American hucksters started juicing rattlesnakes. And then... other even cheaper substitutes like beef tallow, mineral oil and turpentine. [1] I suspect the Erabu sea snake is the Chinese water snake that was originally juiced? I don't think rattlesnake oil would have the same effect :) [1] https://www.npr.org/sections/codeswitch/2013/08/26/215761377/a-history-of-snake-oil-salesmen https://www.npr.org/sections/codeswitch/2013/08/26/215761377...
- deleted 3y ago
  [deleted]
- maxcoder4 3y ago
  I'll rephrase a bit for the HN crowd: "The Ethereum currency (Ether) value proposition is that it is used to pay for decentralized apps on the Ethereum Blockchain. The more application and users are there, the more Ether is needed and hence it's value goes up". At least that's how I understand it. OPs point is that most cryptocurrency advocates go for "but my token and hold, it is sure to grow 10x in a few months" and I (like probably OP) consider it misleading baseless hope at best, fraud usually.
  - kemotep 3y ago
    Should you not want the price to be stable? If an arcade game’s price went from 50 cents per play to 5 dollars per play because more people are using a delivery application on the other side of the world that doesn’t make much sense from a consumer perspective.
    - pcthrowaway 3y ago
      There are definitely bitcoin diehards out there who look at the price of everything relative to bitcoin. From a practical standpoint, I think most people would prefer it if the currency used by their country of residence increased in value relative to other global currencies, rather than just staying stable (though for hyperinflationary countries, even that would be a major improvement). Although stability relative to another currency (see https://en.wikipedia.org/wiki/Fixed_exchange_rate_system https://en.wikipedia.org/wiki/Fixed_exchange_rate_system) is considered (by many) disadvantageous for countries with strong economies, because you strip away the central bank's power to manage the supply. This is basically the whole Gold Standard debate. For blockchain users who want reduced volatility and stability relative to a fiat currency, there are always stablecoins.
      - kemotep 3y ago
        But the argument is that the grandparent comment is making is that you should build your application on the ethereum network, eth is the “oil” of this machine, and the more people who use it the higher the value of eth is. So if I make a game, or an uber for dog walkers, or a global shipping service, or some SaaS app on the ethereum blockchain, then my customers will have to pay more or less (or my costs will be higher or lower) depending on how active the network is. That makes no sense. Day to day price and gas fee fluctuations make it hard to long term plan. Just saying that if you want price stability use a stablecoin doesn’t address that issue because we are not building the app on the blockchain of the stablecoin. There isn’t an eth stable coin that is always 1 blip to 1 eth exchange rate.
PKop 3y ago
>the point is not to just hodl, but to create a core technology that can enable different applications This is has been said about every coin since the beginning of crypto.
- rglullis 3y ago
  Absolutely not. Bitcoin's initial narrative was "digital cash", i.e, digital payments and microtransactions. Given that transaction costs became prohibitive, it switched to "digital gold", or store of value, meaning that Bitcoiners defend the idea that Bitcoin's reason d'être is just to hold it. I've never seen Vitalik or any of the core Ethereum developers talking about the value of Ether being a fundamental metric of any kind. The incentives are made in a way to maximize utility of the blockchain, not the value of its base currency.
  - PKop 3y ago
    You gave 2 examples supporting exactly what I just said. And there are 1000s of other ones that encompass "crypto".
    - rglullis 3y ago
      I'm really failing to understand you here. The "beginning of crypto" was with Bitcoin, can we agree to that? Can we agree that Bitcoin was not claiming to "be a general platform to power distributed applications"? If you disagree, refer to the whitepaper that says "A Peer-to-Peer Electronic Cash System". Can we agree that before Ethereum each chain was just a fork of Bitcoin, and that the token (aka "the currency") was "sold" to others as something that would have its value determined by supply and demand, but that the blockchain had no use that was not connected to transactions related to the token? As in: fundamentally speaking, Bitcoin, Litecoin, Dogecoin, Bitcoin Gold, Bitcoin Cash... are the same? Can we agree that Ethereum (the blockchain) enables distributed applications where people do not care at all about the price of Ether? E.g, I can host files on Storj and pay with credit card, the people hosting data are being paid in Storj's token, and everyone involved in this economy is directly using the Ethereum blockchain, but don't need to hold any Ether at all?
willmadden 3y ago
That's what Bitcoin used to be about, before its development team was taken over and it was crippled.
- rglullis 3y ago
  Bitcoin original plan was about "digital cash", it was fully focused on permissionless payments, but that's about it.
  - willmadden 3y ago
    The whitepaper's plan wasn't, but that's not true at all for Bitcoin itself. Satoshi included OP_RETURN which allowed smart contracts - mastercoin being the first L2 (on Bitcoin). He also wanted to increase the blocksize to allow scaling. Vitalik started Ethereum because the "core devs" (bank incumbent funded usurpers) refused to cooperate. This is also the reason the original maintainers like Gavin and Mike Hearn split off to Bitcoin Cash and other alt-coins.
    - rglullis 3y ago
      > original maintainers like Gavin and Mike Hearn split off to Bitcoin Cash and other alt-coins. So what developments in Bitcoin Cash have been made in that direction? Why is is that all of the "ideological" forks of Bitcoin do nothing but tweak some parameter size in the network settings and do not go beyond that?
      - willmadden 3y ago
        The development roadmap for these cryptocurrencies are documented and available with an internet search...
    - deleted 3y ago
      [deleted]
    - midmagico 3y ago
      This is all pretty much boring, tired lies that altcoin profiteers like to trot out apparently assuming nobody is still around who is interested in contradicting them. The purpose of OP_RETURN was to end the script. It was not designed for rando garbage overlays that are worthless; Satoshi's views on scaling were ambiguous—rather than say it "should" he was instead correcting people who thought you could break consensus by simply setting the value higher. There was absolutely zero communication between Vitalik and anybody about his "plans" to dump an overlay into Bitcoin, and his current story about 80-to-40 bytes is a pure, often debunked lie. There isn't a single communication that Vitalik himself can point to anywhere which shows he was interested in "cooperating" and then core turned him down. His typical lie was that he was interested in stuffing data into Bitcoin, but then core devs "stopped that" by reducing the amount he could stuff into Bitcoin by half—from 80 to 40 bytes—but when he says that he also never points at any discussion, and in any event the direct history contradicts this—no versions of Bitcoin from back then ever reduced anything. It was only ever an increase: from 0, to 40, to 80 in released versions. There no evidence these people ever give which shows some lack of cooperation with Vitalik is the reason why Hearn and Andresen "split off" to make an altcoin, which itself is quite the absurdity, and if true just means they would have been ethereum pumpers anyway.. so..
wslh 3y ago
The problem is that this gospel has been said for almost a decade now and despite, literally, billion dollars of assets that Vitalik has, and others flowing this is not happening. Not saying that this could not happen as an hypotheses but cryptocurrency foundations are far far from business execution basic practices. As an insider I can say that most money flows to a very small group of people and the governance is not really decentralized. For example, very few people can decide on Bitcoin and Ethereum protocol changes, and these people cannot be changed...
- skybrian 3y ago
  It does seem slow, but they did manage the proof-of-stake transition pretty smoothly despite delays and widespread skepticism, so I give them some credit for that. I have no idea what Vitalik is funding. Do you?
  - wslh 3y ago
    He was talking about proof-of-stake since the beginning and every year was talking about the next year. Not blaming Vitalik himself but the whole thing, it is bad to give false expectations. Another thing, no pun intended, is that the proof-of-stake upgrade maintains prohibitive the network fees for transactions while other technologies have low fees. > I have no idea what Vitalik is funding. Do you? The funding of projects is through the foundation but if I remember well the original people and contributors received the ~50% of the total ethers until now.
    - rglullis 3y ago
      > proof-of-stake upgrade maintains prohibitive Consensus algorithms have nothing to do with transaction fees. > while other technologies have low fees. Any "Ethereum killer" that showed up turned out to have the same if not worse problems as Ethereum in the moment they started dealing with minimal real-world traction. > contributors received the ~50% of the total ethers until now. First: source? Second: "50% of total ETH until now" is doing a lot of work here. How much was during the pre-mine and how much was due to the sale? The pre-mine sale raised < 20 million USD. Are you counting the people who bought ETH in the pre-mine as "original contributors"?

pavlov 3y ago

> “Ether as digital oil to power the blockchain” This has made you less skeptical of what he’s peddling? That slogan is a series of red flags in only eight words. He could be selling actual snake oil.

pazimzadeh 3y ago
Actual snake oil has actual benefits. It's fake snake oil you want to avoid. Effect of Erabu Sea Snake (Laticauda semifasciata) Lipids on the Swimming Endurance of Mice https://karger.com/anm/article-abstract/51/3/281/41756/Effect-of-Erabu-Sea-Snake-Laticauda-semifasciata?redirectedFrom=fulltext https://karger.com/anm/article-abstract/51/3/281/41756/Effec...
- bloppe 3y ago
  This is an all-time HN comment
- arcticbull 3y ago
  The origin story of the snake oil trope is kinda cool. Apparently the concept was brought over to the US by Chinese railroad workers. It was made from the oil of the Chinese water snake which is high in omega-3's that actually do reduce inflammation. Unfortunately there were no Chinese water snakes in America, and the American hucksters started juicing rattlesnakes. And then... other even cheaper substitutes like beef tallow, mineral oil and turpentine. [1] I suspect the Erabu sea snake is the Chinese water snake that was originally juiced? I don't think rattlesnake oil would have the same effect :) [1] https://www.npr.org/sections/codeswitch/2013/08/26/215761377/a-history-of-snake-oil-salesmen https://www.npr.org/sections/codeswitch/2013/08/26/215761377...
deleted 3y ago
[deleted]
maxcoder4 3y ago
I'll rephrase a bit for the HN crowd: "The Ethereum currency (Ether) value proposition is that it is used to pay for decentralized apps on the Ethereum Blockchain. The more application and users are there, the more Ether is needed and hence it's value goes up". At least that's how I understand it. OPs point is that most cryptocurrency advocates go for "but my token and hold, it is sure to grow 10x in a few months" and I (like probably OP) consider it misleading baseless hope at best, fraud usually.
- kemotep 3y ago
  Should you not want the price to be stable? If an arcade game’s price went from 50 cents per play to 5 dollars per play because more people are using a delivery application on the other side of the world that doesn’t make much sense from a consumer perspective.
  - pcthrowaway 3y ago
    There are definitely bitcoin diehards out there who look at the price of everything relative to bitcoin. From a practical standpoint, I think most people would prefer it if the currency used by their country of residence increased in value relative to other global currencies, rather than just staying stable (though for hyperinflationary countries, even that would be a major improvement). Although stability relative to another currency (see https://en.wikipedia.org/wiki/Fixed_exchange_rate_system https://en.wikipedia.org/wiki/Fixed_exchange_rate_system) is considered (by many) disadvantageous for countries with strong economies, because you strip away the central bank's power to manage the supply. This is basically the whole Gold Standard debate. For blockchain users who want reduced volatility and stability relative to a fiat currency, there are always stablecoins.
    - kemotep 3y ago
      But the argument is that the grandparent comment is making is that you should build your application on the ethereum network, eth is the “oil” of this machine, and the more people who use it the higher the value of eth is. So if I make a game, or an uber for dog walkers, or a global shipping service, or some SaaS app on the ethereum blockchain, then my customers will have to pay more or less (or my costs will be higher or lower) depending on how active the network is. That makes no sense. Day to day price and gas fee fluctuations make it hard to long term plan. Just saying that if you want price stability use a stablecoin doesn’t address that issue because we are not building the app on the blockchain of the stablecoin. There isn’t an eth stable coin that is always 1 blip to 1 eth exchange rate.

PKop 3y ago

>the point is not to just hodl, but to create a core technology that can enable different applications This is has been said about every coin since the beginning of crypto.

rglullis 3y ago
Absolutely not. Bitcoin's initial narrative was "digital cash", i.e, digital payments and microtransactions. Given that transaction costs became prohibitive, it switched to "digital gold", or store of value, meaning that Bitcoiners defend the idea that Bitcoin's reason d'être is just to hold it. I've never seen Vitalik or any of the core Ethereum developers talking about the value of Ether being a fundamental metric of any kind. The incentives are made in a way to maximize utility of the blockchain, not the value of its base currency.
- PKop 3y ago
  You gave 2 examples supporting exactly what I just said. And there are 1000s of other ones that encompass "crypto".
  - rglullis 3y ago
    I'm really failing to understand you here. The "beginning of crypto" was with Bitcoin, can we agree to that? Can we agree that Bitcoin was not claiming to "be a general platform to power distributed applications"? If you disagree, refer to the whitepaper that says "A Peer-to-Peer Electronic Cash System". Can we agree that before Ethereum each chain was just a fork of Bitcoin, and that the token (aka "the currency") was "sold" to others as something that would have its value determined by supply and demand, but that the blockchain had no use that was not connected to transactions related to the token? As in: fundamentally speaking, Bitcoin, Litecoin, Dogecoin, Bitcoin Gold, Bitcoin Cash... are the same? Can we agree that Ethereum (the blockchain) enables distributed applications where people do not care at all about the price of Ether? E.g, I can host files on Storj and pay with credit card, the people hosting data are being paid in Storj's token, and everyone involved in this economy is directly using the Ethereum blockchain, but don't need to hold any Ether at all?

willmadden 3y ago

That's what Bitcoin used to be about, before its development team was taken over and it was crippled.

rglullis 3y ago
Bitcoin original plan was about "digital cash", it was fully focused on permissionless payments, but that's about it.
- willmadden 3y ago
  The whitepaper's plan wasn't, but that's not true at all for Bitcoin itself. Satoshi included OP_RETURN which allowed smart contracts - mastercoin being the first L2 (on Bitcoin). He also wanted to increase the blocksize to allow scaling. Vitalik started Ethereum because the "core devs" (bank incumbent funded usurpers) refused to cooperate. This is also the reason the original maintainers like Gavin and Mike Hearn split off to Bitcoin Cash and other alt-coins.
  - rglullis 3y ago
    > original maintainers like Gavin and Mike Hearn split off to Bitcoin Cash and other alt-coins. So what developments in Bitcoin Cash have been made in that direction? Why is is that all of the "ideological" forks of Bitcoin do nothing but tweak some parameter size in the network settings and do not go beyond that?
    - willmadden 3y ago
      The development roadmap for these cryptocurrencies are documented and available with an internet search...
  - deleted 3y ago
    [deleted]
  - midmagico 3y ago
    This is all pretty much boring, tired lies that altcoin profiteers like to trot out apparently assuming nobody is still around who is interested in contradicting them. The purpose of OP_RETURN was to end the script. It was not designed for rando garbage overlays that are worthless; Satoshi's views on scaling were ambiguous—rather than say it "should" he was instead correcting people who thought you could break consensus by simply setting the value higher. There was absolutely zero communication between Vitalik and anybody about his "plans" to dump an overlay into Bitcoin, and his current story about 80-to-40 bytes is a pure, often debunked lie. There isn't a single communication that Vitalik himself can point to anywhere which shows he was interested in "cooperating" and then core turned him down. His typical lie was that he was interested in stuffing data into Bitcoin, but then core devs "stopped that" by reducing the amount he could stuff into Bitcoin by half—from 80 to 40 bytes—but when he says that he also never points at any discussion, and in any event the direct history contradicts this—no versions of Bitcoin from back then ever reduced anything. It was only ever an increase: from 0, to 40, to 80 in released versions. There no evidence these people ever give which shows some lack of cooperation with Vitalik is the reason why Hearn and Andresen "split off" to make an altcoin, which itself is quite the absurdity, and if true just means they would have been ethereum pumpers anyway.. so..

wslh 3y ago

The problem is that this gospel has been said for almost a decade now and despite, literally, billion dollars of assets that Vitalik has, and others flowing this is not happening. Not saying that this could not happen as an hypotheses but cryptocurrency foundations are far far from business execution basic practices. As an insider I can say that most money flows to a very small group of people and the governance is not really decentralized. For example, very few people can decide on Bitcoin and Ethereum protocol changes, and these people cannot be changed...

skybrian 3y ago
It does seem slow, but they did manage the proof-of-stake transition pretty smoothly despite delays and widespread skepticism, so I give them some credit for that. I have no idea what Vitalik is funding. Do you?
- wslh 3y ago
  He was talking about proof-of-stake since the beginning and every year was talking about the next year. Not blaming Vitalik himself but the whole thing, it is bad to give false expectations. Another thing, no pun intended, is that the proof-of-stake upgrade maintains prohibitive the network fees for transactions while other technologies have low fees. > I have no idea what Vitalik is funding. Do you? The funding of projects is through the foundation but if I remember well the original people and contributors received the ~50% of the total ethers until now.
  - rglullis 3y ago
    > proof-of-stake upgrade maintains prohibitive Consensus algorithms have nothing to do with transaction fees. > while other technologies have low fees. Any "Ethereum killer" that showed up turned out to have the same if not worse problems as Ethereum in the moment they started dealing with minimal real-world traction. > contributors received the ~50% of the total ethers until now. First: source? Second: "50% of total ETH until now" is doing a lot of work here. How much was during the pre-mine and how much was due to the sale? The pre-mine sale raised < 20 million USD. Are you counting the people who bought ETH in the pre-mine as "original contributors"?