5 ms·

> At that point, a shared ledger implemented with traditional databases / protocols would be faster, easier, and more transparent. Except they are frequently _

by SR2Z 1y ago

> At that point, a shared ledger implemented with traditional databases / protocols would be faster, easier, and more transparent. Except they are frequently _not_. I dislike crypto on principle, but you can't look at the exorbitant transfer fees and latency that a lot of banks charge for common transactions (Visa/MasterCard are especially bad) and say that crypto has no potential. Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. The problem with banks pointing to banking regulation is that they helped shape the regulation - and they did so to protect their business, not to help consumers. We know that central banks are great at monetary policy. We know that decentralized protocols remove a lot of the more parasitic traits of banks. Why not have a central bank currency that can be traded on the blockchain, especially since converting it to real money will still entail KYC?

wredcoll 1y ago
> Why not have a central bank currency that can be traded on the blockchain, especially since converting it to real money will still entail KYC? Because literally the only point is to avoid the existing banking system and you can do that with a postures database with much less cpu involved.
- algo_lover 1y ago
  But with multiple parties involved, who has the rights to read and write to the postgres instance? How do we make sure transactions were not forged? How do we know data at rest is not being tampered with? Blockchain solves that. Newer blockchain protocols especially an L1 is much faster, easier on the environment, and provides all the immutability, transparency, and traceability benefits.
  - topranks 1y ago
    We need to trust those running the system. Societies cannot function without trusted intermediaries, in finance and many other things. If we are in a democracy then the government regulates such organisations and should punish those who do not comply. Blockchain doesn’t scale as a replacement so the point is moot.
  - oblio 1y ago
    You know you can just use regular cryptography to validate data, right? Also, you always have to trust someone, in this case Stripe. Regarding L1 blockchains, how exactly do they solve the speed problem for a distributed global database that needs to be replicated everywhere for the security guarantees to actually work? What do they forgo out of https://en.m.wikipedia.org/wiki/CAP_theorem https://en.m.wikipedia.org/wiki/CAP_theorem ?
    - packetlost 1y ago
      Pretty much always A. In systems like this, it's better to deny transactions than allow inconsistencies.
    - jekrb 1y ago
      non-potatoe hardware and elbow grease in the software https://github.com/anza-xyz/agave https://github.com/anza-xyz/agave
      - oblio 1y ago
        Is there a white paper for what would be a revolutionary discovery in the field of software?
- DennisP 1y ago
  There's not that much CPU involved. Most of the stablecoins are on Ethereum, and I think the rest are on other proof-of-stake platforms, not Bitcoin.
  - jakewins 1y ago
    Ethereum is able to process something like 150 transactions per second, using about 1,000,000 validator machines. Postgres running on a single Raspberry Pi is something like 200 TPC-B read/write transactions per second. Saying Ethereum “is not using very much CPU” is baffling to me. It is the state-of-the-art in this regard, and it uses something like six orders of magnitude more CPU than a normal database running a ledger workload?
    - ricericerice 1y ago
      there's 1,000,000 validators (defined as a public key), but you can run multiple validators per machine. Most estimates that crawl the p2p network to index nodes comes out at like ~20,000 machines doesn't invalidate your point but it at least shaves off a few orders of magnitude and a single PG node is not a fair comparison, we're talking 100% uptime global networks. Visa does about 70,000 transactions per second - how many servers do you think they run across their infra?
      - wredcoll 1y ago
        > Visa does about 70,000 transactions per second - how many servers do you think they run across their infra? So uh, how do we scale etherum's 150tps to that?
        DennisP 1y ago
        ZK rollups which greatly compress data on chain without losing security guarantees, combined with temporary storage using data sampling so each node only has to store a small portion of it. The zk rollups are live and support significantly more than 150tps today, and the data sampling goes live in November. There's a lot more work to be done but that puts the major pieces in place.
- sunshine-o 1y ago
  > Because literally the only point is to avoid the existing banking system and you can do that with a postures database with much less cpu involved. Ethereum is actually very low resource intensive nowadays. You can run a validator node on a RPI, a full sync node on a Intel N100 minipc with a big fast SSD and the "light clients" can probably run on something very small. I have seen banks having to bring semi-trailers full of diesel generators to plug them to their mainframe because the current requirements were too high for the grid during big batch jobs.
  - topranks 1y ago
    Just because they ditch the proof-of-work doesn’t make it efficient. The blockchain structure, the validation mechanism etc are still a very inefficient way to do general compute or database type functions.
  - ChadNauseam 1y ago
    I like crypto (I'm formerly in the industry), but that's not quite a fair comparison. 1. Running a validator is inexpensive in terms of compute, but there are 1,000,000 validators or something, which adds up to a lot of CPU usage. Of course, I think it's insanely awesome that you can run some code on Ethereum and it'll be replicated on 1,000,000 independently-operated machines, but it's not a very CPU-efficient strategy. 2. Banks doing those batch jobs probably had much higher TPS than ethereum.
    - sunshine-o 1y ago
      > Banks doing those batch jobs probably had much higher TPS than ethereum. Yes the platform running in most banks, usually built on what we call "mainframes", is still mind blowing and with incredible performance. Also just one of those CPU is about the price of a house... Also the requirements I cited is for running an Ethereum mainnet "Layer 1" node. And most "TPS" happens on the layer 2s anyway. So it is hard to compare technically. But one thing for sure is becoming an active participant in the Ethereum mainnet has a very low barrier. They got rid of the whole intensive "Proof of work" part about 5 years ago. For a full sync node the waste is more at the bandwidth and disk levels.
idontwantthis 1y ago
> Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. I think everywhere but America has already figured this out. Instant bank payments are pretty standard everywhere else, even third world countries.
- hx833001 1y ago
  The US banks just won’t do it across the board unless it is mandated like ACH. Many in the banking system feel comfortable with this FedNow rollout taking many years. It’s ridiculous.
- whimsicalism 1y ago
  not between countries
  - Yizahi 1y ago
    Last time I paid for something across borders, transaction has completed in less than 10 seconds and I got both updated state in outgoing bank account, and at the receiver side.
    - whimsicalism 1y ago
      doesn’t work for all countries, transfer limits, have to trust some custodian, etc. etc.
- ForHackernews 1y ago
  https://en.wikipedia.org/wiki/FedNow https://en.wikipedia.org/wiki/FedNow does instant settlement in the US.
slashdave 1y ago
> Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. All transactions must be derisked (there is a fallback if the transaction fails). This usually means backed with reserves, which also means they cannot be instant. Now if you don't care for the risk management of a bank, sure, go ahead and do what you would like.
- fnordpiglet 1y ago
  This isn’t even the reason, because the reserve status can be immediately verified across institutions and is often backed by a sovereign in some way in case of a run and payment systems can circuit break, etc. There are legacy reasons depending on the bank network such as business hours and batching and liquidity optimization, but these are increasingly less meaningful and systems like FedNow and others offer instant and final transfer. The real and continuing reason for the delay is to give time for repudiation and assessment of fraud, money laundering, and other financial crimes risk. The risk of instant transfer is instant theft or otherwise absconding with money that shouldn’t be yours. In fact settlement delay makes reserve problems worse because you effectively “hold” money that could potentially not be properly secured during the hold and cause a default on a transaction that was otherwise taken out of balance and pending transfer. Instant clearing and settlement makes this unambiguous. But it also makes transactions as risky as a cash transaction - instant and irrevocable. For some customers this is legitimately ok. But by and large most customers benefit from the delays more than they’re hurt by virtue of having a window to repudiate a transaction that is illegitimate. It’s just they don’t recognize that value until they need it. We all benefit from a system that disincentivizes criminality overall. It’s hard to recognize it because we exist day to day with that benefit and it’s hard to prove the negative, but there were times without the protections against financial crimes and financial oversight and they were NOT better times. They were objectively worse, so our ancestors built a set of guard rails to prevent the endemic badness around us. It appears though as they die off, and as we become less attuned to history, we are very busy ripping apart the guard rails our ancestors very carefully and thoughtfully built into our societies like some junior engineer who assumes every line of code written before them was written by an idiot. Take the American CDC as a case in point - the modern public health system was a very hard won victory against endemic diseases by generations - and as the generation who established it expires, we rip their legacy to tatters.
zaphirplane 1y ago
> Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. How long is settlement for you and what are the fees. Are you talking about banks for credit card payment processors A business needs a processor which will take fee and add some delay
pluto_modadic 1y ago
India's payment network is a good case study. The US is /not/, because US banks are lazy.

by SR2Z 1y ago

wredcoll 1y ago

> Why not have a central bank currency that can be traded on the blockchain, especially since converting it to real money will still entail KYC? Because literally the only point is to avoid the existing banking system and you can do that with a postures database with much less cpu involved.

algo_lover 1y ago
But with multiple parties involved, who has the rights to read and write to the postgres instance? How do we make sure transactions were not forged? How do we know data at rest is not being tampered with? Blockchain solves that. Newer blockchain protocols especially an L1 is much faster, easier on the environment, and provides all the immutability, transparency, and traceability benefits.
- topranks 1y ago
  We need to trust those running the system. Societies cannot function without trusted intermediaries, in finance and many other things. If we are in a democracy then the government regulates such organisations and should punish those who do not comply. Blockchain doesn’t scale as a replacement so the point is moot.
- oblio 1y ago
  You know you can just use regular cryptography to validate data, right? Also, you always have to trust someone, in this case Stripe. Regarding L1 blockchains, how exactly do they solve the speed problem for a distributed global database that needs to be replicated everywhere for the security guarantees to actually work? What do they forgo out of https://en.m.wikipedia.org/wiki/CAP_theorem https://en.m.wikipedia.org/wiki/CAP_theorem ?
  - packetlost 1y ago
    Pretty much always A. In systems like this, it's better to deny transactions than allow inconsistencies.
  - jekrb 1y ago
    non-potatoe hardware and elbow grease in the software https://github.com/anza-xyz/agave https://github.com/anza-xyz/agave
    - oblio 1y ago
      Is there a white paper for what would be a revolutionary discovery in the field of software?
DennisP 1y ago
There's not that much CPU involved. Most of the stablecoins are on Ethereum, and I think the rest are on other proof-of-stake platforms, not Bitcoin.
- jakewins 1y ago
  Ethereum is able to process something like 150 transactions per second, using about 1,000,000 validator machines. Postgres running on a single Raspberry Pi is something like 200 TPC-B read/write transactions per second. Saying Ethereum “is not using very much CPU” is baffling to me. It is the state-of-the-art in this regard, and it uses something like six orders of magnitude more CPU than a normal database running a ledger workload?
  - ricericerice 1y ago
    there's 1,000,000 validators (defined as a public key), but you can run multiple validators per machine. Most estimates that crawl the p2p network to index nodes comes out at like ~20,000 machines doesn't invalidate your point but it at least shaves off a few orders of magnitude and a single PG node is not a fair comparison, we're talking 100% uptime global networks. Visa does about 70,000 transactions per second - how many servers do you think they run across their infra?
    - wredcoll 1y ago
      > Visa does about 70,000 transactions per second - how many servers do you think they run across their infra? So uh, how do we scale etherum's 150tps to that?
      - DennisP 1y ago
        ZK rollups which greatly compress data on chain without losing security guarantees, combined with temporary storage using data sampling so each node only has to store a small portion of it. The zk rollups are live and support significantly more than 150tps today, and the data sampling goes live in November. There's a lot more work to be done but that puts the major pieces in place.
sunshine-o 1y ago
> Because literally the only point is to avoid the existing banking system and you can do that with a postures database with much less cpu involved. Ethereum is actually very low resource intensive nowadays. You can run a validator node on a RPI, a full sync node on a Intel N100 minipc with a big fast SSD and the "light clients" can probably run on something very small. I have seen banks having to bring semi-trailers full of diesel generators to plug them to their mainframe because the current requirements were too high for the grid during big batch jobs.
- topranks 1y ago
  Just because they ditch the proof-of-work doesn’t make it efficient. The blockchain structure, the validation mechanism etc are still a very inefficient way to do general compute or database type functions.
- ChadNauseam 1y ago
  I like crypto (I'm formerly in the industry), but that's not quite a fair comparison. 1. Running a validator is inexpensive in terms of compute, but there are 1,000,000 validators or something, which adds up to a lot of CPU usage. Of course, I think it's insanely awesome that you can run some code on Ethereum and it'll be replicated on 1,000,000 independently-operated machines, but it's not a very CPU-efficient strategy. 2. Banks doing those batch jobs probably had much higher TPS than ethereum.
  - sunshine-o 1y ago
    > Banks doing those batch jobs probably had much higher TPS than ethereum. Yes the platform running in most banks, usually built on what we call "mainframes", is still mind blowing and with incredible performance. Also just one of those CPU is about the price of a house... Also the requirements I cited is for running an Ethereum mainnet "Layer 1" node. And most "TPS" happens on the layer 2s anyway. So it is hard to compare technically. But one thing for sure is becoming an active participant in the Ethereum mainnet has a very low barrier. They got rid of the whole intensive "Proof of work" part about 5 years ago. For a full sync node the waste is more at the bandwidth and disk levels.

idontwantthis 1y ago

> Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. I think everywhere but America has already figured this out. Instant bank payments are pretty standard everywhere else, even third world countries.

hx833001 1y ago
The US banks just won’t do it across the board unless it is mandated like ACH. Many in the banking system feel comfortable with this FedNow rollout taking many years. It’s ridiculous.
whimsicalism 1y ago
not between countries
- Yizahi 1y ago
  Last time I paid for something across borders, transaction has completed in less than 10 seconds and I got both updated state in outgoing bank account, and at the receiver side.
  - whimsicalism 1y ago
    doesn’t work for all countries, transfer limits, have to trust some custodian, etc. etc.
ForHackernews 1y ago
https://en.wikipedia.org/wiki/FedNow https://en.wikipedia.org/wiki/FedNow does instant settlement in the US.

slashdave 1y ago

> Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. All transactions must be derisked (there is a fallback if the transaction fails). This usually means backed with reserves, which also means they cannot be instant. Now if you don't care for the risk management of a bank, sure, go ahead and do what you would like.

fnordpiglet 1y ago
This isn’t even the reason, because the reserve status can be immediately verified across institutions and is often backed by a sovereign in some way in case of a run and payment systems can circuit break, etc. There are legacy reasons depending on the bank network such as business hours and batching and liquidity optimization, but these are increasingly less meaningful and systems like FedNow and others offer instant and final transfer. The real and continuing reason for the delay is to give time for repudiation and assessment of fraud, money laundering, and other financial crimes risk. The risk of instant transfer is instant theft or otherwise absconding with money that shouldn’t be yours. In fact settlement delay makes reserve problems worse because you effectively “hold” money that could potentially not be properly secured during the hold and cause a default on a transaction that was otherwise taken out of balance and pending transfer. Instant clearing and settlement makes this unambiguous. But it also makes transactions as risky as a cash transaction - instant and irrevocable. For some customers this is legitimately ok. But by and large most customers benefit from the delays more than they’re hurt by virtue of having a window to repudiate a transaction that is illegitimate. It’s just they don’t recognize that value until they need it. We all benefit from a system that disincentivizes criminality overall. It’s hard to recognize it because we exist day to day with that benefit and it’s hard to prove the negative, but there were times without the protections against financial crimes and financial oversight and they were NOT better times. They were objectively worse, so our ancestors built a set of guard rails to prevent the endemic badness around us. It appears though as they die off, and as we become less attuned to history, we are very busy ripping apart the guard rails our ancestors very carefully and thoughtfully built into our societies like some junior engineer who assumes every line of code written before them was written by an idiot. Take the American CDC as a case in point - the modern public health system was a very hard won victory against endemic diseases by generations - and as the generation who established it expires, we rip their legacy to tatters.

zaphirplane 1y ago

> Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't. How long is settlement for you and what are the fees. Are you talking about banks for credit card payment processors A business needs a processor which will take fee and add some delay

pluto_modadic 1y ago

India's payment network is a good case study. The US is /not/, because US banks are lazy.