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Don't confuse Ethereum for a currency that competes with Bitcoin. It's different. It's a decentralized, consensus-driven database that anyone can use. Anything

by natrius 12y ago

Don't confuse Ethereum for a currency that competes with Bitcoin. It's different. It's a decentralized, consensus-driven database that anyone can use. Anything that required a trustworthy middleman or counterparty can be replaced by this database where no one can forge entries or take unpredictable actions. Ethereum and systems like it make it easier for humans to interact with each other, and it will be a core part of the story of our era.

fossuser 12y ago
Can you give a little more detail? After reading this article and some of their web page I still have no idea what this actual is (beyond the fact that it's a decentralized platform for decentralized applications). Can you give an example of what this would be used for and how?
- drcode 12y ago
  It's hard to really summarize ethereum well... it's just so different from any existing system, IMHO. Unless you're really into the nitty gritty of cryptocurrency technology, it won't really make sense until people manage to build some compelling apps for it, hopefully around the summer time.
  - zzalpha 12y ago
    So then list some of those compelling apps. Think like a marketing guy. I don't care about the specifics of the mechanism. Tell me what it will do for me, the user, that I'll care about.
    - drcode 12y ago
      OK, I'll give it a shot... At its heart, ethereum is a tool for minimizing counterparty risk and cost. You don't want Twitter to extinguish 3rd party twitter clients? You don't want Uber to take a 30% monopoly fee on every transaction? You don't want your stock broker to front-load your market orders? These are all forms of counterparty risk/cost. So the compelling applications for ethereum are: A prediction market with minimal counterparty risk, a stock exchange minimal counterparty risk, a product market with minimal counterparty risk, a currency exchange with minimal counterparty risk, a poker site with minimal counterparty risk, a social network with minimal counterparty risk, a ride sharing site with minimal counterparty risk, etc.
      - 0x8D3A 12y ago
        Some of your examples need oracles to deliver information into the script, which is (oh no!) your counter party so you're back to square one again. It doesn't work in any other way due to the realities of distributed consensus. The example of a poker system within Ethereum is incredibly unlikely, a social network or Uber clone the same but for meatspace issues rather than cryptographic ones. I've still yet to come across a single person who can give me a compelling reason for Ethereum to exist other than "this is awesome because it will change the world" or other similar drivel. It's always impossible due to limits in Ethereum's design, limits of reality, or just stuff you can do in Bitcoin anyway and nobody has realized.
        drcode 12y ago
        The goal is to minimize counterparty risk, not entirely eliminate it... you are right that in many cases that just isn't possible.
        0x8D3A 12y ago
        Even in cases where it might be possible the end result to a human is often completely unusable. You might hate the Uber taxi cartel or whatever, but at least using them you have some degree of privacy (with "smart contracts" your privacy is absolutely gone, and not just financial privacy) and customer service. For example there's a fad of putting "ownership" of physical assets into bitcoin tokens for example, fine, that works until someone steals the token and not the physical asset. Now who owns the asset? Reality is out of sync with what the block chain says so, there's no support to help me get it back and no backdoor. Privacy is even harder. With Bitcoin everyone knows what you spend, where you spend it, probably what you spend it too with some extrapolation. With "smart contracts" now everybody knows who your arbitrator is, who you play poker with, what brand of fridge you own. There's no getting around that if you want a public ledger.
        bachback 12y ago
        Much agree - those are the big conceptual holes in smart contracts. The concept still has a lot of merit, in the very long term. It's a bit like trying to imagine Google in 1993. Most of the things one can assume are most likely going to be wrong, including even the usages of these systems. I'd personally start with extending the Bitcoin script and thinking about better ways for multiple users to use it.
    - natrius 12y ago
      - Decentralized, uncensorable prediction markets, which publicize expertise so everyone can predict the future - Decentralized, low-margin labor markets (e.g. Uber, Postmates, etc.) with lower prices for consumers and higher profits for workers - Currencies based on local prices indexes, which can give even the smallest of countries stable money that they don't have today And lots of other things people haven't thought of yet.
    - RoboTeddy 12y ago
      A random example: you could implement online poker (which is currently banned in the US). It'd be trustless (i.e., anyone can verify that they're not being cheated), and couldn't easily be taken down [1] [1] https://forum.ethereum.org/discussion/comment/2944/#Comment_2944 https://forum.ethereum.org/discussion/comment/2944/#Comment_...
- hidingfromherd 12y ago
  I like to think of it as a global coordination platform. If you're familiar with bitcoin: bitcoin is a platform that coordinates global views of bitcoin balances and verifiable logic for transfer of bitcoin from one account to another. In a similar way: ethereum is a platform that coordinates global views of state and verifiable logic for state transitions. > Can you give an example of what this would be used for and how? This would be used in any scenario where a global or otherwise undefined group of actors desires to coordinate action in a way that does not inherently require trust from a single party. In human terms, it is used when you want to communicate or interact with some unknown others without relying on a company/single entity to provide the medium. Oh yeah, the example. Lets build a small one. Lets say the people at the tor project wants to publish some master public keys, etc. There is a core group of folks who should have write access, but they don't necessarily trust each other. Some of their 'important decisions', like changing their group membership, or changing a public key, should be put to a vote. (Oh and lets say they need to be able to cycle their individual keys, as well) They could create an ethereum contract (or interacting contracts) that managed the operation. They wouldn't have to necessarily trust each other individually, and their progress would be visible/verifiable by all. The contract(s) would handle their published data (allowed adding/removing content), maintain their group membership, and would presumably only be modifiable by the members of their group. Members could be modelled as ethereum addresses. Member needs to change keys? Include logic to swap a member for another address, iff the call came from the member to be swapped out. Important tasks need to be voted on? Include logic to initiate and track votes on certain operations.
zzalpha 12y ago
it will be a core part of the story of our era. ROFL, wow... that's not grandiose at all. It's a database. On the internet. I'm gonna go out on a limb and bet at least a few billion folks on the planet likely won't see their lives change much any time soon because Etherium was conceived. Edit: Ahh. Zapchain again. Now I get it. Times like this I wish there was a way to filter my Hacker News RSS feed to cull out posts from particular users or sources...
- aianus 12y ago
  A few billion folks live the same life now as they did before the computer was invented. Does that make the computer an insignificant part of our era?
  - zzalpha 12y ago
    What? That's not at all true. Just because a person doesn't, themselves, own a computer, doesn't mean their lives aren't touched by their existence. As the first example that springs to mind: computers have enabled access to telecommunications infrastructure (think cell phones), which have utterly transformed the lives of many of the world's poorest. But a pipedream consensus database running on the internet? Colour me skeptical that it's going to utterly transform the world the way the computer has.
  - yuvadam 12y ago
    It certainly gives some very relevant perspective about the privileges we enjoy, absolutely.
- lazaroclapp 12y ago
  So, here is the thing, let's not consider the question of whether Ethereum will or won't be successful. I don't have the faintest clue whether it will be or not. But, let's for a moment assume it is successful, wildly so. Would it be a big deal? Yes, it likely would be. If Ethereum is as successful as some of people working on it hope it will be, it could be as important as HTTP. Yeah, HTTP is one protocol... on the internet, most people have little idea about how it works or what it's about, yet it does affect billions of people and is an important part (at the infrastructure level) of one of the defining phenomenons of our era: the Internet. Some people hope that cryptocurrencies are going to be next decade's Internet and Ethereum is going to be its HTTP. The main break from the standard internet given by Ethereum is the following: fully distributed apps that exist not in any server, but as a public contract between their users. If you want eBay on the internet, you build a program on a server you own and tell it how to mediate transactions between buyers and sellers. If you want eBay on Ethereum, you publish a contract about how buyers and sellers should behave, and include in that contract some provisions that enforce themselves, no middleman required. Will this be practical? Who knows. Would it be useful if it works? I believe it would be. Would it be industry changing? Perhaps. Would it be world changing? Well... let's say it at least has a chance. Now, whether Ethereum is another http/www/html or, say, another Project Xanadu, that's a different question. Ethereum is an idea that can only work if many untested pieces turn out to work together as desired and the main benefits from those technologies are sufficient for people to buy into what would be a clean departure from the existing web. Experience shows that such departures are seldom successful (remember when every website was going to be a Java Applet? That was still way less of a moonshot than Dapps). But the thing is, regardless of whether Ethereum succeeds or not, its development is likely to produce useful ideas, and it is a project that, at least in principle, should it succeed, really can change our infrastructure. It is worth keeping in mind, that, in some cases, changing infrastructure has changed the world quite significantly (e.g. trains, telegraph, Internet, and even WWW vs the telnet/email era of the Internet).
DennisP 12y ago
But it still has a currency. You need something for rewarding miners.
- natrius 12y ago
  Correct. But the currency aspect isn't why it matters. Nothing will outcompete Bitcoin as a currency as far as I can see.
RoboTeddy 12y ago
Ethereum seems like a decentralized consensus-driven trustless COMPUTER that anyone can use -- it's not just a database. Anyone can pay to start and run a process ("contract" in ethereum-speak) that runs arbitrary (albeit sandboxed) code. Like you mentioned, processes can store data. Processes can also send and receive messages ("transactions" in ethereum-speak) with users and with other processes.
- natrius 12y ago
  Yeah, I guess calling it a database makes it sound like a cloud MySQL service. But to be clear, it's not an EC2 analogue either. If there were demand for a distributed EC2, we could build one way better than Ethereum. Ethereum is necessarily slow because consensus must be reached on the data. You wouldn't run an arbitrary program on Ethereum. You run programs on Ethereum to define the state transitions in a database the whole world can access and trust. If you're building a marketplace, for instance, then you're defining what it means when a customer buys something. Every customer and merchant who uses your system has proof of how their interactions will work, and it's impossible for anyone to try to cheat. The database and its state transitions are what matters.

by natrius 12y ago

fossuser 12y ago

Can you give a little more detail? After reading this article and some of their web page I still have no idea what this actual is (beyond the fact that it's a decentralized platform for decentralized applications). Can you give an example of what this would be used for and how?

drcode 12y ago
It's hard to really summarize ethereum well... it's just so different from any existing system, IMHO. Unless you're really into the nitty gritty of cryptocurrency technology, it won't really make sense until people manage to build some compelling apps for it, hopefully around the summer time.
- zzalpha 12y ago
  So then list some of those compelling apps. Think like a marketing guy. I don't care about the specifics of the mechanism. Tell me what it will do for me, the user, that I'll care about.
  - drcode 12y ago
    OK, I'll give it a shot... At its heart, ethereum is a tool for minimizing counterparty risk and cost. You don't want Twitter to extinguish 3rd party twitter clients? You don't want Uber to take a 30% monopoly fee on every transaction? You don't want your stock broker to front-load your market orders? These are all forms of counterparty risk/cost. So the compelling applications for ethereum are: A prediction market with minimal counterparty risk, a stock exchange minimal counterparty risk, a product market with minimal counterparty risk, a currency exchange with minimal counterparty risk, a poker site with minimal counterparty risk, a social network with minimal counterparty risk, a ride sharing site with minimal counterparty risk, etc.
    - 0x8D3A 12y ago
      Some of your examples need oracles to deliver information into the script, which is (oh no!) your counter party so you're back to square one again. It doesn't work in any other way due to the realities of distributed consensus. The example of a poker system within Ethereum is incredibly unlikely, a social network or Uber clone the same but for meatspace issues rather than cryptographic ones. I've still yet to come across a single person who can give me a compelling reason for Ethereum to exist other than "this is awesome because it will change the world" or other similar drivel. It's always impossible due to limits in Ethereum's design, limits of reality, or just stuff you can do in Bitcoin anyway and nobody has realized.
      - drcode 12y ago
        The goal is to minimize counterparty risk, not entirely eliminate it... you are right that in many cases that just isn't possible.
        0x8D3A 12y ago
        Even in cases where it might be possible the end result to a human is often completely unusable. You might hate the Uber taxi cartel or whatever, but at least using them you have some degree of privacy (with "smart contracts" your privacy is absolutely gone, and not just financial privacy) and customer service. For example there's a fad of putting "ownership" of physical assets into bitcoin tokens for example, fine, that works until someone steals the token and not the physical asset. Now who owns the asset? Reality is out of sync with what the block chain says so, there's no support to help me get it back and no backdoor. Privacy is even harder. With Bitcoin everyone knows what you spend, where you spend it, probably what you spend it too with some extrapolation. With "smart contracts" now everybody knows who your arbitrator is, who you play poker with, what brand of fridge you own. There's no getting around that if you want a public ledger.
        bachback 12y ago
        Much agree - those are the big conceptual holes in smart contracts. The concept still has a lot of merit, in the very long term. It's a bit like trying to imagine Google in 1993. Most of the things one can assume are most likely going to be wrong, including even the usages of these systems. I'd personally start with extending the Bitcoin script and thinking about better ways for multiple users to use it.
  - natrius 12y ago
    - Decentralized, uncensorable prediction markets, which publicize expertise so everyone can predict the future - Decentralized, low-margin labor markets (e.g. Uber, Postmates, etc.) with lower prices for consumers and higher profits for workers - Currencies based on local prices indexes, which can give even the smallest of countries stable money that they don't have today And lots of other things people haven't thought of yet.
  - RoboTeddy 12y ago
    A random example: you could implement online poker (which is currently banned in the US). It'd be trustless (i.e., anyone can verify that they're not being cheated), and couldn't easily be taken down [1] [1] https://forum.ethereum.org/discussion/comment/2944/#Comment_2944 https://forum.ethereum.org/discussion/comment/2944/#Comment_...
hidingfromherd 12y ago
I like to think of it as a global coordination platform. If you're familiar with bitcoin: bitcoin is a platform that coordinates global views of bitcoin balances and verifiable logic for transfer of bitcoin from one account to another. In a similar way: ethereum is a platform that coordinates global views of state and verifiable logic for state transitions. > Can you give an example of what this would be used for and how? This would be used in any scenario where a global or otherwise undefined group of actors desires to coordinate action in a way that does not inherently require trust from a single party. In human terms, it is used when you want to communicate or interact with some unknown others without relying on a company/single entity to provide the medium. Oh yeah, the example. Lets build a small one. Lets say the people at the tor project wants to publish some master public keys, etc. There is a core group of folks who should have write access, but they don't necessarily trust each other. Some of their 'important decisions', like changing their group membership, or changing a public key, should be put to a vote. (Oh and lets say they need to be able to cycle their individual keys, as well) They could create an ethereum contract (or interacting contracts) that managed the operation. They wouldn't have to necessarily trust each other individually, and their progress would be visible/verifiable by all. The contract(s) would handle their published data (allowed adding/removing content), maintain their group membership, and would presumably only be modifiable by the members of their group. Members could be modelled as ethereum addresses. Member needs to change keys? Include logic to swap a member for another address, iff the call came from the member to be swapped out. Important tasks need to be voted on? Include logic to initiate and track votes on certain operations.

zzalpha 12y ago

it will be a core part of the story of our era. ROFL, wow... that's not grandiose at all. It's a database. On the internet. I'm gonna go out on a limb and bet at least a few billion folks on the planet likely won't see their lives change much any time soon because Etherium was conceived. Edit: Ahh. Zapchain again. Now I get it. Times like this I wish there was a way to filter my Hacker News RSS feed to cull out posts from particular users or sources...

aianus 12y ago
A few billion folks live the same life now as they did before the computer was invented. Does that make the computer an insignificant part of our era?
- zzalpha 12y ago
  What? That's not at all true. Just because a person doesn't, themselves, own a computer, doesn't mean their lives aren't touched by their existence. As the first example that springs to mind: computers have enabled access to telecommunications infrastructure (think cell phones), which have utterly transformed the lives of many of the world's poorest. But a pipedream consensus database running on the internet? Colour me skeptical that it's going to utterly transform the world the way the computer has.
- yuvadam 12y ago
  It certainly gives some very relevant perspective about the privileges we enjoy, absolutely.
lazaroclapp 12y ago
So, here is the thing, let's not consider the question of whether Ethereum will or won't be successful. I don't have the faintest clue whether it will be or not. But, let's for a moment assume it is successful, wildly so. Would it be a big deal? Yes, it likely would be. If Ethereum is as successful as some of people working on it hope it will be, it could be as important as HTTP. Yeah, HTTP is one protocol... on the internet, most people have little idea about how it works or what it's about, yet it does affect billions of people and is an important part (at the infrastructure level) of one of the defining phenomenons of our era: the Internet. Some people hope that cryptocurrencies are going to be next decade's Internet and Ethereum is going to be its HTTP. The main break from the standard internet given by Ethereum is the following: fully distributed apps that exist not in any server, but as a public contract between their users. If you want eBay on the internet, you build a program on a server you own and tell it how to mediate transactions between buyers and sellers. If you want eBay on Ethereum, you publish a contract about how buyers and sellers should behave, and include in that contract some provisions that enforce themselves, no middleman required. Will this be practical? Who knows. Would it be useful if it works? I believe it would be. Would it be industry changing? Perhaps. Would it be world changing? Well... let's say it at least has a chance. Now, whether Ethereum is another http/www/html or, say, another Project Xanadu, that's a different question. Ethereum is an idea that can only work if many untested pieces turn out to work together as desired and the main benefits from those technologies are sufficient for people to buy into what would be a clean departure from the existing web. Experience shows that such departures are seldom successful (remember when every website was going to be a Java Applet? That was still way less of a moonshot than Dapps). But the thing is, regardless of whether Ethereum succeeds or not, its development is likely to produce useful ideas, and it is a project that, at least in principle, should it succeed, really can change our infrastructure. It is worth keeping in mind, that, in some cases, changing infrastructure has changed the world quite significantly (e.g. trains, telegraph, Internet, and even WWW vs the telnet/email era of the Internet).

DennisP 12y ago

But it still has a currency. You need something for rewarding miners.

natrius 12y ago
Correct. But the currency aspect isn't why it matters. Nothing will outcompete Bitcoin as a currency as far as I can see.

RoboTeddy 12y ago

Ethereum seems like a decentralized consensus-driven trustless COMPUTER that anyone can use -- it's not just a database. Anyone can pay to start and run a process ("contract" in ethereum-speak) that runs arbitrary (albeit sandboxed) code. Like you mentioned, processes can store data. Processes can also send and receive messages ("transactions" in ethereum-speak) with users and with other processes.

natrius 12y ago
Yeah, I guess calling it a database makes it sound like a cloud MySQL service. But to be clear, it's not an EC2 analogue either. If there were demand for a distributed EC2, we could build one way better than Ethereum. Ethereum is necessarily slow because consensus must be reached on the data. You wouldn't run an arbitrary program on Ethereum. You run programs on Ethereum to define the state transitions in a database the whole world can access and trust. If you're building a marketplace, for instance, then you're defining what it means when a customer buys something. Every customer and merchant who uses your system has proof of how their interactions will work, and it's impossible for anyone to try to cheat. The database and its state transitions are what matters.