Ethereum Thinks it Can Change the World. It's Running Out of Time To Prove It. (technologyreview.com) 150
The blockchain system has daunting technical problems to fix. But first, its disciples need to figure out how to govern themselves. From a report: The handful of idealistic researchers, developers, and administrators in charge of maintaining its software are under increasing pressure to overcome technical limitations that stymie the network's growth. At the same time, well-funded competitors have emerged, claiming that their blockchains perform better. Crackdowns by regulators, and a growing understanding of how far most blockchain applications are from ready for prime time, have scared many cryptocurrency investors away: Ethereum's market value in dollars has fallen more than 90% since its peak last January.
The reason Devcon (the annual "family reunion" organized by the Ethereum Foundation; this year's edition was held in October) feels so upbeat despite these storm clouds is that the people building Ethereum have something bigger in mind -- something world-changing, in fact. Yet to achieve its goal, this ragtag community needs to crack a problem as complicated as any of the toe-curling technical challenges it faces: how to govern itself. It must find a way to organize a scattered global network of contributors and stakeholders without sacrificing "decentralization" -- the principle, which any cryptocurrency community strives for, that no one entity or group should be in control.
The reason Devcon (the annual "family reunion" organized by the Ethereum Foundation; this year's edition was held in October) feels so upbeat despite these storm clouds is that the people building Ethereum have something bigger in mind -- something world-changing, in fact. Yet to achieve its goal, this ragtag community needs to crack a problem as complicated as any of the toe-curling technical challenges it faces: how to govern itself. It must find a way to organize a scattered global network of contributors and stakeholders without sacrificing "decentralization" -- the principle, which any cryptocurrency community strives for, that no one entity or group should be in control.
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What's wrong? Why does everybody else have to solve this problem? The invisible hand of the market has arthritis?
Never Going to Work (Score:5, Insightful)
The currency issue is religious/political.
You are never going to institute a currency that cannot be fiddled with by the powers that be. One of the cornerstones of Crypto Currency is a static rate of inflation. They it can be easily stolen by hacking exchanges, or taken possession of by authority. It's volatility is directly linked to the currently established and highly manipulated currencies that people use to exchange them with.
Investors only care if it gets them money, governments only care if it gets them spend and traceability, and Central Bankers only care if they have direct control over it's production and distribution.
Right now, the only thing going on is the wait... when the Central Bankers find a cryptocurrency they like and can control like they do fiat currencies then we will finally have a cryptocurrency that has some traction. Until then... this is all "expensive" novelty shop antics.
Re: Never Going to Work (Score:2)
Most cryptocurrencies are deflationary, not inflationary.
Re: Never Going to Work (Score:5, Insightful)
based on what evidence?
Cryptos are mined, which means over time more and more are added to the available pool. How does this fact fit into a "deflation mode"?
Inflation has a basic component... "amount of x". It is a key principle of supply and demand. More supply = less value. Less supply = more value. Demand has the same model in the opposite direction. If there are only 1000 coins in the market a demand for only 1 of them means its value is low. If there is a demand for 2000 of them then the value is high. Now... if the market flood with 1 million... the value AND demand for 1 or 2000 is low & low.
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The supply is constantly increasing, but the rate of increase is slowing constantly. I don't know economic, but I don't think that classifies as inflationary, since the value of the currency is designed to go up over time. Inflation isn't just the injection of more supply, but enough supply to inflate the value of the currency.
Re: Never Going to Work (Score:5, Insightful)
As long as the pool grows, regardless of the rate of growth it creates inflation.
Look at Venezuela and it's hyper inflation. What is growing? The amount of money. Everyone is a millionaire down there but only in the way everyone with $10k are penny millionaires in the USA.
" Inflation isn't just the injection of more supply,"
Correct, but the injection of more supply always guarantee's inflation. Just because OTHER factors can also increase or even LOWER inflation does no mute the basic fact that adding more X to the pool increases inflation.
What you and the other commenters are missing is that you think just because another mechanism can create deflation that somehow can mean that this does not create inflation.
It's simple as explain int he supply and demand model.
If there are 1000 coins and 10 more are created then inflation of 1% just occurred. This inflation may not be immediately felt by everyone but it is there. Additionally, if the demand for a lot of things fall, and cause deflationary effects of 2% that means that deflation was 1%. But if those 10 coins were not added then deflation would have been 2%. This is oversimplified for educational purposes but makes it clear that just because overall inflation is based on multiple things... adding currency to a pool is always inflationary and will never not be, no matter how many other factors offset that inflation.
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It sounds like you're looking for key words in my reply and responding to those without actually applying any critical thinking. The injection of currency has to reach a critical level before it deflates the value of the currency. You're working too much in pure theory - but in the real world, population growth is inherently deflationary to currency. That's just one factor in a chaotic system.
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No, you are just trying to turn my argument into something else and you are getting upset that I am not biting.
I don't care what you think, I only care about the facts. You can sit around the prognosticate all you want, it means nothing in the context of my comment.
Adding more currency creates inflation no matter how many fallacies you use to say otherwise. You are the one blathering about theory. It is very simple math to understand that increasing supply of currency decreases its value and thereby cre
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You are the one blathering about theory. It is very simple math to understand that increasing supply of currency decreases its value and thereby creates inflation.
What do you think math is? It operates on theory. If there is only one factor, and that factor is money supply, then increasing the supply of money always causes inflation. If it is not the only factor, then you have to consider the other factors.
It's not theory, its just a plain as day fact just like gravity.
And I'm sure you'd tell me that a helium balloon should follow the law and fall to Earth rather than buoyantly float in our atmosphere. Because gravity is very simple math.
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Math is not a theory, Math does not operate on theory. 1+1=2 is NOT a theory. Where did you get that idea?
I do not think you are willing to be reasonable here. I am only talking about 1 thing. And that is the currency itself. You have constantly tried to shoehorn in extraneous factors to derail the conversation in some vain attempt to countermand my basic and factual point.
No matter how many other factors you try to confuse the situation with, increasing the supply of money is an inflationary effect. T
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and does not change even if the "overall" effect of an economic result was deflationary.
If the economic result is deflationary, then the value of the currency goes up. You can't just put the currency in a bubble and say that it's inflationary as long as no humans interact with it - it doesn't exist outside of human interaction.
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Straw-man argument... again.
The act of adding more creates inflation... regardless of another effect offsetting it. Done, no more to say about it.
It's inflation omnichad, it's inflation good or bad,
It's inflation here and there, it's inflation everywhere,
If's inflation omnichad, that fact won't change...
even when you're mad!
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No, that's not a straw man argument. You're just oversimplifying it.
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"You're just oversimplifying it."
I did state that I am only talking about 1 element did I not? I even used an oversimplified example and stated it as such. The reason why it is kept simplified because it is a knowable quantity in the chaos and you are trying to bring unknowable quantities in to muddy the water. I have been trying to tell you that the entire time.
Get off the theoretical and stick to the factual. If you want to expand the conversation, stop trying to refute a fact causing me to have to ke
Re: Never Going to Work (Score:4, Insightful)
I did state that I am only talking about 1 element did I not?
Go look up the definition of inflation. It never describes one element. It talks about entire systems.
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SirAstral you seem to be missing something very fundamental, which is why you're getting trashed here. Inflation is a currency having less buying power today than it had yesterday. That's it. There are many sources of inflation, only one of which is the creation of more currency. Similarly, deflation is a currency having more buying power today than it had yesterday. That's it. There are many sources of deflation, only one of which is the destruction of currency.
What you should be saying is that the creatio
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>I'm sorry you can't accept this, but CC's will be around and your dumb ass won't be for long, lol.
Shame you're so "confident" in this "fact" you have to post anonymously.
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Both of them are so busy looking for excuses to call the other retarded that they've failed to grasp that one is talking about gross and the other net.
Popcorn?
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Don't feel bad. You're right and he's wrong. Inflation is not simply the amount of money in circulation. No one outside of a few cranks believes this. Properly understood (and Wikipedia properly understands) "In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time."
The amount of money in circulation is related to inflation but it is not itself inflation.
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The injection of currency has to reach a critical level before it deflates the value of the currency.
No it doesn't. Just because something deflates doesn't negate the inflationary component of it. The economy differently if inflation is 5% or 4%. The opposing factor still has an affect.
You're not applying enough theory. By splitting hairs you're making no point other than you prefer to split hairs than talk about the topic at hand.
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Having an inflationary component to it does not mean it results in inflation. To say otherwise would be splitting hairs. Inflation is an overall systemic effect, not a contributing factor.
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As long as the pool grows, regardless of the rate of growth it creates inflation.
That effect alone creates inflation, yes. But your original comment claimed that (and I quote)
One of the cornerstones of Crypto Currency is a static rate of inflation.
which is just completely untrue. Not only because the amount of new crypto mined in for e.g. Bitcoin (and most coins) decreases over time (which is the opposite of a "static rate of inflation"), but additionally the loss of coins due to private keys being destroyed or lost means there is a strong deflationary effect on all crypto (for instance, it's estimated that about as many Bitcoins have been lost as their ar
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The fact that forks happen mean that, theoretically, any cryptocurrency can print money faster than Zimbabwe ever did.
There is also a question fo Gresham's Law, and whether/how it might applied to cryptocurrencies.
While a cryptocurrency skeptic overall, I recognize the argument there is value in the network of players working a particular cryptocurrency. That implies that a currency has very real arguable value as long as you see it moving around.
But Gresham's Law suggests there is an unstable dynamic, tha
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It's only inflationary if prices of the goods and services you buy in the currency are going up. This depends on more than just how much money there is. You also have to factor in how many people have the currency to spend, and how many goods there are to spend them on. Let's say you have economic production of 1million eu (economic utility, ie goods and services), and you have 1million bc (bitcoins), then theoretically, assuming nobody's saving their bc, then the 1 million bc can buy the 1million eu at a p
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Most cryptocurrencies are designed to inflate logarithmically (inflation decreases the more you've mined). Our economic theory assumes unending exponential growth, so at some point the inflation rate of the cryptocurrency has to be surpassed by the growth rate of the economy, producing overall deflation.
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You are making specious claims. Computational power is the limiting factor, what happens if a breakthrough in processing occurs? A lot of crypto can flood. Same as if a bug occurs. Are you going to take back the buggy currencies? prefect way to start a war or at least raise crime in the chaos.
Overall deflation "could" happen but not even hardly a realistic claim by anyone that knows better. Look at currencies world wide and their histories. Inflation is the de-facto and most economists consider a sma
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"Most cryptocurrencies are designed"
First four words of my post. Yes, if any currency gets broken, whether through magic quantum computers or good old counterfeiters, all bets are off.
Your second paragraph doesn't really make sense. One of the distinguishing factors of most cryptocurrencies is that the supply of new tokens is designed to be limited, and to approach that limit asymptotically (logarithmically usually). You can't hold up regular currencies, where the rate of printing new currency is purposely
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Cryptocurrencies are specifically designed to deal with that.
For instance for Bitcoin, the network works in such a way that if processing power doubles, so does difficulty, keeping the mining rate the same it was.
Additionally, the amount you get for mining periodically halves and there's a fixed maximum supply of 21 million bitcoins total.
So unless you manage to find a defect in the design, it doesn't matter what processing power you have: the rate mining will remain constant, punctuated with a halving of p
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Re: Never Going to Work (Score:2)
Mining is the equivalent of pushing around pre-existing currency. No new currency is created. It is simply claimed. And there is a limit even to that. Something like 80% of all BTC that will ever exist has been claimed. The currency was all created and locked up in the initial algorithms. Since some coins are lost over time, this makes BTC and similar de facto deflationary currencies. No semantic nonsense will change that.
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> this makes BTC and similar de facto deflationary currencies.
Until they're forked, then they're inflationary.
Re: Never Going to Work (Score:2)
That's like including Euros when determining the inflation of the dollar.
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Cryptos are mined, which means over time more and more are added to the available pool. How does this fact fit into a "deflation mode"?
Incorrect: bitcoin is deflationary because it gets harder to mine over time, and the total bitcoin there will ever be is 21 million - that's it.
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Cryptos are mined, which means over time more and more are added to the available pool. How does this fact fit into a "deflation mode"?
A currency is deflationary if its supply of money grows more slowly that the goods it can be exchanged for. The big selling point of cryptocurrencies is that because the money supply in each one is algorithmically limited and asymptotic to some final value, they are all inherently deflationary. As each one takes more energy to mine, the amount of coin it takes to buy a given real-word item decreases. That by definition is deflation.
That's exactly why Bitcoin and its many imitators soon stopped being a mediu
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EDIT: "race to invent new currencies to mine and hold..."
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I completely agree.
Crypto is not tangible.
Stocks represent actual equity and shares in something tangible.
While you can create companies, their share value is mapped to the tangible value of the company.
With crypto, the value of a crypto currency is completely nebulous and arbitrary. It's even less tangible than Dutch tulips or Beanie Babies. The idea that anybody would use crypto as an investment is absurd. Yes, some people are making money in crypto, just like some people make money in Ponzi schemes
Re: Never Going to Work (Score:1)
If the crisis is bad enough that my bank(s) fail and FDIC insurance doesn't pay out I am pretty certain a random number on a hard drive is not what someone will want in trade for goods and services. If that is your concern, investing in ammunition (or reloading supplies) might be a better long-term investment.
Re: Never Going to Work (Score:2)
Re:Never Going to Work (Score:4, Informative)
Wait until the next financial crisis. Crypto will work. Your bank cards may not.
I'm sure that people like you back in the 1920s would have said:
"Wait until the next financial crisis. Gold will work."
Except that it didn't. To keep the financial system afloat, they simply outlawed gold. They can do the same with cryptocurrency.
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I remember hearing stories of how people would exchange a gold chandelier for a bag of potatoes. The nutritional value of gold is apparently very low.
Fun fact, potatoes are a distributed currency that you can still mine at home with commodity hardware!
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Crypto currencies for your day to day purchases will need to find a way to cut down its price variation.
If I had 20 bitcoins in 2003 I could buy a Pizza, in 2016 I could buy a house. in 2018 you can buy a car. If I had 20 US Dollars in 2003 I could buy a 2 large pizza with 4 toppings, in 2016 I can buy two large Pizza's with 2 toppings, in 2018 I can still buy 2 large pizzas with a 2 toppings (but they may skimp a little on the cheese)
When is a good time to buy a currency? Who knows with the variance you
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>Yeah but who is gonna accept money if they cannot convert it to gold?
When's the last time you ever paid for anything in gold?
Gold has no value unless converted into an established, highly-regulated fiat currency that is accepted by everybody.
Go ahead and try to buy a pizza with the equivalent in gold you stupid fucking idiot.
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Wait until the next financial crisis. Crypto will work. Your bank cards may not.
Darling, crypto doesn't even work now, let alone at the next financial crisis when the Tulip Craze 2.0 will be over.
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You left out a group of people that makes Eth different: the ones trying to find interesting applications for dapps running on the blockchain.
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I do not think they are significant in the context of this argument, though that may change in the future. Sure they might be able to come up with some creative applications for things, but they do not have the powers that Lawmakers, regulators, banks, and Financial institutions have... not by a mile.
In this context they could just as easily say we want to trade shoes as a form of currency. But they still need to convince the government and financial institutions to accept shoes as a currency too. Until
It *already* works (Score:1)
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Ethereum had its own version of bailouts: https://ftalphaville.ft.com/20... [ft.com]
It's different from traditional banking, though, because Ethereum users themselves agreed to the bailout, and it wasn't really forced. The original chain does continue as Ethereum Classic, but it's a much smaller player.
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Never Going to Work
The currency issue is religious/political.
You're contradicting yourself. I've been shocked at how long it's taken to reach this point, I figured this was just a momentary lapse in judgment, but this has gone on for quite a while now and you've given the reason right there.
Ethereum thinks it can change the world? Maybe. Can't rule out that possibility. If enough people believe in it hard enough, that alone can be enough to sustain it.
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Buh-bye Speculators (Score:5, Insightful)
The best thing to happen to the future of fintech is all these speculators running for the doors. Back to where things were in 2015 would be just dandy, so serious developers can get back to making real, workable solutions. For some reason crypto caught fire before most people working on it thought things were ready for primetime - that was quite unfortunate because it got regulations interested in a nascent technology. It's like the USPS got hold of SMTP in 1986 and decided to take it over. :/ Quite a setback.
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Proof of Work is the only known solution to trustless security. And even Bitcoin uses orders of magnitude fewer resources than any fiat currency system requires. cf. Wars for Petrodollar stability; Bitcoin never killed a half million children.
Re:Buh-bye Speculators (Score:4, Insightful)
Go to the supermarket, well the food maybe poison, you should have to test it yourself. How would you test well you couldn't ask someone they could be lying, you would have to do your own research to determine those test food safety. That would be all everybody would be doing checking that everybody else is not lying.
Install software? did you read the source and then compile the source yourself? did you check the compiler and compile that too? did you get an electron microscope and check the hardware your software is running on? what about that electron microscope you sure someone didn't mess with that?
Society runs on trust, that is one reason I believe people don't read terms and condition, they trust that they are reasonable, imagine the total time used if everybody read all the terms and conditions, and constantly checked for update for every site they visited, all the software they ran, and service they used.
It is usually better to trust and sometimes get screwed over than never trust.
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Trump's value is falling faster than anycoin ever.
Interesting that you'd write that. Rasmussen just today released poll results that shows Trump's approval is ahead of Obama's at the same point in Obama's presidency. http://www.rasmussenreports.co... [rasmussenreports.com]
Blockchain and the Standard Model of Physics (Score:5, Funny)
Dissociated Press (DP) — FOR IMMEDIATE RELEASE
Physicists identify new fundamental particle
May herald a new particle family and restructuring of the Standard Model
Geneva, Switzerland — December 3, 2018
Keywords: hypino, shinyon, blockchain
High energy particle physicists at the CERN (Conseil Européen pour la Recherche Nullité) facility have confirmed the existence of the long-conjectured hypino (hy-PEE-no). It is thought to be the first member of a new class of particles known as shinyons (SHY-nee-ons), distinct from bosons and fermions.
Unlike other subatomic particles, hypinos carry no charge, and have neither rest nor relativistic mass. Their only defining quantum property is spin. Hypinos are thought to be the fundamental unit of marketing hyperbole. To date, hypinos are the only known members of the proposed class of shinyons, which are of especial interest to tech investors and holders of the MBA degree. Dr. Martin Waugh, of the Institute for Advanced Squander, further posits that the hypino may be the carrier of the so-called “weak-minded force”, a mutual repulsion between fools and their money. It is theorized that, upon sufficiently accelerated spin, hypinos transform into super-excited hyperinos, detectable only by Chief Information Officers.
The discovery of the hypino is recounted by Drs. Robert Crawford and Robert Jensen as follows:
“It was a Friday afternoon, and we and our colleagues were returning from a long lunch. Maintenance on the Large Hadron Collider (LHC) was scheduled to start Saturday morning, and the apparatus would be unavailable for two months. We were in a ‘what the hell’ kind of mood, so we thought we'd take a fantasy shot, just for grins and giggles.
“We had a few leftover Higgs Bosons from 2012 on the shelf, so our lowly lab technician, Garth Dennis, breech-loaded them into the beast , set up a blockchain for the target, positioned the extremely sensitive Swindleometer at the intended point of collision, energized the superconducting electromagnets, and let it rip. Upon collision, the blockchain shattered into a shower of the elusive hypinos. Examination of the debris field revealed that the blockchain and all of our cash were gone! Apparently the hypinos were entangled with our funding.”
There may be natural sources of hypinos. The strongest natural emitters appear to be located in Redmond, Washington, and Armonk, New York.
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Glad to hear that your total humorectomy was successful ! My best wishes for your continued good health.
More of the same (Score:1)
Running out of time? (Score:3)
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As a currency governance isn't the main problem (Score:5, Interesting)
Play (Score:2)
Cryptocurrencies can be outlawed by governments, which means the corruptions in charge of many countries, best at killing their political enemies, can invest, watch it grow, sell, then outlaw it so as to not threaten their power to track.
Crypto to fiat money is like torrents to HTTP (Score:5, Interesting)
When the torrent protocol was invented some people believed it could be the new internet. It's obvious by now that it's never going to happen. Torrents are just harder to use than HTTP. They maybe can save some money in bandwidth costs at the expense of being less reliable and harder to use. In practice they offer only one real advantage to HTTP - by the nature of being distributed they allow for the illegal distribution of copyrighted content.
The same thing with the blockchain. The distributed transaction is alway more expensive than the centralized one if compared apples to apples, no exceptions. BlCh offers just one real feature: by the nature of being distributed it allows for circumvention of regulations. And that's the only sustainable use case that was discovered in 10 years of its use. All other use cases are nothing but marketing, FOMO, or fraud.
As for ETH changing the world, here is a question I usually ask when meeting a crypto enthusiast: "Loan me a 10 ETH for two weeks. We will write a digital contract that I'll return 15. Except, when the contract comes to term I will have no money in my purse. What are you going to do?".
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His example is pointing out... (Score:1)
That Ethereum contracts only work for existing assets in the blockchain. As soon as any asset is outside of the blockchain, or the blockchain contents do not meet the future projections the whole contract model collapses in on itself.
If there is literally no ETH in the account to fulfill the future contract, how do you go about restitution? What if he transfers the 10eth you gave him to another account leaving it and the 5 in interest never returned? Do you revoke all transactions he did on that 10 eth? If
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As soon as any asset is outside of the blockchain, or the blockchain contents do not meet the future projections
This doesn't follow. Real Goods are already managed on symbolic systems, but the difference is that ethereum offers the possibility of managing these scarce resources in a more efficient and effective way. It's not perfect, though, and there is competition. But the key here it is serves as an alternative to these other symbolic systems - a system that can lay claim to resources, and allow for trade and ownership of them in a way that can be scaled to the global level.
the whole contract model collapses in on itself.
this definitely doesn't follow. O
One thing that would help (Score:2)
Cryptocurrency... (Score:1)
Cryptocurrency: Teaching libertarians the importance of regulation since 2016.
Disgusting waste of energy on a planetary scale. (Score:5, Informative)
What could we have done with 40 tWh of energy?!
It takes 15,000 kWh produce one ton of aluminum. That was 2.6 Gigatons of aluminum we could have had. We got stupid hash codes instead. This is 460,000 times the yearly world production of aluminum.
We wasted the energy of 460,000 times (not tons fricken times) the yearly world production of aluminum last year on Bitcoin and Ethereum!
Bitcoin energy use:
https://digiconomist.net/bitco... [digiconomist.net]
Ethereum energy use
https://digiconomist.net/ether... [digiconomist.net]
Aluminum produced / year
http://www.world-aluminium.org... [world-aluminium.org]
Energy to produce aluminum:
https://agmetalminer.com/2015/... [agmetalminer.com]
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But why would we need 2.6Gt of aluminium? You know what we could do with? 30Mt less CO2 in the air.
Re: Disgusting waste of energy on a planetary sca (Score:2)
That Mt is metric tons
Crypto coin is done (Score:2)
I'll be honest: I mined for a short while and made a little money. However, the best money I made was selling the equipment on eBay. Glad I didn't buy any of the imaginary money because now all of them are in the shitter. Trading volumes are down. Anyone considering it with half a brain are going: gee, maybe this is a bubble? While the people still in it are praying and crying. Upside for those of you who resisted its lure, if you own property (a REAL commodity), then the dumb fucks that invested thei
Crypto currencies are for speculation (Score:1)
For for real currency, get one those prepaid cards. They're damn near as anonymous. Maybe more so.