>Over time, Ethereum has proven to be sub-optimal for the incredible demand DeFi services have seen. The network has diseconomies of scale and, given its low throughput capability, gas fees (the cost of executing a transaction on the Ethereum network) have recently been over $150. This makes executing simple low-value transactions, such as swaps on Uniswap, prohibitively expensive! Since the emergence of DeFi, there are several other L1 chains (like Solana and Avalanche) that have become a popular place for DeFi developers to build with transaction fees. Ethereum itself is also in the midst of the infamous “ETH2” transition, which aims to solve this problem on the Ethereum network itself.
This is not correct in the sense that a) 'ETH2.0' is now deprecated term, and b) does not solve the gas fee issue by itself. Ethereum has pivoted to a modular rollup centric roadmap that solves the high costs of transactions already now (cf StarkWare and MatterLabs zkSync) while still keeping the secuirty and decentralisation of the main Ethereum settlement layer. This is in contrast to other L1s such as Solana which have sacrificed decentralisation for higher speed and throughput.
Check out this wonderful resource by @epolynya for the most comprehensive summary of this new roadmap
https://polynya.medium.com/rollups-data-availability-layers-...
www.reddit.com/r/Web3skepticism
Of course DeFi is more than just loans and borrowing, but that's an aspect that's constantly promoted by evangelists so I think it's an important point to mention.
- Credit ratings from the real world being moved on chain, both by startups and by established companies (see Fitch report from Oct 21, pay-to-access only).
- Credit ratings across and on chains (https://www.credprotocol.com/) to make sure that a defi OG on eth can have access to collateral on other chains.
- Chainlink and others are working on products like CCIP (https://chain.link/cross-chain) to facilitate creating more systems like this through Oracles vs having to be reinvented.
I would imagine this state of affairs gets better over time.
Besides, credit histories often have incorrect information that needs to be corrected, and often creditors will cut you a deal or just be nice ("goodwill adjustments"). Blockchain history is immutable, so how do you handle this? Sure, you can write something to the blockchain that amends an existing entry, but the existing entry is still there to see, even if it was erroneous. I would bet that some lenders would use "has more than $SOME_NUMBER amended entries in history" as a negative signal, even though it's not necessarily fair to characterize them that way.
Hell, negative things on credit reports (in the US) disappear after 7 years. Sure, you can tell lenders to disregard negative things older than 7 years, but do you really expect them to do that?
Compare it to normal exchanges:
- need to register
- need kyc
- hard to tranfer LARGE sums cheaply
- your bank can block your assets as well as your gouverment
- fees are sometimes very high as well. Example tried to convert one currency to an other 1% fees in europe. I think you would pay less in a DeFi setup.
- Now imagine you could buy stocks and so on on defi. That would be a killer application.
I could go on but the point is. DeFi solves a problem.
It wasn't until recently that governments (arguably) became good at using technology to physically regulate banking activity, and it's only because the financial system became centralized enough for them to gain visibility into what was going on. Before then, and - to be honest, even now - government regulation was operationalized through the threat of repercussions and consequences for non-compliance.
Aside from reducing visibility into the transactions themselves, I don't understand what, exactly, DeFi or any of the other acronyms for ledger based systems do to stop this. Does DeFi, crypto, or whatever it's being called at the moment make it easier to avoid government oversight? Sure, but if you are doing something illegal in the process and get caught, there will still be legal repercussions.
> hard to transfer LARGE sums cheaply... fees are sometimes very high as well. Example tried to convert one currency to an other 1% fees in europe. I think you would pay less in a DeFi setup.
Is this still true? I'm pretty (very) sure that Interactive Brokers and other platforms allow for extremely cost effective currency transfers.
A mortgage lets you buy and live in a house even if you don't have enough money to buy the house.
Likely there will be competition, and bad actors causing no recourse. But non-performing loans are easy to see so much faster than the traditional system, could easily limit losses with lending caps.
I didnt really understand the part about loans only usuable for financial speculation, you can cash those loan proceeds out for USD to do whatever you want. But even if you couldnt, financial speculation is called “good debt” anyway, compared to consumptive spending, so I dint understand the criticism standard here.
The best I can come up with logically is something like cardano's prism that effectively puts a persons encrypted identity on the blockchain which allows that person to reveal things like their grades etc. to future partners as a means of quickly establishing trust. Maybe something like that could enable defi loans? Even that is a stretch.
In "Blockchains Are a Bad Idea", James Mickens gives several arguments against blockchain-based systems like Bitcoin:
See his presentation here: https://youtu.be/15RTC22Z2xI
1. People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities undermine trust relationships and are not needed for legitimate (not illegal) transactions.
2. Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin and related systems lack these protections.
3. Existing tools such as public-key cryptography and digital signatures can provide most of the functionality that applications need without the problems that blockchain-based systems have.
2. What is legal is not what is moral. E.g., outlawing sex work, which results in SWers in even Western countries getting kicked off traditional payment systems, or having SW forums taken down (e.g. backpage). Having a decentralized and censorship-resistant infrastructure for these essential utilities is vital, and blockchains can be a key component of that infrastructure.
3. As a cryptographer, PKC and digital signatures have thoroughly failed to provide a decentralized and secure P2P communications infrastructure. (And no, Signal doesn't count: it's fantastic, but it's run by a benevolent operator.)
Generally people have choices in how they handle their finances: you can choose which financial institutions you use and how you want to pay most of the time. If you don't want to be tracked, you can get cash and pay with cash.
However, some of the tracking can be to your benefit. Most banks and credit card companies offer some degree of fraud protection / prevention and if you have a good credit history and want to take out a loan, they will happily give you the money. It requires a real-life trust relationship where the bank / finance company is a trusted business partner and not an untrustworthy predator.
If you find the relationship with your bank or credit card provider it not to your liking, you can choose a different bank or credit card provider that offers more favorable terms.
>> 2. What is legal is not what is moral. E.g., outlawing sex work, which results in SWers in even Western countries getting kicked off traditional payment systems, or having SW forums taken down (e.g. backpage). Having a decentralized and censorship-resistant infrastructure for these essential utilities is vital, and blockchains can be a key component of that infrastructure.
I disagree here. I personally do not think that sex work is moral or 'an essential utility'. If a payment provider does not want to offer payments for illegal or immoral products or services that is their choice. Some payment providers might still be willing to, but no one can really stop cash payments.
You do have a point here though, no one can stop blockchain-based payment systems and they have been instrumental in the recent increases in malware and ransomware.
>> 3. As a cryptographer, PKC and digital signatures have thoroughly failed to provide a decentralized and secure P2P communications infrastructure. (And no, Signal doesn't count: it's fantastic, but it's run by a benevolent operator.)
PKC and digital signatures don't provide infrastructure. They provide tools to be used at endpoints. You can use freely available cryptography tools such as OpenPGP (https://www.openpgp.org/software/) to generate your own keys and securely communicate with someone else over existing communication infrastructure.
Bitcoin provides pseudononymous identities. Just like how someone can move to a new domain or amazon account after word gets out that they are selling deffective goods.
Trust only goes so far, even when dealing with people you should be able to trust. If this were not the case, then close-to-home scams would not exist. E.g. embezellment and other forms of stealing from people you work with face-to-face.
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>2. Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin and related systems lack these protections.
The legal system is complex, slow, and _EXPENSIVE_. A lot of bad behaviour also goes unpunished when the cost to rectify is greater than the amount stolen. Offering an alternative, low-cost and quick system, and accepting the downside of there being no "takebacks", who is to say this is a strictly negative thing?
There is also nothing stopping a service provider from stepping in and providing dispute resolution by way of mostly automated eskrow. If the transaction of goods for money happens without flaw, then the money is released automatically. If an issue occurs but the buyer and seller can resolve it amicably, that two is automated. In the unlikely case that one or both parties are malicious, the service provider reviews the case and releases funds as appropriate (e.g. checking that the parcel was actually posted, reviewing images of the good if it was damaged in transit, resolving as best able in case of scams).
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>3. Existing tools such as public-key cryptography and digital signatures can provide most of the functionality that applications need without the problems that blockchain-based systems have.
They can, but there are very few examples of such tools. This is hackernews, and this opinion is repeated ad nauseum, yet I don't see anyone actually going out and hacking something together.
Just like how it has been possible for financial houses to open up APIs to allow people to better manage, automate or make their money work exactly they want; it should come at no surprise when something comes along that actually allows this, no matter how much people cry that this was all possible and much more efficient without $NewTech, the people that have adopted said $NewTech aren't going to care too much.
Solana’s consensus protocol isn’t responsible for its performance, it’s the fact that they mandate higher performing machine SKUs and at least 500Mbs (recommending 1Gbs) internet speeds. They also had to largely centralizing and have around 1000 validators. Ethereum’s fees and performance are due to a push for decentralization instead of cranking up the max gas per block to a level that wouldn’t be feasible for someone at home to run a node.
I’m not sure why I’d use a blockchain that’s very close to being a centralized service. That’s the worst of both worlds, you don’t have censorship resistance you get with Ethereum and you don’t get the consumer protections you get with fully centralized services.
Solana’s 1000 validators may not even be owned by 1000 different entities, which reduces the attack difficulty.
Solana scales through centralization, not new ideas in blockchain scalability.
I don’t care how many Bitcoin mining pools there are. Mining pools are different than validators since they are made up of different individuals and not a single controlling entity. I also think PoW should die, and that’s all Bitcoin will ever support.
Edit: if all we want is 1000 entities controlling our chain, we can choose 1000 well-known institutions (banks, libraries, etc…). That would be less vulnerable to bribes and random censoring (perhaps I censor txt if a Dapp that’s competing with my investments) than 1000-ish unknown entities running the chain without any slashing.
b) It is easy for miners to switch to another pool in a matter of minutes. What do you do when you want a whole different set of Solana validators?
While it's true that Solana nodes have higher requirements than Ethereum full nodes (though not sure about validators?) I think it's incorrect to say that Solana's consensus protocol is not responsible for the high performance performance. Solana's consensus protocol (Tower BFT) works tightly with Proof of History. These two elements coupled together allow that the validator leader can be rotated asynchronously allowing performance increases in block propagation, throughput and ledger storage. Have you really had a good read of how Solana works? For eg. Sealevel allows for parallel contract execution, something which to my knowledge no other chain is capable of. All these innovations combined with the higher node requirements allow for TPS that no other chain is even close to and the Ethereum Modular vision will not achieve for quite some time (assuming it works).
> They also had to largely centralizing and have around 1000 validators.
Not sure what you're pointing to here. There was 600 validators a few months ago. Now there is 1000. 2000 additional validators are on devnet and would likely go onto mainnet in the coming months. How else should a blockchain decentralize then to add additional validators and try and spread the delegated stake around to reduce the number of nodes required to halt the network?
The fact that Solana went down for 17 hours not too long ago and there was nothing Solana labs could do to bring it back shows the validators are not run by themselves.
> Ethereum’s fees and performance are due to a push for decentralization instead of cranking up the max gas per block to a level that wouldn’t be feasible for someone at home to run a node.
Ethereum's fees are due to its wild success + it's very low TPS on the L1 because it was more or less the first of its kind. Subsequent chains like Solana have made thousands of small or large alternative engineering decisions that in sum allow for much higher throughput and lower fees. Solana doesn't use gas, perhaps you're thinking of BSC or AVAX?
Solana is attractive to everyday users because it’s cheap to use, but it’s security isn’t suitable for high-valued assets (even self-verifying the chain is expensive). They sacrificed security and censorship resistance for short-term low fees, but will suffer from the same scalability issues every other L1 will/has hit and will rely on rollups. Rollups with a highly-centralized base layer aren’t suitable. Even the ZKSync team has tweeted that using ZKSync on top of Solana is more secure than using Solana itself because the zero-knowledge proof will be validated by Ethereum.
In the same way that legitimate artistic spaces of old are just capitalised upon and harvested to make that "hip bar", which is but a pale imitation designed to trick us. "Web3" is the Shoreditch of Web 1.0. There are no real things in it any more, no real culture, only rehashes created for profit!
People who are creating "Web3" content are doing it in order to capitalise on the throwback culture, the "geekiness", it's all done purely to further the cash grab, it's co-opting and appropriating geek culture for personal gain.
It's almost an artistic statement upon itself. Almost.
> Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors.
GOOD. "Web3" will be rightfully choked to death by greed.
As far as I'm concerned, Web3 is beyond this. It's what happen when you let Ponzi schemers write the marketing material. I can't for the life of me discern what's of actual value from what is a fabrication in the pile of technologies put forward. It doesn't help that I personally have yet to see a use for a blockchain which isn't replicating an existing financial instrument while trying to avoid the eyes of the state.
I’m sure there is some good things in the middle of it all but I respect the authors of this article for having the courage to delve into the whole steaming pile. I certainly do not have it.
Web3 = decentralized identity, full data and connection graph ownership by user, reputation transfer, verification via zero knowledge proofs, support for VR/AR and 3D objects.
All of this stuff is either in prototype or draft phase, but it's ok. These things need to be built to stop horror stories on HN about "algorithm justice" and "data kingdoms”:
- Google accidentaly bans your 10+ year old Gmail account that is a huge part of your online identity, oops. You can't access your important data or reach support if you can't make this situation a huge deal on HN, Reddit or Twitter
- Facebook or Twitter locks your account because you added a new sentence to your About you section
- LinkedIn reads your messages and makes sure you can't automate responses to recruiters, locks your account if you reply in a generic way
If you are trying to say that web3 will prevent platform holders from banning you from their platform, then good luck with that. Any platform can and will ban you and have complete control over their platform. Thinking web3 is going to prevent that is naive for many many reasons. If Facebook bans me then web3 isn't going to allow me to post on Facebook still. Same with Twitter and Linked In.
If you are saying that web3 solves these by making it so that these platforms aren't in charge of my identity, well they aren't today so I'm not sure what the deal is. If gmail bans my account it's not a huge issue because I use a custom domain for my email, so I can route it to another provider or host my own. If Facebook bans me then I lose contact with family on there but I don't lost my identity because FB isn't in charge of my identity. same with twitter or linked in or whatever.
All these problems you list are solvable today with the decentralized web we've had for decades. There's a reason centralization has happened on these platforms, and it seems like all the web3 talk I see is naive to that.
Edit: Also Keybase is a great example using cryptography to solve the identity problem without a blockchain and with some level of decentralization (keybase's servers are centralized but the actual identity is all based on PGP and GPG that's been around for a long time).
A world in which you lose some magic alphanumeric combination (or a thief pinches your hardware key, etc.) and you are literally locked out of your identity (together with access to your eternal blockchain-backed social rating or whatever is the logical next move) seems simultaneously horrifying and ridiculous.
Lose your keys, you’re out of luck and locked out of who knows how many applications permanently.
It might be fine for us, but just think of the less technically inclined folks in your life. Are they going to remember a 32 word phrase or use a password manager for a key?
And what happens if they’re hacked? If google detects your account is hacked, you may be able to salvage it.
If someone nabs your wallet, they get access to however many apps you have set up along with whatever funds you have in there.
Maybe it’s awesome. Maybe it’s the web version of string theory. Can someone tell us why it’s more of the former than the latter?
Meanwhile, Cash App, Apple Pay, and Stripe have done more for fintech in the past month than all other cryptocurrency technologies combined in the last decade.
Connecting to services like patreon or getting small amounts for games on itch.io are headache inducing high friction activities involving several extra third party services that are barely worth the effort. The attached risk is hard to state as better given all the fly by night operations in the local finance industry.
Even if very few people use crypto, it's orders of magnitude less stress to put up a link to a wallet for donations on say a page with a visual demo on how linear acceleration and light bending motivate gravity.
It's instrumental in financing sci-hub, which is also vital here.
You probably live in a country where central institutions are trusted. Probably without overwhelming levels of corruption actively antagonistic to citizens, or double digit inflation, or very high unemployment rates and a general lack of opportunity.
I don't think cryptocurrencies are some magical cure and can't say they will be part of a solution concept. Neither do I care for gambling and scummy activity on it. For some of us it isn't about inflation hedging (although it has a useful role if you can anticipate impending economic collapse) or anti-fiat or overthrowing governments.
It's about imagining a network of transactions where anyone can participate regardless of their country of birth, without a central synchronizing consensus mechanism and a strongly tamper resistant storage useful in coordinating economic activity. Blockchain free decentralized tech are preferable where possible but there are some things only blockchain structures (or even worse scaling massive communication overhead systems) can do.
They can't even get their numbering scheme right. This would be "web4"
Disregarding the semantic web throws out the history of the tech that sought to build p2p knowledge graphs before the social giants pushed it aside. They care little for these concepts given their blatant disregard.
The financial market is going out of hand because since the 70's/80's it isn't serving it's purpose anymore, which is regulating and allocating resources and credit. Instead it is disjoint from actual value and productivity, so it has started a life of its own.
People and entire nations are being held down by financial obligations while not benefiting from the increase in productivity and profit because the connection between finance and value production is almost completely severed.
The only non-violent way out of this is forgiveness. Which acknowledges that exact monetary value and debt in any form and especially in it's current form is just a highly volatile figment. And that's only possible if we can actually _forget_ transactions.
An eternal, cryptographic, decentralized transaction log might just be the perfect tool for long term financial oppression and exploitation. And the more convenient it gets the more exchange will flow through it. Well at least until the people start magnetizing and burning down data centers and PCs. But I think there are less destructive ways forward.
Education and hard work drive labor. These aren’t qualities respected by any kind of wealth generators or management. If anything they are unrewarded implicit requirements except for labor where there aren’t other more substantial qualities to rate individual contributions.
In most of the country house prices remained low and stable until very recently. Only a few coastal areas have seen decades of out of control pricing.
I mean, there's a domain name system. There are various games. There was recently a high-profile crowdfunded attempt to buy an artifact at auction. Feel free to be skeptical of all of these, but what's the point of posting that you "haven't seen" anything legitimate if you're unwilling to exert a bare minimum level of effort to research other use cases?
You mean ENS, the .eth domain registrar incorporated in the Cayman Islands? It doesn't matter what the blockchain says, my .eth domain is only good as long as the registrar agrees to honor it. Sounds like GoDaddy with more steps.
> There are various games.
What's the point of a distribute ledger that can only be used within a game controlled by a centralized company?
> There was recently a high-profile crowdfunded attempt to buy an artifact at auction.
You mean ConstitutionDOA, which imploded quite spectacularly? People are still wondering if that was a scam or just sheer incompetence.
Honestly it's hilarious that you would bring that up as a flagship example.
> you're unwilling to exert a bare minimum level of effort to research other use cases
I have exerted that effort and more, and still come up short.
That particular episode also laid bare the problems no web3 proponent seems to want to address: a whole load of people are going to lose all the money they gave to the fund because transaction fees will swallow their investment whole if they ever try for a refund.
The "buy an artifact" thing ended up a total mess. To the extent any true distributed blockchain was used, it didn't help anything: https://www.vice.com/en/article/qjb8av/constitutiondao-after...
What I'm unwilling to do is wade through the mountains of scams and get-rich-quick schemes to find novel applications of a distributed ledger. Games? Seriously? Show me a game that isn't just a vehicle for boosting the trade volume of some shitcoin.
It's all dystopian tech bro capitalism to me.
> There was recently a high-profile crowdfunded attempt to buy an artifact at auction. Feel free to be skeptical of all of these, but
Yeah, that one where half the people who want a refund will lose a significant chunk, if not all, of their donation in fees. I find it absolutely laughable that with all of the fancy "smart contract" tech out there someone couldn't figure how to hold these donations in cryptographic escrow and return them without a huge penalty if the transaction were to fall through. It's hard to feel bad for those who put money in. It should all be automated and foolproof, and I thought that was the point.
So let’s say I want to try this out this weekend. Do I just download MetaMask and make a wallet? Do I have to go somewhere or pay someone to inscribe my username in the blockchain or does this basically work immediately? And what are some sites that support this?
Not everyone has access to Venmo or free checking accounts. And not every behavior the state is trying to restrict is nefarious.
That's kind of the whole point. Money without a state and without permission. If you don't believe in that then of course you won't see the value in decentralized finance.
Coins like Ethereum pushed way forward, via smart contracts, the possibilities available in cryptocurrencies. Then others like Chainlink added again a whole new level of possibilities connecting the smart contracts to trusted real world data. That goes way beyond the scope of financial instruments, a whole world of automated business can be built on top of that. BTW blockchain is outdated technology, is doesn't scale enough for being able to handle a massive use of cryptocurrencies.
Alas, for whatever reason, it never got deployed.
With a traditional cloud provider, you trust them, upload your data and they deal with the rest, backing it up internally and guaranteeing retrievability with their reputation.
But with blockchain p2p storage, it's really hard to provide the same guarantees. If you only upload the file once and let the blockchain replicate it, then a malicious (or greedy) entity can manipulate the blockchain and control all replicas (backed by a single disk copy). So your software must encrypt multiple copies of your data and upload seperate replicas with different encryption keys.
But that still leaves you open to a very malicious entity going out of it's way to track all uploads from a node, and monopolising control over them, then deleting them when you try to download them. To actually provide the same guarantees that a cloud provider does in a trustless way, your local software will also have to continually download chunks to make sure they are still retrievable, and you might also need to use the tor network for all accesses.
With all that extra complexity, there is a lot to go wrong, and a traditional cloud provider might end up being the cheapest option. I used to agree with you, but after trying to design such a system with these trustless guarantees myself, I've come to the conclusion that there is no good use case for blockchain, outside of exchanging value.
Is that not enough for you? Just because you think you live in a time and place where the eyes of the state are kind and benevolent?
Web 2 is distinct from Web (AJAX, SaaS. Cloud, Mobile). I’m sort of shocked it’s even brought up as a fuzzy distinction.
Nothing wrong with that. Everyone agrees cryptography is a good thing, worldwide warrantless surveillance is bad, privacy is good. So why is it acceptable for the government to pry into people's finances? Total surveillance is already the norm there. If a blockchain is what it takes to defeat that, then so be it.
Similar to how software ate the world while the state wasn't looking?
They call it "web3" when it's not web, as in, world wide web... so it really means nothing.
There is nothing there. It's all just random imagination an ponzi schemes. Good luck getting anything useful out of this.
Web 3.0 should probably have something to do with the increasing centralization of web services, and the increasingly common subscription fees everyone is paying.
Instead it’s about blockchains … which are pretty much the only way the web is becoming less centralized.
Highly recommended read.
> It’s a hip bar in a club that a cooler friend had to tell you about.
Ok then.
I’m an outsider to that community. Perhaps @pinboard said it less hypefully when he described it as an “unregulated casino with a bar scene attached”.
The right comparison may not be with past tech revolutions. It may be to organizational evolutions like monarchy to democracy, women entering the workplace, the invention of the limited liability corporation etc. In each case there were people who thought it was unnecessary.
I suspect what makes Web3 appear extra contentious is that it divides core members of the middle class. Like artists for eg. Artists tend to be reliably anti-tech initially, taking pride in being socially middle class but economically underclass unless supported by other means.
Artists still largely depend on patronage but now are less beholden to institutions/expert tastemakers (museums, grants, commercial art buyers like movies) or potentially tyrannical cohesive crowds based on ideological aesthetics (Patreon style). Web3 loosens the grip of both.
Web3 is Crowds3 too. We focus too much on authority figures and institutions. Crowds evolve too.
Crowd1 = geographic scene in a city that could ostracize you
Crowd2 = filter-bubble online crowd that can cancel you
Crowd3 = skin-in-the-game crowd that doesn’t subsume individuals
[credit to https://twitter.com/vgr/status/1463182365555970049]
Also, I think less than 0.01% of 'artists' have ever heard of Web3, even most people in Tech haven't really hard of it or couldn't describe it in any meaningful way.
"You have a fiduciary responsibility to every single one of your fans“ sounds like a black mirror episode.
Also investing in pre IPO for retail investors in scam-resistant schemes.
Public funding of projects. Voting with ones wallet but formalized and outliers and spam resistant.
Ability to profit from and measure public goods thus allowing to employ Capitalism there and get rid of EU bureocracy. One can dream.
If you're an accredited investor (which is easier to be than ever), there's always Equityzen and friends. But it's already not so scam-resistant. There are lots of sketchy startups out there, and I'm not sure why one bypassing traditional finance channels would be any less scammy.
I'm not sure that "blockchain" is central to "Web3". "Web3" may be augmented reality, which doesn't need a blockchain.
Seeing this put as a conditional is refreshing after all the hype.
It pretends to democratize things, but rather moves from a monopoly to an oligarchy, which works great for the 'in' group but not necessarily for those outside it.
- Dysfunctional government - Hyperinflation - Limited access to financial/investment products if any
The crypto space does have a huge amount of problems, but I think there's some innovative stuff going on in crypto. You'll end up writing it off if you just fixate on the speculators and the "blockchain everything" people.
That... seems like a huge negative to me. No wonder crypto enthusiasts give me the same feeling as relentless door-to-door salesmen.
- It turns practitioners into "relentless door-to-door salesmen" as you put it, fanatical commission-based salesmen, which makes any kind of rational discussion about pros and cons etc. impossible.
- It allows you to monetise without having anything to monetise, which has drawn in the scammers and fraudsters on an unprecedented scale.
- It offers no incentive to working solutions. All the ICOs failed because they got the money up front with no obligation to deliver anything, so even the small number that weren't out and out scams ended up effectively becoming scams. Spend any time in the space, and you'll realise the gap between what is promised and what is possible is often insurmountable, but the gap isn't important, because you just need to convince enough people that what you are trying to do is possible for long enough to get rich quickly.
- It offers no incentive to more efficient solutions. Why use existing fast, free and low energy money transfers, for example, when you can make slow, expensive money transfers that use up 5% of the world's electricity but make a handful of people rich in the process? There are very few cryptocurrencies which have genuine legitimate use cases, and the small number that arguably do are always worse in every way than what they replace, but they are still attractive and gain traction because they can get a small number of people rich quickly.
- It doesn't look like it'll go away. While putting use case before monetisation means something without a use case will wither away, with monetisation before use case it could go on burning up trillions more programming hours and countless other resources indefinitely without ever finding a genuine legitimate use case.
So crypto is doing the same for value/money. It's freeing it from the institutions (banks, governments, etc.) and allowing it to flow more freely and efficiently. This is why some people call it the internet of value/money. So, if you believe that freedom allows innovation to flourish, you should see this as a very powerful thing that could eventually be the backend of the entire financial system, just as TCP and other protocols are the backbone of the internet. It allows innovation to flourish at the edges, because we have stable monetary protocols that are open to anyone. A hacker in their basement can now build financial applications, or a group can coordinate in new ways through DAOs, or someone can just store value that isn't tied to any government.
> The network effects behind TCP/IP's and Linux's success are fairly clear and reduce ultimately to issues of trust and symmetry -- potential parties to a shared infrastructure can rationally trust it more if they can see how it works all the way down, and will prefer an infrastructure in which all parties have symmetrical rights to one in which a single party is in a privileged position to extract rents or exert control.
Sure you may be able to build a bespoke proprietary protocol on top of the open foundations of http or the bitcoin and etheream blockchains, but businesses will have an incentive to shop for more open systems if they are staking anything important on it.
http://www.catb.org/esr/writings/magic-cauldron/magic-cauldr...
Also, the page requires JS to render, so it's probably crap anyway.
Exactly, both blockchain skeptics and one-blockchain maximalists miss that people are doing what the market can bare. Do what the market can bare. Why die on the ideological hill? What utility does that have?
The path for founders is simpler. The founders bring their whole network to their ventures over and over and over again. That is projects launched on blockchain platforms right now.
Unless the non-blockchain space magically becomes competitive for founders, globally, of any background, anonymously, overnight, then that world isn't competition. There are 3 trillion dollars within the crypto ecosystem that doesn't need to be converted to cash to be used to fund new ventures.
This bothers me: That we could end up with expensive, unnecessary systems that exist not because they offer a tangible benefit but because everyone just kept going along with things, collecting investor money and ignoring criticism until it was too late.
I don’t see that being apocalyptic necessarily, I think Adam Smith’s scythe will mow down any companies that make truly bonkers decisions on this stuff. But it bugs me that we could collectively spend years arguing about this and building blockchains and training a generation of blockchain engineers only for the near totality of blockchain stuff to fail for reasons that were evident from the beginning.
No mention of the actual distributed web protocols like IPFS or Dat as far as I could tell.
Have I massively missed something or has the crypto community just co-opted the name web3 for their own non-web related stuff? How does the web factor in to crypto?
But the thing is, he is not tech-inclined at all and spends most of his time on excel and on third party platforms (as in, fund manager platforms, insurance platform, medical aid, taxation etc). So what I took away from his talking about this stuff is that financial advisors are being "educated" to think that web3 = crypto = new 4th industrial revolution etc and everyone will get rich as hell very quickly so we all have to do it NOW. It was a huge wtf moment for me because I was mostly ignoring this stuff and the whole web3 umbrella and here I have a legit CFP guy talking about this stuff. All while I'm standing there not knowing wtf he is going on about, most of it sounding extremely dodgy from a software developers perspective.
Make of this what you will but I think a lot of people will get hurt, esp non-tech people. I feel like these people live in an alternate universe and they've built a whole ecosystem of webinars, trading platforms that they are trying to sell onto normal people that doesn't know better; that doesn't seem to be used for the greater good (most of it scammy or used for crime etc).
It seems pretty reasonable, as far as crypto stuff goes, except that there is a massive, expensive machine behind all the HTTP APIs that is solving very specific problems you probably don‘t have while making someone rich.
This feels like when web2 was coalescing as an idea. A lot of people were trying to shoehorn their pet technologies into the discussion. XML was holding on for dear life. It's ridiculous and completely divorced from the topic at hand. My only explanation for the behavior is that it's difficult to see the obvious absurdity when you're deeply invested in a particular outcome.
At least spend a week or two as a web 3 USER before you make your own conclusions. Forget the investment side for a minute and use the dapps.
Programmers for cartridge-based game systems and many other embedded devices with no connectivity have decades of experience with this.
I see cryptocurrencies and ledgers being mentioned and, at the same time, comments mentioning the concepts aren't central to it. It seems we are the proverbial blind men describing an elephant.
As for the question of casinos, I think @pinboard’s description of Web 3 as “an unregulated casino with a hip bar scene” (sigh) strikes me as… about right?
edit: by inclusive, I mean adoption and funding. The wheel does not need to be re-invented, poorly.
The problem is all the junk riding Bitcoin's coattails. At some point, probably soon, the bottom will fall out of at least part of this. NFTs are already crashing. That's not too visible, because there's no "market price" across different items. But you can look at sales on OpenSea, and notice that the resale prices are mostly lower than the previous price.[1] Smooth Love Potion [2], part of the Axie Infinity Ponzi, already crashed.
The big moment will come when Tether comes un-tethered. It cannot survive a net outflow, because it has very little asset backing. Something is going to crack in the Tether/Binance area. Binance is giving some people 200x leverage.[3] That never ends well.
[1] https://opensea.io/collection/collectvox?search[sortAscendin...
[2] https://coinmarketcap.com/currencies/smooth-love-potion/
[3] https://www.coalexander.com/post/the-tether-binance-axis-and...
I don't think "if this didn't happen then this wouldn't have happened" is a real argument, it's just a statement. True for just about everything. It's possible I'm misinterpreting and you just mean it as a statement?
ponzi://
cf. https://www.npr.org/sections/money/2017/06/28/534735727/epis...
Being decentralized means that all the efforts that a central government is currently taking will be distributed to everyone, and now everyone has to worry about things that were taken granted before: basic safety, security and trust. This is why there aren't many decentralized systems that caught on because their usability is pretty bad for most people.
I stopped reading here. First, this is factually wrong -- the software industry has tons of experience dealing with software that can't be upgraded. Ever try to upgrade the firmware on a chip with no I/O facility for doing so? The answer is you don't; you instead focus on getting the code correct the first time, and possibly you build out a way to recall the product and replace it with a fixed version and price in the risk of needing to do so into the product itself. It can be done; it just takes discipline.
Second, if you don't understand why smart contracts being immutable is a necessary and desirable feature of the system, not a bug, then you're not going to understand much of web3. Like, think about it for five minutes -- if your smart contracts can be upgraded by default, and this code manages valuable digital assets, then their code can be replaced with code that steals those assets. Making this very, very, very hard is deliberate.
While it’s certainly true that firmware on many devices can’t be or simply isn’t updated, it’s also the case that bugs ship. Because of this, engineers design and ship their more complex devices with the facility to upgrade firmware. Even my ages old stereo receiver is upgradable (although painfully so).
But this is about smart contracts: code that in many cases moves money. I’d put that in the category of code that really could benefit from carefully controlled upgradability.
I’m not the only one. For instance, the primary USDC contract on Ethereum is a proxy contract — it’s upgradable by design. I think that makes a lot of sense, and apparently so do the engineers managing those many billions of dollars: they’ve weighed the balance of “trust” in the abstract with “make sure it doesn’t break” in the real and made their decision.
Beyond that, a guiding principle of some newer blockchains (like Tezos) is that code will need to evolve over time. Like many things Web3, it’s too soon to tell how things will shake out in the long run, and a variety of approaches seems desirable.
First, if you're saying that you need a way to upgrade your money-managing code periodically because you will likely ship versions of it with show-stopping bugs (such as those that enable the destruction or theft of the users' funds), then why should I trust that you will ship flawless code for upgrades?
Second, if the combined security budget of the people who can carry out the upgrade is less than that of the majority of the block producers on the chain, then why build an upgrade procedure at all? Why risk it? Instead, just deploy a new version of the smart contract, and ask users to use that one instead. If it gets confirmed, then an honest majority of block producers will ensure that it stays confirmed. This takes no code at all. You simply sign the new code with the same key that deployed the old code to demonstrate that it originates from the same author(s). Let users decide on their own whether or not to use your upgraded code -- after all, it might introduce new bugs, and the "bugs" you are fixing might be features to other people. It's not your place to tell users what version of the code should be used, and what should not be used.
1. polygon is a cheap(as in transaction fees) knock off of Ethereum, competition good. bad from the perspective of capture value in the protocol.
2. as far as I can tell as long as one oracle doesn't become dominate that provides competition
3. Defi is enabling users value across other networks. uniswap, etc.
4. On a side note, not sure why there's not an api that encrypts an nft on ipfs and only returns the watermarked version unless you send it a fee. or your the owner.
By whom?
"Upgrading" a contract should require the approval of all parties to the contract.
This is a threshold that real-world contracts don't typically have to achieve. They leave lots of details out, or vaguely defined, because the odds are low that that part of the contract will have to come into play, and it's not worth the extraordinary effort and time and expense to negotiate every tiny very-unlikely-to-happen case.
To quote Lawrence Lessig [1]: "Often obscurity is a real value. Obscurity is what you want... In principle we should be negotiating all of these [possible things that could happen to our deal]... What contracts do all the time [instead] is they create these fuzzy or vague or ambiguous places as a gamble... And if it turns out [that this .002% occurrence does] happen, we'll ask... a judge to figure them out.
Also, if you're just going to replace one immutable contract with another, you're back to meatspace and re-negotiation, which can be time consuming and expensive.
[1] MIT 15.S12 Blockchain and Money, Fall 2018. "Smart Contracts and DApps" https://youtu.be/JPkgJwJHYSc?t=3543
And boy does it show!
How do you debug your smart contract? Your users tell you their money got stolen out of it. I wish that was a joke.
> Also, if you're just going to replace one immutable contract with another, you're back to meatspace and re-negotiation, which can be time consuming and expensive.
Is upgrading them in place somehow better? At least by keeping the old systems around, the people who still get mileage out of them aren't sold up-river.
Edit: this site navigation experience is one of the worst i've ever encountered. I'm really interested in looking around but it's so painfully slow.
Edit 2: the new tab is blocked on the main site, not on the blog post
Edit: on the main site, blog post links work fine
(That is, unnecessarily and avoidable breaks some links that should be thusly clickable even if some still can be.)
How we got to this point, I have no idea.
I have no idea what this does but turning this off made it readable.
Shady gambling, scams and shitty art is not the future.
