I agree with mostly everything he said, to be honest. I've stuck with Bitcoin now for the last 3+ years and interestingly, that was only -because- Bitcoin made it so hard to do anything useful. I would need to learn how all kinds of niche areas of cryptography worked and the fun of hopelessly trying to outsmart Bitcoin's god-awful restrictions is what kept things fresh to me.
Sure, it did teach me a lot of obscure things about crypto + game theory, and some of those things actually turned out to be quite useful. But I also can't deny how much longer it takes to do the most basic things in Bitcoin and I think that now we're progressing towards using blockchains to solve problems outside of Bitcoin -- Ethereum seems more up to the task than Bitcoin.
That's not to put Bitcoin down though. There has definitely been some tremendous innovations there recently: segregated witnesses and sidechains are pretty cool. But I've also seen the community change significantly since I first got involved and I'd argue most of those changes have been bad. For example: /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing. Most of Bitcoin's current media is also controlled by only a handful of individuals so its very easy to manipulate the crowd into "consensus" but I won't even go there.
I'll personally always love Bitcoin but I can't see that these problems can be fixed at this point. The Bitcoin project was largely hijacked as far as I can tell and since the crowd has been won there's no going back now.
> /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing.
You should go to /r/btc instead. It has a much better culture, and no censorship.
> /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing.
This is the main reason why I can't ever take bitcoin seriously - their community just seems to have so much unconstructive hatred towards anyone who ever says anything negative about bitcoin.
You're definitely right about the consolidation of influence... as someone who was a mod on bitcointalk.org and /r/bitcoin for years I hate it and it drove me to leave both of those behind.
I am probably in the minority here on HN but I don't completely grok bitcoin (granted I have not put in much effort to understand it). I have asked many of my techie friends and none of them understand it either - I follow the Einstein (?) principle. If you cannot explain it, you probably don't understand it.
On top of this, there is now Ethereum and DAO which are also completely incomprehensible to me. But the reason for this comment is that I totally blown away that there are people out there who understand it and are willing to fund this to record levels.
The context for this comment is that I ask myself this question about products and startups all the time. Who uses them? Why are they gaining traction and nobody I know even knows about them let alone use them... To conclude, I find all this bitcoin talk very motivational - not everybody needs to understand what you are building. You just need a passionate following of people who do.
They're both like databases replicated onto thousands of nodes. All the fancy crypto and mining is just a way of making the replication secure, so every node has the exact same data even though it's on a public network and nobody knows who's running the nodes.
On Bitcoin, there's one table with two columns: username and balance. You have read access to this table and you can call a stored procedure that transfers some of your balance to another user.
On Ethereum, you have developer rights. It has the same username/balance table as Bitcoin, but you can also create your own tables and write your own stored procedures, which can be called by other users.
Of course this is a drastic simplification of both systems, and misleading in some ways, but it's the best quick explanation I've come up with.
I'm getting obsessed with Ethereum because it's amazing to me that, for example, I can write two pages of backend code plus an html/javascript front end, and I've got a crowdfunding system which I can deploy for free, run indefinitely with zero downtime, and have it moving money around without getting anyone's permission at all. (Or it could be an auction, casino, currency or derivatives exchange, vault, etc.)
'To understand' something can mean all kinds of different things. You don't really need to understand how smtp/pop work to use email or how https works to be [reasonably] sure your credit card number you're sending over the wire to an online vendor won't be stolen in flight.
Same with Bitcoin. You acquire it, you use a piece of software called 'the wallet' to store it and you either share your 'Bitcoin address' with someone to send Bitcoin your way or they give you their address for you to send the btc to.
I have been and remain intrigued by Ethereum, but there's one element that always struck me as impractical.
All its advocates get very excited about all the complex automated things it can do, which is admittedly very cool. But for the real world, I'm skeptical that anything more complicated than a basic escrow could work. Once you're talking about real, complex applications (like a DAO), what if there's a bug? Even if bugs are rare, the potential implications when they do happen are so severe that it still diminishes the value of the platform.
And the ability of members to "vote in" new code is no solution. Nobody in their right mind is going to do that without a thorough code audit, which is a pretty high friction interface to what is supposed to be a financial or business instrument. It would inevitably devolve to trusting a relatively small group of "experts", which rather defeats the point of the whole enterprise.
Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update.
It amazes me that an alpha product (The DAO) is control of ~$150,000,000.
Plus the way that "The DAO" operates is going to be crazy. Basically people submit proposals of things they want the DAO to build, then "The DAO" "hires" contractors to build it (A roundabout way of investment). So Slock.it would be a contractor of "The DAO", but could theoretically be replaced.
But Slock.it is a DAO itself. So basically the chain would look at minimum something like this.
"The DAO" <-> "Proposal" <-> "Contractor Agreement" <-> Slock.it
Bear in mind that "The DAO" and Slock.it are managed by distributed consensus. And what if a company was a contractor to >1 DAO?
Add in all of smart contracts contained in each DAO, the amount of interconnected unmodifiable software that will run these organizations will become staggering. Attempting to design something to be fault free in a normal network is insane, but then you add possibilities for social faults in voting and consensus.
I am sure something like Ethereum will be the future. But the current state is extremely alpha to be handling that sort of financial power.
EDIT:
To prevent a takeover many ethereum contracts will implement an exit strategy, like splitting the minority into a new contract.
> Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update.
Such is life though. It is not just ethereum. Bitcoin cannot survive a majority attack. In the long run, I can't see how even a government can survive a majority attack. One obvious solution to the problem is to try to prevent any one bloc from gaining majority status. I'm sure there are more elaborate solutions though and if any of them is elegant, I'd like to learn about it.
One solution would be to have "curators" with an expanded role. These curators would have dictatorial powers (via a supermajority vote of the curators) to nullify and replace the entire contract. However, they would promise to do this only in case of a genuine software bug, or if ordered to do so by a court with jurisdiction over them, not for any other reason. There would be many curators. Many of them would be professional curators, similar to professional accountants or trust executors, who work for huge firms which, like Big Four accounting firms, have a lot to lose if any of their members are caught misusing their power.
Yes, the Turing completeness of Ethereum means it suffers from the unsolvable halting problem. There is no way to prove that a given Ethereum program does not have a bug that will cause it to halt at some point in the future. Thus it is dangerous to rely on an Ethereum contract as the sole means of releasing funds.
The voting problem is a more obvious flaw. There seems to be a naive optimism on the part of certain developers that simple voting rules will surface the best quality viewpoints. This is fine in hackernews, but is not OK for open source software development.
I'm convinced that Ethereum is going to suffer the same fate as Bitcoin. Here's the cycle that will eventually play out:
(1) Relatively interesting technological breakthrough comes along. Promising but questionable applicability to real-world problems.
(2) It attracts early, idealistic developers, some of whom are genuinely talented. Rational debate is still possible at this point.
(3) The hype builds up and in turn attracts various groups: raging anarcho-capitalists, developers of a mildly libertarian bent, get-rich-quick enthusiasts and teenagers. The price continually bubbles and spikes as fresh money comes in from speculators betting on the hype.
(4) The spiking price is misinterpreted as a signal that the technology is going mainstream and is ready to be applied to real-world problems. Lots of half-baked apps and companies are built. No actual traction is found (with the notable exception of the dark web).
(5) Repeat (3) and (4) until the press and wider community no longer believe the hype. Possibly rebrand to 'blockchains' or some other less toxic noun.
I'm actually convinced that Ethereum has something unique to offer specifically to developers. Ethereum will be a common ground for a lot of high value code and data between organizations, people, etc. A lot is possible in a few lines of solidity, I've seen devs create working decentralized exchanges in a few weeks. As you can see, the use of Ether here is just to ensure that the code a user wants to execute on the EVM gets executed. Users need not have to use it as a currency.
Ether's primary purpose is to secure the Ethereum network, not to be used as a "currency" like Bitcoin. If someone gave me an ether every time the Ethereum devs keep emphasizing this, I'd be very rich by now. If Bitcoin did a great job at transferring value in the network without being slow and full all the time, all the ancaps would have stuck to Bitcoin and would have left us in peace.
The Bitcoin challenger is not Ethereum itself, it will be services like Maker that are currently being built on top of Ethereum. Ether purpose is to secure Ethereum so that services like Maker don't have to worry about the security and scalability of the underlying blockchain and can focus on the EVM abstraction and above.
Yes, other than your second premise in (1), you nailed Bitcoin's trajectory to a 'T'. As someone who entered the developers in (2) back in early 2011, I watched this painful transition to 3 and 4 repeat itself until 2014, at which point I basically left due to the toxic composition of the community (it was the get-rich-quick types and scammers, often overlapping, that truly devastated the community). It makes me incredibly sad that such a promising technology has suffered this fate. Ah well, being money, I suppose that becoming corrupted was its destiny from the beginning.
I do disagree with your assertion in (1), which is that Bitcoin's applicability to real-world problems was questionable. From the beginning, it was clear to me that at least the technology behind Bitcoin could easily become Money 2.0. Unfortunately, I failed to take into account the social/governmental/financial factors.
Agreed. Ethereum seems like a pretty cool iteration on what bitcoin was able to achieve, but just like with bitcoin we're left with a gigantic deficit when we subtract real-world-applicability from the incredible levels of hype.
Running arbitrary decentralized code on a shared public ledger... I have to admit that this is pretty damn cool and I feel confident that there will be some useful projects or developments that will eventually emerge from this technology, but at the moment there aren't any obvious problems that this technology solves better than the existing centralized solutions. I saw a lot of talk about "autonomous corporations" in previous Ethereum threads, but it seems pretty clear that these entities are not capable of much autonomy beyond shuffling around eth between other Ethereum wallets/entities.
I agree. I think another fundamental flaw with (current) cryptocurrencies is that they are all too computationally expensive to replace a simple, trust-based system. If you look at it from an economic perspective, the incurred losses from a trust based system (caused by it's inevitable and sporadic abuse) are probably still smaller than the costs caused by a (theoretically) abuse free system like ethereum. That being said, there might be corner cases where these additional costs are sufficiently small to make a blockchain-like solution viable - for example for very low volume but very high value transactions, like a settlement of financial contracts (bonds, etc.), ie. for any transaction, where an abuse of the system is extremely costly.
Hopefully bitcoin will keep being the wild west of speculation and endless arguments. Ethereum seems to downplay its value storage capability. It needs 1-2 killer apps to become popular, but imho it should never market itself as a value store.
For anyone interested in getting started with Solidity in 20-30 mins, one of the languages that Ethereum contracts can be coded in (some analogize this language to JS, the other language is Serpent which is compared to Python), you can see a quick primer I put together:
A few common misconceptions that I'd like to correct,
Ether is not in the currency business. It was emphasized multiple times by the devs themselves. It so happens that Bitcoin is so slow and full that users are flocking to use Ether as a currency even when Ether's inflation is uncertain. This is an open network, we cant stop people from using it the way they want it to.
Ethereum is not being built for financial apps only. It provides a VM that can run code and store data. This can be used for any purpose that requires code to be executed and data fields to be changed atomically in a secure way, the users need to pay a fraction of a cent worth of Ether to run this code. That means they dont have to be invested in Ether to be able to derive value from the Ethereum network. You have to be invested heavily in Bitcoin to get value from the Bitcoin network, especially after Bitcoin payments are such a dud. Please dont rush to type that Steam started accepting Bitcoin recently.
Ether is not competition to Bitcoin. Bitcoin killer will be a new token on the Ethereum network. There could also be a AirBnb killer and a Uber killer built on the network too. These are companies that pride on being leaders in sectors by writing only code. What if this code and data can exist as commons in the Ethereum network that is global and has 100% uptime. Users pay a fraction of cent worth of Ether to run transactions instead of a percentage cut. And these users will transfer money between themselves for these transactions with the token that killed Bitcoin, not Ether. It will take a while to kickstart a reputation layer on Ethereum network but these usecases are a real possibility.
There is a very good chance that these new tokens created on the Ethereum network will surpass the total market cap of Ether very soon :O
Ether's long-term inflation is uncertain, but its maximum inflation is known. It's 26% of the crowdsale amount per year, or about 22% of the initial supply (so as the supply increases, the rate decreases). The devs have reserved the right to lower the inflation rate when they transition to proof of stake, but they've guaranteed not to increase it. That guarantee is enforced by the community just like it is on Bitcoin, plus it's actually written in the legal documents for the crowdsale.
Right now the ether inflation rate is under 20%. Bitcoin's inflation when it had a $1 billion market cap was 33%.
As a currency, ether works just as well as bitcoin, but with higher throughput and much less latency.
I agree with the overall sentiment of the piece. The one thing I disagree on is the perception that there should be "killer apps" for bitcoin. I think this perspective views Bitcoin as the the technological breakthrough, looking for apps to be built on top of it. But really the technology is the Blockchain, and Bitcoin (decentralized currency) is the "killer app".
Ethereum is different because in addition to being a currency, it is also a platform. It needs "killer apps" to differentiate itself, otherwise it's just a currency, and can be discarded like litecoin and doge. I think Fred has given us reason to believe it will succeed in providing the ability for killer apps to be built on top of it, but we still have to see. None exist yet. The DAO has yet to do anything real.
Maybe just a detail, but it seemed like an important one to me.
> Ethereum may attempt to move to proof of stake. [...] I believe this risk is manageable because there would be extensive testing beforehand.
This is a really big cop-out. I follow Ethereum pretty closely and I believe that the biggest threat to Ethereum's future is an attempt to move to proof-of-stake.
If you spend a bit of time in the ethereum community you'll find that everyone is very excited to reap the benefits for getting-in-early on ethereum, and they're very excited for the eventual switch to proof-of-stake so that they can collect money. Everyone who is invested in Ethereum is doing so in order to stake. This is terrible for the community, because who is ever going to get excited to invest in meme-powered internet money that they already missed the boat on?
What kind of testing is able to account for that kind of social effect? (Or maybe I'm just a stupid mathless Austrian.) Anyhow, that's just to talk about the social effects, and I think there are many technical problems with proof-of-stake beyond that... Let's not forget that there hasn't been a single successful PoS cryptosystem yet.
I also think that there are big problems looming within the EVM, and to give the article credit, that's mentioned and represented fairly in the article. (forward search for 'Bit-thereum' in OP)
I'm prepared to be wrong about Ethereum, even excited at the prospect. but if I was invested in a cryptocurrency it would be Bitcoin. I think that there are currency wars looming and I think Bitcoin stands to gain a lot from that. Bitcoin's big problems are overstated and will be solved in due time. It just needs to live past the death of Moore's law.
Here are some general thoughts for those interested more in this topic:
- Ethereum and Bitcoin both let you lock up the cryptocurrency and provide a series of rules that are required before the money can be unlocked; this has a lot of power, because unlocking can be done by a single party (a standard payment use case), but also by a series of other people/groups or external events (currency price, weather, etc)
- The rules for unlocking cover a wide gamut from requiring several users to agree (e.g., multisig like a multi key safe deposit box to voting for a dividend), to requiring an external action to happen (e.g., unlocking if the temp is below a certain amount on a given day for weather based insurance contract); these actions replicate many current real world interactions like an insurance contract, a voting mechanism for corporate governance, and escrow (just to name a few); the OP has also written about Distributed Autonomous Orgs (DAOs) on TechCrunch
- A key benefit for letting these be programmatic is that they can cut out a middle party (or at least reduce the dependence on this middle party with a network of oracles) - cutting costs and reducing dependence on this third party
- Some key value props where this could help in the early days:
1) cross-country transactions, as the contract language is international (legal systems can be hard to enforce across geographies)
2) Small amount transactions (as fixed costs may be high in a real world contract today for each party)
3) contracts where middlemen have monopoly-based pricing
4) contracts where the middle parties have a low degree of trust (more likely today, certain markets don't exist due to this reason)
5) Contracts in a country where legal systems are weak/expensive
- For Bitcoin vs. Ethereum, many Bitcoin enthusiasts will argue that Bitcoin provides a similar functionality, but Ethereum's high level languages are generally much easier to write (I'll likely get some push back by partisans, but Ethereum's Serpent and Solidity might be closer to JS/Python/C, while Bitcoin's Forth-inspired/stack-based language is closer to a higher-level assembly); there are also some specific differences like Bitcoin requires all or nothing unlocking, is not turing complete, has restrictions on the transaction byte size, and has some miners enforce transactions that only have a few of the contract op codes, not all; still, some Bitcoin devs (like Gavin) note that the surface area for security holes is significantly larger with Ethereum
(See my other post for an introduction to the language)
Ethereum is an cryptocurrency retailer and exchange platform. Coinbase should support cryptocurrencies where there is customer demand and backed by credible technical teams. Bitcoin and Ethereum both meet that criteria.
I wish Coinbase had a stronger set of technical advisors. Fred and Brian seem to rarely meet with the engineering and research community. Charlie Lee is pretty strongly on crytocurrency technology but just one person.
This article is FUD, but then so is this post. People on both sides have huge incentives. And don't be deluded into thinking there aren't sides. The wealth at stake and the ability to dodge banks makes it impossible to be deeply invested in this and not have an agenda.
Here are the paragraphs where I thought the FUD was most obvious. Worth looking over.
Developer mindshare is the most important thing to have in digital currency. The only reason these networks (Bitcoin, Ethereum) and their tokens (bitcoin, ether) have value is because there is a future expectation that people will want to acquire those tokens to use the network. And developers create the applications which drive that demand. Without a reason to use the network, both the network and its currency are worth nothing.
In contrast, Bitcoin has had a leadership vacuum since Gavin Andresen stepped aside after other core developers did not get on board with his (in my opinion rational and convincing) arguments to increase the block size. “Core developers” as they now stand are also relatively fragmented.
Beyond a leadership vacuum, Bitcoin’s “leadership” is less clear and toxic. Greg Maxwell, technical leader of Blockstream which employs a solid chunk of core developers, recently referred to other core developers who were working with miners on a block size compromise as “well meaning dipss.” A second discussion board needed to form on reddit, /r/btc, because of censorship on the original /r/bitcoin. The content on the Bitcoin discussion boards feels like squabbling while Ethereum’s is talking about relevant issues and new ideas. In summary, Ethereum leadership (and as a result its community) is moving forward while things need to get worse before they can get better in Bitcoin.*
What is very real, though, is the possibility that Ethereum blows past Bitcoin entirely. There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership, and has more developer mindshare. Developers → apps → users → network success. First mover advantage is challenging to overcome, but at current pace, it’s conceivable.
Also, I still don't understand why I'd want a programming language in my currency.
See my other comment for your question why you might want a programming language in your currency. An example of a real world "programming" language in your currency is a legal contract (e.g., insurance contract, escrow contract, corporate bylaws with dividend rules).
Blockchains aren't about currencies. They're about providing a single immutable scroll for a society to write entries on. You can use a scroll to record transactions for a currency, but you could also use it for any interaction between people.
Everyone is 100% allowed to and encouraged to change their mind, but it's no surprise that this is penned by Fred not Brian given Brian's quite firm stance on non-btc digital currencies ~ a year ago. I felt it was out of line at the time, although his comment (which mostly mentioned Ripple and altcoins) has turned out technically to be true, the idea that innovation in digital currencies was "done" and Bitcoin needed to be the focus was pretty crazy.
Ethereum is exciting - my dad, a lawyer who doesn't know you can use the internet at our house, is excited about it. It makes sense how you would use it. I hope it continues up and to the right!
Might Fred Ehrsam have some personal interest in Etherium, being a former Goldman Sachs trader (Etherium having been co-founded by Goldman Sachs alum Joseph Lubin)?
So... honestly asking here, but why isn't the blockchain length a problem in the long run? Whenever I've read about this there's a bunch of handwaving and change of subject, but I admit I've not read that much.
Glad to see Coinbase moving in this direction. I'm hoping they'll become a consumer friendly portal for the (hopefully many) assets that will trade on Ethereum.
I'm new to Bitcoin development and cryptocurrencies in general. Can anyone give a quick intro to Ethereum's scripting system and why it's such a big deal?
[+] [-] Uptrenda|9 years ago|reply
Sure, it did teach me a lot of obscure things about crypto + game theory, and some of those things actually turned out to be quite useful. But I also can't deny how much longer it takes to do the most basic things in Bitcoin and I think that now we're progressing towards using blockchains to solve problems outside of Bitcoin -- Ethereum seems more up to the task than Bitcoin.
That's not to put Bitcoin down though. There has definitely been some tremendous innovations there recently: segregated witnesses and sidechains are pretty cool. But I've also seen the community change significantly since I first got involved and I'd argue most of those changes have been bad. For example: /r/Bitcoin seems to have become a toxic echo chamber for irrational hatred against former high contributing core members and almost any kind of counter-views are censored which is honestly quite disturbing. Most of Bitcoin's current media is also controlled by only a handful of individuals so its very easy to manipulate the crowd into "consensus" but I won't even go there.
I'll personally always love Bitcoin but I can't see that these problems can be fixed at this point. The Bitcoin project was largely hijacked as far as I can tell and since the crowd has been won there's no going back now.
[+] [-] Nutomic|9 years ago|reply
You should go to /r/btc instead. It has a much better culture, and no censorship.
[+] [-] pjc50|9 years ago|reply
[+] [-] madeofpalk|9 years ago|reply
This is the main reason why I can't ever take bitcoin seriously - their community just seems to have so much unconstructive hatred towards anyone who ever says anything negative about bitcoin.
[+] [-] smaps|9 years ago|reply
[+] [-] kingrunner|9 years ago|reply
[+] [-] educar|9 years ago|reply
On top of this, there is now Ethereum and DAO which are also completely incomprehensible to me. But the reason for this comment is that I totally blown away that there are people out there who understand it and are willing to fund this to record levels.
The context for this comment is that I ask myself this question about products and startups all the time. Who uses them? Why are they gaining traction and nobody I know even knows about them let alone use them... To conclude, I find all this bitcoin talk very motivational - not everybody needs to understand what you are building. You just need a passionate following of people who do.
[+] [-] DennisP|9 years ago|reply
On Bitcoin, there's one table with two columns: username and balance. You have read access to this table and you can call a stored procedure that transfers some of your balance to another user.
On Ethereum, you have developer rights. It has the same username/balance table as Bitcoin, but you can also create your own tables and write your own stored procedures, which can be called by other users.
Of course this is a drastic simplification of both systems, and misleading in some ways, but it's the best quick explanation I've come up with.
I'm getting obsessed with Ethereum because it's amazing to me that, for example, I can write two pages of backend code plus an html/javascript front end, and I've got a crowdfunding system which I can deploy for free, run indefinitely with zero downtime, and have it moving money around without getting anyone's permission at all. (Or it could be an auction, casino, currency or derivatives exchange, vault, etc.)
[+] [-] oska|9 years ago|reply
No, HN is generally bad for discussion of bitcoin.
> I have asked many of my techie friends
An introductory whitepaper [1] was written by bitcoin's creator in 2008. That's probably still the best place to start.
[1] https://bitcoin.org/en/bitcoin-paper
[+] [-] sopooneo|9 years ago|reply
These groups may only slightly overlap.
[+] [-] ChemicalWarfare|9 years ago|reply
Same with Bitcoin. You acquire it, you use a piece of software called 'the wallet' to store it and you either share your 'Bitcoin address' with someone to send Bitcoin your way or they give you their address for you to send the btc to.
That's really it in a nutshell :)
[+] [-] dev1n|9 years ago|reply
[1]: http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-a...
[+] [-] lukev|9 years ago|reply
All its advocates get very excited about all the complex automated things it can do, which is admittedly very cool. But for the real world, I'm skeptical that anything more complicated than a basic escrow could work. Once you're talking about real, complex applications (like a DAO), what if there's a bug? Even if bugs are rare, the potential implications when they do happen are so severe that it still diminishes the value of the platform.
And the ability of members to "vote in" new code is no solution. Nobody in their right mind is going to do that without a thorough code audit, which is a pretty high friction interface to what is supposed to be a financial or business instrument. It would inevitably devolve to trusting a relatively small group of "experts", which rather defeats the point of the whole enterprise.
Even worse, voting on updates is broken by design... a majority of participants could collectively decide to screw over a minority and simply steal their assets by voting in a code update.
[+] [-] SanFranManDan|9 years ago|reply
Plus the way that "The DAO" operates is going to be crazy. Basically people submit proposals of things they want the DAO to build, then "The DAO" "hires" contractors to build it (A roundabout way of investment). So Slock.it would be a contractor of "The DAO", but could theoretically be replaced.
But Slock.it is a DAO itself. So basically the chain would look at minimum something like this.
"The DAO" <-> "Proposal" <-> "Contractor Agreement" <-> Slock.it
Bear in mind that "The DAO" and Slock.it are managed by distributed consensus. And what if a company was a contractor to >1 DAO?
Add in all of smart contracts contained in each DAO, the amount of interconnected unmodifiable software that will run these organizations will become staggering. Attempting to design something to be fault free in a normal network is insane, but then you add possibilities for social faults in voting and consensus.
I am sure something like Ethereum will be the future. But the current state is extremely alpha to be handling that sort of financial power.
EDIT:
To prevent a takeover many ethereum contracts will implement an exit strategy, like splitting the minority into a new contract.
[+] [-] newjersey|9 years ago|reply
Such is life though. It is not just ethereum. Bitcoin cannot survive a majority attack. In the long run, I can't see how even a government can survive a majority attack. One obvious solution to the problem is to try to prevent any one bloc from gaining majority status. I'm sure there are more elaborate solutions though and if any of them is elegant, I'd like to learn about it.
[+] [-] bshanks|9 years ago|reply
[+] [-] zekevermillion|9 years ago|reply
The voting problem is a more obvious flaw. There seems to be a naive optimism on the part of certain developers that simple voting rules will surface the best quality viewpoints. This is fine in hackernews, but is not OK for open source software development.
[+] [-] drpancake|9 years ago|reply
(1) Relatively interesting technological breakthrough comes along. Promising but questionable applicability to real-world problems.
(2) It attracts early, idealistic developers, some of whom are genuinely talented. Rational debate is still possible at this point.
(3) The hype builds up and in turn attracts various groups: raging anarcho-capitalists, developers of a mildly libertarian bent, get-rich-quick enthusiasts and teenagers. The price continually bubbles and spikes as fresh money comes in from speculators betting on the hype.
(4) The spiking price is misinterpreted as a signal that the technology is going mainstream and is ready to be applied to real-world problems. Lots of half-baked apps and companies are built. No actual traction is found (with the notable exception of the dark web).
(5) Repeat (3) and (4) until the press and wider community no longer believe the hype. Possibly rebrand to 'blockchains' or some other less toxic noun.
[+] [-] daoland|9 years ago|reply
I'm actually convinced that Ethereum has something unique to offer specifically to developers. Ethereum will be a common ground for a lot of high value code and data between organizations, people, etc. A lot is possible in a few lines of solidity, I've seen devs create working decentralized exchanges in a few weeks. As you can see, the use of Ether here is just to ensure that the code a user wants to execute on the EVM gets executed. Users need not have to use it as a currency.
Ether's primary purpose is to secure the Ethereum network, not to be used as a "currency" like Bitcoin. If someone gave me an ether every time the Ethereum devs keep emphasizing this, I'd be very rich by now. If Bitcoin did a great job at transferring value in the network without being slow and full all the time, all the ancaps would have stuck to Bitcoin and would have left us in peace.
The Bitcoin challenger is not Ethereum itself, it will be services like Maker that are currently being built on top of Ethereum. Ether purpose is to secure Ethereum so that services like Maker don't have to worry about the security and scalability of the underlying blockchain and can focus on the EVM abstraction and above.
[+] [-] jnbiche|9 years ago|reply
I do disagree with your assertion in (1), which is that Bitcoin's applicability to real-world problems was questionable. From the beginning, it was clear to me that at least the technology behind Bitcoin could easily become Money 2.0. Unfortunately, I failed to take into account the social/governmental/financial factors.
[+] [-] vectorpush|9 years ago|reply
Running arbitrary decentralized code on a shared public ledger... I have to admit that this is pretty damn cool and I feel confident that there will be some useful projects or developments that will eventually emerge from this technology, but at the moment there aren't any obvious problems that this technology solves better than the existing centralized solutions. I saw a lot of talk about "autonomous corporations" in previous Ethereum threads, but it seems pretty clear that these entities are not capable of much autonomy beyond shuffling around eth between other Ethereum wallets/entities.
[+] [-] jcfrei|9 years ago|reply
[+] [-] return0|9 years ago|reply
[+] [-] billions|9 years ago|reply
[+] [-] nemild|9 years ago|reply
https://learnxinyminutes.com/docs/solidity/
You can test your code here:
https://ethereum.github.io/browser-solidity/#version=soljson...
[+] [-] Hortinstein|9 years ago|reply
[+] [-] daoland|9 years ago|reply
Ether is not in the currency business. It was emphasized multiple times by the devs themselves. It so happens that Bitcoin is so slow and full that users are flocking to use Ether as a currency even when Ether's inflation is uncertain. This is an open network, we cant stop people from using it the way they want it to.
Ethereum is not being built for financial apps only. It provides a VM that can run code and store data. This can be used for any purpose that requires code to be executed and data fields to be changed atomically in a secure way, the users need to pay a fraction of a cent worth of Ether to run this code. That means they dont have to be invested in Ether to be able to derive value from the Ethereum network. You have to be invested heavily in Bitcoin to get value from the Bitcoin network, especially after Bitcoin payments are such a dud. Please dont rush to type that Steam started accepting Bitcoin recently.
Ether is not competition to Bitcoin. Bitcoin killer will be a new token on the Ethereum network. There could also be a AirBnb killer and a Uber killer built on the network too. These are companies that pride on being leaders in sectors by writing only code. What if this code and data can exist as commons in the Ethereum network that is global and has 100% uptime. Users pay a fraction of cent worth of Ether to run transactions instead of a percentage cut. And these users will transfer money between themselves for these transactions with the token that killed Bitcoin, not Ether. It will take a while to kickstart a reputation layer on Ethereum network but these usecases are a real possibility.
There is a very good chance that these new tokens created on the Ethereum network will surpass the total market cap of Ether very soon :O
[+] [-] DennisP|9 years ago|reply
Right now the ether inflation rate is under 20%. Bitcoin's inflation when it had a $1 billion market cap was 33%.
As a currency, ether works just as well as bitcoin, but with higher throughput and much less latency.
[+] [-] beaner|9 years ago|reply
Ethereum is different because in addition to being a currency, it is also a platform. It needs "killer apps" to differentiate itself, otherwise it's just a currency, and can be discarded like litecoin and doge. I think Fred has given us reason to believe it will succeed in providing the ability for killer apps to be built on top of it, but we still have to see. None exist yet. The DAO has yet to do anything real.
Maybe just a detail, but it seemed like an important one to me.
[+] [-] nickysielicki|9 years ago|reply
This is a really big cop-out. I follow Ethereum pretty closely and I believe that the biggest threat to Ethereum's future is an attempt to move to proof-of-stake.
If you spend a bit of time in the ethereum community you'll find that everyone is very excited to reap the benefits for getting-in-early on ethereum, and they're very excited for the eventual switch to proof-of-stake so that they can collect money. Everyone who is invested in Ethereum is doing so in order to stake. This is terrible for the community, because who is ever going to get excited to invest in meme-powered internet money that they already missed the boat on?
What kind of testing is able to account for that kind of social effect? (Or maybe I'm just a stupid mathless Austrian.) Anyhow, that's just to talk about the social effects, and I think there are many technical problems with proof-of-stake beyond that... Let's not forget that there hasn't been a single successful PoS cryptosystem yet.
I also think that there are big problems looming within the EVM, and to give the article credit, that's mentioned and represented fairly in the article. (forward search for 'Bit-thereum' in OP)
I'm prepared to be wrong about Ethereum, even excited at the prospect. but if I was invested in a cryptocurrency it would be Bitcoin. I think that there are currency wars looming and I think Bitcoin stands to gain a lot from that. Bitcoin's big problems are overstated and will be solved in due time. It just needs to live past the death of Moore's law.
[+] [-] nemild|9 years ago|reply
- Ethereum and Bitcoin both let you lock up the cryptocurrency and provide a series of rules that are required before the money can be unlocked; this has a lot of power, because unlocking can be done by a single party (a standard payment use case), but also by a series of other people/groups or external events (currency price, weather, etc)
- The rules for unlocking cover a wide gamut from requiring several users to agree (e.g., multisig like a multi key safe deposit box to voting for a dividend), to requiring an external action to happen (e.g., unlocking if the temp is below a certain amount on a given day for weather based insurance contract); these actions replicate many current real world interactions like an insurance contract, a voting mechanism for corporate governance, and escrow (just to name a few); the OP has also written about Distributed Autonomous Orgs (DAOs) on TechCrunch
- A key benefit for letting these be programmatic is that they can cut out a middle party (or at least reduce the dependence on this middle party with a network of oracles) - cutting costs and reducing dependence on this third party
- Some key value props where this could help in the early days:
1) cross-country transactions, as the contract language is international (legal systems can be hard to enforce across geographies)
2) Small amount transactions (as fixed costs may be high in a real world contract today for each party)
3) contracts where middlemen have monopoly-based pricing
4) contracts where the middle parties have a low degree of trust (more likely today, certain markets don't exist due to this reason)
5) Contracts in a country where legal systems are weak/expensive
- For Bitcoin vs. Ethereum, many Bitcoin enthusiasts will argue that Bitcoin provides a similar functionality, but Ethereum's high level languages are generally much easier to write (I'll likely get some push back by partisans, but Ethereum's Serpent and Solidity might be closer to JS/Python/C, while Bitcoin's Forth-inspired/stack-based language is closer to a higher-level assembly); there are also some specific differences like Bitcoin requires all or nothing unlocking, is not turing complete, has restrictions on the transaction byte size, and has some miners enforce transactions that only have a few of the contract op codes, not all; still, some Bitcoin devs (like Gavin) note that the surface area for security holes is significantly larger with Ethereum
(See my other post for an introduction to the language)
[+] [-] zmanian|9 years ago|reply
I wish Coinbase had a stronger set of technical advisors. Fred and Brian seem to rarely meet with the engineering and research community. Charlie Lee is pretty strongly on crytocurrency technology but just one person.
[+] [-] current_call|9 years ago|reply
Here are the paragraphs where I thought the FUD was most obvious. Worth looking over.
Developer mindshare is the most important thing to have in digital currency. The only reason these networks (Bitcoin, Ethereum) and their tokens (bitcoin, ether) have value is because there is a future expectation that people will want to acquire those tokens to use the network. And developers create the applications which drive that demand. Without a reason to use the network, both the network and its currency are worth nothing.
In contrast, Bitcoin has had a leadership vacuum since Gavin Andresen stepped aside after other core developers did not get on board with his (in my opinion rational and convincing) arguments to increase the block size. “Core developers” as they now stand are also relatively fragmented.
Beyond a leadership vacuum, Bitcoin’s “leadership” is less clear and toxic. Greg Maxwell, technical leader of Blockstream which employs a solid chunk of core developers, recently referred to other core developers who were working with miners on a block size compromise as “well meaning dipss.” A second discussion board needed to form on reddit, /r/btc, because of censorship on the original /r/bitcoin. The content on the Bitcoin discussion boards feels like squabbling while Ethereum’s is talking about relevant issues and new ideas. In summary, Ethereum leadership (and as a result its community) is moving forward while things need to get worse before they can get better in Bitcoin.*
What is very real, though, is the possibility that Ethereum blows past Bitcoin entirely. There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership, and has more developer mindshare. Developers → apps → users → network success. First mover advantage is challenging to overcome, but at current pace, it’s conceivable.
Also, I still don't understand why I'd want a programming language in my currency.
[+] [-] nemild|9 years ago|reply
[+] [-] natrius|9 years ago|reply
[+] [-] deftnerd|9 years ago|reply
Actually, I think you're looking at it wrong. It's not a programming language in your currency. It's a currency in your programming language.
[+] [-] pmorici|9 years ago|reply
[+] [-] tommynicholas|9 years ago|reply
Ethereum is exciting - my dad, a lawyer who doesn't know you can use the internet at our house, is excited about it. It makes sense how you would use it. I hope it continues up and to the right!
[+] [-] pithic|9 years ago|reply
[+] [-] kem|9 years ago|reply
[+] [-] aakilfernandes|9 years ago|reply
[+] [-] bunkydoo|9 years ago|reply
[+] [-] Cyph0n|9 years ago|reply
[+] [-] Animats|9 years ago|reply
[+] [-] anonbanker|9 years ago|reply
Ethereum enables the killing of giant-killers.
0. http://arcade.city
[+] [-] mrfusion|9 years ago|reply
That sucks I'm out 900$ on this thing. :-(. Any ideas?