I love how everyone assumes that the ETH blockchain is immutable and there is nothing that can happen to undo any of this. Did everyone simply forget when the Dao had a contract bug and the ETH devs literally just rolled back the transaction?
So crypto is immutable, "code is law", decentralized, whatever, until people need to roll back transactions and use centralized exchanges because "they already solved these issues"? Seems like a whole lot of global warming just to re-invent a terrible imitation of banking...
After reading Moxie's blog post on web3 [1] I feel it is a stretch to call anything Ehtereum-based decentralized anymore when this many applications use Alchemy or Infura as providers for their Ethereum nodes.
Thank you for that link, I see it was posted to hn, but gained little traction.
It certainly puts words to my feelings around current "crypto" trends as someone (probably like moxie) that still remember the first wave of cypherpunks[1] and dreams of digital currencies.
It feels strange when a lot of smart people insists on something that's obviously false in a practical, real-world sense - and it's nice to see someone else shine a light on that, and explain in simple, correct terms what's actually going on.
I wonder if there are any emerging systems that are more likely to realise the idea (ideals) of digital currencies and smart contracts?
I had hopes for etherum, but now I'm thinking that if we'll ever get there, it'd be in the next generation (call it third generation, bitcoin being first, etherum second - and earlier things generation zero).
I'm thinking it would be proof-of-stake, and somehow viable as real peer to peer, or split in a more sane way between infrastructure and "wallets".
Also, core devs and all stable cryptos are "centralized" by definition. This whole ecosystem is just cancer to a traditional society. It's not an evolution.
Something happening once does not mean it will happen again. There have been numerous huge hacks in the past 5 years, even where the losses were from the most influential of holders and no action was taken (e.g. parity bugs).
A bug and reversal occurred in the first few years of Bitcoin's existence that has effectively meant that Bitcoin won't reach the stated 21m coins exactly.
It's guaranteed at this point that there won't be any further reversals.
The point is that it can happen if enough influential individuals in the eth community want it to happen, it is a social software not "immutable", and this will be further enshrined if PoS ever becomes a reality.
Bitcoin has the same problem, and cryptocoin enthusiasts are fooling themselves if they think that miners won't raise the 21m cap when the end of Bitcoin rewards start looming.
> 21m cap when the end of Bitcoin rewards start looming.
This has actually already happened with Monero. The mining reward schedule was much more aggressive in it's diminishing returns. Once the mining returns cross a threshold of not being able to sustain the cost of mining things dried up very quickly. Devs jumped in and added Tail Emission [1] so that all blocks have a fixed reward of 0.6 XMR that will never change or go away.
Anything can be done using a fork. But the days of a chain (read as "only bitcoin & ethereum") doing any kind of deep state change and coming out the other side as the winning fork are done. The stake holders are so diverse and so invested in the values (i.e. immutability, scarcity) that any such fork is doomed to failure.
We found out with previous Bitcoin forks, how influential companies and miners are. 21M is non negotiable, and which stakeholder would want to dilute themselves?
> But the days of a chain (read as "only bitcoin & ethereum") doing any kind of deep state change and coming out the other side as the winning fork are done.
When it comes to miner prerogatives the day is never done, they are the sole arbiters of what "winning chain" means, and when they are incentivized to act in unison their will is indomitable.
> and which stakeholder would want to dilute themselves
Miners. Based on your definition, "stakeholders are diluted" every time miners make money, so if the choice is between continuing to make money or not, it's pretty obvious what decision they will make.
I suppose there's a possible future where the miners do nothing and bitcoin transaction fees skyrocket in response. At that point I would expect a mass exodus to altcoins with cheaper transaction fees, but I don't see the miners acquiescing to this future.
It's exactly the same with banks, except "we" (normal plebs) cannot actually see when it happens, as compared to blockchains where all data is public. With banks it happens all the time, but no one knows, so it doesn't make the news. When it happens in blockchains (that one time), it's very obvious so it makes the news.
I'll make no argument for/against cryptocurrencies here, as the discussion if it's good/bad is futile. My comment is just a statement of fact about the differences/similarities of what we have now, and what cryptocurrencies offer.
How is it at all the same? The banking system is not immutable, the chargeback for example is available to all the "plebs" and we make regular use of it when transactions go awry.
Normally you do not have to actually directly interact with the legal system to reverse a fraudulent bank transaction. The banks have internal policies to comply with the legal system, because the other outcome is more expensive for them.
If you initiated a wire to the wrong account, that's one thing. The banks will not reverse this sort of transaction, to my understanding. If someone else fraudulently initiated a wire from your account, then that's another thing. This type of transaction will be reversed. I'm not sure which situation you're talking about. ACH transactions are a whole other ballgame.
I’m talking about me wiring money to someone who was actually a scammer, same as AI said before.
If your response is “oh well you should have been more careful about that”, congratulations on endorsing the very same defense crypto enthusiasts were giving and validating that they’re not all that different.
I reckon that the wire transfer is one of those things where you get a ton of warnings from your bank that the transaction is normally not reversible, at least it is at my bank. I think it's unfortunate that there are any legitimate transactions that require wire transfers -- I definitely am not someone who endorses the status quo here.
I guess my take is that all crypto transactions have properties strictly worse than the worst type of bank transfer. In addition to being irreversible when you initiate them, they are also irreversible if someone fraudulently initiates them on your behalf. And there is no more secure option that you can use with crypto. There is to my knowledge nothing in the crypto space with security properties similar to an ACH transfer.
Too bad for you, my sympathies. But there is still a huge difference here: Someone has your money; it didn't cease to exist. (So from the bank's viewpoint: "Our books are balanced, it went from one account to another.") In this crypto case though, the money was destroyed by the system; the "bank" "ate" it. At least that shit doesn't happen in the old Alfa Romeo banking system.
Yes, there is a difference in that respect. But I was replying to the parent’t point that, because the banking system is run by humans, obviously they will fix anything for you that a human can identify as a bad result. (Like sending the money to the wrong place or to a scammer.)
It’s kind of missing the point to focus on the narrow issue of “can you accidentally destroy money in the conventional banking system?”
> It’s kind of missing the point to focus on the narrow issue of “can you accidentally destroy money in the conventional banking system?”
No it isn't. That's a huge difference. On the contrary, focusing on “Shit happens in the conventional banking system too!”, that's missing the point, IMO.
It’s not really a difference because you can destroy money in the conventional banking system eg by burning paper money. And it’s extremely important if the defense you’re giving I’d wrong, which it is, if that defense is “humans can come in and correct obviously unreasonable things”.
In both conventional banking and crypto, yes, there are situations of “sorry, you’re fucked, but like, you’re just supposed to know not to do that” (where “that” is send wires you’re not 100% sure of or guard your physical cash carefully).
No offense, but you really seem to be drawing the abstraction boundaries poorly here.
> you can destroy money in the conventional banking system eg by burning paper money.
But that's an accident or intentional vandalism by a user of the system; it isn't built into the system itself.
> In both conventional banking and crypto, yes, there are situations of “sorry, you’re fucked, but like, you’re just supposed to know not to do that” (where “that” is send wires you’re not 100% sure of or guard your physical cash carefully).
In conventional banking the “sorry, you’re fucked” situations don't destroy the money banking is all about handling.
> you really seem to be drawing the abstraction boundaries poorly here.
My "abstraction boundary" (if I understand the term correctly?) is: A system that can have parts that do this -- destroy the very thing it's supposed to handle, "money" -- is a crap system. "Yeah, but you can burn cash!" (vandalism) or "Mistype an account number and the money is lost (to you)!" (not destructive) are not system critiques but whataboutism.
Currency-changing ATMs (do such things exist? If not, why not?) or vending machines like for petrol don't have built-in banknote shredders.
[Edit: Left off half a sentence, screwed up emphases.]
In the banking system every day there are reversals for many mistakes of different kinds even if the amounts are tiny and only ordinary people are involved, and if $500k is at stake, the legal system can be used to "convince" banks to do what's right even if they don't want to.
The DAO is a big reason why (culturally) this kind of thing can no longer be done. That was a defining moment for the culture and is seen as a growing pain but also a "never again" moment.
Which is exactly what ETH already did years ago with the Dao. There was no technical reason for the rollback/fork. It was just that too many people would lose money because of a bug in a contract. A contract that explicitly said "this is the code" regardless of bugs. So yeah, lol.
