One of the things that made me less skeptical of Ethereum was that Vitalik has consistently argued based on his view of "Ether as digital oil to power the blockchain", which is to say that the point is not to just hodl, but to create a core technology that can enable different applications.
I still think that we should not forget the "I need a censorship-proof way to send money to someone overseas" story, but mostly as a hedge against the existing institutions, not as an immediate need.
The problem is that this gospel has been said for almost a decade now and despite, literally, billion dollars of assets that Vitalik has, and others flowing this is not happening.
Not saying that this could not happen as an hypotheses but cryptocurrency foundations are far far from business execution basic practices.
As an insider I can say that most money flows to a very small group of people and the governance is not really decentralized. For example, very few people can decide on Bitcoin and Ethereum protocol changes, and these people cannot be changed...
It does seem slow, but they did manage the proof-of-stake transition pretty smoothly despite delays and widespread skepticism, so I give them some credit for that.
He was talking about proof-of-stake since the beginning and every year was talking about the next year. Not blaming Vitalik himself but the whole thing, it is bad to give false expectations.
Another thing, no pun intended, is that the proof-of-stake upgrade maintains prohibitive the network fees for transactions while other technologies have low fees.
> I have no idea what Vitalik is funding. Do you?
The funding of projects is through the foundation but if I remember well the original people and contributors received the ~50% of the total ethers until now.
Consensus algorithms have nothing to do with transaction fees.
> while other technologies have low fees.
Any "Ethereum killer" that showed up turned out to have the same if not worse problems as Ethereum in the moment they started dealing with minimal real-world traction.
> contributors received the ~50% of the total ethers until now.
First: source?
Second: "50% of total ETH until now" is doing a lot of work here. How much was during the pre-mine and how much was due to the sale? The pre-mine sale raised < 20 million USD. Are you counting the people who bought ETH in the pre-mine as "original contributors"?
> Consensus algorithms have nothing to do with transaction fees.
Please don't tell bullshit. Look at Algorand and other protocols, consensus has a relationship with fees because it is linked with the cost of reaching consensus!
You can even read that in the Ethereum subreddit [0].
> Source?
It is repeated ad nauseam in Internet [1] and you can analyze the blockchain genesis to check it.
> Ethereum killer?
It is not about the protocol but the community you create. Algorand has solved the PoS before Cardano and Ethereum but they are #58 now and the creator is one of the parents of modern cryptography, Turing Prize, etc. Solana is #5. Beyond comparing the Solana protocol with Algorand it is a matter of "business" execution, technology is a smaller part. Probably if Livra from Meta was accepted it would be in the top 10.
Even when you think about Solidity as a programming language, it was not well designed (e.g. security) but that doesn't matter.
I asked for "source" because I know that this is "repeated ad nauseam in the Internet" while being provably false.
The very first result on your google query is a bitcoin.com page that is 404, but archive.org has this:
The Ethereum network started off with a supply of 72 million Ether (ETH).
Eighty-three percent of that (60 million) was distributed to people who had
purchased ETH in a crowd sale that was conducted in July and August of 2014.
(...)
Of the remaining 12 million ETH distributed at the launch of the network in 2015,
half was split amongst 83 early contributors to the protocol based mostly on time
contributed. The other half were set aside for the Ethereum Foundation.
So, the "50% to contributors" is actually 8.33%.
> consensus has a relationship with fees because it is linked with the cost of reaching consensus!
Wrong. Fees are determined by network activity and the amount of transactions competing to get into the block being "mined". The cost to validate a full block is not really different than the cost to validate a block that is not completely full.
If Algorand or Cardano ever got close to the transaction volume from Ethereum, you can bet that their average transaction fees would go up accordingly.
> If Algorand or Cardano ever got close to the transaction volume from Ethereum, you can bet that their average transaction fees would go up accordingly.
I'm not sure what you mean by this. I don't know about Algorand or Cardano transaction volume, but many EVM-based blockchains process a similar number of transactions to ethereum (or more), with lower fees. They do all have different (proof of stake still) consensus models though
Let's get Polygon out, because they are not a base-layer blockchain.
> a similar number of transactions to ethereum (or more), with lower fees.
Are we talking about the base currency (Wei) or the dollar-equivalent amount? If Wei, the only way that the transaction fees can be lower is if the chain has a different set of costs for the operations.
If you are talking about the dollar-equivalent amount, then yes, transactions are going to be "more expensive". But even then, it is not related to the consensus algorithm and just the "price of the base token".
Transaction volume meaning.. the number of transactions processed by the network?
If you meant monetary volume, you should have used a different term than one which is well-recognized to refer to the number of transactions (both in and out of blockchain applications of that term)
edit: I see, you're suggesting the fees are cheaper because the token is cheaper, and somehow seem to think EVM networks will have a straightforward relationship between the number of transactions and the cost denominated in their gas token.
I don't see how this follows. The fees are entirely a function of network constants and usage, which have more to do with what people are willing to pay to get their transaction into a block.
Ethereum has a limited amount of block-space, and a fixed number of blocks per year. The gas price isn't entirely a bidding system, because there's basically a floating multiplier which adjusts automatically based on the "fullness" of the most recent however many blocks, but the principle is that you need some form of congestion control
In blockchains which have larger blocks, or more numerous blocks, or a number of blocks/block-size which adjust based on usage, it is not as costly to get a transaction included.
So I don't know about Cardano or Algorand, but many networks can handle as many transactions as ethereum while having much cheaper transaction fees, which seemed to be the point you were arguing against
You know that Algorand and Solana supports a bigger number of TPSs that Ethereum and with lower fees and different consensus mechanisms, if you don't know that I am talking about someone that tries to show expertise but don't have any real one. It is a fact.
Initial investors are also contributors. The number allocated initially is really huge.
I also know that Solana had frequent outages and issues where they could resolve their transaction sequence, because their hardware and connectivity requirements make it prohibitive for "casual enthusiasts" to run a node.
And if "initial investors are also contributors", then you are just parroting the "Ethereum is pre-mined" from Bitcoiners, and we can safely end the discussion here.
I didn't mention Algorand because its overall network is a blip compared with Ethereum and Solana in any metric, and it can barely be considered as Battle-Tester in a "real world" scenario.
If doing DeFI on Algorand is so much better/cheaper than on Ethereum, then why is it only 1/500th of Ethereum's size?
Mind you, it seems that this calculation is not attributing "bridged" TVL as related to the chain size and activity. If it were, there are 330 Billion USD that depend on Ethereum's base layer security.
This has made you less skeptical of what he’s peddling? That slogan is a series of red flags in only eight words. He could be selling actual snake oil.
The origin story of the snake oil trope is kinda cool. Apparently the concept was brought over to the US by Chinese railroad workers. It was made from the oil of the Chinese water snake which is high in omega-3's that actually do reduce inflammation. Unfortunately there were no Chinese water snakes in America, and the American hucksters started juicing rattlesnakes. And then... other even cheaper substitutes like beef tallow, mineral oil and turpentine. [1]
I suspect the Erabu sea snake is the Chinese water snake that was originally juiced? I don't think rattlesnake oil would have the same effect :)
I'll rephrase a bit for the HN crowd: "The Ethereum currency (Ether) value proposition is that it is used to pay for decentralized apps on the Ethereum Blockchain. The more application and users are there, the more Ether is needed and hence it's value goes up". At least that's how I understand it.
OPs point is that most cryptocurrency advocates go for "but my token and hold, it is sure to grow 10x in a few months" and I (like probably OP) consider it misleading baseless hope at best, fraud usually.
Should you not want the price to be stable? If an arcade game’s price went from 50 cents per play to 5 dollars per play because more people are using a delivery application on the other side of the world that doesn’t make much sense from a consumer perspective.
There are definitely bitcoin diehards out there who look at the price of everything relative to bitcoin.
From a practical standpoint, I think most people would prefer it if the currency used by their country of residence increased in value relative to other global currencies, rather than just staying stable (though for hyperinflationary countries, even that would be a major improvement).
Although stability relative to another currency (see https://en.wikipedia.org/wiki/Fixed_exchange_rate_system) is considered (by many) disadvantageous for countries with strong economies, because you strip away the central bank's power to manage the supply. This is basically the whole Gold Standard debate.
For blockchain users who want reduced volatility and stability relative to a fiat currency, there are always stablecoins.
But the argument is that the grandparent comment is making is that you should build your application on the ethereum network, eth is the “oil” of this machine, and the more people who use it the higher the value of eth is.
So if I make a game, or an uber for dog walkers, or a global shipping service, or some SaaS app on the ethereum blockchain, then my customers will have to pay more or less (or my costs will be higher or lower) depending on how active the network is.
That makes no sense. Day to day price and gas fee fluctuations make it hard to long term plan. Just saying that if you want price stability use a stablecoin doesn’t address that issue because we are not building the app on the blockchain of the stablecoin. There isn’t an eth stable coin that is always 1 blip to 1 eth exchange rate.
> or a global shipping service, or some SaaS app on the ethereum blockchain, then my customers will have to pay more or less (or my costs will be higher or lower) depending on how active the network is.
Only if you want to have these applications fully running on the base layer, which is frankly nonsense.
To give you one practical example: Storj can provide a object storage service at AWS scale, and its pricing has nothing to do network activity and the price of storage does not change based on the amount of transactions per minute. Unless you want to be paid in real-time and account for every byte that you are storing and transmitting, there is no need to put all of the business logic in the blockchain.
I don't agree with this, but also think you're arguing a different point.
My point was that prices being "stable" isn't actually what's desirable, prices being nonvolatile is.
> So if I make a game, or an uber for dog walkers, or a global shipping service
I mean this is exactly how many of these things work. Uber pricing fluctuates based on demand. So do global shipping prices in many cases. So do game prices on Steam.
Even if the price was the same in the currency you're using (say USD), the value of USD is constantly changing.
> and the more people who use it the higher the value of eth is.
And I'm not sure how this follows. The more people who purchase ETH, the higher the value is.
But using the ethereum network doesn't require you to transact in ETH, only that you pay for the transaction fee (the network cost that makes it possible to to store and execute your transaction essentially) in ETH
If the stakes of the arcade game were so high that people wanted to have its logic running on the base-layer - e.g, high prizes for winners, or the possibility of using power ups obtained in other games - then the price to play would have to depend on the network activity.
But because these games don't, it should be totally fine to delegate this application to a layer-2 system like a roll-up or a payment channel.
But does the layer 2 coin have a stable exchange rate with the layer 1 coin?
And again, we are talking about just to pay to play the game. Today an arcade that uses dollars may charge you 50 cents for a life. Or the equivalent in tokens (layer 2). If suddenly the value of 50 cents could pay for 10 lives, do I need to now charge customers more tokens to play? How do I plan long term with hiring or my utilities if the price I could be paying month to month can fluctuate as much as cryptocurrency does?
Why not just use a stable currency to price your "game token"? Once you are out of the base layer, there is no need to tie any transaction costs to the base layer token.
So, in your example, the game company could easily just say "pay us X amount of dollars however you want, and you will receive the exact same amount on the layer-2 to play".
I feel like we are right back to why even bother using cryptocurrency for this if the fundamentals of it aren’t stable enough for day to day transactions.
My example was talking about using a layer 2 token. Now you’re telling me that it’s simple just use a completely different currency to buy tokens?
Absolutely not. Bitcoin's initial narrative was "digital cash", i.e, digital payments and microtransactions. Given that transaction costs became prohibitive, it switched to "digital gold", or store of value, meaning that Bitcoiners defend the idea that Bitcoin's reason d'être is just to hold it.
I've never seen Vitalik or any of the core Ethereum developers talking about the value of Ether being a fundamental metric of any kind. The incentives are made in a way to maximize utility of the blockchain, not the value of its base currency.
The "beginning of crypto" was with Bitcoin, can we agree to that?
Can we agree that Bitcoin was not claiming to "be a general platform to power distributed applications"? If you disagree, refer to the whitepaper that says "A Peer-to-Peer Electronic Cash System".
Can we agree that before Ethereum each chain was just a fork of Bitcoin, and that the token (aka "the currency") was "sold" to others as something that would have its value determined by supply and demand, but that the blockchain had no use that was not connected to transactions related to the token? As in: fundamentally speaking, Bitcoin, Litecoin, Dogecoin, Bitcoin Gold, Bitcoin Cash... are the same?
Can we agree that Ethereum (the blockchain) enables distributed applications where people do not care at all about the price of Ether? E.g, I can host files on Storj and pay with credit card, the people hosting data are being paid in Storj's token, and everyone involved in this economy is directly using the Ethereum blockchain, but don't need to hold any Ether at all?
BTC (and derivatives) were very much "just for holding". The fact that they hoped it could be used for day-to-day value transfers does not negate the fact that the system can only work with a continuous influx of capital. "You should pay something with BTC, but if possible buy back the USD-equivalent amount" was standard advice already in 2011.
> Saying you have some other use case besides asset appreciation is not a unique proposition.
>they hoped it could be used for day-to-day value transfers
And they said this, including Satoshi. Yes they were wrong, but they said it.
>Now, it isn't
It's never been unique, because every coin has said it including, as you have mentioned in every response so far, Bitcoiners.
You've also said Eth guys have said. What are we left with? Every other **coin has obviously said it. I'm not arguing they all mean it, or they've been right. I'm arguing they all said it.
> I'm not arguing they all mean it, or they've been right. I'm arguing they all said it.
Then this whole discussion is pointless. Why should we care about what people say or believe, unless it can be backed by their actions?
Instead of putting them all in the same bucket because on what they said, let's judge them based on what they did. And Vitalik has consistently shown that his work is aligned with the stated plans and vision for Ethereum.
You started the thread by saying you trust the intentions of a coin project based on them saying they're not in it for the money.
I just meant to point out that this was no special characteristic, as they all have done this. "Crypto" has been professing "use cases" since the beginning.
>Then this whole discussion is pointless.
Yes it certainly was, since you wanted to argue that you believe him, yet got caught up in trying to refute for some reason the point that they all say it. You say trust actions instead. Great, as long as we agree words are irrelevant particularly when they all say the same thing.
No, I said that he has argued (to justify the project decisions and work) based on his view.
I never said "I believe on what he has promised". I said "all he has done and delivered has been consistent with his professed views". It's completely different, and I honestly do not see how you could interpret what I said in such a twisted way.
The whitepaper's plan wasn't, but that's not true at all for Bitcoin itself. Satoshi included OP_RETURN which allowed smart contracts - mastercoin being the first L2 (on Bitcoin). He also wanted to increase the blocksize to allow scaling. Vitalik started Ethereum because the "core devs" (bank incumbent funded usurpers) refused to cooperate. This is also the reason the original maintainers like Gavin and Mike Hearn split off to Bitcoin Cash and other alt-coins.
This is all pretty much boring, tired lies that altcoin profiteers like to trot out apparently assuming nobody is still around who is interested in contradicting them.
The purpose of OP_RETURN was to end the script. It was not designed for rando garbage overlays that are worthless; Satoshi's views on scaling were ambiguous—rather than say it "should" he was instead correcting people who thought you could break consensus by simply setting the value higher. There was absolutely zero communication between Vitalik and anybody about his "plans" to dump an overlay into Bitcoin, and his current story about 80-to-40 bytes is a pure, often debunked lie. There isn't a single communication that Vitalik himself can point to anywhere which shows he was interested in "cooperating" and then core turned him down.
His typical lie was that he was interested in stuffing data into Bitcoin, but then core devs "stopped that" by reducing the amount he could stuff into Bitcoin by half—from 80 to 40 bytes—but when he says that he also never points at any discussion, and in any event the direct history contradicts this—no versions of Bitcoin from back then ever reduced anything. It was only ever an increase: from 0, to 40, to 80 in released versions.
There no evidence these people ever give which shows some lack of cooperation with Vitalik is the reason why Hearn and Andresen "split off" to make an altcoin, which itself is quite the absurdity, and if true just means they would have been ethereum pumpers anyway.. so..
This is the same tired misinformation you are spreading from 2017+ and I will prove it with primary sources.
Also, why are the comments on your account 90% calling other people liars about cryptocurrency?
Satoshi's views on scaling were NOT ambiguous. He planned to increase the blocksize and have users switch to SPV wallets. Read section 8 of the Bitcoin white paper:
if (blocknumber > 115000)
maxblocksize = largerlimit
It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete.
When we're near the cutoff block number, I can put an alert to old versions to make sure they know they have to upgrade."
Regarding OP_RETURN, both mastercoin and counterparty existed because of OP_RETURN, so no, it's not "garbage". It's a data field that can be used to link L2's to the Bitcoin blockchain by embedding them in transactions. These projects, factom, and countless others that built off of OP_RETURN had to abandon Bitcoin for other chains because of the core developers' gatekeeping.
> original maintainers like Gavin and Mike Hearn split off to Bitcoin Cash and other alt-coins.
So what developments in Bitcoin Cash have been made in that direction? Why is is that all of the "ideological" forks of Bitcoin do nothing but tweak some parameter size in the network settings and do not go beyond that?
I still think that we should not forget the "I need a censorship-proof way to send money to someone overseas" story, but mostly as a hedge against the existing institutions, not as an immediate need.