If you're talking history, I don't think that's quite fair. The whole hash-based algorithm was just the most mathematically simplistic way to make the idea work. It still is.
If you're talking present-day, yeah, mostly Bitcoin hoarders don't want to see any change that might make their currency start functioning like a currency instead of fake gold.
Gold without millenia of collective psychology to give it staying power as a store of value once more useful, cheaper, and faster to transact cryptocurrencies get any uptake.
I think you're confusing the present state of cryptocurrency as being its conclusion. Yes, Bitcoin was the first mover, and Bitcoin has the most buy-in. But cryptocurrency in general does not have global buy-in as a way to buy and sell stuff.
A) Barriers to initially acquiring crypto coins remain a bit high. B) Expense of transactions remains way too high, C) Transactions are way too slow, and D) For Bitcoin in particular, the hoarders make it politically difficult for Bitcoin to move to an algorithm that can produce faster transactions and therefore serve as a better means of payment.
All the major blockchains in the cryptocurrency ecosystem, right now, are too slow and expensive to be of much use as a currency to the global economy. It stands to reason that if one of them, unburdened with Bitcoin-holder demands for ever-increasing scarcity, solves that problem (Proof of Stake?), then Bitcoin will be supplanted by a cryptocurrency that improves the currency experience. Several are in the process of fixing that, while Bitcoin is not.
No cryptocurrency's competition is Bitcoin. The competition is old school means of payment. If your currency becomes closer than Bitcoin to being as useful as traditional money, your currency will have an advantage over Bitcoin.
Imagine you sell a phone on Craigslist, for crypto. You and the buyer can either deal with a $10 fee and 30 minutes to an hour of sitting in a Starbucks to complete your transaction, or you can give up, swap cash for goods, and walk away. Which one do you choose? Time is expensive, too.
Yes. I've transacted quite a bit in person for Bitcoin, and I'm fine with an unconfirmed transaction as long as the value is less than $500 or so and I can see it in the transaction pool.
The way I see it, an unconfirmed Bitcoin transaction is still more trustworthy than a confirmed debit card transaction. At least with Bitcoin, I'm 100% sure the person has the money in the first place, and that once the transaction clears (in ~10 minutes), they can't reverse it later and stick me with the loss.
Not to be all "both sides tho," but I think you're both right. I code on blockchain stuff from time to time, and it's both really awesome for the decentralized no-trust part and straight-up nonsense for entire categories of problems that would be better solved off-chain. The hype machine is crazy and driving things toward the blockchain that absolutely don't belong there. ("Uh, do you need a blockchain, or do you just need to cryptographically sign something, and you've never thought about cryptography before today?") There are still some very interesting untapped possibilities that aren't better-served by any centralized system yet.
IMO PoW scarcity is only more important to the future of cryptocurrency than global speed and cost of exchange if: You are already heavily invested in PoW coins.
What if you having a personal near-guarantee that this weird asset you hold onto stays deflationary _isn't_ the most important problem for blockchains to solve?
Currencies' value lies in their usefulness as a means of exchange. Cheaper operation of the network and faster verification of transactions make for a better currency.
And the more powerful Ethereum-like blockchains that remain on a Proof of Work system are too expensive to perform their most interesting possible duties. Cost and speed improvements are essential for making the next leap forward.
It makes absolutely zero sense to bend to holders' "I must have a guaranteed deflationary asset, or I will complain to all my libertarian friends" desires. There are so many more important things to do with blockchain tech, including more globally important ways to create wealth.
EDIT: "You" is not the parent thread. I'm just expanding on what the parent said.
I'm with you, only I kind of wonder how many people actually see them as actual currencies. In any case I don't think that prospect is what is fueling the current hype.
I remember an article a while back that was arguing that Bitcoin is currently undecided whether it wants to be a currency or an asset. Currently, coins seem to be treated mostly as assets and I don't see indicators of that changing anytime soon.
IMO the problem with Bitcoin as an asset, over the long term, is that its proponents' nearest comparison is gold. Gold has at least _some_ intrinsic value, and more importantly it has millenia of history as both an asset and a means of exchange. If Bitcoin doesn't get off of Proof of Work, it's entirely plausible that it will be superseded by a Proof of Stake coin that has more utility.
Which is not even to mention my most cryptocurrency-controversial belief: Gold is the only deflationary asset that might not flash-crash into non-existence as a hoarder favorite.
Because it's insanely expensive to operate a PoW blockchain. We literally set things on fire to generate electricity for these global brute force algorithms. Proof of Stake uses game theory (you will avoid cheating if cheating costs you money) to replace expensive raw computing power.
It seems likely that it is exactly that expense which make bitcoin and other PoW blockchains successful.
The proof-of-stake algorithms can disincentivize cheating within the blockchain, but I haven't seen any that have the type of external cost that PoW blockchains have. The fact that so many people are investing so much power in bitcoin vs. other currencies is likely much of what gives it so much value.
PoW coins have a multi-year headstart, and Bitcoin didn't have any truly interesting decentralized competition until Ethereum. Ethereum is moving to PoS, I presume because being able to more cheaply and quickly execute smart contracts is deemed more valuable than artificial scarcity. A sentiment with which I could not agree more.
The problem then becomes how do you determine the 'real' Ethereum. For Bitcoin, it is generally understood as the blockchain with the most proof of work.
With proof of stake, what's the disincentive to participate in all forks, or even a large number of alternate histories. If there are multiple Ethereum blockchains using PoS, how can I as a new user determine which one is 'the' Ethereum?
Ethereum is going to PoS as a mechanism to reduce liquidity and increase the coins price. Nothing more. The entire history of ethereum is full of a lot of... less than ideal decisions like this.
Whether or not that's true, I literally have code sitting on the shelf waiting for it be cheap enough to run on ETH, and I think PoS will make it cheap enough.
Ethereum is moving to PoS because it would greatly help with scaling. Once Ethereum has Casper, they can start thinking about implementing sharding allowing on-chain scaling.
it's insanely expensive to mine gold, but we do that too. there are shared delusions about what we are willing to trade our labor for. it doesn't have to make sense.
Yes, and we'll also eradicate the rainforest for profit even though that might spell doom for the ecosystem of the planet. Only because everyone does something doesn't mean it's a good thing to do.
You know how much energy goes into TV? Video games? Driving on vacations? Flights to Thailand? Concrete for skate parks? I don't understand the obsession about blockchain energy use when a significant amount of energy is used on other more frivolous pursuits without question.
Every single thing you mentioned benefits from increases in efficiency that drive down the cost of these pursuits, making them accessible to more people.
A few years back anybody with a decent home PC could mine BTC, nowadays the barrier for entry pretty much requires a truckload of Nvidia products (or customized ASICs) and subsidized electricity.
Fast forward a few years ahead. Do you see more or fewer miners participating in such ecosystem?
PoW as it’s currently implemented encourages centralization.
> We literally set things on fire to generate electricity for these global brute force algorithms.
Who's "we"? Because I don't. People who mine do. They do it by their own free will. It's their resources they spend.
If you want to talk about setting things on fire for no reason, let's talk about smoking. Google tells me more than a billion people smoke. I'll argue that the maintenance of a decentralized, publicly accounted money system is more useful than people inhaling tobacco smoke.
It's the global commons: carbon and other pollution from electricity generation, fossil fuel extraction. Manufacturing and building wind farms and solar arrays also have an environmental impact.
Is it weird that for a certain category of tech company that I intuit would learn from their mistakes, I trust them more _because_ they've had one catastrophic failure? And just sort of assume that many of the ones who haven't are still riding on a wave of blissful ignorance? Maybe that's nonsense, but it's still a thought that occupies my mind.
I would totally agree with you had they not blown their chance to handle this responsibly. The finger pointing and downplaying of what had happened totally destroyed my will to give them the benefit of the doubt in that respect.
I think you should at least take a good look at how they handled that one catastrophic failure, and also consider whether it was the result of an unfortunate accident or a momentary lapse, rather than just the first of many failures-waiting-to-happen that actually happened.
