The main issue with "Web3" is that it moves records of transactions from many private places to one public place. Sure this one place may not be controlled by a single entity, but it facilitates tracking at an unprecedented level.
Cryptocurrencies are the ultimate example of this and are an absolute boon to tax collectors, forensic accountants and fraudsters. In our current economy financial transactions are recorded in millions of individual ledgers that are kept private, or in the case of cash transactions are often not recorded at all, or are not linked to an individual. There is no central ledger.
With crypto currencies however you can not only see all transactions but also trace them back to individual users as long as you can link a wallet to a person. This is a massive increase in centralisation yet discussion of whether this is a good idea seems to be entirely missing. The notion that centralising transactions in one place is somehow an example of decentralisation just seems mad.
Web3 is more of a problem soup, I don't think it's accurate to say there's any one specific "main" problematic aspect of it. The whole ecosystem is one terrible idea built on another in the name of achieving a worse version of what we already have.
> are an absolute boon to tax collectors, forensic accountants and fraudsters
Weird that it would be a boon for both forensic accountants and fraudsters. How do you reconcile that sentence?
The fact that something is done in public does not mean that it is centralized. There is public and decentralized, public and centralized, private and centralized, and private and decentralized.
Decentralization itself, is a spectrum and not a binary quality. Just as, I assume, public / private also falls on some sort of spectrum spanning from everyone in the world being able to see to VISA/Mastercard corporate privacy policy to national intelligence agencies to group or individual privacy.
It is completely possible to conduct transactions privately on blockchains. Monero and z-cash (using zero knowledge proofs) are the best examples of this.
The biggest blockchains choose not to either due to legacy design choices (zero knowledge systems are a recent innovation) or the benefits of openness. For example, public transaction history allows for development of an on-chain reputation for a pseudo-anonymous account. It's also quite useful for managing decentralized organizations, as the treasury and spending records is meant to be public to keep the DAO accountable to its members and prospective members.
With the recent introduction of zk rollups on Ethereum, it's now possible to have the best of both worlds, in my opinion (see https://aztec.network/index.html). Transactions that need to be private will be conducted on zero-knowledge rollups built for privacy. Mastercard is working on this with Consensys for Ethereum (https://www.coindesk.com/business/2021/12/16/consensys-colla...).
> Weird that it would be a boon for both forensic accountants and fraudsters. How do you reconcile that sentence?
It is very common to track people by the tokens they hold and target them for theft and fraud.
One example is to airdrop a backdoored token, and when the user tries to move it they wind up authorizing movement of their other valuable tokens. Or to just use the airdrop to lead a curious user to the airdrop event's website, which is then a phishing campaign that achieves the same result.
Tracking partial identity through tokens is actually a very common concept amongst the newer blockchain platforms which also have addressed such topics as the drawback you describe.
While said attack is theoretically possible it only is applicable to tokens managed by the same contract and only on platforms which do manifest tokens as script state (think erc20). Platforms with native assets (Cardano and some others) are immune to such attacks.
where can I learn more about that approach? I just assumed the eUTXO model would be more like the UTXO model where assets could still be tracked to a single address, like with the old Counterparty or OMNI model in Bitcoin.
What would you consider Solana's approach to assets? I was surprised to find that each address has another unique address for its balance and possession of any asset issued on that network.
The key is not in eUTXO (allthough eUTXO is a great piece of work, especially because it solves a multitude of scaling issues in the long run), it is in the ledger's capability of handling custom assets natively. This way a wallet exactly shows you which tokens you own are affected by a contract invocation.
I don't know how solana handles assets but I personally stay clear from that ecosystem. Too much VC hype for my likes and way too little decentralization of funds.
Looking at the token standards[1], I can't see how you could create a "backdoored token" that would authorize movement of other tokens but that sounds like a scary threat vector. Could you explain how that would work please?
I've heard about ERC20 tokens that allowed the issuer to pull them back (that's the SoarCoin thing[2]) but not a token that allowed other tokens to be transferred.
The standards only really define what should be done at the interface or what the function inputs and outputs should be, but don't really define the internals of the functions. For example inside of a malicious approve function call, you could hardcode a list of popular addresses that also approved those tokens if the msg.sender is holding (balanceOf calls) them and even potentially then have transfer functions calls inside of the approve function call for the malicious token.
For me, its only scary if one regularly interacts with tokens they haven't bothered to look up for the source code for. People really shouldn't be interacting with contracts if their first time hearing of it is from looking at who randomly airdropped them a token with a domain name in it. But hey, people regularly do stuff in crypto that i just think "wtf arw the thinking", so w/e.
Both of you are wrong. ZK fundamentally does not allow to hide the rules (the code). It only allows to hide particular executions. So yes, while you can have an ERC20 interface and some censorious garbage inside (I look at you, USDC), you can't hide that fact from observers.
The issue is that there are people blindly interacting with malicious contracts, which is more of a social problem and not a technical one. There are people now who for example, don't approve random token addrs that they haven't decompiled or which had the source available… i know, shocking…
Did you respond to the right chain of comments, none of us mentioned anything related to ZK solutions (chains line mina or rollups or otherwise)?
> "It's not safe to use web3 unless you're comfortable analyzing decompiled source code" is a super good sign for the future of the ecosystem.
Plenty of people don't de-compile or read the source, don't engage with random tokens credited to their address, and the ecosystem around using "smart" contracts has grown since 2015. Not my problem if people want to use/trust something else (others audits for example) without putting in any work to learn/observe themselves and engage with random stuff. That's their problem, not mine. Some learn better after going through school of hard knocks anyways.
As a society, we have expected more and more people to learn how to read and write for basic literacy over hundreds of years. Those who know how to read and write code will have a leg up for that expanding literacy set for engaging with digital things and those who don't will be left behind esp as more aspects of life are governed/mediated through code and this goes beyond the whatever is being branded as "web3".
If you don't wanna use it, you are free not to (unless in the case someone hacks your devices from across the world, you don't engage in backups, and the only way to unlock it is to buy some tokens to pay them off; then its just hard choices to make).
> As a society, we have expected more and more people to learn how to read and write for basic literacy over hundreds of years. Those who know how to read and write code will have a leg up for that expanding literacy set for engaging with digital things and those who don't will be left behind esp as more aspects of life are governed/mediated through code and this goes beyond the whatever is being branded as "web3".
We have. We've also extended protections for people lagging behind, for example by putting restrictions on what kinds of contracts can legally be entered into and voiding contracts that one party could not have reasonably been expected to understand, or entered into under duress or undue influence.
None of these protections exist under "smart" contracts, which is exactly why we can't and won't allow code to govern or mediate life as web3 envisions. Your dystopian vision of "oops, you lost your retirement savings because you didn't decompile that contract before interacting with it, too bad", or "oops, you lost your retirement savings because someone beat your wife with a baseball bat until you handed over your private key, sucks to be you"--in short, the dystopia of "code is law"--flies in the face of thousands of years of jurisprudence and civilization. Once the goldrush hype wears off people will realize how heinous the fundamental idea is and dump it in the gutter of history where it belongs.
> We've also extended protections for people lagging behind, for example by putting restrictions on what kinds of contracts can legally be entered into and voiding contracts that one party could not have reasonably been expected to understand, or entered into under duress or undue influence.
And are constantly bypassed in practice by those with more resources than others wrt engaging with the various legal systems (or corruption thereof) around the world.
> None of these protections exist under "smart" contracts
Not true, some people buy off chain legal insurance for a particular juridiction and only deal with protocols they have some legal recourse over. Some use multisig accounts with trusted parties.
> which is exactly why we can't and won't allow code to govern or mediate life as web3 envisions.
There is no shared we though, some individuals (and governments) will adapt to it, some wont, some contracts/cryptocurrencies will survive, some wont, and people will make the convenience trade-offs like they always have had as things change. If you are only willing to try to force someone else to do your dirty work of imposing on peoples freedoms, you'll be behind those who are willing to put you in the ground themselves to defend such irrespective of any particular jurisdictions laws.
> Your dystopian vision of "oops, you lost your retirement savings because you didn't decompile that contract before interacting with it, too bad", or "oops, you lost your retirement savings because someone beat your wife with a baseball bat until you handed over your private key, sucks to be you"--in short, the dystopia of "code is law"--flies in the face of thousands of years of jurisprudence and civilization.
Bad things will continue to happen to some people even with out smart contracts or cryptocurrencies (bad things which don't happen to most people in the course of their lifetime btw), but if you want to live your life in fear as an excuse to not learn and adapt in face of bad things that may happen, that's on you.
> Once the goldrush hype wears off people will realize how heinous the fundamental idea is and dump it in the gutter of history where it belongs.
Yeah, like when people stop being motivated by greed, like when central banks and governments stop debasing their currencies like they have through out history, like when large private banks and service providers stop blocking people from using their platforms, etc. Could happen, I'm not holding my breath.
> One example is to airdrop a backdoored token, and when the user tries to move it they wind up authorizing movement of their other valuable tokens.
Do you have an example of where something like this was actually deployed? How would a user moving one token would result in another token being moved?
I can only imagine a situation where a user might be induced to install a compromised wallet, and then to give that wallet keys to the their account. But this is not an attack strategy that depends on there being a "backdoored token" of any kind.
Is there some way to code an ERC20 token that would somehow give you access to a user's other tokens?
But is it not the case that the approve() method must be invoked directly by the sender (i.e. by the account that holds the tokens that are the target of the theft)? Wouldn’t the invocation be rejected by the ERC20 token if it is made indirectly, i.e. if the invocation were made from within another method (provided that the target ERC20 token is coded properly)?
> With the recent introduction of zk rollups on Ethereum, it's now possible to have the best of both worlds, in my opinion (see https://aztec.network/index.html). Transactions that need to be private will be conducted on zero-knowledge rollups built for privacy. Mastercard is working on this with Consensys for Ethereum (https://www.coindesk.com/business/2021/12/16/consensys-colla...).
I can’t find any real technical documentation on this system but from what I understand about ethereum, this kind of use case effectively needs to be run off the main ethereum blockchain?
I just don’t understand what the purpose of the blockchain really is when most of the interesting ways to scale add features rely on processing transactions OFF the chain.
This is a misunderstanding. The goal of cryptocurrencies is not to process transactions. The goal is to order transactions. The order is the hard part. (Notice that if I have one ETH, and I submit a transaction to send alice an ETH and to send Bob an ETH, alice and bob are both very interested in the order - only one transaction can go through, and which one is determined by which one comes first in the chain).
Fundamentally the order doesn’t really matter, as long as it doesn’t change retroactively. Once you have agreement on the order, anyone can process the transactions and know they’ll get the same final result as anyone else.
I’m not sure about this specific one, but most “rollup”s use the main chain for agreement on the order, and then outsource the actual processing to someone outside the chain. Some use cryptography from verifiable computing, so the off-chain person can also submit a proof that their processing is right and there’s no possibility of fraud. (the proof can then be verified extremely quickly.)
I think the point regarding centralization is that with the blockchain the ledger is central (assuming a single coin ends up winning) whereas right now we have many different ledgers that may not entirely agree. Including single individuals having their own ledgers.
So if I don't trust Big Tech, I'm somehow supposed to trust groups of sketchy people who do things like give up their US citizenship (as an immigrant to the USA - the privilege is real) to move to {insert sketchy country or a known haven for certain activities - its legal there!} so they can now facilitate millions of dollars moving each day outside of any government jurisdiction.
I mean, yeah. There is a privilege associated with that. The US is a great starting point, but you can outgrow it, especially when it comes to financial services if you aren't interested in the incumbents.
People with money in stable economies aren't clamoring for US citizenship, some are interested in it but its just an option. The whole continent is populated by people that lost consensus wherever they came from. Like 99% of the population has a heritage that was either deemed an extremist in their "motherland" or were simply just outside of the cool kids club and had to fight for scraps, or avoiding the impending reality of both. The other 1% are basically the 1% financially and just here for play while retaining their options to do the same anywhere.
US citizenship is also one with most burden from having it. At least compared to many other stable ones. Yes, you can make great money there, but also the taxation is not done by vast majority of other citizenships. So getting rid of it for anything slightly worse makes lot of sense from individual stand point.
Monero is one of the few chains that offers a truly new feature on top of other alternatives and... look at the price chart of its tokens. Now compare that to Shibe or whatever. Makes it pretty clear that price is driven by memes rather than features.
I think this is very true even outside of crypto. As an extreme recent example, consider GameStop.
This problem is larger than crypto. It seems to be related to the accessibility of trading to "retail investors" (enabled by lower fees, new technology, monetary policy, etc.).
And also Secret Network, which hides smart contract variables, which therefore includes token and wrapped token amounts, along with the current owner. Monero has a trustless-enough bridge over to there.
And also Aztec Network, and Tornado Cash, and Zcash, and soon Starkware, and...
I'm surprised so many people on Hacker News apparently still believe that you can "see all transactions" on every blockchain. It really only takes some surface level research to find working, production blockchains/cryptocurrencies that use one of several types of cryptography to hide that data, plus if you're using a pseudonymous blockchain, non-custodial ways to "break the link" between wallets.
Are any of those even in the top 30 cryptocurrencies by market cap? Is anyone speaking about them in the context of Web3 or is it all ETH, XRP and maybe two more?
From my blissfully uninformed mind, the only time these cryptocurrencies pop up is precisely this: as a counterargument to the popular ones, where you can see all the transactions. They're fringes even among the fringe that is cryptocurrencies.
> Is anyone speaking about them in the context of Web3 or is it all ETH, XRP and maybe two more?
Aztec Network, Tornado Cash, and Starkware all run on top of Ethereum... Aztec and Starkware are currently in the community spotlight because they're rollups or so-called "Layer 2s" that push the state of the art of Ethereum's tech (and the state of the art in zero knowledge cryptography, especially Starkware's CAIRO language and their EVM to zero knowledge proof circuit transpiler). Tornado Cash has over $4B in deposits, and for many is the go-to way to anonymize transactions on Ethereum.
Ernst & Young released Baseline last year, a zero-knowledge cryptography toolkit for operating private data services on the public Ethereum network.
The answer to "who cares" is basically the entire nascent industry, plus a handful of mathematicians and cryptographers - if you are paying attention.
A lot of these smaller networks are on top of or connected to top 10 chains.
A number of the top 10 networks will eventually (~5-10 year time frame) get privacy preserving transactions however the space is still very much in development and it's a bit easier to reason about the network and what changes to make next when you can see what the users are doing. I know at the very least, IOG (the company currently leading Cardano development) is doing privacy preserving smart contracts research with the intent that it eventually becomes part of the protocol.
There's a lot for Layer 1 protocols to accomplish as it is so the space is largely delegating privacy chain research/functionality to L2s for the time being.
I hear the word “eventually” associated with crypto, quite a bit. I’ve yet to see an “eventually” actually pan out before they run out of money or the value tanks so low nobody will mine it anymore. As an observer following all of this fairly closely, it feels remarkably like a scam.
I find it telling that several currently live privacy networks were mentioned in this comment tree that you can use today, yet you still latch on to the word "eventually" and call the space a scam.
Maybe that was a bit unfair. Perhaps what I should say is that there is too much competition, such that no one can get the traction they need to truly accomplish their goals, with few exceptions.
Well, you have to see all transactions, in order to know the current balances on every wallet, in order to prevent double spending. This is, in fact, the whole principle on which blockchains operate.
There is no such requirement. The only requirement is that you be able to prove consistency and correctness of the ledger. The naive blockchain implementation needs transaction visibility but there isn't a hard requirement for it beyond that.
Monero uses a system that at a high level is referred to as Ring Signatures (it's not too complicated but it's more than I want to get into at the moment). Zcash and other networks use zero knowledge non-interactive proofs to prove consistency/correctness.
The major drawback of privacy preserving chains is that the transactions are expensive to compute due to all the maths that goes into maintaining that consistency without publicly leaking information. This isn't prohibitive for a desktop but a mobile phone will likely take a few minutes to build and send a transaction in the current environment (can be improved by HW acceleration or general HW improvements).
I've spent the last 30 minutes researching how ring signatures can be used to prevent double spending without revealing the spender's balance, and I've found nothing. Do you know where I can find the details?
There are a lot of variations, but in Zerocash-style schemes (which can be viewed as massive ring signatures), each note has an associated 'nullifier'. Spending a note involves revealing its nullifier, and for the transaction to be valid, the nullifier must not have been used before.
A nullifier is derived deterministically from private account data, and zero-knowledge proofs are used to show that a nullifier was dervied correctly without revealing the private account data.
Here's a short explanation video to get you started. The general idea is that multiple signers are used, such that an outside observer doesn't know which signer is the "real" one, but only knows that "at least one of them" is.
Technically the part the preserves double spending is Ring CT however by and large I see it lumped under Ring sigs when discussed.
Here's a link to the Ring CT papers. The original explains the base system, 2.0 formalises the security of the system, and 3.0 describes how the original protocols had issues and how they were improved.
Personally I find the Ring CT 3.0 paper to be the most enlightening of these. For a simpler/shorter explanation however, Moneropedia has some videos that are helpful in this.
Monero uses a UTxO (unspent transaction outputs) accounting model. There are a number of networks that use this model, namely Bitcoin. The UTxO model doesn't strictly have a concept of accounts but rather keys and UTxO. You can think of UTxO as as atomic chunks of data/value. These UTxO are created once and used once. If you want to spend money, your inputs are UTxO, the outputs are UTxO, and the balances of all of these inputs and outputs must sum up to a net 0. Now UTxO can only be spent if a valid cryptographic signature can be produced. If your private keys can produce that signature, the value held in that UTxO can be spent by you.
This gives us our three key points. All UTxO consumed or spent in a Tx must collectively sum up to zero, UTxO can only be spent if the proof object/cryptographic signature produced is valid, and UTxO can only be spent if they haven't yet been spent.
First Ring CT has each sender derive a one time private key from their private key and a one time public key derived from the recipient's public key. These keys are used to produce a set of encrypted "coins" which essentially hold the value of the UTxOs being spent and then created. This allows the sender and recipient to know the contents of the actual meaningful transaction. Then a cryptographic proof verifies that out of all the public keys in the Tx, all the keys can spend their selection of coins included in the Tx and only one of them is the real set of coins. From there the balance is verified by doing that some clever math where the sum of the encrypted outputs is divided by the sum of the encrypted inputs must equal some constant determined by the encryption key. This is a bit of a simplification but it works out such that it is equivalent to "ins - outs = 0" in a traditional UTxO system.
The key/signature verification mentioned previously has a nifty property where the produced "key images" serve as what are effectively "hashes" of the UTxO. This means that if any key image has previously been used in a transaction, it effectively guarantees that the corresponding UTxO has already been spent. Going back and checking this is somewhat more expensive than on a traditional network however optimisations (like using a bloom filter) allow for this check to run significantly faster.
That's how Monero upholds those 3 properties that are required for consistency in a UTxO based network without leaking information about the sender, recipient, or balances. In short it's using one time PKI derivations to break information symmetry and then from there structuring the encrypted data so that you can use some clever arithmetic and signature checks to verify correctness.
Apologies if my explanation isn't terribly clear or perfectly accurate. It's my reasonably solid understanding of the system. I'm not a formally trained cryptographer or mathematician so my choice of words or explanations may be somewhat inaccurate however they give a reasonable coverage of how the system works. If you want to dive more into the meat of it, I'd seriously recommend the Ring CT 3.0 paper as it's really well put together once you can get through the terse notation and dense amount of information.
I would like to see more information about how Secret network's TEEs (trusted execution environments) are secure. The fact that they rely on special features of some Intel proessors makes me think that any sufficiently powerful actor would be able to break the encryption through backdoors that would exist in those processors.
Too bad most big exchanges don't accept Monero for trading since know-your-customer policies won't work when you can't associate a wallet address with someone.
1. Not all crypto currencies are public. See monero, haven, secret network. Although that last one depends on some specific features of some Intel processors... I'm of the opinion that the pseudonymous nature of public blockchains is very beneficial to society. I would love it if I could see what companies, governments, and people near me were spending their money on. It would enable me to make better decisions.
2. "Web3" is about decentralization but it doesn't necessarily mean storing data on a blockchain. The most important aspect is that users no longer have to sign up or log in. They submit responses which are signed by a key pair, which is their identity instead of a record in a "users" table.
> "Web3" is about decentralization but it doesn't necessarily mean storing data on a blockchain. The most important aspect is that users no longer have to sign up or log in. They submit responses which are signed by a key pair, which is their identity instead of a record in a "users" table.
It is a record in a "users" table. It is just that this table is the publicly readable blockchain.
Exactly. And, if everyone is using the same blockchain for names (to get the universal login experience), then that becomes centralized source for user accounts. Compare that to today where I have distinctly separate accounts on nearly all platforms.
This one I find especially hilarious given the complete hatred people had for the unification of user profiles among Google products that happened a decade ago. "You are telling me that my gmail account has to be linked to my youtube account, wtf" was a common complaint. Now, this is seen as somehow desirable?
How do you figure that public blockchains provide a more pseudo anonymous experience than anything we use today?
I can go to a website today and register any name I want. The main thing that can break that is IP. How does a public blockchain solve the problem of routing a request to a device? How does consolidation of all user accounts to a single public ledger offer _more_ anonymity than exists today where I can have a random distinct account on any website I use?
> I'm of the opinion that the pseudonymous nature of public blockchains is very beneficial to society.
Have you tried to “steelman” this? Because I don’t think it will pass basic scrutiny.
The same companies and governments you want track have more incentives and resources to hide their transactions than any individual, so, either all transactions are public or they’ll be able to hide while most individuals won’t.
Well, except for ransom attacks, nobody is forced to use a public cryptocurrency.
For it to be common and being proud of one's economic transaction history would be awesome.
In the 90s, experiments in publicity like reality TV and the Truman Show movie gave way to social media in the next decade. We are constantly finding new ways to publicize our lives because there is value in publicity.
Privacy shouldn't disappear absolutely but we've got a long ways to go towards greater publicity before reaching the limit of usefulness.
> being proud of one's economic transaction history would be awesome.
I sincerely doubt we'll ever see that. First off, Venmo has already tried to apply the social media formula to transactions. I don't know of a single person who reads their Venmo feed just for fun. Next, most transactions are boring and not worth sharing. "John bought toilet paper and Q-tips. [Like] [Retweet]".
You state that the move to hyper-publicity that we've already seen hasn't reached it's peak for usefulness and yet there are already widespread conversations about the dangers and pain that this hyper-publicity has caused.
If we reach a future where people are "proud" of their transactions and are sharing them everywhere then we've made a horrible mistake.
> I would love it if I could see what companies, governments, and people near me were spending their money on. It would enable me to make better decisions.
I dont get this. I mean, spend your money on the things you need, and if there's money left after that, spend it on things you want.
Dont spend it on something your neighbour wants. Let them spend their money on that.
Open ledgers could indeed be a good thing, but no need for blockchain for that, the legislature could simply require all banks to dump all tx daily in a standard format (a payment system version of what the SEC's EDGAR does for US public company disclosures).
Private ledgers are also sharded, which means they scale much higher.
When cryptocurrencies can handle 10% of Visa’s transaction rate, somebody wake me up and I’ll start paying attention to it. Until then a lot of this stuff is pearl clutching.
Visa is only a fraction of total money transactions worldwide. To be a replacement it has to be able to go an order of magnitude higher than Visa, and last I checked it’s still three orders of magnitude below Visa. That’s a lot of orders of magnitude to overcome. Too many by most accounts. People who make those sorts of improvements started out with a prototype that was already 20-50 times faster than the status quo.
I think of it as centralization in that all transactions will be stored in one “database”, but decentralized in that the database has millions of nodes and anyone can add their hardware as a node
Not completely. The main difference between blockchain and classical banking is that the protocol defines what transaction can be done and the network of block producing nodes manages the evolution of its state. In classical banking you have multiple routes that go around the protocol (law in this case) and you also live in a federated feudal system where your bank reigns supreme in what you own.
I call bs on this argument. Protocol on the blockchain still has to abide by the rule of law. And the idea that certain things are not allowed on the blockchain is false - someone will create a new fork, chain or there will be a more elaborate workaround.
It’s just a very complicated way to deliver anything.
Adoption of forks depends on public adoption. Let's call this common consensus.
Classical law is just the public deciding which set of rules leads to a healthy society, these laws are then adpptedby societal structures. Let's call this... Hmm common consensus?
You are seeing differences where there aren't any.
That was true five or ten years ago - today there are legitimate alternatives and work being done on even better alternative to solve the issue you are talking about. Most fall under the domain of Zero Knowledge Proofs which have use cases beyond pure blockchain systems.
Apart from that, Web3 isn't simply crypto-currency adoption, its about using the consensus innovation core to crypto-currencies to build platforms regulated autonomously by a public group with certain guarantees for security, openness and control.
> it moves records of transactions from many private places to one public place
True for some of its current incarnations, but it is absolutely not a built-in limitation and therefore not a valid criticism of the entire space.
As a matter of fact, a number of existing blockchains are already entirely opaque to analysis (zcash, monero, grin, beam, etc...), and in these, the effort required to actually connect participants and transactions is typically orders of magnitude larger than the economic rewards you'd derive from the answer.
Really? So I can go onto one of these chains and transfer anything to a new address without a third party blessing my transaction?
I was under the impression that nearly the entire thing is based on some form of consensus. Consensus is necessarily by third parties. So if the consensus drives decisions on what gets accepted and what does not, is that not a permission? If there is a single dominant consensus, is that not centralized?
centralized = one party holds all the power. decentralized = many parties, each of which do not hold all the power in isolation, therefore must come to consensus on a case-by-case basis to make decisions. equating decentralized consensus to "oh but that just means they become a centralized single party in aggregate" is an incredibly stupid take. just because I can agree with 4 other parties that one transaction is valid does not that mean that I somehow merge with all 4 of those parties into an entity that has the exact same interests for everything else. can you understand that?
Not sure about the fraudsters necessarily, but it seems like a core irony of the so called web3 is that the concepts involved could have great utility for governance of individuals and companies in an economy where a great deal of effort is spent tracking down tax dodgers. However, the web3 anti-establishment shtick seems to sell better at the moment.
I’m not an expert, but my impression is that lightning makes this not so much the case - that payments are routed through a web of peer to peer nodes and they only do periodic net settlement on the public blockchains.
Imagine paying someone for a sandwich and being obligated to give them access to view your bank account balance (past, present and future) in perpetuity.
True but you missing the point. This shared database gives the power of decentralisation- you won’t get cancelled - the so called permission less data. Nobody is control yet everybody has some control - true democracy.
The public transaction problem is solved by bullet & zero knowledge proofs in currencies like Monero & Zcash. I trust Monero more as it seems Zcash has a on demand back door to unravel specific transactions.
Web3 is a panacea but it might take a decade to arrive as the building blocks are in place.
The problem with web3 is not that it's centralized -- that's irrelevant.
The fundamental problem with all crypto"currencies" is as follows: the world uses real currencies and there is only one way this enters into the world of crypto"currencies": by someone selling a coin to someone else. Thus, regardless of what crypto"currency" we are talking about, it would be a zero sum game if not for transaction fees. However, with transaction fees it becomes a scam because there's a set of players who are guaranteed to win and there's another set of players who, en masse, are guaranteed to lose. It utterly doesn't matter what you do with your crypto"currency", this is the underpinning scam of it.
And once you entered the game, the only way for you to not lose money is to find a greater fool who will take over your crypto"currency", everyone who owns some becomes a proponent of it. It's an ingenious scam.
And no, nothing in the real world is like this. In the real world, the amount of currency increases when a bank extends a loan which then creates more value by such things as being using as capital, allowing you to enjoy a home now instead of decades later and so forth. Also, stocks are not a zero sum game -- companies actually create value and so forth.
Web3 is a buzzword that makes it sound like something which it isn't, same with AI - dumb but pattern recognition is still useful. I wouldn't call trustless programmable money with defined supply irrelevant since there is no alternative in the mainstream financial system. You are talking about just one function - transfer of value - but that already works just fine. For your points:
You can have much lower transaction fees than in Visa / Mastercard (which sometimes you can't even legally charge customer with) so there's a bigger scam by your definition.
One has to find someone willing to trade to get goods -_- because dollars instantly turn into chicken soup when you're hungry.
For fractional banking you need a trusted system, this is outside of cryptocurrency scope but you can do it atop of cryptocurrecnies just fine, look at exchanges.
> You are talking about just one function - transfer of value
I do not. I am talking of the only way money enters this system. If there would be no money in the system no one would care. At the end of the day, in this time and place, our society decided money is the ultimate goal. I don't like it but it's what it is.
> You can have much lower transaction fees than in Visa / Mastercard
First of all: it's nonsensical to compare money to ... money? the problem with crypto"currency" is that it's not money and it's crossing that barrier which makes players lose money. Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant.
> Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant.
To highlight this, Americans are grappling with Zelle (which is just rolled out) and ACH while their neighbors to the north have Interac running relatively seamlessly and Europeans have SEPA and even some countries have local feeless/reasonably priced quick transfer systems like Swish/iDeal, and discussing how Asians handle their transfer and payments would just shake heads on why those systems aren't available stateside (I'll pick India's UPI and the (mainland) Chinese system as representatives, but that doesn't mean similar systems aren't available elsewhere).
If you don't charge customers for their debit/credit card payments (which again you sometimes legally cannot do) the point stands even if you have a 0-fee payment option since even if you choose to use that you are still paying for other people's transactions.
> you are still paying for other people's transactions
Ultimately, someone needs to eat the cost of that. For barter, you need to eat the cost of wrongly-advertised products. For paper money, you need to eat the cost of either actively rejecting fake paper money or accept that from time to time you will have fake and unredeemable paper money. For coins, same thing, you need to verify that the weight is indeed what's expected or accept that some fake coins will end up in your coffers. For electronic systems (regardless of the form), someone needs to run the computers that verifies that transaction A did indeed happen.
Some pretend that only centralised electronic systems are the only ones having costs, while in fact it's far from the truth. Ironically, the credit card game in the US where they jack up the merchant fees way, way up is a counterexample that capitalism is fostering a pro-consumer market (I'm not saying that capitalism per se is broken, it's just the fact that capitalist policies in this area doesn't work out great). In Europe where they implemented caps, "rewards" type credit cards have gone down, but regular credit card and debit card usage have gone up. This is because the "rewards" system isn't pro-consumer, it looks like pro-consumer but instead it actually benefits only those who massively use them to the detriment of others. Unlike "rewards" type credit cards, regular credit cards acts more like a tool that can make or break finances who uses them not correlated to the frequency of use, and debit cards are essentially plastic wallets.
Strictly speaking, if the issuer of the currency didn’t get fully on board with the transition, wouldn’t it be mayhem?
If I am a private financial institution, I’m having a grand old time converting the first 1% of dollars to crypto. I can still spend all of that money on salaries and construction and mega yachts. But when we are at 50%? You have half the dollars in the world. You can’t possibly spend them. This isn’t income any longer, it’s a liability. The only way to get to 90% is if you trigger hyperinflation.
Eventually to beat fiat currency you actually have to win the government over. They collected gold coins and issues dollars, because it’s fiat currency and you can do that. How do you collect all of the silver and not issue fiat currency? How do you collect all the dollars and not do the same?
Magic thinking. It’s all magic thinking, and I’m too old for this shit.
...Or you can use a cryptocurrency like NANO (I'm sure there are others very similar), which is feeless and has nearly no delay to transfer. If there is a scam hiding in there, I've yet to find it.
Honestly I've stepped back from the entire crypto space for a while now, the whole space pisses me off, it's all hype and no progress. Or rather, the work that was needed to be done has now been done (feeless, near instantaneous, anonymous, and consensus based transfers of money) is now possible, and yet I still hear the screams about bitcoin daily. It's an outdated technology. A paradigm shift for software for sure, but a now long outdated one.
I'm sure bitcoin maximalists will reply in rage, but I can't convince you to see the truth through your speculative emotions, so I won't even try.
It’s funny, when I see critics of crypto currencies, there’s always one crypto currency which solves that particular problem. Crypto advocates always seem to have another argument in their toolkit. If you put forwards an economic argument against, they will rave about the technical benefits. If you bring technical arguments, they will shout about the economic benefits or how this currencies over here solves that problem. Quite magical and convenient to be honest. Circular arguments similar to debating the existence of God…
This is simply the result of arguing with a group instead of an individual. Once refuted, the person you were speaking to does not change their mind, at least not publicly. They fade into the crowd like Homer into that hedge and another person steps up to "whatabout" something new. The group will switch around its voting to ensure this. A group cannot admit it was wrong. This functionally happens only by membership in that group dwindling, likely as it gets more argumentative.
Can't you exchange goods and services for crypto, without using fiat? Transaction fees are obviously unfortunate, but there is just no going around the need for infrastructure. And where is an infrastructure - there are maintenance fees, crypto isn't unique in this regard.
It’s not “without using fiat”: cryptocurrencies are pure fiat currencies but with very weak backing — people need sovereign currencies to pay taxes, pay or get paid for government functions, and participate in large preexisting economies. Nobody has to use cryptocurrency for those reasons and the variable, usually high, fees discourage use — especially in the case of Bitcoin where the economic model incentivizes hoarding.
Speculators can generate a lot of noise but it also creates a toxic atmosphere where anyone spending feels like they’re the sucker for not holding it instead. That’s how after a decade there are a tiny number of non-Bitcoin businesses which would notice if Bitcoin disappeared tomorrow.
I thought even Bitcoin maximalists have given up on this nonsense by now? Fiat money is legal tender backed by the taxation power of a nation state and ultimately, the monopoly on violence. This is why I always write crypto"currency" -- even naming so, crypto shills have pulled an ingenious move pretending their scam is a currency which it utterly is not.
The standard definition of a fiat currency is that it’s not backed by some kind of asset and thus has only the value given by social convention. The most widespread examples are backed by sovereign states and thus have the weight you describe but there have been private ones as well.
This is why I described it as a very weak one because it doesn’t even have the commitment of a bank behind it and the extremely highly operating costs means there’s a real long-term risk of not being able to find a buyer.
If you compare with other asset classes, you'll find a crisis of legitimacy in all of them.
Cash: Not backed by anything but literal 'trust' in the government. It's fiat, and has been since 1971.
Government Bonds: similar to cash, also relies on the trust and "too big to fail" ethos.
Houses: Greater fool theory. People realized they can simply ban building them to make theirs worth more, as the remaining home supplies are in far-off, economically irrelevant (undesirable) areas.
Stocks: Over 90% are owned by the top 10%. Someone had to make it to sell it to someone else, just like crypto.
Stocks generate rent and so do houses. That is why these things can continue to grow in value without being called ponzi schemes, though there are certainly speculative phases for both. To compare these things with cryptocurrency is to show a profound misunderstanding of investment. Cryptocurrency does not generate any rent, the sole reason you buy Bitcoin is because you think you might find a greater fool to buy it from you for a higher price. This is identical to how ponzi schemes function
Cryptocurrencies do generate rent. You can lend them and collect interest on it.
Houses don't grow in value because they generate rent - they are deteriorated by residents and need permanent investment in repairs to hold their value. Instead, they grow in value if their environment and surrounding infrastructur improves because more people will want to live there and offer a higher price.
Likewise, if more merchants accept a coin, the coin is more valuable because its more flexible.
Nobody thinks of crypto in terms of currencies anymore.
They’re the same old running on different infrastructure: assets, shares of ownership in a business/protocol, certificate of ownership of a digital item, and yes occasionally, currencies
Doesn't matter. It doesn't change the fundamental scam nature of the game. You are describing game rules, it's typical of people in the game -- but it's participating in the game which makes people lose money. It utterly does not matter what happens inside the walled garden of crypto"currencies".
>And once you entered the game, the only way for you to not lose money is to find a greater fool who will take over your crypto"currency", everyone who owns some becomes a proponent of it. It's an ingenious scam.
> 1. There's no set of players who are guaranteed to win
Pension fund managers are guaranteed to win, and they win more as life expectancy goes down.
> 2. There's no set of players who are guaranteed to lose
Literally everybody else loses, as inflation eats away at the buying power of older peoples' ongoing or soon-to-start pension payments, and young people pay in to a system that there is now no guarantee they will earn from in 40 years time.
> 3. No one is set to gain by advocating for the "current pension system".
Plenty of people stand to gain, see above, as well as politicians interested in protecting the status quo and electability above all else.
You have a political axle to grind, fine, but that's not relevant to the discussion here.
Maybe the current US pension is set up like this, maybe not, that's debatable perhaps. But it's not an inherent feature of the systems everywhere unlike the problem with crypto"currencies".
> In the real world, the amount of currency increases when a bank extends a loan which then creates more value by such things as being using as capital, allowing you to enjoy a home now instead of decades later and so forth
Or the central bank decides to flip a switch and create trillions of dollars in money with the stoke of a key and distributes it to parties it feels needs them (mostly banks and other financial parties [0]).
This is also a very short term limited view of money. A stable currency is not the norm for most of history. Even today's relatively stable system in western democracies is very short.
If you take a longer, broader view of currency and monetary policy you'll see that the system is not sustainable an there is value in an alternative money supply thats based on rules and not reliant on the wisdom of central bankers appointed by politicians. Whether crypto is the answer is different question. But to think that somehow western central bankers are beyond approach and figured it all out in the last 50 years is naive.
Though I generally agree with the sentiment, there is one significant use case -- transferring money across country borders. Currently, transaction fees on cash transactions are much much higher than they are on cryptocurrencies (maybe except bitcoin) and so this would mean that, in theory, they could be used as a way to transfer goods across country borders.
This has always struck me as…I don't think a "weak" use-case is the terminology I'm looking for, but maybe "fragile"? What I'm trying to get at is that I'm not sure that the existing non-crypto money transfer services have to charge as much as they do to be profitable. If cryptocurrency-based transfers get popular enough that they're perceived as a threat, then I suspect Western Union and friends -- or perhaps new entrants to the market -- will introduce "new products" that are more competitively priced.
>> there is one significant use case -- transferring money across country borders. Currently, transaction fees on cash transactions are much much higher than they are on cryptocurrencies
If you think malware ransom payments are the primary use case for transferring money across borders then you should get out of your bubble and make friends with people originating from other countries or with family back in those countries.
Retail FOREX is pretty similar. It's a zero sum game with broker's fees, plus you're playing the game with a lot of very experienced, very well funded institutional investors.
I think crypto has basically eaten any interest in retail FOREX, but a few years back it was gaining some traction and I was amazed at how many people were playing a (typically highly leveraged) game that was clearly not in their advantage.
I think the author makes the mistake of assuming that web3 is a meaningful, tangible term being used in good faith.
In reality, web3 is a marketing buzzword that cryptocurrency boosters have started promoting in an attempt to legitimize their resource intensive and otherwise useless financial speculation.
So if I just stop using web3 as a catch-all for the things I work on (i.e. IPFS, Crypto Wallets, Merkle Trees) and just start naming them one by one everything will be OK and it's not a marketing buzzword anymore? Or should I be aware that I am in fact only building marketing funnels even though I find value in the technology being built?
Yes, you should stop using it. Here's Wikipedia's definition of the web:
> The World Wide Web (WWW), commonly known as the Web, is an information system where documents and other web resources are identified by Uniform Resource Locators (URLs, such as https://example.com/), which may be interlinked by hyperlinks, and are accessible over the Internet.
The only one of the three you referenced that has anything like that is IPFS, and it's missing large chunks of the web experience we know. Sorry, but a crypto wallet and a data structure simply have nothing to do with the web in any sense that word has ever known.
People love the web. It has profoundly affected nearly everyone on Earth. The last time someone invented something like it was in 1440 in Germany. If you want to redefine it as something completely different, people will assume you're doing it in bad faith to co-opt goodwill for your product. If it's for your crypto wallet, they will be right.
Would it be better if we (the shill council for naming things) just renamed it to ‘net’? You seem to imply that ‘web’ is taken by our current stack
Would the fact that ‘net’ is aiming to make content-addressing a first hand citizen give any weight into being some sort of web? (this seems to be what the paragraph you quoted seems to be mostly concerned with)
Would being able to authenticate to websites with your crypto wallet in a frictionless way give any weight into being some sort of web?
Would a data structure that allows us to content-address files and ensure content resilience give any weight into being some sort of web?
I guess the answer to all my three questions is no because these are not covered in the narrow definition of the web that you provided.
I’m not sure what people loving the web has anything to do with the fact that ‘web3’ seems to be the slug for this new stack shuffle. Do people love web1? web2? This is a non issue. People love being connected as simple as possible, they don’t love the web for using HTTP instead of IPFS…
It seems you have understood. The web is a specific thing, in the same way a printing press is a specific thing. The folks who named the web didn’t call it “electronic printing press” in the same way they named email, because it is a unique and separate idea. The people who named Web 2.0 recognised it was not all that different from before, just a few less page reloads. All your suggestions are unique and separate ideas from the web, and that is great. It’s not that difficult to understand. Give them a different name.
The problem with "web3" is it implies/its proponents claim that it's a successor to web 2.0. How does it make sense for this crypto "assettech" stuff to replace/supersede the current www stack? Naming it "web3" just comes off as a cheap attention grab.
From what I've read web3 creates a new stack in the sense that ENS is used instead of traditional domain names, public key cryptography replaces traditional auth, smart contracts replace application backends and the blockchain acts as the database storing assets, user generated content and profiles (with large or volatile data stored on IPFS).
It’s more that technical people understand how this actually works and realize that, for example, all of these “web3” apps depend heavily on the real web and underlying internet protocols like TLS, IPFS is expensive and slow enough that it’s not suitable for most applications, and the proposed solution for the backend is both unusable for apps requiring privacy or access control and, even if it did work, much slower and far more expensive than hosting your app on a single iPhone.
When you want to be paid up front for something which needs fundamental redesigns and many orders of magnitude improvements for scalability and performance, it’s reasonable to question your motives.
I feel like a lot of people are somehow angry that this new tech stack’s slug seems to have settled on the “web3” keyword, which they don’t like. I don’t know a single person in the space that cares enough for how its named.
There’s also the armchair argument that this doesn’t work for ‘reasons’ which is what you also find in posts with research papers where a random commenter is lecturing on how they should have done it without actual involvement in the space.
Most of us work on things we find interesting and feel like it could work (those lucky enough at least), which as some pointed out could just be us being dumb, but at the end of the day, if anything comes out of it, and it’s useful, no one is going to care how its named except the people that don’t like it.
Flip your question around: how much money does he stand to gain from selling to new adopters? Even if you’re striving to be ethical, it’s hard to stay objective when you have a substantial financial win on the line.
What’s named “web3” doesn’t improve on web technologies, making it odd to market it as a successor, and it’s hard to discuss when the term means whatever the sales person is currently selling.
Listing a specific technology avoids allows claims to be discussed technically without the vagaries of marketing.
Crypto market is really sad. It's a novel technical solution. But it can't find a problem where it fits as a good alternative.
It's not a good alternative to banks, art collections or web hosting. But Bitcoin is still worth billions, NFT are all the rage and Web3 went from new concept to "trend" in the span of what feels like a week. But even with all the success they don't seem to be convincing many they have any intrinsic value.
So here we go again a clearly horrible solution to a problem most don't care about, but I'm sure will make some early adopters rich, and inevitably end in disaster for most.
Yes, completely glossing over the usefulness of digital-native money: instant, verifiable transactions from anywhere in the world, programmable money and low fees.
Oh, and how it disrupts the remittances industry, something extremely useful to vulnerable communities with families abroad.
I agree that Web3 is mostly a grift, but cryptocurrencies are quite useful already.
It's not instant and the fees aren't always low. I was trying to transfer $10 USD in Bitcoin last May, when the BTC market was going insane, and it was impossible.
Additionally: can you make cryptocurrency transactions offline? In my opinion that is a crucial part of the "digital cash" idea. I don't know the technical details so it would be nice if someone more knowledgeable could answer.
I'll even throw in a scenario that I've encountered: the card readers in a store aren't working, because there is a connection issue. Instead of using cash in my literal physical wallet, I'd like to pay with my digital wallet. Can I conduct my transaction offline with the store?
You can do an offline transaction, but there's no way to prevent double spend until it's online. If you gave some crypto to someone offline, you could double spend it until the recipient is online and publishes the transaction.
AFAIK, the blockchain is online, so I can't conceive of a way for an offline transaction. I suppose you could write down your wallet service and/or ID on a piece of paper, then when the store goes back online they trustfully transfer the digital money, but even then one of the parties must be online.
My perspective: I don’t see bitcoin replacing fiat anytime soon, so for day-to-day transactions, cash works all good! No need to replace it completely. They can coexist.
In the scenario you mention, I’d just reach for cash.
However, as a protocol for payments/value in the digital world, it’s very compelling.
If we are aiming to re-think currencies and use cryptocurrencies as the new building block, I feel like it should handle these cases, otherwise we will need to re-do the whole thing again in the future. I'm too lazy to do this multiple times.
Then you can use Bitcoin Lightning, a micropayments network layered on top of Bitcoin, and settled on-chain. There are solutions to these things, it's still just an early market.
Oh yeah, that technological marvel/crutch when every single participant must lock permanently a big sums of tokens in advance to each other, and then the system will solve that little easy CS problem called "traveling salesman" in realtime on millions of paths and clients simultaneously. That one? Amazing and really enticing proposal but I'll stick with predatory mastecard for now, tyvm.
It is exactly the same situation as the Dot Com bubble. Enormous amounts of money and hype are being poured into a new promising technology. So you end up with people convincing themselves that WebVan and Pets.com will be the future of grocery delivery or buying pet products.
And today it is "BTC is the ONLY internet Money", "Ethereum will be the ONLY way people can execute smart contracts in the future". Invest Now!
I completely agree with you, but the dotcom ideas you used as examples were ironically great ideas.
Grocery delivery is the future (or at least a huge, lucrative chunk of it) and a lot of people do buy pet products online and sometimes even in a subscription model. Chewy.com is a huge business.
Right, and public ledgers, digital money, smart contracts will be used by the people in the future, but BTC and ETH prices are as important as WebVan/Pets.com stock prices for that to happen.
Smart contracts are just software, so I agree. Software will be used in the future.
I still don't know the value of public, distributed, cryptographic ledgers. They don't seem to solve real-world problems because there is no way to tie them to the real world. They preserve lies just as well as they preserve truths.
Digital money is useful, but fiar is already digital.
BTC is used for bypassing government controls (drugs, money laundering, currency export controls, remittance) There will most likely be demand for that in the future. I'm not saying anyone should invest in crypto, I'm just saying those use cases exist.
> Yes, completely glossing over the usefulness of digital-native money: instant, verifiable transactions from anywhere in the world, programmable money and low fees.
However, these properties are not exactly specific to "digital-native money":
* Instant: banks can transfer money instantly between accounts as long as both accounts belong to the same bank. In Europe I can name Raiffeisen and ING as two examples and I believe that Wells Fargo in the US has instant transfers as long as both accounts are opened at the same bank and probably there are more. And in most case there are no "gas" fees for those transfers.
* Verifiable: all bank transactions are verifiable (at least internally, banks are forced to have an audit department) and in all cases you receive a receipt for your transaction. If you want to verify all the transactions yourself, glossing over the severe privacy issues that a blockchain will introduce (once you know the real ID of a wallet, you'll know all the finances of a person), it's not that easy to validate crypto transactions "from anywhere in the world": Ethereum requires more than a TB of space and Solana validator requirements basically point to an expensive server running in a datacenter (at least 128GB of RAM and 300Mbit symmetrical network bandwidth). Even Bitcoin's blockchain is several GB large which is very unwieldy to sync in areas with slow or bad internet connection (yes, DSL is still a thing).
* Programmable money: I'm guessing this would be the take on "smart contracts", but this is far for being perfect because you still need to trust that the code in the smart contract triggers the right action. For example, if I were to buy a laptop from somebody using a smart contract I will still need to trust that the smart contract will trigger the entire flow of sending the correct laptop using a courier to my place. A way around it would be to have the owner send the laptop to a third-party and the third-party would have some sort of reputation for correctly implementing the outcome of smart contracts, but we're back again at trusting a central authority and the entire flow could be implemented using regular code, so what's the point of smart contracts?
* Low fees: there are a lot of fees associated with cryptocurrency transactions on top of several "blockchain fees" like Ethereum's gas. For example, the service fee for using MetaMask is 0.875% of the transaction, or if I move $1000 from one account to another using MetaMask will cost me $8.75. I currently pay $0 for moving from one account to another one as long as they are opened the same bank.
Cryptocurrencies can have some legitimate benefits in specific situations (I'd imagine that transactions between parties in areas with no or very bad/expensive Internet access can be more trustworthy using cryptocurrencies), but I doubt these cases are as frequent as many people claim they are. I'd argue that by far the most interesting use would be to use cryptocurrencies as stores of value and have them regulate as some sort of equity because this would allow Wall Street to do all kinds of funky things with them :-)
The best take I've heard was from Michael Saylor of MicroStrategy, who was explaining a couple of months ago how it's much better to invest into Bitcoin because you can easily split it and move it to another country should the tax be too high, while buying a lot of land in New York requires paying a property tax and can even be devalued based on the zoning.
Just as Chinese citizens seem to be mostly happy about the politics in their country. Maybe that is the actual problem, people not caring about issues like free speech until it is too late. (Julian Assange is still imprisoned in the UK and almost nobody cares)
Even if I assume you're completely correct and that is a problem, they're still totally correct that cryptocurrencies are solving problems that almost nobody cares about.
And the problem is centralization, which facilitates censorship and totalitarian control.
That nobody cares does not imply that it doesn't matter.
I don't want to bash China specifically, it just happens to be the first example that comes to my mind. So for example nobody cares that millions of Uyghurs are being enslaved in China, but that does not imply that it is not important. (Or take the example of Assange I mentioned - nobody cares that the UK locked him away without good cause).
Also most people don't really care about economics or how money or the stock market works. They just find themselves suddenly with a devalued currency or out of a job.
> And the problem is centralization, which facilitates censorship and totalitarian control.
This is a gross misunderstanding of both the current banking system (which is decentralized) and the degree to which using a slow database doesn’t prevent legal actions. Blockchains are very easy to monitor and censor: ideal for an authoritarian government to get a signed confession for every disapproved transaction you make, and a high-volume always-on network is trivially blocked should they care to.
There are literally "central banks", and if banks don't want to give somebody a bank account, there is nothing these people can do about it. That is the result of centralized control. You can not prevent somebody from having a Bitcoin address.
I know that transactions on the Bitcon blockchain are public. There are approaches to fixing it and several altcoins claim to fix it. It certainly isn't the last iteration of the tech forever. And I think you can also do things to anonymize Bitcoin transactions. I haven't really dug into it yet.
The real fire test of governments attacking crypto coins has yet to happen, agreed. It won't be easy, but nothing will be easy under authoritarian control.
> There are literally "central banks", and if banks don't want to give somebody a bank account, there is nothing these people can do about it. That is the result of centralized control. You can not prevent somebody from having a Bitcoin address.
Banks follow laws, which is also a hard requirement for cryptocurrency businesses. Very, very few people are banned from having an account and those bans are of categories which would also prevent a cryptocurrency exchange in that country from working with them. Note also that “centralized” is only true within a governmental boundary — a bank in Zimbabwe doesn't phone someone in the U.S. to ask whether they should allow someone to open an account, which is why I described it as decentralized because it lacks a central authority.
It's true that someone can try to circumvent those measures, which is a practice dating bank centuries, but there's an important distinction between being able to make a transaction and being able to avoid punishment for doing so. Just as most censorship happens because someone is afraid of the potential consequences for speech rather than prior approval of all communications, it's both possible and a natural extension of existing practice to start demanding that people in your jurisdiction disallow any transactions linked to a particular address or to punish people for accepting a payment after it's linked to a criminal activity. You'll never get that down to zero but cryptocurrencies make it a lot easier to block than real cash payments.
This is also the problem with anonymization schemes: governments don't say “he used Monero, guess we have to give up on law enforcement” but rather “Monero does not comply with our financial laws, any business or person caught accepting it will be fined and risk jail time”. Bitcoin laundering schemes are unproven at scale from a powerful adversary but also simply using a tumbler is risky because you're publishing a durable record of using a service designed to evade legal controls — if that's ever linked back to you, you've given the police a signed confession that you knew what you were doing was illegal. Legitimate users aren't going to pay a premium to take on that risk — especially since it would open them to charges of collusion on whatever anyone else using that service was doing — and that removes legal traffic volume, making it easier for analysis and blocking.
"Banks follow laws, which is also a hard requirement for cryptocurrency businesses"
Laws are not always just, and not everybody who is prosecuted by some government is a criminal. Governments can seize bank accounts.
You can be labeled a nazi for nothing these days, and then businesses (including banks) who do business with you will receive threats and shitstorms to make them stop doing business with you. It can happen quicker than you think. Maybe you are lucky that you live a private live and never dissent with anything. By "nothing" I mean literally nothing - my own Twitter account for example was shut down by a rampant bot that was triggered by mere keywords. Even on HN there are frequent stories about Google accounts and PayPal accounts being locked.
"governments don't say “he used Monero, guess we have to give up on law enforcement” but rather “Monero does not comply with our financial laws, any business or person caught accepting it will be fined and risk jail time”"
Sure, I worry about that kind of issue a lot, when I think about how to enable free speech in unfree countries. Should dissidents in authoritarian regimes just give up, and not use Encryption or Tor? It certainly seems dangerous, but what is the alternative? Also I suppose you could try using Monero without anybody knowing that you used it.
In any case, if the laws in your country become unbearable, you can memorize your crypto seeds and try to flee the country.
> Laws are not always just, and not everybody who is prosecuted by some government is a criminal. Governments can seize bank accounts.
Yes, but that doesn't change the fact that there isn't a magical technological fix for that problem. Wanting something to be useful for dissidents doesn't make it so and it's irresponsible to tell them otherwise just because adoption would be personally profitable for you.
> You can be labeled a nazi for nothing these days
Do you have citations on “nothing”? The examples I've seen are all of people who were doing things most people find objectionable and they didn't get a blanket ban on banking or being online but rather a specific company chose not to associate with them. Even actual Nazis like Stormfront don't seem to stay offline for that long.
> Should dissidents in authoritarian regimes just give up, and not use Encryption or Tor? It certainly seems dangerous, but what is the alternative? Also I suppose you could try using Monero without anybody knowing that you used it.
Think about what trying Monero would mean: you'd have to be able to use a search engine to find a client, download it without triggering monitoring, hope that it's not actually a trojan left by the secret police, hope that it doesn't make identifying network traffic (always-on blockchain networks are easy to profile that way), figure out how to convert local currency into Monero and vice versa, etc. — and either do so perfectly forever or very carefully purge your history without leaving a trace.
It seems a lot less risky to avoid things with massive electronic footprints and focus on using cash and offline communications as much as possible, but really the key part is not overpromising. When sales people go around saying things which are not true about cryptocurrency, they're giving advice which is actively unsafe to follow — it'd be much better not to say anything at all rather than give a false sense of security.
"Yes, but that doesn't change the fact that there isn't a magical technological fix for that problem."
Well there kind of is, at least Bitcoin is better than other things in some regards.
"Do you have citations on “nothing”? The examples I've seen are all of people who were doing things most people find objectionable and they didn't get a blanket ban on banking or being online but rather a specific company chose not to associate with them. Even actual Nazis like Stormfront don't seem to stay offline for that long."
I don't really keep score. An example that comes to mind is JK Rowling being disinvited from the anniversary celebration of the Harry Potter movies for saying "Transwomen are not women". Or Gina Carano being fired from the Mandalorian for warning about singling out people using a picture of the Holocaust. It's not a blanket ban, but the proponents of cancel culture are generally pushing for blanket bans. They will write letters to employers and business partners (including banks) of people they want to destroy and ask them to fire/stop doing business with them. Are you sure your employer and bank will double check such claims before firing you?
Where does Stormfront hosts their servers? Parler took a long time to get back online, but maybe they wanted to overhaul their tech first.
And more and more frequently it will just be bots that brand you a nazi. As I said, I was banned from Twitter by a bot misinterpreting some keywords ("hopefully" and "die" appearing in the same tweet - at least that is the only explanation I can find, as they disallow things like "I hope you die", but that was not the content of my tweet). And the beauty of banning people from social media is that nobody can check why it happened anymore, so people will just assume that "there must have been a reason".
"Think about what trying Monero would mean"
As I said, life under authoritarian regimes won't be easy either way. I don't defend all the sales people saying stuff about crypto coins. Some of it is true, some of it is bullshit. Just because some people tell nonsense, doesn't make all of it wrong.
> I think that's a bit disingenuine considering the US government couldn't even put up a healthcare signup website without it crashing.
Speaking of disingenuous, I feel compelled to note that the failure was built by the private sector (CGI Federal) and fixed by the government (Mikey Dickinson’s USDS team), and it’s certainly not like there aren’t plenty of failures in private industry. You can’t honestly say anything about an entire sector based on a single cherry-picked example. For example, should we look at the high level of skill shown by Stuxnet and similar government operations, compare it to Experian, and conclude that the private sector can’t operate computers securely?
> With such a track record, you really think they could just "tap in" or "modify" any given crypto protocol so they could audit every transaction?
A public transaction ledger means you’re giving them that with no work and there are blockchain analytics companies which already have government contracts even if you believe that civil servants can’t use computers.
Similarly, there’s a well documented history of governments monitoring network traffics, collecting forensics data from phones in police custody, installing malware on people’s phones or computers, etc. There’s a zero-percent chance that they would forget to check for cryptocurrency activity along with everything else.
I don’t really care about the assertion you’re trying to refute, but that’s the same US government that destroyed Iran’s centrifuges through software. You can’t really look at such a large organization and treat it as uniformly competent/incompetent when it clearly isn’t.
Web3 feels like the next grift after we caught on to ICO's.
From the article:
> The problem here is the profit motive: people who are working on web3 generally want to get paid for it, but it's fundamentally harder to extract rent from truly decentralized systems than it is from centralized ones. Because of that, people end up building systems that are centralized at their core, with some aesthetics of decentralization smeared on top, and call it web3.
I remain curious that there are practical applications for blockchain outside digital gold style securities. But web3 feels like a land grab for the mindshare of the future. Trading off the philosophies that got us here, while subverting them with the very things the web fought against (centralisation, pay-to-play and so on).
A big red flag is the level of complexity of web3 compared to say HTTP. I rarely see practitioners of web3 talking with clarity, instead hand waving and double-speak is far more common.
Yes, sometimes the most exciting things are emergent, but it's been over a decade of the blockchain field of dreams and we're still talking in hypotheticals are what it will be good for.
Gall's law seems more prescient than ever:
> A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system.
At the network layer tcp/ip/http are relatively simple compared to blockchain.
At the application layer a web server/cloud is still simpler than a dApp.
At the user layer a credit/debit card is still simpler than paying with crypto.
To say nothing of the ecological impacts. You may think web3 is the future, but we cannot ignore the fact that http is greener. Yes, I know proof of stake will make crypto green but I'm not convinced it's possible [0].
The carbon footprint you refer to applies only to proof-of-work blockchains. Unfortunately 3 of the largest systems use this (bitcoin, Ethereum, and doge) but an alternative has already been created called proof-of-stake. Nearly every new crypto uses proof-of-stake and Ethereum plans to switch to it. The market seems to approve of this as well as some of the big gainers in market cap use this system.
> Yes, sometimes the most exciting things are emergent, but it's been over a decade of the blockchain field of dreams and we're still talking in hypotheticals are what it will be good for.
There’s a reason our current financial infrastructure is still being run on cobol: if it only took 10 years to build it would have been updated already.
Financial tech takes a very long time and with a revolutionary idea such a cryptocurrency, I’m sure it will take even longer.
Things take time, 10 years is not a long time, however I agree with the overall sentiment about web3 and crypto in general in this thread.
Cryptocurrency is less a currency and more another financial investment vehicle for people that are tech savvy enough to get into the game. Put in another way: it’s primarily being used to make money, not trade it for goods/services. Maybe one day it will be used truly as a currency, but txn fees are too high and “HODL”ing makes the person money so they’d rather not trade it.
I'm not for or against, I just find it strange that stuff that already has a name (like blockchain, crypto, etc.) somehow needs another name or some new kind of umbrella name.
I'm not for or against, because it's unclear what there is to be for or against.
Web3 is nothing but an echo chamber. A very empty echo chamber, so it echoes pretty nice. I'm back to the world wide web.
I've been designing and programming for the web and internet for a long time now, and I took one break of a couple of years in between. When I came back there suddenly was this 'cloud' thing. I kept looking for answers. What is this? What's new? And although I found snippets here and there that made sense (it was basically infrastructure based, I found), it took me years eventually to really realize it was nothing more than the internet I already knew, but then decorated with marketing speak and buzz words.
I'm not opposed to new things, not even to new names, but I can sniff a name without meaning from miles away now. It looks like when big money is ready for the internet the whole thing needs a new name, the same now with blockchain, etc.
So I find it kind of funny I guess, hearing the proponents and opponents of Web3 speak.
I understand where you're coming from, but the essence of the entire "cloud" thing, to me, was that the underlying infrastructure disappeared. We went from managing root servers, or VPS maybe, to transparently scaling resources. Using "the cloud" means switching to application-based hosting, where the hardware below doesn't matter anymore, and that's a pretty significant change to me. I don't have to manage the SSH daemon config anymore, instead I push Docker images into a registry.
Of course below all that it's still the same technology we had before, but it's evolved quite a bit, and I actually appreciate that change.
> I just find it strange that stuff that already has a name
This is called marketing.
Entire industries depend on it or even simply exist because of it.
For a closer to home example, see Free Software (which scared businesses away because it had the word "free" in it) vs. Open Source (which made folks understand they could escape things like vendor lock-in)
No, it's not. With marketing it's more clear where the message is coming from. With marketing it's more clear what the message itself even is. This is way more sinister, it's wordplay on a bigger level. Maybe call it public relations.
Your examples miss my point. Your examples are clear enough and have an understandable meaning (once you know what it is). I stick with my comparison of 'the cloud' and 'web3', because they both were names before getting any significant meaning.
Before the web, we used the word "cloud" when discussing networking. It's been hijacked. We used to draw cloud-shaped bubbles in network diagrams, with the label "X25".
It's fascinating how on hacker news one typically finds detailed, reasoned and thoughtful comments. However on the topic of crypto and web3 the comments reliably degenerate into partisan tit for tat, consisting mainly of poorly researched, unreasoned sound bytes.
It's a pity because I'd love to hear quality thought on the space.
My personal view is that crypto and Web3 "are a thing" (Mean Girls) and will continue to be a thing. But the sector is very very new, and supercharged by capital, leading to tumerous horrors. People get burnt, robbed, and jealous, and it leads to nasty feelings.
I find the space interesting and exciting, over all. Also massively frustrating of course. But I try to judge all things not by the worst cases of them (Daniel Dennet - I.e. cars are often good, they aren't always murder boxes). Looking at good examples also gives perspective on what work still needs to be done in the rest.
Can someone recommend places to read or be involved in non partisan discussion about these topics?
Agree completely. There is a ton to criticize about crypto and "Web3" (I hate the term, tbh). It's rife with scams and unearned wealth. Even the things that aren't outright scams are mostly people selling hype.
But this technology does enable something novel. Digital self-custody of scarce assets is a new thing. A thing that nobody could do before this stuff. And if that has utility, then the infrastructure for trading, lending, and all the rest related to those things has value.
Even if you don't personally find it valuable, it should be clear that it is a thing that people could, in principle, legitimately prefer to traditional systems.
That being said, a huge percentage of what's happening in the space is bullshit, an outright scam or an "essentially scam" project. All those things deserve heaps of scorn and criticism. Investigate Tether, regulate ICOs, do all the things. But don't go so far as to deny that there's anything there, or say ridiculous things like "Web3 is more centralized". Even if it's true that web3 is more centralized than the internet, that isn't the basis of comparison here. Web3 isn't competing with the internet, it's competing with traditional finance. And there should be no question that Web3 is substantially more decentralized than that.
Over the years I've witnessed a lot of heated debates on HN... Is the JS ecosystem actually too complex? Is PHP really a fractal of bad design? Is learning vim worth the effort or is it all hype? Is golang fundamentally broken because it lacks(lacked) generics? Does anyone ever actually need k8s? Is nosql always the wrong choice? Is the linux desktop experience truly productive or should you just use a mac? Types or no types? 100% test coverage or overkill? X or Wayland? Gnome2 or Unity? Android or iPhone etc...
Yet, only in the cryptocurrency debate do defenders have to offer up a disclaimer about all the scams, hype, vaporware, fraud, waste, hacks, speculation, crime and other insanity before proceeding to make an appeal to the nebulous hope of future possibilities, as if cryptocurrency isn't older than instagram....
That's because crypto currencies and distributed consensus are inherently economic protocols. They must have monetary value or their consensus mechanisms do not work, which is why proof of work makes you shell out 'value' in the form of energy upfront.
It's a bit goofy to make the comparison you made - I mean you didn't even finish your thought, you just painted a vague yet intense picture you expect people finish for you with the worst possible outlook. You aren't getting rid of crypto, so you'd do more to actually find out what's wrong with it and offer solutions rather than winging about it and praying for authoritarianism.
In my country, this also describes the day to day situation. You can't trust doctors because they make up diagnoses, people pay taxes but it never shows up in infrastructure, schools or anywhere; daily alerts by banks warning against some new clever form of fraud, until recently there was a fair chance new banks would vanish with customer money (I still only trust a few reputable banks), actual family destroying pyramid schemes, ransoms attached to child kidnappings not data, politicians stealing from their constituents, police not trusted because of lack of transparency and corruption, bribes as a defacto tax.
The combination of high levels of poverty and lack of regulation is what leads to the proliferation of scams and dishonest behaviors. Poverty lowers the threshold of criminality, lack of regulation and lack of an enforced justice system enables its flourishing. Poverty also catalyzes more susceptible victims of such crimes.
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> only in the cryptocurrency debate do defenders have to offer up a disclaimer
Financial activity in crypto lacks regulation, which attracts predators, who create scams that attract the poor who are not necessarily gullible, just gambles from desperation.
> Android or iPhone
In Android vs iPhone or Windows vs Mac, people do argue about vulnerability to malware and the merits and demerits of locked down platforms.
I'd also argue your examples are not appropriate, they're more clashes of belief systems and less people freely interacting in market like scenarios. Consider that kickstarter is rife with vaporware, hype and scams. Scams, fraud and hacks in Roblox and Entropia. Crime, speculation and hacks in Habbo Hotel. Western financial systems discriminate against certain professions and citizens of entire countries due to some cost benefit calculations related to fraud.
If you have a system where money can exchange hands, you'll find psychopaths preying on the poor and careless. Oh and this isn't just poor countries and virtual markets, psychopaths preying on the poor and desperate also occurs for developed countries too (you just give them fancy names like debt bubbles and mortgage crises).
I suspect that big corporations and big investment firms are pumping a lot of money into the cryptocurrency space to prevent innovation and to encourage scams in order to discredit the space. They want to buy it up, hype it up, then dump their bags on mom-and-pop investors while attempting a controlled demolition of the space.
This might sound far-fetched to outsiders, but not so far-fetched to those who have worked inside the industry and seen the waste. I've seen obvious shitcoins repeatedly succeed while legitimate tokens never get any attention. In this industry, you can feel the unlimited currency coming straight off the money printers. It's just like Wall Street Bets in reverse except it's worth over a $ trillion and they're going after regular people instead of big hedge funds.
You decide for yourself, but generally shitcoins are regarded as forks without any technical innovation who are not credibly trying to solve any problem or try out a new idea - just make money. They're often meme-themed (though not always, and there are many legitimate projects that are meme-themed).
I've met founders who launched shitcoins which raised a lot of money who acknowledged with no sense of irony that their own token was a shitcoin.
But in general, a shitcoin is a poorly designed project (or just a clone of an existing project) where the founder sells a lot of their tokens and quits immediately after the initial ITO/ICO sale.
> Digital self-custody of scarce assets is a new thing
But what really are the "scarce assets" that Web3 is enabling self-custody for? A token on a blockchain that has metadata pointing to a digital file that anyone can view and reproduce? By definition, every NFT is scarce in that each one is non-fungible. But this scarcity doesn't mean there's any meaningful value. An NFT alone doesn't inherently give you ownership of or rights to anything except the token itself.
The minute you want to attach some meaningful rights to an NFT, like legal ownership of the digital or physical asset the NFT points to, or the rights to an income stream produced by such, you have to enter the world of our traditional legal and financial systems.
At least one way I've tried to see a lot of this stuff is that it's people exploring what governance of the internet looks like. Right now, governments (analog) don't seem to know how to regulate the internet (digital). From this perspective, I can see cryptocurrencies as digital currencies, NFTs as digital property deeds, and DAOs being digital corporations/cooperatives. Others are talking of digital nations, which may get more towards the actual governance systems of these digital spaces, including property rights, freedoms, etc.
So while these digital deeds don't seem to have much connection to the analog world, they may not need to, if digital governance comes about.
That being said, I wonder if the main challenge with digital governance is not so much the digital part but the cross-border part. In other words, governments have jurisdiction over physical land and digital interactions transcend those boundaries. I wonder if many of the things people are trying to solve with crypto would be solved if we had more global governance. Global property deeds (right now, typically at most nation-state level, but also can be very local to city level), global currency (de facto USD right now but no official one), global company registration (at most nation-state level, but also lower as well), and global governance (the UN is there and many other standards bodies, but governance of many things still at most at nation-state level).
So, it says to me there's a desire for more global (read: physical borderless) ways to interact, own, and regulate all of that and that much of crypto seems to be the skirting of nation-state laws and almost reinventing governance from scratch.
Do you need someone to repeat what's scarce? The digital anything can be written down in the blockchain notebook with your name/key and it's yours then. Same as when you would get a C from your teacher who would write it into one of those big notebooks with everyone's names. That combination of your name + class + grade is the asset uniquely assigned to you. Now when you asked your teacher to change that C to a B, to maintain your average, that wouldn't be possible as the teacher would have to write a new record and we would all know that you had a C actually. But all those grades are your only and thus scarce by definition.
I would suggest that your argument doesn't pay enough attention to the second word in "scarce asset" -- asset.
These unique tokens almost always point to digital files that are accessible to everyone and anyone, and that can be viewed, downloaded and reproduced by everyone and anyone.
To the extent that a person might consider these files are "assets" at all, the bigger issue is that ownership of a non-fungible token is still just ownership of a non-fungible token. It doesn't on its own convey any ownership of or economic interest in the "asset" it points to. If you want the token to convey ownership or economic rights, you're back to the traditional legal and financial worlds Web3 is supposed to be supplanting.
To the extent that a person might consider the NFT itself to be an "asset", the question is where the value is derived if the NFT is merely a pointer to a digital file that you don't have ownership of or an economic interest in.
But why would you want your grade history to be public so that anybody can read it? And adjusting grades is a valuable feature, given that some teachers do really make legitimate grading mistakes that should be corrected.
The public aspect of the content is orthogonal to the public aspect of the data. E.g. let's say the grade record is encrypted. Anyone party to the key is able to verify that the record is (un)tampered, but the wide world cannot read your grade.
And that is orthogonal to whether the content is mutable or not. It just means that mutation is deliberate and obvious.
Well, again, in principle, NFTs can be used to represent ownership of anything. The current crop of NFTs I find just as silly and worthless as you do. However, I will note that even the current stuff is no more worthless than, e.g. a piece of paper autographed by a celebrity. What NFTs are right now is the digital equivalent of an autograph. I think buying a hat autographed by LeBron James is stupid, but obviously a lot of people disagree.
However, theoretically, you could tokenize other assets, like real estate, or intellectual property, and then trade them in a more liquid, global manner than is currently possible. The NFT ecosystem is one of the least developed parts of crypto, though.
If you want an example of tokenized value, just look at stablecoins. Stablecoins are literally tokenized dollars. They allow you to self-custody large amounts of, what is effectively digital cash. That is something you couldn't do before. If you didn't trust banks, you either had to store physical dollars in your home, which is extremely dangerous for a number of reasons, or you had to suck it up and trust them anyway. Crypto gives you a third option.
> Well, again, in principle, NFTs can be used to represent ownership of anything.
Possession of a token itself doesn't create legal ownership of a separate asset unless there is a legally-binding instrument that conveys ownership of that asset through possession of the token. To turn tokens into legally-binding instruments of ownership, you're back into the real world of laws, lawyers, financial regulations, etc.
> However, theoretically, you could tokenize other assets, like real estate, or intellectual property, and then trade them in a more liquid, global manner than is currently possible.
This simply isn't true though. Tons of real estate assets are securitized and traded in liquid, global markets. Even average investors can access these markets through REITs.
More esoteric assets, such as music royalty rights, have exchanges like Royalty Exchange[1].
You could of course use the blockchain for these types of things, but just using tokens doesn't absolve you from having to comply with securities regulations. Unfortunately, from what I see, a lot of the people trying to create crypto-based solutions seem to believe that the use of tokens is a "get out of regulation jail free" card.
> If you want an example of tokenized value, just look at stablecoins. Stablecoins are literally tokenized dollars. They allow you to self-custody large amounts of, what is effectively digital cash. That is something you couldn't do before. If you didn't trust banks, you either had to store physical dollars in your home, which is extremely dangerous for a number of reasons, or you had to suck it up and trust them anyway.
Stablecoins claim to allow self-custody of large amounts of basically digital cash. But there are a lot of red flags with stablecoins and I'd humbly suggest that anyone who doesn't trust banks but is willing to trust stablecoins is missing the plot.
Either way, your cash, in whatever form it takes, is at greatest risk because of central bank policy, not how and where your cash is stored. If the USD loses its reserve status, you're going to feel the effects whether you're holding physical dollars or Tether.
Scarcity is a necessary, but not sufficient, condition for value. By establishing the necessary conditions we facilitate the discovery of sufficiency in particular applications. Whether or not any particular scarce digital asset is valuable is a subjective question. Whether or not the underlying infrastructure created the potential for it to be valuable is an objective question, and the answer is yes.
> Digital self-custody of scarce assets is a new thing.
How so?
This is how "web1" operated all the time: People have a cool idea and fire up a webserver to host it. Self-Custody in its purest form.
Sure, others could copy it, but they can also do that with whatever someone generates an NFT for "digital assets" (the certificate cannot be copied, the thing it certifies ownership for can).
As for "scarcity": Digital assets are either shared or scarce, there is no in-between. Distributed Ledgers allowing NFTs make the certificate of ownership scarce, not the asset itself.
> This is how "web1" operated all the time: People have a cool idea and fire up a webserver to host it. Self-Custody in its purest form.
Web1 assets are not scarce, that's the difference.
> Sure, others could copy it, but they can also do that with whatever someone generates an NFT for "digital assets" (the certificate cannot be copied, the thing it certifies ownership for can).
Forget NFTs. Go print yourself $1000 USDC and try to exchange it for dollars. The thing that prevents you from doing that - that's decentralized digital scarcity. There is no equivalent on web1.
Of course there is. If the service offered is not just access to some data, but things like computational power, access to a game server, food delivered, etc. I put up a payment system, and unless its used there is no access to the asset.
What form that payment system has, and what tokens it accepts USD, EUR, BTC, Seashells or Sliced Bread, is completely irrelevant.
All of the web1 equivalents are centralized systems, where the assets in question cannot be traded independently of the central authority. That is the difference.
Every system in a "web3" environment is still hosted on some server or cluster.
And someone, somewhere, has the root pwd for that server. There is still a central authority.
That someone decides if the server is up, what code it runs, and how it interacts with voting, contracts, tokens, etc. on the ledger. The only thing in such an environment that is "dezentralized", is the public ledger (aka. the "Blockchain"), where the current state of the tokens, settings, etc. are stored.
If the people running the service decide that whatever is written in that ledger no longer applies to them, it no longer applies, period.
That sounds terrible, from hearing about NFTs I expected they would be a hash of the file, not a link to a file.
Not like a hash would be much better, as changing one pixel would give you a different hash, but at least it would represent a specific version of an image, a URL could change to anything tomorrow.
It doesn't make any difference. The so-called "asset" is just a piece of digital information, e.g. a picture, which can be copied by anyone for free. As a result, owning such an asset on a blockchain doesn't confer any advantage to the owner. The owner has the same rights over the asset as the people who don't own it.
Some NFT platforms use IPFS, which as I understand it is basically hash of the content plus a mechanism for finding it as long as someone keeps hosting it. Of all the things associated with web3, IPFS is the only thing I’ve found that I think is kinda neat.
Why is everyone here so focused on NFTs? I didn't mention NFTs at all. They just happen to be the hot thing to shit on right now. I am not a fan of NFTs. But "digital receipts" are tremendously valuable. Receipts are proof of provenance.
Proof of provenance is valuable in many, many applications. But anyways, that isn't the point. The type of digital self custody i'm referring to is for things like stablecoins. Stablecoins allow you to self-custody dollars in a way that was not possible before cryptocurrency.
> ...Stablecoins are a type of cryptocurrency that derives its value from some underlying external asset, like the U.S. dollar or the price of gold...
That, doesn't seem very decentralized if it has to pinned to something controlled by one entity?
Ok, so self-custody is that you've not got an account with a bank (a "vault" to keep all your money in) that they ultimately control, you're walking around with a wallet, one with a very secure clasp.
That argument kind of makes sense? But a central authority can still squeeze on you just as much, by targeting who you would trade with though, right? The ledger is public, they know who you traded with, they can make life difficult for them until you're not a customer.
> Why is everyone here so focused on NFTs?
Because that's all we here of {$coinname}Coin and blockchain currently, it is the cultural zeitgeist and the face of the tech to the broad public.
Noone's giving a simple explanation that makes sense and gives the killer app features. It's all marketing hype or five dollar words. It took me a good while to realize that "Stablecoins allow you to self-custody dollars" means "bank can't lock me out of my account"
> That argument kind of makes sense? But a central authority can still squeeze on you just as much, by targeting who you would trade with though, right? The ledger is public, they know who you traded with, they can make life difficult for them until you're not a customer.
Ya, it doesn't make you totally immune from squeezing. It just changes the dynamics of how that squeezing works. Essentially, it becomes much less feasible to squeeze people in a scalable way for centralized entities.
> Noone's giving a simple explanation that makes sense and gives the killer app features. It's all marketing hype or five dollar words. It took me a good while to realize that "Stablecoins allow you to self-custody dollars" means "bank can't lock me out of my account"
Ya, I certainly admit the hype and everything else that goes with it around all this stuff is terrible. Crypto is nowhere near as useful as its boosters will tell you. But I do think there is a kernel of something very cool and interesting there.
Self executing and self-enforcing contracts and self custody is a real innovation, especially for people that live under less than stable governments, or have less than stable currencies. People that say this stuff is going to replace the legal system are idiots. It can never do that. But it can take a few superficial legal structures that are currently expensive and messy, and make them a little cleaner, more transparent, and fairer, I think.
It's self custody in the sense that you can transact your representative tokens without consulting any intermediary, and without having to get anyone's permission.
> But this technology does enable something novel. Digital self-custody of scarce assets is a new thing.
It's unfortunately also pretty much pointless. Digital assets aren't scarce, and physical assets mean leaving the system and losing the properties of it.
Plus self custody, where if you make a mistake like forgetting your password you lose everything permanently, is a bad idea that is incompatible with how human beings actually work.
Literally every online game has been doing digital scarcity forever. Let's see if any of the NFT collections end up having the success and lifetime of Eve Online or World of Warcraft.
I realise there are hypothetical advantages to NFTs over in-game items, but I am not yet sure they will be worth it in the long term.
By calling it web3 they are explicitly positioning it in terms of, and in contrast to, the traditional web. If they wanted to call out finance there's defi for that.
I don't think web3 is just competing with traditional finance, or at least not in the restricted sense of investing/especulation. Also web3 is not replacing anything that already exists, just like "web2" didn't (and to be frank web2 was as much as hyped term than anything else)
I see it more as retaining ownership some of the content we produce and happily give to twitter, youtube, facebook etc to monetise and have some more control over it
Things as being able to:
* remove access to site to display my content but still be published somewhere else if I wish to do so
* be able to serve my content to people that prefer to use another tools without relying on twitter to have a public API as long as I granted them access
* get the person getting hits and making money of ads to share some of that with me, or maybe pay my gas fees
* not be shut down because a given site or state decides my content is not worthy of it, they are still allowed to do this, but I could still continue via another "frontend" and people can choose
There are more use cases around this, and there are many gaps yet around the economics of it to make it accessible/free, make it desirable, legality, liability etc which I believe remain to be solved
Ownership of "content" requires intellectual property laws, which are enforced by courts of justice, and we already have these. A blockchain cannot enforce intellectual property rights because it lacks coercive power. If your goal is to "retain ownership" of the content that you produce, a blockchain is not going to help you AT ALL with that.
This is the classic "but I can already do all that with rsync" dropbox criticism. Yes, the traditional legal system is still required. Crypto does not make it go away, and anyone who says otherwise is a fool. What it does do is change the UX around transacting with these things.
Right now buying IP rights is a bespoke process involving lawyers. It has very high transaction costs in the Coasean sense. Tokenizing and standardizing these things, and standardizing the way revenue across directly to the rights holder in a way that is agnostic to who the owner is.
This is the value of the decentralized economy. It has the ability to shrink the domain of responsibility for the traditional legal system, and standardize things in a way that simplifies entry for entities that are less legally fluent.
I think an appropriate analogy here would be between the private and public markets. Buying stocks on the public market is easy and simple, because the process is standardized. You don't have to read complex legal agreements or study cap tables. You just click buy. The token economy has similar properties, although all the details of what the best ways to standardize, and what should and shouldn't be standardized, are not yet flushed out.
I wasn't talking about it as in copyright / legal sense, and more in the I can allow others to access a snapshot of it at a given time and/or remove access to it for future content if I wish to do so.
Now the relationship is the reverse, I give content to some org and they can do as they wish with it; I'm surrending it for them to use in exchange of them allowing me to use their platform for free.
e.g. from Twitter's terms of use:
> By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods now known or later developed (for clarity, these rights include, for example, curating, transforming, and translating).
If the content was hosted somewhere else and then displayed on twitter instead, this would not be the case or I could revoke it in the future but still be able to distribute such content via other means
Now, if I want to use another site then I need to duplicate the content myself.
Since all that they really offer is the userbase/community, its very hard for competitors to come into play and offer better terms or capabilities.
In fact, they can change these terms at anypoint and I can do very little about it aside of deleting my account (if they even allow you to do that!)
A blockchain is publicly-accessible, append-only database, so again I don't know how an append-only data structure can help you revoke access to some content. Not to mention that Twitter can always choose to not display your tweets unless you grant them a license, regardless of where these tweets are hosted.
even if you could update state* once you gave access to anything it's out of your control as it might be cached somewhere else.
This is why I mentioned for future changes rather than what you already allowed.
And you are right twitter can still have that clause, and they can cause they have somethign to offer (i.e. a userbase) but if the content of everyone would be somewhere else other competiors would be able to offer it and then competiion for users would tend to make those terms more accessible to those that care enough to read them.
* you can by doing it as in an event sourcing system. After all blockchains+smart contracts are similar to a giant state machine
> And you are right twitter can still have that clause, and they can cause they have somethign to offer (i.e. a userbase) but if the content of everyone would be somewhere else other competiors would be able to offer it and then competiion for users would tend to make those terms more accessible to those that care enough to read them.
This seems incompatible with the goal of control: instead of giving Twitter free rein to reproduce your content however, you’re giving everyone on the internet the ability to do what they want with it, completely unrestricted.
(Yes, you could DMCA then but then the blockchain is useless)
Unless whatever service accessed the tweet/image/text/whatever made a local copy and is displaying that once the "blockchain service" no longer allows access.
An NFT doesn't confer access control. Its a certificate of ownership, the asset itself is infinitely reproducible.
NFTs represent something else completely, I'm talking of other use cases that are enabled by the same underlying tech - with the disclaimer I mentioned above of pending issues to be resolved, particulaly gas fees
if you are not aware of how something like what I described could work maybe have a read around on some simple smart contracts where there is hidden state (like guess the answer or contracts that implement role access/control for certain features)
Regardless of what relationship a piece of data has to some blockchain technology: As soon as it is publicly accessible, even once, it's scarcity can no longer be guaranteed, because by their very nature, digital assets are infinitely reproducible.
For most people, crypto is about money, not tech. Easy money, quick money. Therefore the spam level of any crypto discussion is so huge that the opinion gets drowned out by the propaganda.
You are on a forum that is literally owned by an investment firm. Do you think they invest because of the good of their hearts, or as some kind of charity, or because of "the technology"?
Investments happen because people want to make money, end of story. Not to help other people, because that is called charity.
BUT, that doesn't mean that investing is all about scamming people. It is clear at this point that the best investments are the ones that provide actual value to a lot of people.
To conclude: most things are about money, but that doesn't invalidate the value behind it.
And just like the OP, I agree that on HN these discussions always end up nowhere.
"It's all about money, not technology", and when you talk about technology:
"It's technology looking for a problem", and then you talk about use-cases: "A centralized system is more efficient".
> It smells like the .com boom/bust all over again [..]
Question: does being old enough to have lost money* - and having done so** - back in the .com bubble correlate with whether you're positive or negative about Web3 ?
"This Time Is Different" has been said by sales types since at least the year 1637
* Full disclosure: yes, I am
** Full disclosure: yes, I did .. not enough to have mattered, but enough to [still] remember
I made money during the dotcom era but am still negative because it reminds me of the worst parts of day trading. Not pets.com or Kozmo, which for all of their flaws were at least building something lots of people want to buy (both could have worked with less rushed expansion), but the sleazy pump-and-dump companies which had “here a miracle happens” in their business plans. I remember so many people doing the same “who cares about value, this number is going up!” pitch.
The same exact people that I saw domain squatting and left behind when told to put pop-unders on our pages are now closing their scammy SEO outfits to go full web3.
I've worked in the crypto space for several years as a software developer and I can confirm that this is true. Most projects have no interest in developing the technology. Some communities will actively go out of their way to suppress innovation. There is a lot of 'busy work' going on with many projects going in circles.
Like for example, you work for a company which claims to be working towards certain goals, then when you make some significant progress towards one of the main technical goals as an employee; instead of the project founders being pleased and giving you a bonus and rolling out the new tech to the community, they cancel everything, fire you from your job (or put you in a situation where you are forced to quit) and then they turn the entire community and their social network against you to ensure that you don't succeed outside the company... All against the stated goals of the company/project. True story BTW.
Apparently it's unfathomable that detailed, reasoned and thoughtful comments are actually critical of web 3. Here's a thought: could it be that web 3 actually deserves some legitimate criticism? Maybe HN is right and you're wrong?
This.
There isn't a Web 3, at least right now. No concept in the Web 3 craze would currently be possible or practical and if it was you can be very sure that the existing powers that be would shut it down to defend their position. Also valuing digital scarcity is sad and just a way the "haves" distinguish themselves from the "have-nots". The fact that anything can be copied freely and shared is the best part of the internet.
Plus all NFTs are a hilarious game of what marketplace it is published on. Give it 6 months, there will be massive fragmentation of the marketplaces and you'll see "NFT Artists" listing the "Original" on 50 marketplaces at the same time.
HN isn't being criticized for being wrong, but for being too critical and too partisan.
That kind of proves that there is no substance behind Web3, other than a hype train, saying that the technology will be useful someday. "get in now before it is too late."
People mostly email me about very specific topics. Nobody "still doing research™" about the broad topic of crypto is getting anywhere because they get bounced from the funnel immediately and paint the whole space with an equally as broad brush. Its decade 3 and this is where we are, so what do people really want to know? To me, there's lots of killer apps, to others I don't really care to debate any longer, who cares about "mainstream" when there's already 2-3 trillion dollars of value to attract to any product you release. It's not 2009 any more when most of this level of depth (or lack thereof) was relevant.
I personally wouldn't know where to point you, and sadly its more likely you too will run into disillusioning use cases from your own exploration (or wind up in a cult to bolster an implementation that is going nowhere). For me, it's been more interesting to accept that no state of the these technologies is set in stone, that I can influence the future state, and that the monetary incentives to build and influence the future state are phenomenal. Better option than smugly exploiting myself at an adtech conglomerate, for less money.
There is room for more specific things to be discussed, like if you look at the frontpage right now, there is a thread about "Deserializing JSON fast" or "A comparison of Rust and Zig". There could just as easily be discussions about "Solidity vs Vyper" or a thread every time a new version of one of those languages used in Ethereum Virtual Machines is out. Or node technology and processing transactions faster. Things that can inspire, but instead we just get these broad think pieces from wannabe angel investors and some influential VCs. As this is what makes it, it shows that this isn't the community to expect a deeper discussion right now.
> or a thread every time a new version of one of those languages used in Ethereum Virtual Machines is out.
But the majority of people interested in crypto don’t care about the technology, they are in it to get rich. Articles talking about the new technologies underpinning crypto do exist and get submitted, it’s just that to a rough approximation nobody cares about the actual technology.
Look at the level of discussion bitcoin had when it wasn’t realistically exchangeable for USD. That’s the equivalent level of interest from a pure technology perspective.
All of the noise today (including this article) are about the societal implications of disrupting this or that or enabling some other business/grift that wasn’t possible before. The technology is almost irrelevant at this point.
> The technology is almost irrelevant at this point.
There I disagree, my news feeds in other places are heavily populated by development discussion, and word travels fast in the crypto-sphere. So aside from noticing that HN consensus is distinctly not part of it, it would be hard for me to agree less or disagree more. But people are here, they just arent the active contributors and arent coordinated to elevate their posts and comments.
For example, I just had the realization that I could learn a new programming language to write smart contracts solely because I dont need to market myself to out-of-touch recruiters and hiring managers. Deploying stuff onchain is lucrative enough. This changes the entire incentive model of a software engineer, or even a founder’s new venture, as both would otherwise need to optimize for new and shiny web 2.0 frameworks just to attract talent or be attractive to the next company.
You might disagree, but it’s the case for how the crypto world works for the 99.999% who aren’t developers.
I’m not saying that you can’t get good RSS feeds, small communities, etc. I’m saying that any discussions about crypto are going to be completely dominated by the people that love/hate crypto fighting over the non-technical aspects.
This isn’t special to hackernews or crypto, it just happens with anything that becomes disruptive in a good and/or bad way to vocal segments of society.
The same thing happens if discussions were to come up about effective mask technology, better abortion methods, gun improvements, etc. The people actually interested and capable of discussing the technology are dwarfed by the people who have feelings they feel compelled to share.
That seems very interesting! But how does deploying stuff on-chain change the calculus? An unknown person with no Twitter following who's not a member of a Yacht Club/other NFT gang can deploy a contract, but getting people to want to use the contract seems to be a problem for a lone-wolf developer.
Or am I only seeing the tip of the iceberg for the ecosystem?
Getting people to use it is not as hard as you think, unless it’s an entirely new concept. Do more of what works and improves people’s experience, undercut fees from existing contracts. Or make a premium version for that audience segment.
AMMs
Farming
Bridges
Wrapping services
Zapping services (wrapping + amm lp + farming in one transaction)
Yield optimizers (slightly solving issue with LP farming and AMMs)
And if you create a token it advertises itself, bots watch for LPs on AMMs to interact and humans notice the interaction, but another area you can compete is based on how community minded the token is, versus obvious self enrichment
I intentionally chose not to make this a primer on all the acronyms
I also scan the blockchains for certain method signatures of previously popular, which appear when they are invoked. So I find copycat contracts this way, which helps me know about new projects and communities.
Either way to your original question: The time to market is extremely short, the funnel is nearly non-existent with crypto natives, and the overhead costs are lower if you can code - all compared to SaaS deployment or being employed by a SaaS service
> But the majority of people interested in crypto don’t care about the technology, they are in it to get rich.
"But the majority of people interested in TikTok don't care about the technology, they are on it to watch people dance and laugh."
The majority of people on the planet don't care about technology except what it can do for them. Having nuanced discussions about technology usually only interesting to a small subset of people. For many other technologies, HN is a place to have that discussion. But it hasn't been for crypto.
> Look at the level of discussion bitcoin had when it wasn’t realistically exchangeable for USD.
Bitcoin's first block was January 3, 2009. 10,000 bitcoin were famously exchanged for two Papa John's pizzas on May 22, 2010. The first bitcoin exchange, Mt. Gox, was launched July 18, 2010. So you're talking about a year and a half window since it was first conceived to have such discussion, less than 12% of the entire time bitcoin has been in existence.
And considering the name of the bitcoin paper is "Bitcoin: A Peer-to-Peer Electronic Cash System", there was probably some talk about it eventually being exchanged for USD right from the start.
> nobody cares about the actual technology
Yeah that's not true. On HN that may be more or less true (although I care about the tech and I'm on HN), but there's plenty of people that care about the tech and are discussing it in other channels.
It's crazy, I've had much deeper discussions about the tech with people who can't even program on channels on Discord than I've had on HN, ever, about this space. I'm still desperately trying to play catchup, they keep dropping articles and talking about things and concepts I haven't heard of before. And intelligently, too, not just "I like the web3 makes me money go fast moon please." like it seems everyone on HN assumes these people think.
There are people legitimately trying to do new and interesting (to me anyway) things with the space, and donating their time and energy and cash to try to build it and make it happen.
> So you're talking about a year and a half window since it was first conceived to have such discussion, less than 12% of the entire time bitcoin has been in existence.
It doesn’t matter. My point is that was the only time the discussion was actually dominated by people interested in the technology. It’s a reference to a point in time and the tone of discussion around then. I was in security academia at the time and discussions were level-headed about bitcoin, hash cash, and other digital currencies.
> there was probably some talk about it eventually being exchanged for USD right from the start.
There was, but that wasn’t the technology talk that dominated the discussion. There is a reason it sat around for so long until the famous pizza purchase. It was about the technology at the start.
> Yeah that's not true. On HN that may be more or less true (although I care about the tech and I'm on HN), but there's plenty of people that care about the tech and are discussing it in other channels.
To a rough approximation, it’s about 0% of the people interested in crypto though. There are maybe a few thousand actual active crypto developers (and that’s being generous). The number of people who buy crypto to invest/gamble is now in the millions. The conversations are always going to be dominated by topics surrounding the latter because it’s so controversial.
The only way to get to technical discussions is to weed out the people who don’t like it, so you basically have to stay off any general technology forums (HN, chunks of Reddit, etc).
> And intelligently, too, not just "I like the web3 makes me money go fast moon please." like it seems everyone on HN assumes these people think.
That’s a strawman of crypto detractors. It doesn’t help you to model opposing arguments that way.
> There are people legitimately trying to do new and interesting (to me anyway) things with the space, and donating their time and energy and cash to try to build it and make it happen.
Sure, but pretending to invent an entire new generation of the internet (“web3”) is overly grandiose and the better discussions happen around specific technologies.
> But the majority of people interested in crypto don’t care about the technology, they are in it to get rich.
So too are the majority of investors in anything there to make money; you think they care about 'The Project' past its profits for shareholders? Developers who are only in it to make money is another thing, but even that group has nuance - some of them understand that the best way to make money long term is to build something valuable, and don't expect to get rich in one month.
Please do write up and/or share more sensible articles of what “web3” is and what it does. I’ve read a few and they’re always the best arguments against it. Sure it might all sound good when all you have to say is vague things about it being interesting and exciting. But as soon as you pin it down to and show what you actually mean when you use the word then things are a little different.
This isn't specific to web3 but more crypto but the idea of having an integrated method of collecting royalties on resale of an item indefinitely is pretty exciting.
That said, the hype seems a little bit overblown. When people are so focused on "overthrowing Big Tech" as to why web3 will be the next wave, it just seems like hype over substance.
I forgot what the name of it was, but I tried to sign up to some web3 social media site. In order to even post, you had to drop $80 on the relevant crypto to post on the site. I understand the justification but that made me immediately just lost interest in the web3 space. Seems kinda like a pyramid scheme. The people who are already in get richer while the newcomers just get magic beans.
The concept of "collecting royalties" requires a legal infrastructure backed by a state's monopoly on force. Nothing about web3, as I understand it, will require someone to pay me in money that I can spend. People can still copy and redistribute my content (ie this post) and profit from it in various ways. The concept of a blockchain does nothing to prevent this.
But those platforms that let you use the scarce digital assets will. OT allow you to pull unlicensed copies from anywhere but from known endpoints, thus your digital copies are useless as none point to them. Similar to how you hosting www.google.com on your web server doesn't get any of the real Google traffic as none point to you.
So if the platform is doing all the heavy lifting, why do you need the blockchain again? i.e. what is the difference between this and YouTube? Blockchain is superfluous to this scheme
Blockchain is the immutable ledger, a place where if someone writes something down, it is guaranteed to not change, the immutable part. The difference between Blockchain/crypto/bitcoin and YouTube, is that the latter puts no guarantees about the content of a link, we trust Google.
If you go further, the content doesn't need to be a simple url, it could be data of any type. People get stuck on "who needs to pay for url, when I can copy the contents freely", but you're not buying simple url, you're buying a multidimensional point in the current manifestation
of what we think as web3/metaverse. This point is the intersection of your private key, Blockchain used and the content(url). This is valuable because none can claim the same point, and it is guaranteed not to change.
>multidimensional point in the current manifestation of what we think as web3/metaverse
But this is useless. The video is available with or without the blockchain. If you have DRM on the video, then you don't even need the blockchain. The blockchain can't actually do anything outside itself, and if you are trusting Metaverse.inc to enforce ownership, why can't you trust them to store it too?
> This isn't specific to web3 but more crypto but the idea of having an integrated method of collecting royalties on resale of an item indefinitely is pretty exciting.
Exciting for who though?
The only party who benefits from resale royalties is the creator of the NFT and/or the beneficiaries they designate. But what value do they offer the buyer and seller to earn this? In almost all cases, the creators of the NFTs aren't conveying any rights beyond ownership of the token itself. They're not even selling ownership of or rights to the digital assets (GIF, etc.) their tokens point to.
When you buy and sell an asset, you might very well pay a fee to a party who facilitates the transaction, like a broker. The fee is to compensate the broker for the value they provided in facilitating a deal. These middlemen are often maligned for the fees they charge even when the facilitation they provide seems minimal but that doesn't mean that giving creators of an asset a perpetual royalty every time the asset is resold is any better.
To me NFT resale royalties are actually one of those things that look worse than traditional finance. Imagine if a company sold stock to the public and as part of the deal, stipulated that each time a share was sold, it would receive a royalty of 10% of the new share price. Would buyers and sellers see that as a benefit or predation? And at least in the case of company stock, your share would give you actual ownership of a piece of the company and rights that come along with ownership.
With NFTs, you just get a token with a pointer to a digital asset that isn't yours. And for that, you might get to pay the NFT creator a "royalty". I haven't seen any articulation of why this is a good thing.
My feelings exactly. I'm also frustrated and disappointed with how discussions always end up stuck on the same tried and well-hashed points.
I don't want a "pro-crypto" echo chamber, but I also don't want what hn devolves into whenever these topics are brought up.
If you manage to find this reasonable place, please, please post it here as reply to your comment. I've favorited your comment and will check any replies to it for a month or two.
It is a thing but it's caught up in the viral mobthink of the web (amplified by the finance aspect) which makes it hard to evaluate unless you poke deep (groups like the one behind Cardano publish a lot)
I tend to look closely into projects that are outside of the echo chamber that can provide real world value and better economic models than web2 solutions.
My two favorites are:
helium where they build IoT global network, I use a helium GPS-alternative tracker for my moto which costs 10 times less than GPS tracker.
scPrime (although there are other storage alternatives) which build global S3-compatible storage using available disk space on HDs. There is a lot of real estate that is sitting right now that can be harvested for money easily with networks like this.
Helium is very much centralised because it has to (by the nature of their offering) lock down the end-user devices heavily. They have a single approved manufacturer last I checked.
It essentially operates as a unregistered and unregulated ISP and that isn’t something to be taken lightly. It does that by pushing all legal and regulatory liability to operators. There’s also a lot of scams with operators faking their signal etc.
Running a node also likely violates your ISPs ToS - can you contractually resell bandwidth?, so it has similar concerns as what AirBnB etc for the housing market.
There’s nothing stopping something large ISPs from blocking Helium traffic and/or suspending customers for running a node. Alternatively, if this gets big enough, you’ll see ISPs offer LORA hotspots of their own.
Ultimately, it is a very much VC-funded company running regulatory arbitrage on a global scale by using crypto instead. It’s the same if Uber decided to pay drivers in UberBucks a decade ago - that doesn’t change the offering, it just makes it easier to scale while pushing off any regulatory liabilities (including taxation).
> Helium is very much centralised because it has to (by the nature of their offering) lock down the end-user devices heavily. They have a single approved manufacturer last I checked.
As far as I can see there are currently 19 approved device manufacturers [0].
> It essentially operates as a unregistered and unregulated ISP and that isn’t something to be taken lightly. It does that by pushing all legal and regulatory liability to operators. There’s also a lot of scams with operators faking their signal etc.
Scams faking their signal will only help improve the robustness of the network on the long run as these are fixable issues.
Regulation seems to be spurring on every web3 conversation. I believe regulation is lagging behind user adoption and is a pending conversation. As for the exact scenario (LORA network) what kind of regulation do we __want__ the network to have? I don't think blocking user traffic is something we want to have, as an example you mentioned with current ISPs.
It’s not as much as “what regulations we want”, as “this is already a regulated space with every country having its own set of concerns and regulations.
This isn’t about Web3 though - Starlink for eg started accepted beta signups in India without a ISP license and was forced to go back on that. This is exactly kind of regulatory questions that Uber brought with it and it deserves the same level of scrutiny. Uber for eg, was forced to get a Taxi license in various jurisdictions.
Nice to see that they have more manufacturers though.
> Can someone recommend places to read or be involved in non partisan discussion about these topics?
The ethereum developers mailing list or something, I'd expect? I agree with your sentiment, I find the cutoff is "programming crypto stuff" vs "not doing that".
Actually I find the same is true of AI, if you don't know how to train a classifier or what a vector space is, your comment about AI is probably dumb.
Everyone's got opinions I guess, I just find builders have more varied, interesting things to say.
Ps. With crypto, i just think we are in a loop where the end result is failure. And the news flow/discussions are literally the same as in 2017 but with more buzzwords that even techies don't understand it anymore without spending ( significant) time investigating it. The average population doesn't really care and i need more arguments than "i think it's a thing".
Just like in 2017, one of the main problems is that the people vested in crypto want to convince people that don't care. And because of their money involved, they can't let it go.
Eg. The surreal spectacle of a president 'fixing' his country by shouting: "bought the dip" on Twitter every month.
Also for the web 3, i don't really see a reason for it. They claim decentralization, but if you look at eg. OpenSea, the power is not with the "people" and it's really expensive to "mint".
I don't know; I'm surprised you think this is non-partisan. You should visit /r/buttcoin. These are all valid arguments, IMO, and I share their sentiment. Web3, whatever it is, is looking like a massive mistake.
But yet the money continues to flow in. People who know nothing about technology in general are now investing in companies specializing in this technology. Why? Clearly, there's something there. Or maybe there really isn't. And this is the biggest grift ever seen. All led by ridiculous marketing.
I really do think this is all going to collapse. There's no way this clown car just continues endlessly without some repercussions.
It's likely that you will not find any 'agnostic' crypto tech discussion in public, simply because these conversations inevitably quickly attract speculators and those armchair experts who love the sound of their own voice. I suspect it will need something like a private r/cryptotech sub on Reddit to keep things relevant?
I am sorry, but that is like expecting a medical community built for the most parts by experts to be "positive" and have every day in-depth discussion on astrology or homeopathy. We have just seen so much of this lately, and can spot the obvious flaws in the technical basis of this "concept" that is, let us be honest, nothing more than a contradictory "brand" that is being pushed to all media in the name of freedom and decentralization, neither of which it actually provides.
When there is just so much on a flawed concept, you cannot expect discussion to keep rehearsing the same old "Web3 is a scam" talk, and seeing its promoters discourages further from any healthy discussion.
Perhaps the quality of arguments is an indicator here.
At this point in time I am tired of explaining the basics to new, naive newcomers who somehow think that distributed chains of hashes are some kind of new, breakthrough science.
I am tired in the same way as explaining to people that statistically they should vaccinate - the scientific base is already established but it looks like reasonable arguments no longer work.
There’s opportunity cost and I feel like a lot of web3 efforts to reinvent the wheel could be better spent on research into fighting cancer or genetic diseases.
> Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.
I think at this point we’re just so far past the point of having reasonable discourse on this topic that it will not be possible to have a reasoned discussion about it ever again, anywhere, regardless.
Personally I have to fight my own rising blood temperature to even discuss it as being “a thing”, because people have such fundamentally different views on what that thing is, and I believe the argument is made in bad faith (not by you or your comment by the way, just in general).
Adherents would have you believe that the current price, whatever it is at a given point, must mean some variant of “can all these people really be wrong? That’s ridiculous”. It’s not a reasonable starting point for a discussion, and then it immediately breaks down again.
The tldr of it is that to have a discussion we’d need to agree a common set of facts as a starting point.
To me, it’s a collection of distributed ponzi schemes based on signed linked lists, but it seems the whole world wants to agree that regardless of whether or not cryptocurrency is the future of money, blockchain is a really transformative and revolutionary breakthrough without any evidence to support that claim.
>Adherents would have you believe that the current price, whatever it is at a given point, must mean some variant of “can all these people really be wrong? That’s ridiculous”. It’s not a reasonable starting point for a discussion, and then it immediately breaks down again.
But it is reasonable to dismiss the whole field because you think it's a scam? Please read what you write before you post, as this is meaningless and illogical.
This is simply saying “can all these people be wrong?” in other words.
What I wrote is absolutely logical as best I can tell. I didn’t say it’s a scam (although that community is riddled with those too). I said it’s a collection of ponzi schemes (for which there is far more evidence to support than it being a financial revolution).
Charles Ponzi genuinely believed he had revolutionised finance, too.
All you’ve essentially said here is “Lots of people hyping on social media, therefore no scam, shut up fool”.
Based on my reasoning it is illogical and meaningless. Pretty sure same logic as the poster. You on the other hand are not providing anything, but read of what I posted previously, please stop.
Will try to explain my reasoning better. Please see my reply to one of the comments where we compare youtube and web3. tldr; youtube/Google can change content of a link that points to them at will, but in web3 you cannot.
This is a very specific to Hedera Hashgraph link. But they are based on ABFT based consensus algorithm and they have a governing council that includes Google and other entities. Their consensus mechanism requires a majority of nodes outside the control of Hedera - specifically from the Hedera governing council. It’s all public.
I’d start there.
The latest buzz, like Ethereum is on NFTs. Not a fan myself. I hold hbars, but wanted to share one example.
I don't know, seems kind of a stretch to say crypto is decentralized because everybody uses the same protocol. Is the IP protocol centralized too by that standard?
On the other side yeah, most of the goals of decentralization could be achieved by looking at things like the Bittorrent / Pirate / Scihub projects which have been delivering content consistently in a distributed way for decades.
A blockchain is only necessary if you need an immutable history for some reason for a specific part of a process that you want to implement, but every other part of the process can live apart and work without any blockchain tech.
That said, the reason tokens are tied to so many of these projects is to act as incentive and to quantify participation. There is no reason for people to, say, seed torrents aside from feeling good about sharing with other people.
Financializing this process brings an incentive to participate in decentralized projects that otherwise would have no way to exist. Sure, most of the projects will fail and perhaps only existed in the first place to enrich the founders, but isn't that true of the startup space as well?
The projects that succeed will succeed big, but I estimate we are still years away from an example that will be overwhelmingly convincing. By then most the profit will have been made and there will still be people on HN saying the whole cryptocurrency space is a scam. It is my opinion they are wrong, let history be the judge.
While torrents are great for some things (wrote my own bare bones client off of libtorrent and use it to send files to friends as well as download stuff, as well as merged it to work with my fork of opentraker that has a built in LSA search from hash-metadata mappings [0: that can also be distributed via torrents]), they are pretty poor at incentivizing people to seed unpopular content and have it be widely accessible, and tokens on various networks seems to have addressed that for specific applications (there are a bunch of decentralized aws-like type stuff popping up that involve a token, but I still think it will take some time for things to pan out).
Would be great if we could incentive via tokens people to run mastodon instances where people can log in with their address (and multiple chains tokens are recognized) because I personally have no desire for onchain social media like i do for onchain derivatives and exchange functionality.
What makes you think they are the most successful when Bitcoin has a near $1 trillion market cap? Even if you think its worth $0, you cannot deny that it securely locks up all that money despite the hacker honeypot. That seems like an accomplishment.
1. the possibility (but not guarantee) to operate in a hostile government / regulatory environment
2. the possibility (but not guarantee) to operate without a legal entity without shareholders / boards
Web3 is not a guarantee of decentralization or security or anything else that people often mistakenly attribute to it. Web3 has one superpower in that it can say a huge FU to gov and FU to big tech. Web2 can't.
That's it.
It's ok to be disappointed by this superpower. But after reading "the Sovereign Individual", I am a believer in this superpower as being incredibly meaningful and impactful in the longer span of human civilization.
I always felt like the possibility to operate in a hostile regulatory space is a bit of a strawman
for one, blockchains still use the "regular" internet infrastructure at the bottom. If said nefarious government wants to shut down the usage of a web3 service they don't care about the "decentralised" nature, they just cut it on infrastructure level.
as for the legal entity, this is a boon as much as it is a threat to running a service. The dominant stakeholders or miners in your network hold executive power here, the main difference is that you'll have no legal resort if things go south.
in short, i might give you a _possibility_ to evade bad actors outside your system. But it cuts away any regulatory recourse you'd had against bad actors _within_ your system.
Isn't it harder to operate in a hostile government with a centralized ledger? Once the government somehow gets a hold of which wallets you use, they will be able to track down all your steps.
I don't about other block chains but that's a problem that Monero has (partially?) solved by tying transactions to two other wallets each transaction so that it is hard to follow your steps. Of course it doesn't solve all other blockchains problems but I would be curious to see it discussed more. The main criticism I have seen about it is that it allows criminality to move funds under the govts radar, which is not a criticism I'd brush off lightly but I don't how do you combine privacy and protection from govts.
Reading monero's site I got the impression that it would be impossible to know who Bob and Alice are looking at the block chain alone. However, if you had Bob's secret keys you'd know all the money he received and, if you have the sender's private keys, you'd be able to know them too.
That's certainly better than bitcoin, but it's still worse than using cash or gold. In which case you may have no traces of transactions left behind.
If I was living under an oppressive regime, I'd be weary of using crypto instead of cash. However, the advantage that crypto has is to reduce control that democratic governments have over the economy. But it could actually be an asset in combating tax evasion. You'd be able to get a lot more with subpoenas and warrants.
> I don't about other block chains but that's a problem that Monero has (partially?) solved by tying transactions to two other wallets each transaction so that it is hard to follow your steps.
I would be very hesitant to recommend that to anyone who lives under an authoritarian regime rather than casually giving you plausible deniability for buying weird porn. Large scale analysis of the entire network will see through noise and I would especially question that being at all effective in an environment where clients are frequently compromised. If you have to worry about serious consequences cash is a lot less risky if for no reason other than that there’s no possible way to retroactively trace an old transaction.
A range of things we’ve seen in authoritarian regimes: sophisticated attacks like NSO, but also things like mandatory TLS CAs or government monitoring apps, police analyzing phones seized from dissidents or crossing borders, etc. or the very low-tech strategy of offering the guy you just nabbed a lenient sentence if he flips on his partners or having police informants pretending to be part of the underground economy (are you sure the local exchange isn't secretly compromised? That the app you're using doesn't have some intentional flaw?).
There are some people who’ll say their personal opsec is so good they’ll never fall prey to that but even if that was true it’s also everyone you transact with. If you’re living in a repressive regime, you have to worry about everyone you interact with as well, and that’s deadly for a currency network. It’s especially so for one nobody needs to use — if the police stop you and you have the equivalent of Venmo/PayPal on your phone, that’s not risky because millions of people use it and they follow local laws but if some cryptocurrency did successfully allow you to avoid government oversight simply having a wallet app installed would attract attention you don’t want. People who aren't trying to hide their activities won't want to risk that, which means that there'll be less volume in which to hide your transactions.
The problem with that superpower being the key thing is that only a small number of people care about it -- and actually run their own nodes, etc. The vast majority of the millions of users holding coins and NFTs hold them with middle men.
If I am a hostile government I'll simply shut your miner nodes down. It's like wearing blackclad outfit while wielding weapons in the broad daylight, it sends all the bad signal.
Trading tokens on a ledger definitely has zero impact on larger human civilization.
Im really entertained by other nerds making wild claims like this. It's like the internet is jumping the shark. We just don't know what to do with all this anymore. Problems are being created so we can come up with solutions nobody asked for.
Web3 is less centralized in that the user data is exposed and freely available to be composed upon.
For example, when someone makes a deposit (say of ERC20 USDC to earn interest, around 3.0% currently) on https://compound.finance, that data is freely available and the "receipt" becomes another token (the ERC20 USDC cToken). [1]
This token can now be used for other things, on any other protocol, without the involvement of compound itself. For example, there is a "compound" pool on https://curve.fi that allows users to deposit cTokens so that they can earn interest on their stablecoins while also providing liquidity for stablecoin swaps and earning swap fees as well on top. [2] In fact, with this pool, the user can deposit/withdrawal just pure ERC20 USDC instead and curve will deposit/withdrawal that into/from compound on behalf of the user, again, with no involvement of compound at all. (other than interacting with its "immutable" smart contract)
This deposit then gives the user back another ERC20 token "cCrv" that can then be used in other DeFi protocols without the involvement or authorization of curve.
At this point people are talking past each other because "centralization" can be used to refer to many things. The author's analogy is arguing about the direction/standardization of the technology, and the proponents of the technology are talking about the user data.
If I buy a house, I can take a credit on that house.
If I bought some stock, banks will let me take a loan on them afaik.
I can also borrow some money and choose something expensive that I own for a collateral.
Maybe crypto makes the last one easier, but then it will lead to a lot of fraud, because veryifing that the item I set as collateral is the difficult and expensive part.
Sure, but that information today is gatekept quite well and impossible for you or me to pull or integrate without partnerships or paying up heavily. For example, plaid is a company worth 13.4b where largely all they do is log in to your financial accounts on behalf of another (usually financial) institution to scrape your account data. If you try doing that yourself, you will be blocked by the risk systems of the various banks.
Other companies like mint and byallaccounts largely did the same thing and were aquired at $170 per account and $33 per account respectively. So obviously someone is making money on keeping your data gatekept.
No they don't gatekeep the information, your information is always available to you.
Maybe they don't offer the information in the specific way that you want, but that can also happen in web3(Propertery API, OAUTH2 which means you have to have static ip server for authentification,etc.).
You pay for the convenience of having your data aggregated in the specified format.
That aside, banks in the EU are forced to offer api services, as specified in the PSD2 standard.
I just don't see how doing everything in a web3 solves anything better than regulations.
> I just don't see how doing everything in a web3 solves anything better than regulations.
Maybe - but then, good luck getting every single country in the world, to agree on identical, completely open regulations way, way more advanced than PSD2. This is what ""web3"" (or more accurately, open and composable finance primitives such as Ethereum/alt-L1s and the surrounding ecosystem) achieves.
Look at it from the developer side, you (as a dev) cannot offer anything of you what you mentioned without government approval, but you can deploy a new yearn strategy to offer what GP mentioned. We can argue if that's good or bad, but for sure the latter is more decentralized since it doesn't require approval from a gatekeeper.
I would say that depends on the country you live in, but essentially you are saying web3 somehow doesn't get regulated and therefore is better.
The reason you wouldn't be able to simply start a website offering people loans would be because of laws, I see no argument that if you somehow use a different technology it is suddenly legal.
I explicitly said I'm not sure it's better or worse (largely depends in which country you're living I guess), but it's undeniably more decentralized than the current situation.
ahh, ok, then I can agree to some extent, altough I think the problem with product visibility and chain acceptance will make it more centralized in the long term.
Agreed. The one dollar-one vote concept is fundamentally flawed, but has become the main model for crypto community governance. There aren’t a lot of viable alternatives, especially as there is no concept of a person, just free, infinite wallets and limited coins. As such, the interests of the wealthiest steer the entire community, and a bad actor could derail a project with malevolent use of voting powers. Democracy is messy at best, but where there are no ‘demos’ its nigh impossible.
That's an interesting point. I would make the refutation that a system where large 'voters' in a DAO are forced to lock up their tokens after votes proportional to their power would prevent them from sabotaging the project, but if they had even more money at stake in a competitor its easy to imagine scenarios where such foul play may happen.
The interesting thing about governance is that it existed before the term: In Bitcoin the community governs the direction of the protocol by directing their hash power, perceived value, and simple use of the network towards their desired fork. You can't do this with contract tokens unless you want to fork the entire Ethereum Blockchain for the sake of one DAO.
Despite this limitation, if DAO pay to vote schemes could be combined with 'vote with your feet' you could have the clean, efficient governance of a DAO with the fully actionable emergency escape (a fork) in case foul play is sniffed out.
The existing internet is dominated by trillion dollar monopolies. How do you reconcile that Web3 is less democratic than a megacorp oligopoly than can unperson people at will? Web3 has decentralization, freedom of speech, anti-gatekeeping, permissionlessness and inclusiveness, at its core.
> Web3 has decentralization, freedom of speech, anti-gatekeeping, permissionlessness and inclusiveness, at its core.
We already have all of that in the existing web infrastructure, and have had it since the very beginning.
I can spin up a HTTP server on a raspberry pi running in my basement right now and anyone on the internet can access it for free and without any hinderence.
With web3 there is gatekeeping and centralisation as I cannot spin up my own server any more without buying crypto and then paying someone on a centralised database just so that I can do everything I could do before for free on my own.
> With web3 there is gatekeeping and centralisation as I cannot spin up my own server any more without buying crypto and then paying someone on a centralised database just so that I can do everything I could do before for free on my own.
Web3 includes all of the previous web technologies and adds optional layers on top. It is a superset of all web tech. You can totally setup an HTTP server on a Raspberry Pi, that's totally still Web3, but good luck building a truly scalable multi-million user application and competing with AWS on that.
If your app is such that it relies on user-generated content, it wouldn't be Web3 for you to host it exclusively on your Pi, because the users generating the content would not own it, or have guarantees that the data on the Pi was not being manipulated or misused by you. The key idea of Web3 is user ownership and community ownership.
> With web3 there is gatekeeping and centralisation as I cannot spin up my own server any more without buying crypto and then paying someone on a centralised database just so that I can do everything I could do before for free on my own.
You can set up your stack however you like. You don't even have to be using cryptocurrency for payments to be "Web3". You could, for example, allow someone to login with their Ethereum wallet and use their ENS domain name as a username in your chat app rather than adding Google Auth. That doesn't even require a transaction on the blockchain, it's just verifying a cryptographic signature.
Using certificate identities for logging in has been a thing since the 90s. It was (and is) still way better than passwords. The problem is that someone loses the cert and getting new ones is a usability disaster.
Websites intentionally switched to passwords because it was easier for users to understand. Web3 offers no breakthroughs here.
An Ethereum wallet linked with an ENS domain name is:
1) human readable
2) has an on-chain history that is verifiable and reviewable (important for establishing reputation in social applications)
3) benefits from UX improvements in Ethereum wallets, such as Argent's social recovery feature (https://www.argent.xyz/blog/argent-secure-decentralised-ethe...) as well as secure hardware wallets (which address the concern about losing a cert)
4) builds on the network effects of EVM-compatible wallets which makes the experience more familiar to more users
5) can integrate other features such as ENS-linked profile pictures, NFT verification, payments, crypto-based crowdfunding and donations seamlessly
6) user-owned
Can also drop the ENS altogether and embrace anonymity if the user or application desires. Still benefits from most of the above.
Any tech that embraces decentralization and user ownership is considered Web3, in my mind. And any website or application that leverages that technology as a first-class citizen is considered to be Web3, in my mind. It does not have to be cryptocurrency related.
That being said, I think EVM-compatible wallet login will be stickier and have broader network effects as there are exclusive services you cannot access without it (unlike OpenId, which is merely an alternative to other logins).
There is also a major economic incentive to build user-friendly wallet experiences (such as Rainbow, Argent, and Dharma mobile apps) as well as browser plug-ins (Metamask, Coinbase Wallet, etc) and hardware devices (Ledger, GridPlus, etc) and I think that ecosystem of competition is going to produce some big UX wins that OpenId will never really be able to compete with.
Which has basically failed, probably because of complexity for regular users. I don't know much about the crypto version of this, but it is probably more complex for a new user to get started with.
> If your app is such that it relies on user-generated content, it wouldn't be Web3 for you to host it exclusively on your Pi, because the users generating the content would not own it, or have guarantees that the data on the Pi was not being manipulated or misused by you. The key idea of Web3 is user ownership and community ownership.
Aren't most NFT assets hosted on cloud platforms? OpenSea on GCP for example
No. OpenSea is a centralized NFT marketplace not unlike how Coinbase is a centralized marketplace for fungible cryptocurrencies.
OpenSea uses GCP for hosting. But OpenSea does not own your NFTs nor choose where NFTs are hosted. OpenSea does use GCP as a caching layer for NFTs, since it's not scalable to fetch from thousands of different sources at load time.
An NFT is created by deploying a smart contract, and the creator of that contract is free to choose how that asset is hosted. Some NFTs are made entirely of on-chain (typically SVG) assets. Some choose IPFS and post the verifiable hash of the file on the blockchain (much smaller footprint and particularly important for large files). IPFS content must be pinned or hosted in order to guarantee availability and a lot of projects will rely on Filecoin or Arweave for decentralized archival of these assets. They may also host a pinning service on one of the big 3 cloud platforms for additional availability and responsiveness. In that case, even if the content was booted from the cloud co's site, the community could easily fall back on Filecoin or Arweave pin and move their content to another caching layer, with users having guarantee that the data matches the IPFS hash. And then again, some NFT projects do centrally host the content and metadata, and do so intentionally so that they can add interactivity or upgrades. For some NFTs, that's perfectly fine. It really depends on the goals of the creator. Not everything has to be perfectly pure. It's a spectrum of choice and optionality for users and makers. If you only want to purchase decentralized NFTs, then check the baseURI and contractURI of the contract (https://etherscan.io/token/0x1CB1A5e65610AEFF2551A50f76a87a7... as an example).
> Web3 has decentralization, freedom of speech, anti-gatekeeping, permissionlessness and inclusiveness, at its core.
No, web3 has "make as much money as possible" at its core - any of those other tertiary values are expendable in the name of getting rich. The trillion dollar companies also only care about getting rich, but they at least produce useful products, unlike the cryptocurrency ecosystem which is overwhelmingly made up of scams and vaporware.
No, it doesn't. That's a narrative you are imposing in your own head based on dubious surface-level analysis despite being hugely unfamiliar with the space.
For one, the author pointed out that Opensea NFTs are stored on the Google Cloud Platform, one of those trillion dollar monopolies.
Proof of stake means the largest stakeholders can unilaterally reject transactions. Technically the chain could fork. Practically, convincing everyone to move to a new chain seems about as difficult as everyone moving off Facebook because a few people get banned.
Proof of work means the richest people can afford more miners and completely control the chain.
So where is the decentralization? The only realistic decentralization I can make out is that its possible to build alternative chains, but that very thing is possible today. Its possible to build an alternate payment processor or social network if Visa bans your business, the really hard part is building it and getting the entire ecosystem to actually use it.
Opensea uses Google as a caching layer. NFTs on OpenSea can either be created by going through their centralized, counterfactual layer (which doesn't cost gas until someone purchases) or by deploying your own ERC721 smart contract to Ethereum or Polygon and hosting the content however you like. If you follow the ERC721 standard, you can take that NFT to any web store. It is not limited to OpenSea, even if that happens to be the most popular at this time.
> Proof of stake means the largest stakeholders can unilaterally reject transactions. Technically the chain could fork. Practically, convincing everyone to move to a new chain seems about as difficult as everyone moving off Facebook because a few people get banned.
> Proof of work means the richest people can afford more miners and completely control the chain.
> So where is the decentralization? The only realistic decentralization I can make out is that its possible to build alternative chains, but that very thing is possible today. Its possible to build an alternate payment processor or social network if Visa bans your business, the really hard part is building it and getting the entire ecosystem to actually use it.
On a POW system such as Bitcoin or ETH1, you'd need 51% or more of the hash power on the network, which is more than a hundred Google datacenters worth of hashpower, and you'd have to spend a vast amount of energy in order to execute the attack, and at the end of it all, the community would mount a fork and initiate a change that left your attack out of history. It is quite difficult to coordinate a vast amount of people to fork a major chain and have that fork be recognized as the New Bitcoin or the New Ethereum. That is where the decentralization comes in and where the guarantees of execution comes in. Blockchains are protected by cryptography and economics (game theory) as well as social consensus.
From V. Buterin: "Theoretically, a majority collusion of validators may take over a proof of stake chain, and start acting maliciously. However, (i) through clever protocol design, their ability to earn extra profits through such manipulation can be limited as much as possible, and more importantly (ii) if they try to prevent new validators from joining, or execute 51% attacks, then the community can simply coordinate a hard fork and delete the offending validators’ deposits. A successful attack may cost $50 million, but the process of cleaning up the consequences will not be that much more onerous than the geth/parity consensus failure of 2016.11.25. Two days later, the blockchain and community are back on track, attackers are $50 million poorer, and the rest of the community is likely richer since the attack will have caused the value of the token to go up due to the ensuing supply crunch. That’s attack/defense asymmetry for you. [1]"
The underpinnings of the web are effectively decentralized; I can host a blog for a nominal monthly fee and have a bunch of hosts competing for my business. It’s only become centralized because we’ve allowed our attention to become centralized, and given it all to twitter/facebook/etc.
We’re already seeing the same thing happen in web3. OpenSea can (and does) remove NFTs from its marketplace if it wants to. Like the web, there are other markets you can use, and you could even permissionlessly start your own, but you’d be giving up the attention that comes from using an established platform.
This is a real problem that will not, and can not, be solved by Web3. The power of corporate tyranny extends beyond the technological realm. It is political, cultural, and economic to name a few. You simply can't meaningfully challenge that with a technology alone.
I've tried Mastadon and Matrix (using Element). I think they're two of the best examples. But I think for none of these have quite nailed the UX of existing social networks (Mastadon's not quite as good as Twitter and Element is not as feature-rich as Discord). I really think it's as much of a UX problem as a technology problem and not enough decentralized projects have top-tier UX and UI talent to compete.
Mirror (https://mirror.xyz/) is an interesting Web3 alternative to Medium. I think they have gotten a lot of the elements right. Blog posts are backed up to Arweave perma-storage and they have easy point and click integration for crypto donations (with automatic splitting for multiple authors), NFT auctions, and crowdfunding.
At any rate, I think decentralized social networks are still nascent and we haven't yet seen a break out success on the level of Discord or Twitter or Facebook, but I remain optimistic that it will come.
Not only that, but the price is not adjusted to the local cost of living, making it more expensive to poorer nations. The payment gate isn't as high for every one.
I can't justify an internet that hinders the free flow of information.
I think this is a pretty weak article regarding web3. The author wants to claim Ethereum or Bitcoin are more centralized than HTTP, but that isn't a valid comparison. Anyone can spin up their own blockchain exactly in the same fashion of spinning up their own webserver. It's more comparable to something like AWS or Discord or Twitter. Now, I would still say the majority of all things developed on the blockchain are very centralized, from DAOs to NFTs to dApps. And I definitely agree that it's because they're mostly all cash grabs. But the articles being published every day criticizing the web3 world recently have been pretty terrible imo.
Yes, and it will be incredibly insecure unless you either convince a ton of other people to spin up nodes and act honestly in concert with you to run your network, or you build it atop Ethereum etc. Almost the only way to spin up your own is to come up with a world-changing idea, write a whitepaper and sell it to VC. So realistically people build atop Ethereum etc, and that still takes VC money because getting anything done on the famed World Computer is like booking time on a mainframe in 1976.
You don't need VC money to boot up your own HTTPS server on a traditional stack. There are lots of ways in which traditional stacks are not very censorship-resistant, and there are many ways to improve it. But at least anyone can participate on their own terms without having to either write a pitch deck and get funded, or accede to majority rule over some really important parameters of how their network operates. VC money alone is a much more pernicious influence on what will be acceptable behaviour than installing Nginx. The money required is just as heavy censorship as having to go through Visa to accept payments.
If you think "but what about email? Isn't it prohibitively expensive to run your own email server securely?", then you have fully understood the point about blockchains actually facing the same pattern of centralisation that the rest of the web does, but worse, because the alternative (your own big enough, secure enough chain) is comparatively even more difficult to adopt than the mainstream (Eth). You don't need ten million dollars and your own cryptographers and formal verification specialists to write or run an HTTP server, IMAP server, or IP network. Each of which you can do exactly as you please, essentially nobody else dictating how you do it and with costs at the bare minimum, and all of these interoperate with other people's just fine.
If you want an example of a "web3" technology that's not subject to these arguments, just look at IPFS. It's just a bunch of 20-year old ideas combined (bittorrent-esque peer discovery, mixnet routing, content-addressed blob hashes in git). None of the above problems are any worse than they are in Web 2.0, and it is leaps and bounds more censorship-resistant. You could plug in a permanent node or two today, subscribe it to a stream of authenticated tree hashes, and use it as your personal dropbox. If more people used it, you could just publish web pages there, by dragging and dropping a folder. If you have another technology that you think is a Web3 candidate, please compare it to that.
I recommend looking into BSV, as you can store data on-chain for cents, but it looks like any comment mentioning it will get automatically moderated for some reason.
Also you can use BSV (Bitcoin Satoshi Vision) to store the whole images on-chain, literally for cents on the dollar. And yes, BSV also has smart contracts, just like the original Bitcoin did. 53% of all transactions happen in BSV, more than Bitcoin, Ethereum and XRP together: https://bitinfocharts.com/cryptocurrency-charts.html
You've somehow managed to bring up the probably unique topic (utter contempt for Craig Wright) that squarely unites crypto-lovers (because they know him to be the worst kind of scammer) and crypto-haters (who believe Wright to be canonically representative of the entire space).
That's quite a feat, but I somehow doubt you'll get upvoted much.
Web3 is a highly ambigious term so there's no point discussing whether it's decentralized - it simply depends on what system you are referring to.
For the sake of simplicity we stick to the authors main claim. That Ethereum is centralized.
> while anyone can join the Ethereum or Bitcoin network, you can only join if you agree to follow the same protocol
In which other protocol is this not the case? Can you communicate with a web page without using the protocol that it required?
Furthermore, as blockchain protocols are all open source, they allow their network rules and data to be easily forked and run. This is not at all dissimilar to an example provided further that explains that anyone can run their own web network.
> Ethereum is only decentralized in the way that doesn't matter — you're free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
The opposite in fact. The author misses that Ethereum allows anyone to encode their own protocol into the network. Blockchain nodes, simply enforce that those rules are being adhered to by the participants. This is perhaps the only way that matters for what etheruem wants to do. Blockchains are not websites, their purpose is not to serve you data. The purpose is, given a pre existing set of rules - which anyone can code permanently into the blockchain, clients understand exactly in what way those states can transition, and are capable of executing the state transaction as equally as all other peers.
Let's take a practical example. Say you want to publish torrent links. I hope I don't need to explain why dencetralisation matters and what propoerties you are looking for. If someone encodes a smart contract on Ethereum that allows anyone to submit a name, along with a torrent link but not able to delete it. In the Ethereum world, this protocol lives forever more. On the traditional web world, you will:
- Have ISP, hosting provider take your website down
- The web owner may decide to arbitrarily take down specific torrents or the application as a whole
This is where decentralisation matters and what it means.
I’m very much interested in finding out the answer the “blockchain vs the DMCA” question.
A node operator serving any copyright content (irrespective of it being served over HTTP or a DLT) is liable. What happens when Disney starts suing node operators? Your ISP still gets a notice right?
How does DMCA handle steganography? For example, you could post hex-encoded bytes of a copyrighted image in a Facebook post - obviously a trivial example, but with a minor amount of effort and some more obtuse encoding it would be nigh-on impossible to tell otherwise. This is exactly what it looks like when putting copyrighted content on blockchains like on Ethereum. It's also _prohibitively_ expensive to store data on even alternative L1 chains.
That's a compelling argument against a certain type of concern trolling I will forever more be ignoring, but what about the instance of node sabotage by uploading such data? What is the network to do to safe-guard itself from being forced to break laws?
I don't get the argument. We all follow standards like HTTP, IP, ECMAScript and others that are developed by single entity. That doesn't mean it's centralized. It's like saying open source doesn't exist because most of the open source projects are hosted on github owned by microsoft.
It solves the urgent problem of the terrible scarcity of venues for financial speculation in an era of low interest rates and almost 0% real interest rates.
The economist Paul Krugman said that the cryptocurrencies had some of the same ballistics as gold, and gold does well when real interest rates are low, as people lack profitable investment opportunities and so they must seek increasingly aggressive and risky investments.
The cryptocurrencies have the advantage over gold that they can claim to not be gold, nor any known thing, they can claim to be something completely new, with unknown dynamics. This allows for a certain amount of hype that simply wouldn't be possible for gold.
And of course, in terms of ease of moving it around the planet, cryptocurrencies have some real advantages over gold, and therefore are probably stealing a lot of the risk taking that might have otherwise gone to gold.
It's best to heed Warren Buffet's advice to stay clear of investment opportunities you don't understand.
I'm seeing people in tech who are way smarter and more knowledgeable than I'll ever be, scratching their heads around web3 trying to figure out if there's anything of value. If they don't get it, I'm not going to get it, which either means I'm not smart enough to invest time and money in it wisely (as per Buffet) or it's all smoke and mirrors around a giant MLM or Ponzi scheme to relieve lesser fools of their money.
The discussions around web3 reminds me of the days when people were looking for a "killer app" for Web 2.0. Was there any? I don't remember much, but I don't think there was a single thing that stood out as "the" Web 2.0 app. I expect web3 to be more or less the same. A lot of buzz, not much material.
If you define Web 2.0 as content being created by users and using AJAX or something similar to create interactivity on websites, then I'd say Web 2.0 was enormously successful - Facebook, Twitter, etc. fit that definition.
I guess the big difference is that none of them got there by yelling from the rooftops, "Look at us, we're Web 2.0".
Web 2.0 was a post-hoc description of interactive web pages, there were no web 2.0 evangelists pushing web 2.0 as the future, it simply happened organically based on its own merit. The web3 movement is astroturfed by enthusiasts trying to make a buck.
> it simply happened organically based on its own merit
I think I agree with you. I'm not sure I agree with "organically", though - it happened almost instantly[0] when IE delivered XMLHttpRequest. It was irresistible because it was so useful.
[0] By "almost instantly", I mean over about 6 months. By the time Firefox delivered XMLHttpRequest, AJAX was already everywhere.
I don’t recall anyone looking for a killer web 2.0 app, because they already existed when the term was coined. Examples included Flickr and Wikipedia; YouTube came not long after.
They're missing the point. The web already allows you to easily spin up a private network where you can set all the rules. Web2 was the cash grab based on the realization that if you can bring all these people under a network you control you can run the web. Web3 is about the meta-features people care about that brought them onto web2 -- shared state, a common truth, enforceable rules -- but putting them at the protocol level, out of the control of a single actor. That takes trade-offs. (If you know how to solve these issues without these trade-offs, let me know and let's build it!) The original web is still there, and it's still useful. So is web2. This is about building an alternative.
The central premise of this article is that agreeing to use a protocol makes that protocol "centralized". This is nonsense, and so the rest of the article falls apart.
Web3 is a marketing buzz word and nothing more. You can have a decentralized app but it is still probably going through at least one centralized gateway. Until everyone is running IPFS or something similar and people are going to want to host multiple copies like a torrent, then you'll be stuck paying for and hosting the only reliable copy. You're also going to have a lot of people building some censorship control to prevent users from distributing illegal content. Otherwise that first use for Web3 would be pirated content.
The author is arguing if he were to use a different implementation of tcp/ip with the current web it would be the same as having his own chain, which is possible today, but completely meaningless as none would/could connect. Pretty pointless argument, the reasoning is just sad really.
I've said it before, and it needs repeating: we >need< hardware solutions for creating decentralized networks: mesh-networks, fog networks, etc. So far the solutions realistically are null: there has to be a way for the average person to buy the hardware, create the network or join one, and then use it.Software-wise there are some promising protocols but obviously you >can't< be sure how good they are until they're put to the test.And we don't even need protocols that work 100%, given that nowadays one can theoretically use software that adapts to whatever the conditions of the hardware are.I refrain myself to use buzzwords here, but the software is more accessible and you don't even need 100% compatibility between all the protocols out there, as long as you get that respective data correctly between A and B.
But there will not be any progress to any decentralized internet unless we get solutions to the average joe, the consumer, to do this.Obviously this is not in the interest of corporations, governments, and other entities that have control, but in the case of a disaster or collapse of a society, a change of regime towards a totalitarian state, what other viable solutions are besides hoping those in power will "bide by their principles"[assuming they exist]?
That's why frankly any decentralization software-wise is good but quite useless at the same time, including web 3.0, including anything running on IP protocol or through an ISP that is governed by a state.You literally have to cut <=5 "internet cables" worldwide and you got rid of the internet to the vast majority of the planet.Yes Starlink exists but how many people use it and how resilient is it?
The main problem is that unlicensed spectrum has limited range and most places don't have enough density to make it work when only <1% of the population is on the network. So it works in places like New York City. It requires a high enough density of people inclined to do this sort of thing. It could work elsewhere but it's kind of chicken and egg.
For longer range there is still Ham Radio. Check if they give the ham radio exam at your local hackerspace.
Interesting, i wanted to mention the NYC mesh network but i didn't knew about the specifics, i think your link is what i thought of which is nice.From what i recall it's pretty old aswell.'Sadly' I'm not in NYC so yeah..
Also if I recall there are some interesting projects like Helium but those are not necessarily about creating the networks but providing access and "getting the coin" by providing internet access to others.It's interesting but not that much, considering it's somewhat reliant on "the current internet" itself,the hardware is realistically somewhat expensive, and also given that the incentive is to "mine the coin" by providing access to a centralized service, there can be ulterior motives to it.
As for the laws & licenses for certain spectrums and allowed bands, I think ultimately people will not really care when "sh*t hits the fan".It's good right now to keep things tidy and not get chaotic, but i think the important thing is the availability of the devices themselves.
This is 100% true but even worse I think; a lot of people talk about blockchain being censorship-resistant... But what if Intel/AMD/Apple/NVIDIA are forced to have hardware blocks for specific wallet addresses for instance?
I'm still not 100% clear what web3 is supposed to be and why it's mostly advertised by cryptocurrency enthusiasts. We have IPFS and several projects like it, and web3 seems to be that but on a blockchain?
I think some grassroots web3 people will agree with you, web3 is not simply about blockchain and IPFS would certainly be included in their definition.
To answer your question, 'crypto' adds the ability to store valuable data trustlessly. This means any data for which there is profit in manipulating, user accounts, key-stores, accounting (obviously). In practice most of web3 should take place off chain - 'crypto' or blockchains are suited for the most important data. Its much like the difference between the foundation of the building and the interior - it may be easy to take for granted what you don't often see or interact with.
Storing user information on be blockchain not only sounds unnecessary, it's also illegal in the EU.
I get the advantage of blockchains and such for trading virtual currencies, but I'm still not sure why you'd need a public ledger to accomplish anything new that a standard PGP signature wouldn't already accomplish.
Is the idea of web3 to put the entire internet on some kind of blockchain to replace HTTP? Wouldn't that be crazy inefficient?
> Storing user information on be blockchain not only sounds unnecessary, it's also illegal in the EU.
It's necessary for the most basic of blockchain functions; you cannot transact and have a coherent model of accounts without identifying users on chain, even if its done confidentially. Unless owning coins on a blockchain is illegal in Europe, you'll have to clarify.
The extension of blockchain to store information other than account balance of the native chain is natural - so long as that information has comparable value to coins on the chain and you can justify it having all those properties. It's already massively useful for wrapped assets. If you can figure out how to make a crypto that only requires PGP keys then you've solved a massive problem about storing account balances or other information you would like to take on the properties of data on chain - congratulations.
> Is the idea of web3 to put the entire internet on some kind of blockchain to replace HTTP? Wouldn't that be crazy inefficient?
This comes up a lot. No. No serious, competent person in crypto has ever entertained putting the whole internet on the blockchain despite the being what many a skeptic retort. As I said earlier, as much should be off chain as possible, meaning either web2 or peer to peer access. When blockchains people use are a factor better at scaling this will include more and more data and uses. With current scaling and capital allocation (mostly in the slow, expensive Eth) the only businesses that can justify their existence on chain must offer some sort of monetary interest to their users.
I'm sure you have a lot more questions and well reasoned doubts that many in the crypto space have realized and are working on, I enjoy chatting about this stuff but am going to cut myself off before I go too long. If you wanna chat more you can always DM me.
I too, believe that while blockchain technology holds a lot of promise, it is not fulfilling the purpose of decentralization, due in large part to so many transparent cash grabs. The current crypto craze is nothing more than a fancy gold rush.
It will be interesting to see where blockchain technology ends up after the gold rush is over.
Nowhere. It will end nowhere. If you want to build consensus or make sense of things then a first past the post vote on the truth isn't helpful. This is all entirely motivated by cash grabs and not an interest in developing useful things.
Mate this is the third gold rush. Whether the price is up or down there are legitimate people working hard all the time; the ones who don't put all their energy into marketing.
What if I Set up a node with an independent protocol who has followed regulation and keep it up and all of us do the same....
Then WE- are web 3.
Its only centralized if we ALL do not stay true and totally redesign!--usually for profit.
Should we judge the chess board before we play?
Believing decentralization promises are gone again then, Jojo?
Dont believe scared billionaire news. They want you banking on CBDCs --and they cant get that until all of the threats (programmers contributing to HN) are full of disillussionment and quit dissenting and creating well designed decentralized blockchains.
Get away from sold out Bitcoin and ETH and coinbase and the like.
Node up with projects that are Designed for and Maintain Decentralizarion. My fav is Polkadot.
Doing Our part by never working for or supporting sold out protocols is centralizations' threat.
When CBDCs come around its free coins and those are going to be like zombie manna. Dont eat zombie manna.
So node up. We still write the rules!
Until its MUSK Web3, its still open game for us to make it-- ours.
What are you here for anyway?
Node up. Just pick an independent project thats adhereing to regulations.
Below is proof of my argument.
(view all for full effect)
"Whether a blockchain is centralized or decentralized
simply refers to the rights of participants on the ledger, and
is therefore a question of design."
BTW: I see people being confused about what web3 even means. If I had to define it I'd say its the group of technologies and infrastructure that support 'decentralized applications.' The term probably comes from Ethereum where several layers are used to run an application: like 'decentralized DNS' (find an app), 'decentralized file storage' (stores front end code), 'business logic for the application' (blockchain), and so on.
It's a powerful idea but it doesn't make sense to try write every app as a dapp. For example, there's probably no benefits to putting cat pics as a dapp and making them sharable in perpetuality. But a decentralized exchange could be useful.
One issue with Web3 is that there are already decentralized solutions in many categories that Web3 will supposedly solve and yet they never really caught on.
It just might be that general public really does not care about the decentralized part.
He throws around the phrase "Other Blockchains" pretty casually, but then only focuses on Eth. Many of the problems in Ethereum are solved in Avalanche in my opinion. That's why I've heavily invested in it. Avalanche is already PoS, it can support a high transaction rate (estimated >4500 tps), and it has something called SubNets, which is the secret sauce. Subnets can have custom vm's for example. The idea of an application moving to a custom subnet is you can horizontally scale, customize, and future proof itself.
> but global consensus is a goal that is fundamentally at odds with the goal of decentralization.
I’ve long fantasized that machines should “evolve” the network protocols they use to communicate. Parts of packet protocols they never use to communicate might gradually be dropped while common higher level portions always needing to be used might migrate lower. Of course more “formal” protocol specification would still be used when communicating with strangers.
In this it would be like the specialized jargon interest groups adopt.
That is certainly a cool idea, but how would a system like that cope with getting "wires crossed"? The nice thing about standard protocols (a form of consensus) is that there is a schema and at least at the transport level, there are no unambiguous values.
Without consensus, you have the risk of party A saying something, and party B interprets it in a different way than intent.
Wesley is complaining that people "are still using Discord"... as opposed to what? Stuff is being built. Right now everything is centralized, you have to give time for actual decentralized stuff to pop up and hopefully eventually replace old apps. That stuff takes time. Years, decades even.
Also, I keep seeing the "yeah but you can just run a centralized database/private ledger though", but how about I DON'T NEED TO run a centralized database/ledger and just use the public decentralized one?
I don't understand this kind of comment. Why not just use both? You don't need to convert your whole networth into crypto, only in the currency you actually need: to use the (decentralized) service you need to buy the service's cryptocurrency. The end user is still paying for the service they use, but instead of being a "balance" on a private centralized database it's an actual balance on a public ledger.
The only problem is that right now you need a wallet and to actually buy the token, but fiat on-ramps and wallets are getting better by the day, and the UX gap is closing. Eventually people will use "cryptocurrency" without even realizing it.
The name 'web3' has almost nothing to do with the world-wide web. The problem-space is focused on managing trust relationships (heavy focus on financial contracts but trust is so generic it extends to far more uses.) You can focus on infrastructure as part of that dynamic (decentralized platforms help build resilience), but its not the actual purpose of the tech. Comparing blockchain technology to the web misses the point of what is being built on top of new ledger technology.
peer to peer cryptocurrency networks are a weird corner case in open source software. they're open source and they're peer to peer... but they also form gigantic singletons that have applied cryptography level protocol strictness requirements.
i think the argument that many are trying to make is that perhaps you could see more openness built upon these singletons. whether or not that is true remains to be seen.
The author doesn't understand the primary goal. It's precisely to have global consensus that proceeds according to its logic - so if you own something it can't be taken away from you. Everyone running their own private blockchains isn't decentralization, it's federalization. In the internet context, we know exactly how it would look like - initially an ecosystem of independent forums, each a fiefdom of the moderating caste, or subreddits on an alternative reddit that doesn't have global administration.
Network effects would inevitably concentrate most activity to few hubs (which is how we ended with facebook, reddit, and twitter consuming the old internet of phpbb forums). Except instead of posts, now the new powers-that-be would have absolute control over people's wealth. What he in effect, unintentionally, proposes, is to give the equivalent of facebook absolute control over people's wealth.
In fact facebook itself tried exactly that with Libra - but fortunately got shut down by governments.
Honestly, I would prefer a state-run blockchain over the inevitable final form of his proposal. At least it would be regulated by actual laws instead of T&C that give the company near absolute power.
There were crypto experiments of this type, most notably EOS. They had their own 'court' that ended up blacklisting dozens of addresses based on weak claims of theft. Eventually all DPoS networks are going to decay to something like that - because with just few publicly known validators escaping legal liability for not enforcing confiscation and freeze orders from real world courts is impossible.
The scalability argument is true in isolation - everyone agrees it's currently a problem, but has nothing to do with centralization or not.
> The author doesn't understand the primary goal. It's precisely to have global consensus that proceeds according to its logic - so if you own something it can't be taken away from you.
How is global consensus not centralisation though?
Humans are notorious for disagreeing on everything. Having one global arbiter of truth/consensus seems implausible at best.
Anything that could provide global consensus will need to be backed by something formed from a human brain. And our brains are not perfect. We keep updating code because we miss things. Who would maintain the system for global consensus? And how would they not just be our new rulers?
As a perfect example you mention ownership as a feature of global consensus. What do you own with an NFT? Who enforces that ownership? What stops someone pirating an NFT image?
Ultimately this screams of solving a people problem with a technical one. That never works. Not without strong co-operation of the people involved, and even then technology plays a very small role in the solution.
> The scalability argument is true in isolation - everyone agrees it's currently a problem, but has nothing to do with centralization or not.
It does in that a truly decentralised system inherently cannot suffer from the scaling problems cryptocurrencies have.
>How is global consensus not centralisation though?
In the same way reality itself is 'centralized'.
Global consensus is meant to add a digital layer to reality. Reality is objective by definition. What's subjective is trying to measure it - but this problem doesn't exist for digital systems.
>Who would maintain the system for global consensus?
The practical implementation has to ensure that
(1) consensus is maintained by a diverse set of potentially anonymous participants. Ideally, this would mean literally all humans, but that's of course impossible. The set should be large and diverse enough so that even powerful actors (especially governments) have no ability to force them to do something.
DPoS, PoA fail here from the start. PoW is vulnerable over medium term: it has infinite economies of scale which leads to centralization and taking it over externally is always possible (because 'stake' in PoW is external and potentially infinite - mining hardware).
(2) the most profitable course of action is for every validator to follow the protocol honestly. In ethereum's PoS that's achieved by slashing maliciously misbehaving validators.
PoW has an orders of magnitude weaker punishment here (just mining rewards for the time spent on mining a minority chain). Most DPoS systems rely on the assumption that a majority is always honest, even if it makes financial sense to not be - eg. Cardano's Ouroboros.
>Who would maintain the system for global consensus? And how would they not just be our new rulers?
In the early period updates are necessary as system evolves - but eventually it has to be frozen, with the possible exception of scaling parameters (like block size, number of shards) which could be determined by a vote from validators.
>What do you own with an NFT? Who enforces that ownership?
There's no difference to real life here. "Owning" a house actually means there exists a publicly verifiable promise from an entity capable of wielding some form pf violence to enforce that property right. Therefore, an NFT that's connected to any external asset can only a different form of such a record.
In the case of image NFTs, it's an improvement on physical art. The point of buying physical art is to either signal wealth, or to use it for money laundering. Image NFTs are infinitely superior for the first - because they are globally visible (as opposed to a physical piece of art) and fake NFTs are impossible (so you can't buy a cheap replica and pretend you spent a fortune on the original). They are much better for money laundering because they are inherently global (no transport issues) and evade identity checks in the banking system.
Exactly like physical art, if you just like it and want to look at it - you can save a copy. A replica of physical art is free in the same way - you can save a photo of it. If you want a physical replica, in both cases you can print it. An actual replica of physical art would be more expensive, but in many cases orders of magnitude cheaper than the original.
Therefore, nobody buys expensive existing art just because they like it, which leaves two reasons I mentioned.
>Ultimately this screams of solving a people problem with a technical one.
Yes. The entire history of human civilization consists of solving social problems with technology.
> In the same way reality itself is 'centralized'.
Global consensus is meant to add a digital layer to reality. Reality is objective by definition. What's subjective is trying to measure it - but this problem doesn't exist for digital systems.
This was always going to get philosophical fast, but I don't think reality is strictly objective. At least not the representation of it we humans create to understand it. Look at the constant evolution of our understanding of the universe (and those who inhabit it). If we were to describe that as objective truth, it would be unquestionable. Instead the scientific method asks us to consider it as the best answer we have currently, until new evidence emerges.
I agree measuring reality is subjective, but thats the only way we can interpret it. Our eyes even lie to us to make up for deficiencies, for example your blind spot.
The key point here is underlying our shared reality is a shared truth. But neither of these are shared by everyone, and it's almost always too nuanced to pick one side and declare that the objective truth. Epistemology is centered around this challenge.
> (1) consensus is maintained by a diverse set of potentially anonymous participants. Ideally, this would mean literally all humans, but that's of course impossible. The set should be large and diverse enough so that even powerful actors (especially governments) have no ability to force them to do something.
An anonymous direct democracy? Even representative democracies are struggling to have a fully informed and engaged electorate. I love the ideal here, but practically I don't see it happening. In particular becuase governments have enough power to manufacture fake people to take over a system like that, particularly if it's anonymous.
> (2) the most profitable course of action is for every validator to follow the protocol honestly. In ethereum's PoS that's achieved by slashing maliciously misbehaving validators.
> PoW has an orders of magnitude weaker punishment here (just mining rewards for the time spent on mining a minority chain). Most DPoS systems rely on the assumption that a majority is always honest, even if it makes financial sense to not be - eg. Cardano's Ouroboros.
We have law enforcement and justice systems to account for when people do not act honestly. History proves time and again when the conditions are right, people will not act according the time's concept of honesty.
Blockchain was meant to solve the Byzantine Generals Problem right? That describes the need to communicate when not all actors are reliable.
Humans are not always reliable, sometimes maliciously so.
The bigger problem is that honesty is a question of morality, not logic. How can you encode that into a smart contract? Doesn't this mean we're swapping a judicial system for an unelected one?
> In the case of image NFTs, it's an improvement on physical art. The point of buying physical art is to either signal wealth, or to use it for money laundering. Image NFTs are infinitely superior for the first - because they are globally visible (as opposed to a physical piece of art) and fake NFTs are impossible (so you can't buy a cheap replica and pretend you spent a fortune on the original). They are much better for money laundering because they are inherently global (no transport issues) and evade identity checks in the banking system.
I mean I'm glad you said the quiet part out loud, because outside of money laundering it's hard to describe the NFT craze as anything but a bit suss.
Some of us buy physical art for the beauty and intrigue of it. Though not from Sotheby's.
NFT's as a record/marketplace for a physical asset backed by a means to legally enforce the ownership is something I can see happening.
But NFT's that record a log of ownership over a JPEG?
What's stopping me from making my own chain, and selling the same JPEG NFT there?
And then, how do we prevent the wash trading that's artificially inflating prices?
> Therefore, nobody buys expensive existing art just because they like it, which leaves two reasons I mentioned.
Ha agreed, though if they do they'd usually loan it to a museum. There are collectors who do it for the love of the art though, they exist.
> Yes. The entire history of human civilization consists of solving social problems with technology.
Fundamentally disagree here. At macro and micro scales social problems are solved with social solutions. I've seen this at enterprise levels and startups. If you try to tackle a social problem with a technical solution you alienate people and make the problem worse.
Technical solutions to social problems lack the humanity required for a meaningful fix.
A hilarious example is the type of solution that led to Goodhart's Law[0].
When a measure becomes a target, it ceases to be a good measure.
Probably the most famous example being[1]:
> In India while it was a British Colony, the Colonial Rulers wanted to reduce the number of snakes. So they offered to pay for dead snakes brought to them. Goodhart’s Law: Enterprising Indians began to breed and farm snakes to kill and get their reward, which was much easier than killing wild snakes, actually increasing the total snake population.
Built on centralization but the centralized platforms only offer NFT speculation and take a huge fee. I’ll get to the “only offer speculation” in a minute. First, a huge part of NFTs’ fundamental value is people perceiving these things as valuable, ownable, rights-assigning assets, but how much would this be true if there wasn’t OpenSea? Simply because one can look up and see them on OpenSea gives NFTs value. If OS went down for an extended period, top NFT collections would drop in value.
Also the only platforms that can exist at this point are JPEG “trading” platforms like OpenSea simply because speculation is the only thing that's profitable, and because there isn’t yet any legal precedent allowing real assets to be traded using ERC721. I mean, yeah someone can try to put their deed on IPFS but what happens when something like this hits a snag and has to head to court? The fact that no one can convincingly say a judge would side with the ledger is a huge, and the reason NFT use cases are stuck in casino mode.
> while anyone can join the Ethereum or Bitcoin network, you can only join if you agree to follow the same protocol that all the other nodes use.
Just reiterated definition of the protocol. Absolutely irrelevant to decentralization topic.
> The way this protocol is decided on is not exactly centralized, but it's not exactly decentralized either.
Decentralization is not "I do whatever I want". It's "other people can't force their arbitrary will on me".
> The entire blockchain world is focused on building systems for global consensus, but global consensus is a goal that is fundamentally at odds with the goal of decentralization.
Once again complete confusion of terms. Global consensus is on question of property. Property is by definition a right to thing that excludes everyone else's rights to the thing. This you can't have two different opinions about ownership and be able to cooperate effectively. Thus - global consensus.
This critique reminds me "blockchain + X" dynamic. You don't need blockchain if you are not talking about global consensus. You don't need blockchain for the use-case where HTTP is enough.
> Ethereum is only decentralized in the way that doesn't matter — you're free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
No! This way of decentralization matters a lot, since it deals with money. Go and read about people who got cut off the banking system as a result of political censorship.
> I care about decentralization is primarily to avoid global failures
Ethereum competes with banking system (global and local) and with great amount of other chains. Author problem is with notion of owneship / property, not with Ethereum.
> If you're trying to run a DAO, why build it on Ethereum... ?
Ethereum is a part of web3, not whole of web3. If you build your DAO on other chain, you will not have this problem.
> It's much more damning to me that the fundamental technology these people choose — Ethereum and similar blockchains — is more centralized than the web.
Author provides this claim while providing no evidence. And they even agree that blockchains are censorship resistant elsewhere in the text.
I see no point in continuing. This article is a critique by a person who got a wind of some buzzwords and now think that they can contribute an insightful opinion.
Yeah the whole point about "everyone agrees on a protocol therefore it is centralized" is one hell of a strawman. Centralized means "some small number of entities can unilaterally decide to change the rules". Anyone can change the rules at any time and users can decide to follow or not. This is just a hard fork.
So the argument starts with a (rather bizarre) claim that blockchains are centralized because one have to use the protocol that the rest of the network is using. The argument goes on with an attempt to contrast blockchains with the "web as it exists" and claim that one can "speak whatever protocol you want" in it -- with a caveat that "one have to put significant work" to convince others to use it.
It is quite ironic that author is basically explains the concept of a hard fork [1] while never even mentioning those. Most likely because he is not familiar with basic blockchain concepts. Or, to put it more bluntly, has no idea what he is talking about.
I agree that there's a little confusion in the article regarding the role of protocols in the decentralization equation. That said, I do think the larger point (global consensus protocols are just another form of centralization) is valid and worth discussing.
No - that's not a "little confusion". It is almost total lack of knowledge of the subject at hand. So many concrete examples by the author are not valid. Changes and forks in blockchain protocols happen all the time. You can start your own local blockchain in your own private IP subnet or whatever. You can create your own private ledger on the global net in less than a minute [1].
You could say that this new form of centralisation has the potential to allow governance systems that breakaway from, modify or usurp nation States. All of it being economically incentivised. This is pretty interesting IMO.
> The entire blockchain world is focused on building systems for global consensus, but global consensus is a goal that is fundamentally at odds with the goal of decentralization.
This whole article starts by missunderstanding logical and operational decentralization. Blockchain tech succeeds in allowing developers that don't know each other come to a consensus about how a financial system should work (logical centralization) and then operate an instance of that in a completely trust less, participatory environment (complete operational decentralization).
This is "works as intended" and explicitly good. It shows that consensus on what is right can be achieved over an anonymous internet.
Based on that, I'd say improbable that anything insightfull remains inside this article.
It is my observation that the time good programmers spend validating (with full or master nodes) on projects designed to be decentralized can win web 3.0 in our favor with protocols that don't plan on selling out for profit.
> The problem here is the profit motive: people who are working on web3 generally want to get paid for it, but it's fundamentally harder to extract rent from truly decentralized systems than it is from centralized ones. Because of that, people end up building systems that are centralized at their core, with some aesthetics of decentralization smeared on top, and call it web3.
There are a lot of dumb thoughts about web3 on HN; this is a valid criticism and it doesn't so obtusely assume that because web3 is new, it has grifters, and it has broken promises, that every issue arising from it is somehow unsolvable.
Laughs into my millions of dollars of investment earnings.
In all seriousness, I do get a wiff of traditionalists complaining about an emerging change that isn’t a straightforward understanding. Take Tesla short sellers for example: they just can’t contain their frustration for all the billions they lost over the past years and love to tell everyone about it and the haters come out in droves with theory of X and Y but no real theory is proven without s proper set of experiments.
We’ll be playing the crypto experiment for decades.
We need both decentralised internet and decentralised web.
Internet is an architecture issue. It was promised but not in real life. Due to isp and mobile intraf, like it or not, so easy to be firewall by national totalitarian country.
Web is originally decentralised as long as the people want to. There is nothing controlled you you must go through Facebook. That can change say if Facebook sent data to china as of now.
Frankly internet and web is still young. But we hope humanity can be free not bounded.
Handshake, to me, is an example of a better version than the current version of the web.
I would rather have a decentralized root zone on a blockchain than a centralized root zone controlled by ICANN.
This fixes a lot of problems, including no need to trust certificate authorities.
Others may not agree and would rather it be centralized and controlled by ICANN. But you can't deny that it is more decentralized to have the root zone on the Handshake blockchain.
All the arguments made can be made in the context of the internet as well. It is acknowledged at some places, but is then shoved aside with hand wavery counter arguments.
I also don't understand the jab at gcp for honoring DMCA. You're always reliant on an ISP on some level, there's no real self hosting from the bottom up without having to play nice with other parties, in this example, honor DMCA.
The problem is that everyone assumes crypto is some type of panacea. People keep saying transparency and distributed as keys words to engender an idea. People are believing the idea, but I’m skeptical the idea can “walk the walk.”
Could you show my grandmother how to see the transactions on the block chain easily for any crypto?
IMHO Web3 is more of an idea people are using to profit than a real thing to create equality.
Blockchain is horrible as it is totally logged and transparent for all. It is totally centralised from totalitarian country point of view. The security by covering up does not work for many, let alone you use this for web access.
Think China every time you do any human work. Be free and not be bound. Totalitarian does not pay for humanity.
I agree with you on some level - blockchains have an financial information leakage problem that needs to be addressed. But the difference with legacy systems is not on the government level - you don't have ANY financial privacy from your government, and this is by design. There is difference however in that on blockchain you have no financial privacy from anyone (so from other government, including totalitarian ones, from moral busy-bodies, from criminals etc).
There are some projects that try to address this. For payments that is (famously) Monero and ZCash. There is nothing in production for smart-contract-like capability ATM. But there are attempts to build such capability on top of ZEXE [0] paper and there is Aleph-Zero [1], which is unlikely to succeed (they bought DAG idea, and they will fail), but their research/code is likely to spawn better variants.
The only value I see with crypto and web3 is when we finally leave the earth and transactions need to be reconciled over billions of kms. Before then, it really doesn’t have much value. IOW, each planet or system would have its own fork. A “Wild West” scenario is the only time this kind of tech really makes sense.
The author thinks that to be decentralized, you should have your own chain. Holochain has one chain per app, more similar to what the author wants. It's not exactly a blockchain though. There are quite a few other non-blockchain projects
in development also.
Found an overview that shows non-blockchain projects. Not sure whether or not it's an accurate comparison of features, but it's the best of list I've found of alternative crypto technologies.
https://i.postimg.cc/05RJqbYB/SN-Comparative-Analysis-v4-1-I...
The cynicism in these threads on this topic is really something. It seems to correlate with an overall change in mindset in the tech space (maybe driven by the younger generation?).
I remember when startups and making lots of money was cheered on HN. A decade ago people would have been looking at the positives of this tech, figuring out how they could get involved and how they could make money and try to make it succeed. There was a much more optimistic atmosphere. It now seems that people making lots of money are reviled. It gels with the anti/post capitalism memes that are quite prevalent.
I’m not judging this view (I often find myself swinging between capitalist views and socialist views and try not to strongly subscribe to either) but I think it explains the cynicism in these “crypto” threads.
I disagree. I think the cynicism is there because the audience on HN is more aware of the technical aspects of crypto and thus has a better understanding of its flaws. The criticisms of web3 are legitimate, especially when it comes to the question of decentralization.
This is all possible today, no web3 required. Logins with client certificates were solved decades ago and "owning" items digitally is something many services can do for you, see Steam, Amazon Video, Apple iTunes etc. To get those services to give up control and put all their things into web3 is a pipedream.
Both of them are crypto in original meaning of the word. The difference - UX of wallet-based solutions is infinitely better that UX of browser-handled user certs.
"it's decentralized in that many people can join the network, but not decentralized in that people can't easily spin up their own networks that are separate from other peoples'"
Maybe he missed how Amazon switched off Parler's servers, or Google and Apple started censoring Mastodon clients that did not exclude gab.ai? If you want to do anything that may be disliked by current authorities, it may not be that easy to spin up your own network.
>>Ethereum is only decentralized in the way that doesn't matter — you're free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
This is centralization of logic, that establishes uniformity of the protocol, but it is a decentralized configuration of power, where every party is subject to the same rules for accessing the blockchain.
Fees are a limiting factor, but all data is treated the same with respect to fee calculation, irrespective of who submits it for inclusion in the blockchain.
The future belongs to all of us, it's just a question of which kind of future is equitable for the largest subset of the human population. One person's acceptable externalities could constitute their neighbor's breaking point. It's fine to say that creation and innovation are Good Things, all else being equal. But we need to ensure that the externalities of new creations are justified in light of the social good they bring.
web3 is a marketing term. There are some problems to be solved.
1) Giving more $$ and ownership to media creator than curator (platform).
2) Faster and efficient financial transactions.
3) Improving online identity.
These can be, and will be improved on incrementally from web2. If FB decides to pay more $$ to content creators and toggles the switch to better detect original content and give due credit, what is the business case for an equivalent web3 clone?
The opportunity for new so-called web3 applications will be because of inertia on part of existing platforms.
web3 is not there yet but people are putting sincere efforts to get there.
web3 is more open source than current centralised web, all contracts on blockchain can be read and forked, all coins are open source. forking coins, contracts, communities are all happening, new leaders emerge and consensus build, but new use case emerge where people and their motivations differs, the cycle of forking starts again.
NFT content storage is not completely sorted out, many are now using IPFS, we need couple of more distributed alternatives.
From a cursory look Arweave is not looking interesting: it start with lies that it is censorship proof, but with a way to remove child porn and spam because lawyers, and then lies that a one time payment buys storage for eternity, of course not. I stopped looking for other lies from there.
Really don't know why I bothered when there is the Andeersen Horowitz logo at the bottom of the page which tells you all you need to know, these guys would never fund anything that does not involve thinly disguised theft.
Cryptocurrencies are the ultimate example of this and are an absolute boon to tax collectors, forensic accountants and fraudsters. In our current economy financial transactions are recorded in millions of individual ledgers that are kept private, or in the case of cash transactions are often not recorded at all, or are not linked to an individual. There is no central ledger.
With crypto currencies however you can not only see all transactions but also trace them back to individual users as long as you can link a wallet to a person. This is a massive increase in centralisation yet discussion of whether this is a good idea seems to be entirely missing. The notion that centralising transactions in one place is somehow an example of decentralisation just seems mad.