I agree with the "disclosure" thing. I have about $1000 in Ethereum (which used to be $100), but I think it'll get a lot higher, so I haven't sold it yet. I've also made several donations on ERC tokens, worth about $300 total (summing for the value they were at the times of payment.) I don't have a significant amount of any other cryptocurrencies (except possibly Dogecoin from that old Reddit tip bot, back when Dogecoin was a joke.)
But there's a lot of wrong things in this article, which is disappointing because I generally like this author. But I don't think the author is being intentionally misleading.
TLDR of the parts I disagree with
Free CPU cycles have always been subject to abuse. I do agree the recent spike in magnitude of abuse is from miners. But the author states this is an entirely new thing, which is untrue.
Software has always had a profit incentive. I don't know where the "integrity and trust" the author used to have in the software industry comes from.
Proof-of-Stake isn't being blocked by those with money. They don't have any reason to. Those with money want Ethereum to move to Proof-of-Stake. The author doesn't explain the reasoning behind arguing that "they" don't want PoS to succeed.
As an example: Ethereum is the prime example used by PoS fans, because it is strictly necessary for it to move to PoS. It's 100% going to move to PoS.
Also, 'hard drives' are already used for many different proof-of-space cryptocurrencies. It's not "coming", it's already here.EDIT: I think the author is talking about a very new Proof-of-Space coin, Chia, which is causing HDD shortages.
There are a lot of parts I agree with though, this is just a list of parts I disagree with.
Ahem, here's my full reply, part by part:
Cryptocurrency has invented an entirely new category of internet abuse.
The way this is written makes it sound like botnets have never existed and that free CI/CD (and similar services offering free CPU cycles) have never been abused. Like, the author is obviously aware of password databreaches and SHA256 hashes, but also asks "what kind of abuse would a CI platform endure?"
Like, the pieces are already in the blogpost. DDoS botnets, password cracking, etc. I can show you tutorials on how to install hashcat or jtr on Google Colab to crack passwords, but I don't know of any tutorials to use it to mine cryptocurrencies. I definitely agree that cryptocurrency mining has increased the magnitude of abuse and that absolutely sucks. But it doesn't weaken the author's point to acknowledge that these services have been subject to abuse since their inception.
The integrity and trust of the entire software industry has sharply declined due to cryptocurrency. It sets up perverse incentives for new projects, where developers are no longer trying to convince you to use their software because it’s good, but because they think that if they can convince you it will make them rich.
Like, this gives the impression that the author is deep in some silicon valley nightmare bubbles. Does the author believe nobody was writing code for money before 2009? Has the author really not seen any open-source projects that aren't related to cryptocurrencies since then? Like, the author goes on to say "Which one are investors more likely to invest in? Hint: it’s the one that’s more profitable," and, yeah, this isn't a new problem either. They then go on to mention the DAO, which implies the author is pretty knowledgeable in this area, and then mentions how "they" forked the blockchain, as if it's something special only a reserved "they" can do.
The conspiratorial "they" continues on later, with this line:
Not to mention that any attempts at reform, like proof-of-stake, are viciously blocked by those in power (i.e. those with the money) because of any risk it poses to reduce their bottom line. No, your blockchain is not different.
Which is kind of wildly untrue. This point is the most misinformed, it's completely false. Like, I'm literally betting $1000 that the author is wrong here!
Ethereum is the second largest cryptocurrency and it's migrating to proof-of-stake. I'd love to know any reason why it wouldn't. Those with the big money are also willing to bet that, since they are extremely incentivized to move to proof-of-stake.
For starters, Ethereum on PoS is an eco-friendly, deflationary, and all of Ethereum's cool parts get better under PoS. Investors want those improvements to happen. More and more regular non-tech people will be interested in investing once that whole "eco-friendly PoS thing that will never happen" actually happens. You also have to keep in mind that regular people use Venmo and PayPal like it was a bank, and also don't know what FDIC means. Investors are extremely aware of how much money Proof-of-Stake can make them. But this huge profit incentive doesn't even matter, because it is strictly necessary to move to Proof-of-Stake, or it will die.
For context, Ethereum is effectively designed so that it will kill itself if Proof-of-Stake is not used. This is because of the "Ice Age", which makes mining exponentially more difficult over time. Within a few years, it will be impossible to mine new blocks. But there are currently two forks, one with PoW and one with PoS. Almost every new cryptocurrency you hear about is implemented on top of Ethereum, and most of them are running on the PoW fork.
It's not all just speculation and investment either. There are people running actual, useful software services for money on Ethereum, so there are actual software companies who's function entirely depends on Ethereum existing. So, even if you think it's all stupid, Ethereum is definitely going to finish its migration to proof-of-stake.
As a note, Ethereum's migration to PoS isn't a panacea. For starters, anyone can hard-fork and remove the difficulty bomb and keep mining if they want, but they'll be leaving the dApps and the other coins behind. But more realistically, they'll just sell their GPUs or repurpose their mining rigs for some other purpose, probably mining another cryptocurrency. The energy consumption will just be shifted out of Ethereum's hands.
As a final note, the author says "Rumor has it that hard drives are up next." I think the author is being misleading here as well, because that implies it hasn't already happened yet. "Proof of storage" / "proof of capacity" cryptocurrencies have already existed for many years.EDIT: I believe the author is talking about the Chia coin, which is a proof-of-space coin, which is getting popular for some reason and is causing storage shortages already.
twovests wrote (edited )
I agree with the "disclosure" thing. I have about $1000 in Ethereum (which used to be $100), but I think it'll get a lot higher, so I haven't sold it yet. I've also made several donations on ERC tokens, worth about $300 total (summing for the value they were at the times of payment.) I don't have a significant amount of any other cryptocurrencies (except possibly Dogecoin from that old Reddit tip bot, back when Dogecoin was a joke.)
But there's a lot of wrong things in this article, which is disappointing because I generally like this author. But I don't think the author is being intentionally misleading.
TLDR of the parts I disagree with
Also, 'hard drives' are already used for many different proof-of-space cryptocurrencies. It's not "coming", it's already here.EDIT: I think the author is talking about a very new Proof-of-Space coin, Chia, which is causing HDD shortages.Ahem, here's my full reply, part by part:
The way this is written makes it sound like botnets have never existed and that free CI/CD (and similar services offering free CPU cycles) have never been abused. Like, the author is obviously aware of password databreaches and SHA256 hashes, but also asks "what kind of abuse would a CI platform endure?"
Like, the pieces are already in the blogpost. DDoS botnets, password cracking, etc. I can show you tutorials on how to install hashcat or jtr on Google Colab to crack passwords, but I don't know of any tutorials to use it to mine cryptocurrencies. I definitely agree that cryptocurrency mining has increased the magnitude of abuse and that absolutely sucks. But it doesn't weaken the author's point to acknowledge that these services have been subject to abuse since their inception.
Like, this gives the impression that the author is deep in some silicon valley nightmare bubbles. Does the author believe nobody was writing code for money before 2009? Has the author really not seen any open-source projects that aren't related to cryptocurrencies since then? Like, the author goes on to say "Which one are investors more likely to invest in? Hint: it’s the one that’s more profitable," and, yeah, this isn't a new problem either. They then go on to mention the DAO, which implies the author is pretty knowledgeable in this area, and then mentions how "they" forked the blockchain, as if it's something special only a reserved "they" can do.
The conspiratorial "they" continues on later, with this line:
Which is kind of wildly untrue. This point is the most misinformed, it's completely false. Like, I'm literally betting $1000 that the author is wrong here!
Ethereum is the second largest cryptocurrency and it's migrating to proof-of-stake. I'd love to know any reason why it wouldn't. Those with the big money are also willing to bet that, since they are extremely incentivized to move to proof-of-stake.
For starters, Ethereum on PoS is an eco-friendly, deflationary, and all of Ethereum's cool parts get better under PoS. Investors want those improvements to happen. More and more regular non-tech people will be interested in investing once that whole "eco-friendly PoS thing that will never happen" actually happens. You also have to keep in mind that regular people use Venmo and PayPal like it was a bank, and also don't know what FDIC means. Investors are extremely aware of how much money Proof-of-Stake can make them. But this huge profit incentive doesn't even matter, because it is strictly necessary to move to Proof-of-Stake, or it will die.
For context, Ethereum is effectively designed so that it will kill itself if Proof-of-Stake is not used. This is because of the "Ice Age", which makes mining exponentially more difficult over time. Within a few years, it will be impossible to mine new blocks. But there are currently two forks, one with PoW and one with PoS. Almost every new cryptocurrency you hear about is implemented on top of Ethereum, and most of them are running on the PoW fork.
It's not all just speculation and investment either. There are people running actual, useful software services for money on Ethereum, so there are actual software companies who's function entirely depends on Ethereum existing. So, even if you think it's all stupid, Ethereum is definitely going to finish its migration to proof-of-stake.
As a note, Ethereum's migration to PoS isn't a panacea. For starters, anyone can hard-fork and remove the difficulty bomb and keep mining if they want, but they'll be leaving the dApps and the other coins behind. But more realistically, they'll just sell their GPUs or repurpose their mining rigs for some other purpose, probably mining another cryptocurrency. The energy consumption will just be shifted out of Ethereum's hands.
As a final note, the author says "Rumor has it that hard drives are up next."
I think the author is being misleading here as well, because that implies it hasn't already happened yet. "Proof of storage" / "proof of capacity" cryptocurrencies have already existed for many years.EDIT: I believe the author is talking about the Chia coin, which is a proof-of-space coin, which is getting popular for some reason and is causing storage shortages already.