ellynu wrote
Reply to comment by twovests in cryptocurrencies are good actually by twovests
i disagree with communism as being definitionally moneyless (unless we mean strictly marxist communism, i guess)
that would be the correct definition, yes.
so: how would you go about implementing that labour voucher? i mean this. i really can't see anything better than a cryptographically secured system for doing this
not an expert but i imagine you could do that just fine and not need a blockchain or anything. especially considering how slow they are at doing transactions and you would expect people to be creating and then destroying one like, once a day or so? billions of changes in state every day when cryptocurrencies seem to top out around a million or so currently, even if they continue improving that's off by a factor of 1000 or so. the cost per transaction seems really steep too.
or, 6,900 people get together and put together $10 each worth of ethereum. it's called pooling and it's been around forever
so everyone gets 1/6900 or 0.014492753% of what ever percent chance of a reward whenever more ethereum is made? seems like a raw deal to me, honestly. why wouldn't rich people have, say, 51%+ of the value of ETH in rich stakeholders split their holdings into 32 ETH chunks, become a ton of validators, then only validate themselves getting anything? the ethereum docs seem to just suggest this wouldn't happen because it would lose value, but what if they just work secretly? why assume that a bunch of people with tons of money are gonna act rationally? i mean... have you seen markets?
in proof-of-stake, extra coins are made by sitting on coins. money is made by buying those coins with money, and then sitting on the coins hoping others will buy them for more money later.
so cryptocurrency is not a currency, it is a commodity you trade money for to sit on in hopes it gains more value? what gives it value that say, beanie babies didn't have?
this isn't a problem with proof-of-stake. this isn't tied to choice of consensus mechanism, and this problem isn't unique to cryptocurrencies.
except it is a problem with it because the value of it is a bubble, and it apparently doesn't even work as a currency? doesn't have to be unique to cryptocurrencies to be a huge problem with them.
twovests OP wrote
especially considering how slow they are at doing transactions and you would expect people to be creating and then destroying one like, once a day or so?
they're slow when design to be slow. e.g. bitcoin is designed to take 10 minutes on average, while litecoin takes bitcoins exact mechanisms but chooses 2.5 minutes. ethereum takes about 15 seconds.
either way, this is a problem with a decentralized / distributed design, but implementing labour tickets would probably be centralized. there'd be no mining, no network fees, just the government signing transactions to citizens.
the reason for choosing cryptographic currencies is that you have a choice between paper currencies (and so you enter an arms race of counterfeiting) or a digital currency (which you'd probably want to secure, using cryptography). (i know, it's technically not a currency
so everyone gets 1/6900 or 0.014492753% of what ever percent chance of a reward whenever more ethereum is made?
The block reward would be small, but each party would be making some amount of interest on their stake. So, each party might earn 5% of their stake (rather than 5/6900 %.)
why wouldn't rich people have, say, 51%+ of the value of ETH in rich stakeholders split their holdings into 32 ETH chunks, become a ton of validators, then only validate themselves getting anything?
so, this is a good question. i don't have a Mathematically Correct Answer here because i don't understand all the innards of Ethereum's PoS. (it's more complex than 'traditional' PoS.)
one thing to note is that if they're just taking 51% of block rewards, that's not breaking ethereum or anything, they're just making some money. it's still a flat 2% per block, but they'll make about 51% of those rewards.
but what if they're misbehaving? one thing to note is that the 51% means they break a threshhold of probability assumptions, but won't have total control over the cryptocurrency. and when other validators see their bad behavior, their stake gets "slashed", so their coins just disappear.
but what if it's not 51%, it's something like 90%? the common thing is that, in addition to a 51% attack being costly, everyone will see it and either (1) fork the currency, or (2) stop using it.
proof-of-stake is better than proof-of-work here because, when we fork the currency, they lose all their power to perform the attack. with proof-of-work, they still have their ASICs / GPUs.
why assume that a bunch of people with tons of money are gonna act rationally? i mean... have you seen markets?
the thing is that this is well-known. like, it's not just "rational" as in "acting perfectly", it's "rational" as in, everyone knows it would just be throwing away money. in fact, the only way i could see such an attack is if someone wanted to destroy ethereum, such as by hacking numerous exchanges and staking. but i imagine in such an extraordinary and absurd case, the exchanges and the community would just hard-fork to a previously known good state.
more techy stuff here: https://eth.wiki/concepts/proof-of-stake-faqs
except it is a problem with it because the value of it is a bubble, and it apparently doesn't even work as a currency? doesn't have to be unique to cryptocurrencies to be a huge problem with them.
i mean, we won't really know if it's a 'bubble' or not until it bursts. and even then it can still have value. e.g. DAI, built as an ethereum token, will retain a value pegged to $1 USD. also, who's saying it doesn't work as a currency? wherever you can buy things with cryptocurrencies, bam, it works as a currency
re: the problem, i mean that it's not a problem with ethereum or any other cryptocurrencies that rich people get richer by investmenting, it's a problem with capitalism. but if anyone knows of any software or math that encourages wealthy people to give away their wealth then please let me know because that'd be cool as hell
ellynu wrote
the reason for choosing cryptographic currencies is that you have a choice between paper currencies (and so you enter an arms race of counterfeiting) or a digital currency (which you'd probably want to secure, using cryptography).
then its not really a cryptocurrency in any way brought about by bitcoin and all its successors, its just centralized servers with info on it. the majority of money is done via changing numbers on private ledgers anyways already, and this was true before bitcoin. banks and nations aren't mailing pallets of $100 to each other. all of this time and energy spent on cryptocurrency is, from that perspective, a complete and utter waste of time, at best.
The block reward would be small, but each party would be making some amount of interest on their stake. So, each party might earn 5% of their stake (rather than 5/6900 %.)
why not just have money in a bank account at that point, and then its regulated and insured by the FDC
one thing to note is that the 51% means they break a threshhold of probability assumptions, but won't have total control over the cryptocurrency. and when other validators see their bad behavior, their stake gets "slashed", so their coins just disappear.
how many validators are needed? what if they can't be? what if they could maliciously do so?
the common thing is that, in addition to a 51% attack being costly, everyone will see it and either (1) fork the currency, or (2) stop using it.
this is taking for granted that everyone would see it and immediately take countermeasures. there is none built in, its just expected that people will see it and stop.
also, who's saying it doesn't work as a currency?
i was referring to this, where you differentiated between making coins and making money:
in proof-of-stake, extra coins are made by sitting on coins. money is made by buying those coins with money, and then sitting on the coins hoping others will buy them for more money later.
that sounds less like a currency to me and more like a speculative commodity, where people buy into it in the hopes of making money. that seems to be the primary use of any cryptocurrency. in addition there is a tiny list of places where you can use it to exchange for goods. i could trade a magic card for my friend to buy me lunch, but that doesn't make it a currency.
DAI, built as an ethereum token, will retain a value pegged to $1 USD
why not just use the USD instead of a stablecoin? and what is backing it? other coins, or USD?
twovests OP wrote
then its not really a cryptocurrency in any way brought about by bitcoin and all its successors, its just centralized servers with info on it.
to specify, by centralized i mean centralized disbursement
the majority of money is done via changing numbers on private ledgers anyways already, and this was true before bitcoin. banks and nations aren't mailing pallets of $100 to each other.
they are, when it's necessary. the difference is that every $1 a bank has matches $1 worth of a bill (or treasury note) somewhere.
if i sign a message saying that there are now 2000 jstpst Coins, and that i'll give you a jstpst Coin for $1, and you pay me that and then i sign that message to your public key... then we just made a new crypto currency 8) and everyone can see our account balances
this is different than if, say, you gave me $1 and i stored that in a special vault and i stored that information in an SQL database and i double-pinky-promised the government to keep it safe.
tangential: just as banks "build on top" of paper dollars with this system of accounting and balancing (so they don't need to mail paper bills to one another), something called the "lightning network" builds on top of bitcoin. it's meant to make payments fast, tiny, and cheap. it actually works, but not everyone uses it.
why not just have money in a bank account at that point, and then its regulated and insured by the FDC
yeah you can do that. nobody is forced to stake. staking is entirely optional.
this is taking for granted that everyone would see it and immediately take countermeasures. there is none built in, its just expected that people will see it and stop.
there are plenty of countermeasures built in, like slashing. that's automatic. human eyes and hands correcting for bad behavior is the worst-case scenario that none of the countermeasures work.
that sounds less like a currency to me and more like a speculative commodity, where people buy into it in the hopes of making money. that seems to be the primary use of any cryptocurrency.
yeah, it is right now, except in some places where it's commonly used as a currency. as noted, you can use a stablecoin if you want something that doesn't vary greatly in value.
ethereum is one good example because it allows you to do computation using the blockchain as a computer. this is because ethereum's scripting language is stronger than bitcoin's. this is basically how DAI and other ethereum tokens (specifically, "ERC20" tokens) exist.
in addition there is a tiny list of places where you can use it to exchange for goods. i could trade a magic card for my friend to buy me lunch, but that doesn't make it a currency.
it does if a lot of people are using magic cards as a standard. if there were a tiny but noteworthy list of places using magic cards as a standard for trade, then yeah, it'd be a currency.
tangential, but one of the big reasons to use cryptocurrencies is that you can kind of see how the money is spent. if i give UNICEF 0.1 ETH, i can see how they're spending their cryptocurrencies. if i give UNICEF $200, then i just have to trust them on their reputation.
and, as awful as this sounds, item-duplication glitches in MMOs would basically disappear if transactions existed on a blockchain. there's a lot of reasons that kind of datastructure makes sense in the design of an MMORPG. there is so much blockchain/cryptocoin snakeoil bullshit but this is like... one of the three legitimate usages of NFTs.
why not just use the USD instead of a stablecoin? and what is backing it? other coins, or USD?
one would buy DAI if they want a coin that has a stable value while also being able to be converted (for free) to other ethereum tokens.
i don't really know how all the technical details of how DAI works so i can't answer that for you any better than their whitepaper can: https://makerdao.com/en/whitepaper/
Apparently it's "collateral backed", so it seems USD.
Anyways, this conversation has really diverged from the original discussion. to circle back, i was responding to this criticism of proof-of-stake:
so whoever has the most for the longest is determining who gets more? what is even the point of cryptocurrency then? it all just seems like grifts upon grifts, reinventing the current state of things but even worse this time.
which (1) proof-of-stake is better than proof-of-work in terms of "trickle up", but that's just a problem with capitalism. math and software isn't gonna fix it. (2) it doesn't impact the value of cryptocurrency. (3) i feel like we've had substantial discussion to agree that cryptocurrency isn't a "grift".
ellynu wrote
Apparently it's "collateral backed", so it seems USD.
its backed by other coins, like other stablecoins including tether, which is notorious and involved in pumping up the price of other coins
that's just a problem with capitalism. math and software isn't gonna fix it
this is true
it doesn't impact the value of cryptocurrency
i am still not convinced it has any real value, rather than just a bubble backed by the hopes and dreams of software devs and desires of grifters.
i feel like we've had substantial discussion to agree that cryptocurrency isn't a "grift".
it definitely is built upon grifts
twovests OP wrote
i am still not convinced it has any real value
i agree here, in the same sense that existing paper currencies have no real value. they're practically useless. but i can buy things with both of them.
ellynu wrote
fiat currencies at least have the value of being a generally accepted item with an exchange value that is easy to use to trade for things, and its backing is usually the existence of the states that made them and the institutions and laws they use to back things. bitcoin/ethereum/etc are mostly useful as a speculative commodity. in the terms of capital, they are much more M-C-M (exchanging money for a commodity, at the hope of selling it later for more money) than C-M-C (producing something to get something else that you need).
if tether, for example, was operating by minting regular currency rather than cryptocurrency, it would be so obviously a giant scam. creating fake dollars to buy other fake dollars to bump up their price to back the fake dollars they made and repeat.
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