Table of contents
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Online communities
- https://news.ycombinator.com/item?id=15134670
- rec'd by patio11 here
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- Warren Buffet
- patio11
- his HN comments containing the word 'bitcoin'
- 2014.08.05 - Kalzumeus - Harry Potter and the Cryptocurrency of Stars
- I found this a little hard to follow. Pictures might've helped. Rereading may help.
- Recently, a new cryptocurrency called Stellar was announced. This happens on a daily basis these days, and the vast majority of them amount to nothing. Stellar, on the other hand, is backed by Stripe (among a host of Silicon Valley bigwigs), designed to fix some issues with Bitcoin (a system/asset/community/engineering artifact/etc of which I am a notorious critic), and appears to be a protocol for value exchange which happens to include a novel asset to be used in a self-organizing distributed boiler room rather than the other way around.
So I thought it was worth understanding how Stellar works, at the protocol level. It turned out to be easier to explain with a story than a code sample. Hermione Granger: Some cryptocurrencies require you to wait while mysterious wizards called “miners” run hundreds of billions of magical maths spells, called a proof of work, to make sure no one is tampering with the block chain. One block appears roughly every ten minutes and a transaction needs to have been included in a block at least six deep to be settled. If we had settled this transaction with one of those cryptocurrencies, Mr. Ollivander couldn’t be sure we had paid him for about an hour, although that is just an approximation based on probabilistic reasoning and observed features of the protocol rather than anything deterministic.
Harry Potter: That sounds dreadfully inconvenient.
Hermione Granger: And it would be, but Stellarmus doesn’t use a proof of work system, it uses an iterative consensus algorithm, so confirmations are almost instant — closer to “a slow remote API request” than anything involving a blockchain. No mining happens and there is no duplicative work performed worldwide in the hopes of getting seigniorage.
Defense Professor: Right, and no currency network will ever, ever be more adopted than my network. Currency is the strongest network effects business.
Harry Potter: Err, Professor, don’t the Muggles’ currencies count as a network, too? I mean, you can send them by computer, and they have individual buildings which are worth more than all cryptocurrencies put together. In addition to that being, um, disproof by counterexample, even if the networks effect argument were true, wouldn’t that have been an insurmountable barrier against the success of your own network, which you appear to think is succeeding?
Defense Professor: Pah, the Ministry of Magic. Quite possibly the only thing I trust less than a goblin. While we’re on the subject of trust, Granger, why don’t you explain to the boys here what “trusting the network” means?
Hermione Granger: So in any distributed system you need some way to get everyone on the same page about what reality is right now. Consistency, availability, partition tolerance: pick any two. The Defense Professor’s cryptocurrency does this in a trustless fashion — no matter how many peers lie to you, as long as there is at least one peer who is truthful, you learn the true (consistent) state of reality.
Defense Professor: The truth will set you free.
Hermione Granger: Unless, of course, sufficient miners conspire against you, in which case they can retroactively overwrite reality at will. You have to trust them not to do that.
Harry Potter: I’m not feeling like anything is happening.
Defense Professor: Give me an hour or so to wait for confirmations and then this is totally on.
Have I mentioned that I don’t like Bitcoin? I don’t like Bitcoin. I’ve been working on a one-stop-shop explanation of why I don’t like Bitcoin, but haven’t posted it yet. Check back here on the blog if it interests you.
While I don’t like Bitcoin, I tried to be fair to the technical reality of it. To the best of my knowledge, no character in the above story ever tells a direct lie.
Do I like Stellar? Too early to tell. I haven’t really dug into it as an engineering artifact. The embryonic ecosystem does not yet have any tangible economic value. (And the Bitcoin ecosystem? *whistles*) Suffice it to say that at the moment it looks like a very interesting proposal for something that may some day be a toy, and some people I trust believe the toy may eventually be more than a toy, but I have no particular reason to believe or disbelieve that that will be the case yet.
- 2017.01.17 - HN - Ask HN: Why is the community so negative towards blockchain technology?
- Well since you asked.
Blockchain is the world's worst database, created entirely to maintain the reputations of venture capital firms who injected hundreds of millions of dollars into a technology whose core defining insight was "You can improve on a Ponzi scam by making it self-organizing and distributed; that gets vastly more distribution, reduces the single point of failure, and makes it censorship-resistant."
That's more robust than I usually phrase things on HN, but you did ask. In slightly more detail:
Databases are wonderful things. We have a number which are actually employed in production, at a variety of institutions. They run the world. Meaningful applications run on top of Postgres, MySQL, Oracle, etc etc.
No meaningful applications run on top of "blockchain", because it is a marketing term. You cannot install blockchain just like you cannot install database. (Database sounds much cooler without the definitive article, too.) If you pick a particular instantiation of a blockchain-style database, it is a horrible, horrible database.
Can I pick on Bitcoin? Let me pick on Bitcoin. Bitcoin is claimed to be a global financial network and ready for production right now. Bitcoin cannot sustain 5 transactions per second, worldwide.
You might be sensibly interested in Bitcoin governance if, for some reason, you wanted to use Bitcoin. Bitcoin is a software artifact; it matters to users who makes changes to it and by what process. (Bitcoin is a software artifact, not a protocol, even though the Bitcoin community will tell you differently. There is a single C++ codebase which matters. It is essentially impossible to interoperate with Bitcoin without bugs-and-all replicating that codebase.) Bitcoin governance is captured by approximately ~5 people. This is a robust claim and requires extraordinary evidence.
Ordinary evidence would be pointing you, in a handwavy fashion, about the depth of acrimony with regards to raising the block size, which would let Bitcoin scale to the commanding heights of 10 or, nay, 100 transactions per second worldwide.
Extraordinary evidence might be pointing you to the time where the entire Bitcoin network was de-facto shut down based on the consensus of N people in an IRC channel. c.f. https://news.ycombinator.com/item?id=9320989 This was back in 2013. Long story short: a software update went awry so they rolled back global state by a few hours by getting the right two people to agree to it on a Skype call.
But let's get back to discussing that sole technical artifact. Bitcoin has a higher cost-to-value ratio than almost any technology conceivable; the cost to date is the market capitalization of Bitcoin. Because Bitcoin enters through a seigniorage mechanism, every Bitcoin existing was minted as compensation for "security the integrity of the blockchain" (by doing computationally expensive makework).
This cost is high. Today, routine maintenance of the Bitcoin network will cost the network approximately $1.5 million. That's on the order of $3 per write on a maximum committed capacity basis. It will cost another $1.5 million tomorrow, exchange rate depending.
(Bitcoin has successfully shifted much of the cost of operating its database to speculators rather than people who actually use Bitcoin for transaction processing. That game of musical chairs has gone on for a while.)
Bitcoin has some properties which one does not associate with many databases. One is that write acknowledgments average 5 minutes. Another is that they can stop, non-deterministically, for more than an hour at a time, worldwide, for all users simultaneously. This behavior is by design.
I can go on, and probably will some other day. This is a bit of a hobby for me.
- Well since you asked.
- 2017.09.21 - Great Wall of Numbers - Eight Things Cryptocurrency Enthusiasts Probably Won’t Tell You
- HN discussion
- rec'd by patio11 here
It 'doesn't pass the test of a currency'
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