The Merge
September 17, 2022 7:28 AM Subscribe
Ethereum just completed The Merge — here’s how much energy it’s saving [The Verge]
Ethereum Merge: what it means for the crypto-currency industry [WEF]
How The Merge will slash Ethereum’s climate pollution [The Verge]
Ether’s New ‘Staking’ Model Could Draw SEC Attention [WSJ; ungated]
Ether Falls as Ethereum Revamp Turns Into ‘Sell-the-News’ Event [Bloomberg; ungated]
Obligatory: Man Who Lost Everything In Crypto Just Wishes Several Thousand More People Had Warned Him
Also obligatory: Web 3 is Going Great [previously]
Ethereum Merge: what it means for the crypto-currency industry [WEF]
How The Merge will slash Ethereum’s climate pollution [The Verge]
Ether’s New ‘Staking’ Model Could Draw SEC Attention [WSJ; ungated]
Ether Falls as Ethereum Revamp Turns Into ‘Sell-the-News’ Event [Bloomberg; ungated]
Obligatory: Man Who Lost Everything In Crypto Just Wishes Several Thousand More People Had Warned Him
Also obligatory: Web 3 is Going Great [previously]
It's incredible that some people are framing this as removing carbon from the environment. It wouldn't have been put there in the first place if you weren't chasing short term crypto bubble profits!!!! you idiots!!
posted by dis_integration at 7:44 AM on September 17, 2022 [36 favorites]
posted by dis_integration at 7:44 AM on September 17, 2022 [36 favorites]
GPU Mining No Longer Profitable After Ethereum Merge [Tom's Hardware]
posted by glonous keming at 7:46 AM on September 17, 2022 [21 favorites]
posted by glonous keming at 7:46 AM on September 17, 2022 [21 favorites]
I know nothing about how the deeper aspects of crypto mining works, so please excuse this probably silly question...
Won’t the ETH miners being put out of work simply repurpose their substantial hardware investment to mining BTC, or any of the other remaining proof-of-work coins, making the merge a moot point? Or, is it not that simple/easy/worthwhile?
posted by Thorzdad at 7:50 AM on September 17, 2022 [4 favorites]
Won’t the ETH miners being put out of work simply repurpose their substantial hardware investment to mining BTC, or any of the other remaining proof-of-work coins, making the merge a moot point? Or, is it not that simple/easy/worthwhile?
posted by Thorzdad at 7:50 AM on September 17, 2022 [4 favorites]
As much as I detest proof-of-work for the massive energy use and carbon footprint, I like that no one is really acknowledging that proof-of-stake is just accelerated capitalism: the more you own, the more you get. There seems to be even less reason to join, unless you're able to throw enough in to get tokens coming out of proof-of-stake. And then you need to find someone to buy those tokens, but that's back with the Line Goes Up post.
posted by Hactar at 7:50 AM on September 17, 2022 [18 favorites]
posted by Hactar at 7:50 AM on September 17, 2022 [18 favorites]
Yeah, I mean, good for the environment, maybe, but Proof of Stake has a ton of problems itself….
posted by GenjiandProust at 7:53 AM on September 17, 2022 [3 favorites]
posted by GenjiandProust at 7:53 AM on September 17, 2022 [3 favorites]
GPU Mining No Longer Profitable After Ethereum Merge [Tom's Hardware]
A PSA: Unless you are absolutely certain of the provenance, do NOT buy used graphics cards on the market - it is very likely that you will get a card that was used for mining, and is at the end of its life.
posted by NoxAeternum at 7:56 AM on September 17, 2022 [27 favorites]
A PSA: Unless you are absolutely certain of the provenance, do NOT buy used graphics cards on the market - it is very likely that you will get a card that was used for mining, and is at the end of its life.
posted by NoxAeternum at 7:56 AM on September 17, 2022 [27 favorites]
Because a lot of the NFTs are on ETH, this is better but BTC is still the top game in town and there's no real interest in transitioning to proof of stake there.
posted by Selena777 at 7:56 AM on September 17, 2022 [3 favorites]
posted by Selena777 at 7:56 AM on September 17, 2022 [3 favorites]
Ethereum just completed The Merge
Back in the 1970's, this was just the kind of headline I was expecting to be reading in 2022.
posted by fairmettle at 7:57 AM on September 17, 2022 [120 favorites]
Back in the 1970's, this was just the kind of headline I was expecting to be reading in 2022.
posted by fairmettle at 7:57 AM on September 17, 2022 [120 favorites]
Won’t the ETH miners being put out of work simply repurpose their substantial hardware investment to mining BTC, or any of the other remaining proof-of-work coins, making the merge a moot point? Or, is it not that simple/easy/worthwhile?It's certainly possible that another proof-of-work coin might get profitable enough to make it worth switching, but I believe the Tom's article suggest that none of them are right now (electricity costs more than the mined value received). As for Bitcoin, it has for a while been at a stage where only specialized hardware is good enough to make mining worthwhile.
posted by 3j0hn at 8:06 AM on September 17, 2022 [4 favorites]
Won’t the ETH miners being put out of work simply repurpose their substantial hardware investment to mining BTC, or any of the other remaining proof-of-work coins, making the merge a moot point? Or, is it not that simple/easy/worthwhile?
Mining BTC with GPUs is very inefficient in terms of capital and power. BTC is just pure hash crunching. There are mining specific ASICs that can do 100THash/sec for $10K. Even with the reduced price of GPUs, 10x 3090s is still an order of magnitude behind those ASICs for both performance vs capital outlay and power consumption. ETH was designed specifically for GPUs as a way to (in theory, at the time) democratize the mining process. It required a very large working set (3GB+) and lots of memory bandwidth to power the compute through that set. It was the memory bandwidth requirement which gave consumer GPUs the edge over ASICs, which are heavily compute based but zero memory bandwidth, in ETH mining.
Effectively there is no market for a PoW cryptocurrency that can be mined by GPU and no market for a GPU to mine a PoW cryptocurrency. That's why Nvidia has slashed prices on the 30 series and hence why EVGA has pulled out of the GPU market completely.
posted by Your Childhood Pet Rock at 8:07 AM on September 17, 2022 [16 favorites]
Mining BTC with GPUs is very inefficient in terms of capital and power. BTC is just pure hash crunching. There are mining specific ASICs that can do 100THash/sec for $10K. Even with the reduced price of GPUs, 10x 3090s is still an order of magnitude behind those ASICs for both performance vs capital outlay and power consumption. ETH was designed specifically for GPUs as a way to (in theory, at the time) democratize the mining process. It required a very large working set (3GB+) and lots of memory bandwidth to power the compute through that set. It was the memory bandwidth requirement which gave consumer GPUs the edge over ASICs, which are heavily compute based but zero memory bandwidth, in ETH mining.
Effectively there is no market for a PoW cryptocurrency that can be mined by GPU and no market for a GPU to mine a PoW cryptocurrency. That's why Nvidia has slashed prices on the 30 series and hence why EVGA has pulled out of the GPU market completely.
posted by Your Childhood Pet Rock at 8:07 AM on September 17, 2022 [16 favorites]
Back in the 1970's, this was just the kind of headline I was expecting to be reading in 2022.
Yeah, but back then we would have assumed it meant something threatening but deeply cool.
It would have been something like "The elders of the synthetic cyberspace religion Ethereum have announced, from their cyborg-assembled cathedral complex on the far side of the moon, that they have completed their transition to a fully hive mind entity."
Instead it's just "Our stupid software toy now burns less electricity."
I'm very disappointed with this century's ability to deliver on the promises it makes
posted by thatwhichfalls at 8:10 AM on September 17, 2022 [69 favorites]
Yeah, but back then we would have assumed it meant something threatening but deeply cool.
It would have been something like "The elders of the synthetic cyberspace religion Ethereum have announced, from their cyborg-assembled cathedral complex on the far side of the moon, that they have completed their transition to a fully hive mind entity."
Instead it's just "Our stupid software toy now burns less electricity."
I'm very disappointed with this century's ability to deliver on the promises it makes
posted by thatwhichfalls at 8:10 AM on September 17, 2022 [69 favorites]
From the "Ethereum Merge: what it means for the crypto-currency industry" article, Justin Drake, one of Ethereum’s key researchers leading the migration says,
posted by glonous keming at 8:19 AM on September 17, 2022 [37 favorites]
"The other interesting aspect of the Ethereum merge is that with Proof of Stake if we do suffer a 51% attack, we can precisely identify the attacker and eject them from the system. More than that, we can penalize them, including by destroying all their stake. And if they want to do a second attack, they have to rebuy."many decentral, such egalitary
posted by glonous keming at 8:19 AM on September 17, 2022 [37 favorites]
I'm very disappointed with this century's ability to deliver on the promises it makes
I’d settle for being able to by a decent bowl of ramen from a pedicab food truck in the incessant rain.
posted by GenjiandProust at 8:25 AM on September 17, 2022 [91 favorites]
I’d settle for being able to by a decent bowl of ramen from a pedicab food truck in the incessant rain.
posted by GenjiandProust at 8:25 AM on September 17, 2022 [91 favorites]
This is good because at a minimum it means that all these people trying to extract value from each other by selling each other things with dubiously-debugged smart contracts attached are now no longer doing it on top of a ludicrously inefficient database explicitly designed to burn insane amounts of energy doing useless calculations.
The crypto-mining world had already really moved to proof-of-having-a-lot-of-money long before people outside of it started noticing how much energy was being burnt, massive buildings full of computers diligently turning energy into waste heat and useless calculations aren't cheap. The dream that coiners sold of a world where everyone is part of the bank system and is occasionally the lucky one who gets a block reward died long ago.
Most of the news I've seen about ETH miners moving to other coins basically conclude that there are no chains they could mine that are anywhere near profitable enough to be worth it. There's time for that to change but not a ton, rent's gonna be due on those buildings full of computers, electricity bill's coming, employees gotta be paid. This is the first article on the subject on /r/cryptocurrency at the moment but there are a lot more versions of essentially the same article out there if you care to go looking. ETH miners splitting off a "Classic Etherium" chain that's still based on Proof-Of-Wasted-Energy doesn't seem to be happening.
Bitcoin is still around and still based on Proof-Of-Wasted-Energy, of course, and until that changes, cryptocurrency is still very much using an apocalyptic amount of energy to enable a whole lot of scams. There has been some noise about the Biden administration banning Proof-Of-Wasted-Energy but it is largely based on a couple of sentences in a recent White House paper on the overall subject that says the EPA and the DOE should develop some standards for energy usage and environmental effects. I don't expect that "should" to turn into "did" any time soon, never mind that turning into actual regulations that get enforced, but it sure will be interesting to watch if it happens.
posted by egypturnash at 8:36 AM on September 17, 2022 [8 favorites]
The crypto-mining world had already really moved to proof-of-having-a-lot-of-money long before people outside of it started noticing how much energy was being burnt, massive buildings full of computers diligently turning energy into waste heat and useless calculations aren't cheap. The dream that coiners sold of a world where everyone is part of the bank system and is occasionally the lucky one who gets a block reward died long ago.
Most of the news I've seen about ETH miners moving to other coins basically conclude that there are no chains they could mine that are anywhere near profitable enough to be worth it. There's time for that to change but not a ton, rent's gonna be due on those buildings full of computers, electricity bill's coming, employees gotta be paid. This is the first article on the subject on /r/cryptocurrency at the moment but there are a lot more versions of essentially the same article out there if you care to go looking. ETH miners splitting off a "Classic Etherium" chain that's still based on Proof-Of-Wasted-Energy doesn't seem to be happening.
Bitcoin is still around and still based on Proof-Of-Wasted-Energy, of course, and until that changes, cryptocurrency is still very much using an apocalyptic amount of energy to enable a whole lot of scams. There has been some noise about the Biden administration banning Proof-Of-Wasted-Energy but it is largely based on a couple of sentences in a recent White House paper on the overall subject that says the EPA and the DOE should develop some standards for energy usage and environmental effects. I don't expect that "should" to turn into "did" any time soon, never mind that turning into actual regulations that get enforced, but it sure will be interesting to watch if it happens.
posted by egypturnash at 8:36 AM on September 17, 2022 [8 favorites]
METAFILTER: very disappointed with this century's ability to deliver
posted by philip-random at 8:48 AM on September 17, 2022 [25 favorites]
posted by philip-random at 8:48 AM on September 17, 2022 [25 favorites]
I think it's unintentionally apt that the shift is from the "Prisoner of War" model to the "Piece of Shit" model.
posted by chavenet at 9:07 AM on September 17, 2022 [10 favorites]
posted by chavenet at 9:07 AM on September 17, 2022 [10 favorites]
As someone doing a lot of DNA and RNA nanopore sequencing in the coming months, I am very excited about this. GPU base calling is so much faster than CPU calling, but we've been holding off on purchasing hardware for a year or so because of what crypto did to the graphics card market. In a world of $500 graphics cards, science is gonna move faster.
posted by deludingmyself at 9:28 AM on September 17, 2022 [36 favorites]
posted by deludingmyself at 9:28 AM on September 17, 2022 [36 favorites]
This is great because the head of the SEC just said that PoS cryptocurrencies are almost certainly securities according to the Howey test. I'm SO EXCITED by this.
posted by seanmpuckett at 9:28 AM on September 17, 2022 [20 favorites]
posted by seanmpuckett at 9:28 AM on September 17, 2022 [20 favorites]
I like that no one is really acknowledging that proof-of-stake is just accelerated capitalism: the more you own, the more you get
Proof of work wasn't all that different - you need lots of money to buy mining hardware. Plus, the people who are really into crypto-currency probably see the speed-running of capitalism as a virtue.
posted by It's Never Lurgi at 9:31 AM on September 17, 2022 [8 favorites]
Proof of work wasn't all that different - you need lots of money to buy mining hardware. Plus, the people who are really into crypto-currency probably see the speed-running of capitalism as a virtue.
posted by It's Never Lurgi at 9:31 AM on September 17, 2022 [8 favorites]
The best part of crypto is watching it slowly reinvent the entire history of finance, and being shocked -- shocked! -- by things like bank runs and the existence of interest and how fiat currency works.
posted by Eyebrows McGee at 10:09 AM on September 17, 2022 [28 favorites]
posted by Eyebrows McGee at 10:09 AM on September 17, 2022 [28 favorites]
Let's hope that people that roll coal learn from this show of restraint and begin rolling tar sands shale natural gas.
posted by NoThisIsPatrick at 10:12 AM on September 17, 2022 [8 favorites]
posted by NoThisIsPatrick at 10:12 AM on September 17, 2022 [8 favorites]
When does the Treasury of the United States ,or China, issue and regulate crypto currency?.There must some plan for the future in place.
posted by hortense at 10:28 AM on September 17, 2022 [1 favorite]
posted by hortense at 10:28 AM on September 17, 2022 [1 favorite]
I think a big part of the motive for the Ethereum people is that a lot of corporate NFT projects had a lot of PR trouble for that association with energy waste.
They're now late enough that they've missed peak NFT hype, but I could believe it took them this long to turn the ship.
posted by RobotHero at 10:41 AM on September 17, 2022 [1 favorite]
They're now late enough that they've missed peak NFT hype, but I could believe it took them this long to turn the ship.
posted by RobotHero at 10:41 AM on September 17, 2022 [1 favorite]
Matt Levine at Bloomberg has a good analysis in his (free, unlike Bloomberg itself, tho maybe not when linked) newsletter. A key point is that, power a cited paper:
posted by Going To Maine at 10:43 AM on September 17, 2022 [3 favorites]
for investors, the advantage is that Ether post-Merge will resemble more of a traditional financial asset that pays interest, like a bond or a certificate of deposit. That could entice hedge funds, asset managers, and wealthy individuals who’ve stayed on the crypto sidelines so far.Interest would be paid, as I understand it, because your staked coins on an exchange will generate more ether for the exchange, which will pay it back to you. (Or, if you have enough coins, you just get interest by validating yourself.) The re-invention of interest seems like a pretty big deal for adoption of crypto (sadly), even if the reduced energy is deservedly the top-line story.
posted by Going To Maine at 10:43 AM on September 17, 2022 [3 favorites]
When does the Treasury of the United States ,or China, issue and regulate crypto currency?.There must some plan for the future in place.
I think that depends on what you mean by “crypto currency”. The point of ether and Bitcoin et al. is to be stateless. At least per Levine, the SEC is currently engaged in a campaign of talking about how crypto is definitely in need of regulation and qualifies as an unlicensed security, but has also been refusing to act in most any case despite claiming that it could. That said, you can definitely sit in on Congressional hearings about the US issuing some kind of token, though I have no idea what that means for progress on that front. China and other countries have banned crypto, but I don’t know what that means about the state eventually issuing a token.
posted by Going To Maine at 10:52 AM on September 17, 2022 [2 favorites]
I think that depends on what you mean by “crypto currency”. The point of ether and Bitcoin et al. is to be stateless. At least per Levine, the SEC is currently engaged in a campaign of talking about how crypto is definitely in need of regulation and qualifies as an unlicensed security, but has also been refusing to act in most any case despite claiming that it could. That said, you can definitely sit in on Congressional hearings about the US issuing some kind of token, though I have no idea what that means for progress on that front. China and other countries have banned crypto, but I don’t know what that means about the state eventually issuing a token.
posted by Going To Maine at 10:52 AM on September 17, 2022 [2 favorites]
I'm very disappointed with this century's ability to deliver on the promises it makes
It's true, we've ended up with the stupidest of dystopias.
posted by clawsoon at 11:02 AM on September 17, 2022 [5 favorites]
It's true, we've ended up with the stupidest of dystopias.
posted by clawsoon at 11:02 AM on September 17, 2022 [5 favorites]
(Maybe other people see this more often, but I think the The Discourse would benefit from more emphasis on the idea that Capitalism is inherently anti-state to the extent that the state wants your taxes.)
posted by Going To Maine at 11:02 AM on September 17, 2022 [1 favorite]
posted by Going To Maine at 11:02 AM on September 17, 2022 [1 favorite]
(Maybe other people see this more often, but I think the The Discourse would benefit from more emphasis on the idea that Capitalism is inherently anti-state to the extent that the state wants your taxes.)
As I understand it, the developments of capitalism and the state were tightly intertwined in many ways. Maybe it's more accurate to say that capitalism is anti-welfare-state, a relatively recent development?
posted by clawsoon at 11:05 AM on September 17, 2022 [1 favorite]
As I understand it, the developments of capitalism and the state were tightly intertwined in many ways. Maybe it's more accurate to say that capitalism is anti-welfare-state, a relatively recent development?
posted by clawsoon at 11:05 AM on September 17, 2022 [1 favorite]
When does the Treasury of the United States ,or China, issue and regulate crypto currency?.There must some plan for the future in place.
Why would they? They already have perfectly good currencies which they control.
There is no technical benefit from cryptocurrency unless your use case requires having a currency that is outside governmental control and legal oversight. That's the only scenario where any of this makes sense.
There's no magic "benefits of blockchain technology" behind all this. All of that is pure hype. We're a decade into this crap and the only applications that anybody has demonstrated are scams, crimes and ponzi schemes.
Bitcoin burns more power than Argentina and can handle about 7 transactions per second. The only way you can use crypto at scale as a mainstream currency, is if you only use the global ledger to settle up in bulk between a few big players, which is functionally what banks already do.
posted by automatronic at 11:09 AM on September 17, 2022 [24 favorites]
Why would they? They already have perfectly good currencies which they control.
There is no technical benefit from cryptocurrency unless your use case requires having a currency that is outside governmental control and legal oversight. That's the only scenario where any of this makes sense.
There's no magic "benefits of blockchain technology" behind all this. All of that is pure hype. We're a decade into this crap and the only applications that anybody has demonstrated are scams, crimes and ponzi schemes.
Bitcoin burns more power than Argentina and can handle about 7 transactions per second. The only way you can use crypto at scale as a mainstream currency, is if you only use the global ledger to settle up in bulk between a few big players, which is functionally what banks already do.
posted by automatronic at 11:09 AM on September 17, 2022 [24 favorites]
As I understand it, the developments of capitalism and the state were tightly intertwined in many ways. Maybe it's more accurate to say that capitalism is anti-welfare-state, a relatively recent development?
I believe the promise of ether, however, is capitalism without the state.
posted by Going To Maine at 11:12 AM on September 17, 2022 [3 favorites]
I believe the promise of ether, however, is capitalism without the state.
posted by Going To Maine at 11:12 AM on September 17, 2022 [3 favorites]
Bitcoin burns more power than Argentina and can handle about 7 transactions per second. The only way you can use crypto at scale as a mainstream currency, is if you only use the global ledger to settle up in bulk between a few big players, which is functionally what banks already do.
Power the WEC article, ether is working to get to 100,000 transactions per second. The future is coming.
posted by Going To Maine at 11:14 AM on September 17, 2022 [1 favorite]
Power the WEC article, ether is working to get to 100,000 transactions per second. The future is coming.
posted by Going To Maine at 11:14 AM on September 17, 2022 [1 favorite]
And then what? I mean maybe no one knows but so far there's very few use cases for it at all. I guess more scamming per second is what's coming but it's not like we've seen so much value locked behind the transaction gate.
posted by Carillon at 11:17 AM on September 17, 2022 [4 favorites]
posted by Carillon at 11:17 AM on September 17, 2022 [4 favorites]
Ethereum just completed The Merge — here’s how much less energy it’s saving wasting. FTFY HAND
posted by theora55 at 11:19 AM on September 17, 2022 [12 favorites]
posted by theora55 at 11:19 AM on September 17, 2022 [12 favorites]
And then what? I mean maybe no one knows but so far there's very few use cases for it at all. I guess more scamming per second is what's coming but it's not like we've seen so much value locked behind the transaction gate.
I dunno man, I’m not Vitalik Buterin out Mark Andreessen, but it seems like Ether wants to replace the dollar.
posted by Going To Maine at 11:19 AM on September 17, 2022 [1 favorite]
I dunno man, I’m not Vitalik Buterin out Mark Andreessen, but it seems like Ether wants to replace the dollar.
posted by Going To Maine at 11:19 AM on September 17, 2022 [1 favorite]
I dunno man, I’m not Vitalik Buterin out Mark Andreessen, but it seems like Ether wants to replace the dollar.
Considering that the US has been willing to go to war to maintain the position of the US dollar as the reserve currency of the world via being the currency of settlement for global petroleum sales, there will be some barriers to overcome to get there.
posted by clawsoon at 11:32 AM on September 17, 2022 [9 favorites]
Considering that the US has been willing to go to war to maintain the position of the US dollar as the reserve currency of the world via being the currency of settlement for global petroleum sales, there will be some barriers to overcome to get there.
posted by clawsoon at 11:32 AM on September 17, 2022 [9 favorites]
I feel like one of the useful things crypto could do is "replace Visa and Mastercard with something that doesn't funnel a modest percentage of the entire world's GDP into the pockets of private payment processors" but, well, FedNow is kind of aiming at that for the US with no crypto involved, and I think most of the rest of the world *has* free government-run payment networks? America's got such a bad case of early adopter syndrome in so many things.
posted by egypturnash at 11:40 AM on September 17, 2022 [4 favorites]
posted by egypturnash at 11:40 AM on September 17, 2022 [4 favorites]
I don’t think you want governments to be issuing cryptocurrency because it inevitably leads to tracking of all transactions and the parties thereof to prevent whatever the government is against today, real or imagined.
That’s two of the main problems today: it’s not backed by anything that everyone can agree has real value and it’s (mostly) anonymous.
posted by JustSayNoDawg at 11:47 AM on September 17, 2022 [5 favorites]
That’s two of the main problems today: it’s not backed by anything that everyone can agree has real value and it’s (mostly) anonymous.
posted by JustSayNoDawg at 11:47 AM on September 17, 2022 [5 favorites]
I think replacing the dollar is a steep climb! I also think you can make a lot of money and do damage to a lot of financial systems on the way there. They are on the road, and they aren’t going to get off it unless something big happens. Like, say, Tether losing its peg…
posted by Going To Maine at 11:49 AM on September 17, 2022 [2 favorites]
posted by Going To Maine at 11:49 AM on September 17, 2022 [2 favorites]
SHE-HULK: ATTORNEY AT LAW SMASH!!!
posted by y2karl at 11:58 AM on September 17, 2022 [2 favorites]
posted by y2karl at 11:58 AM on September 17, 2022 [2 favorites]
Seems like it might be a right turn for the second season, but I’m for it.
posted by Going To Maine at 12:04 PM on September 17, 2022 [2 favorites]
posted by Going To Maine at 12:04 PM on September 17, 2022 [2 favorites]
Right I hear what you're saying about what they want to do, I'm saying so what? There's a lot of people who say crypto will make art better or replace the dollar, etc etc, but no matter the energy costs or transaction numbers there's so far no value to crypto other then scamming.
posted by Carillon at 12:36 PM on September 17, 2022 [3 favorites]
posted by Carillon at 12:36 PM on September 17, 2022 [3 favorites]
"...Proof of work wasn't all that different - you need lots of money to buy mining hardware...."
posted by It's Never Lurgi at 11:31 AM on September 17 [3 favorites −] Favorite added! [!]
While I put it in the context of "primitive accumulation" (which is really all they're doing, from graphics cards to "crypto" itself, groundfloor-ism...
But then - that your quote made me think... Proof of Stake is just cutting out the middle-card.
posted by symbioid at 12:41 PM on September 17, 2022 [1 favorite]
posted by It's Never Lurgi at 11:31 AM on September 17 [3 favorites −] Favorite added! [!]
While I put it in the context of "primitive accumulation" (which is really all they're doing, from graphics cards to "crypto" itself, groundfloor-ism...
But then - that your quote made me think... Proof of Stake is just cutting out the middle-card.
posted by symbioid at 12:41 PM on September 17, 2022 [1 favorite]
it seems like Ether wants to replace the dollar
And those people who bought a copy of Jodorowsky's Dune storyboards wanted to start a billion-dollar film franchise, and the people buying old cruise ships want to establish libertarian sea-colonies, and my nephew wants to be the President, a Fireman, AND a Super-Spy at the same time. I think he's got the best chance at success.
posted by Saxon Kane at 1:29 PM on September 17, 2022 [19 favorites]
And those people who bought a copy of Jodorowsky's Dune storyboards wanted to start a billion-dollar film franchise, and the people buying old cruise ships want to establish libertarian sea-colonies, and my nephew wants to be the President, a Fireman, AND a Super-Spy at the same time. I think he's got the best chance at success.
posted by Saxon Kane at 1:29 PM on September 17, 2022 [19 favorites]
I dunno man, I’m not Vitalik Buterin out Mark Andreessen, but it seems like Ether wants to replace the dollar.
Which is FUNNY, because the only reason five nines of Ethereum users (and crypto users in general) care about Ethereum is because they can sell ETH for USD.
posted by Pope Guilty at 1:33 PM on September 17, 2022 [3 favorites]
Which is FUNNY, because the only reason five nines of Ethereum users (and crypto users in general) care about Ethereum is because they can sell ETH for USD.
posted by Pope Guilty at 1:33 PM on September 17, 2022 [3 favorites]
The merge as covered by Scam Economy.
posted by The Ardship of Cambry at 1:40 PM on September 17, 2022 [2 favorites]
posted by The Ardship of Cambry at 1:40 PM on September 17, 2022 [2 favorites]
“I feel like one of the useful things crypto could do is "replace Visa and Mastercard with something that doesn't funnel a modest percentage of the entire world's GDP into the pockets of private payment processors”
I hear this idea echoed a lot, and while I agree there a fair bit of skimming (hah!) going on, I don’t know that folks actually understand or appreciate exactly how much risk the card networks and issuers carry.
The base cost of a credit card transaction (swipe fee plus % of net) goes to pay bankers and fund Olympics ad campaigns, true, but it also sets up what amounts to a big insurance policy for everyone using the network, from cardholders to merchants and everyone in between. Disputes/chargebacks, automated fraud detection, and even niceties like being able to roll your card number as needed don’t come for free in a cryptocurrency-based system.
I can’t really imagine doing significant exchange of goods and services atop crypto payment rails without some sort of external insurance to cover fraud, hacking, and disputes. Odds are that insurance would be priced based on my transaction volume, perhaps with some minimum fee per transfer. As a customer/user of this tech, I might even want a “hard copy” representation of my wallet address/public key/etc. for interacting with merchants offline.
All of which seems strangely familiar somehow…
Anyway, I’m all for competition amongst safe, legal payment networks. “We’re cheaper because there are no rules or taxes” isn’t competition, though; it’s declaring regulatory Calvinball. It also sounds kind of fun as long as literally no one using said network is unable to soak a loss of the entirety of their “wallet” as a routine part of doing business.
posted by rcoder at 1:45 PM on September 17, 2022 [12 favorites]
I hear this idea echoed a lot, and while I agree there a fair bit of skimming (hah!) going on, I don’t know that folks actually understand or appreciate exactly how much risk the card networks and issuers carry.
The base cost of a credit card transaction (swipe fee plus % of net) goes to pay bankers and fund Olympics ad campaigns, true, but it also sets up what amounts to a big insurance policy for everyone using the network, from cardholders to merchants and everyone in between. Disputes/chargebacks, automated fraud detection, and even niceties like being able to roll your card number as needed don’t come for free in a cryptocurrency-based system.
I can’t really imagine doing significant exchange of goods and services atop crypto payment rails without some sort of external insurance to cover fraud, hacking, and disputes. Odds are that insurance would be priced based on my transaction volume, perhaps with some minimum fee per transfer. As a customer/user of this tech, I might even want a “hard copy” representation of my wallet address/public key/etc. for interacting with merchants offline.
All of which seems strangely familiar somehow…
Anyway, I’m all for competition amongst safe, legal payment networks. “We’re cheaper because there are no rules or taxes” isn’t competition, though; it’s declaring regulatory Calvinball. It also sounds kind of fun as long as literally no one using said network is unable to soak a loss of the entirety of their “wallet” as a routine part of doing business.
posted by rcoder at 1:45 PM on September 17, 2022 [12 favorites]
Does this mean that we're back to the post-2008 dream of a libertarian paradise where Ron Paul looks like a moral exemplar for his opposition to invasion and torture and a prophet for his warnings about debt?
posted by clawsoon at 1:47 PM on September 17, 2022 [1 favorite]
posted by clawsoon at 1:47 PM on September 17, 2022 [1 favorite]
I share the distaste for cryptocurrencies and, above all else, the gross 'culture' of capitalism at its core, and of course the insane way all the bros talk about it. Bitcoin is a disaster and I wish it would die immediately and everyone involved in mining lose all their "investments".
That said, I do view ethereum a little differently since this merge was planned from the start (should have BEEN from the start, but...). Energy consumption now is equivalent to pretty much any other web service. It is, as everyone has said above, right now all (maybe a few exceptions) pointless. But a pointless internet project is fine if it's not burning nations worth of power, there's plenty of others.
As a coder I feel like there are real, useful possibilities for the blockchain. Not replacing the dollar, not replacing the web ("web3" has to be dumbest over-reach in the history of technology), but for what it IS.
What is it? A decentralized database people can attach permanent scripts to that anyone can interact with, and which is all enforced to be public. An example I'd wish for is concert tickets. A concert ticket platform built on ethereum could be set up to allow easy transfers (no uploading a PDF to stubhub), and more importantly it could enforce a percentage of any resale going to the artist (and venue even). Pretty easy for services to be built on top that hide the whole wallet nonsense from users and let them interact in $. I think there's real potential for a genuine good for blockchain as essentially backend service to replace ugly middle-broker monsters like Ticket Master in various industries.
There's an interesting and potentially useful tech there if all the froth, speculation, and hyperbole would go away. Hope the crash continues so maybe we can see some of that one day.
posted by malphigian at 1:57 PM on September 17, 2022 [6 favorites]
That said, I do view ethereum a little differently since this merge was planned from the start (should have BEEN from the start, but...). Energy consumption now is equivalent to pretty much any other web service. It is, as everyone has said above, right now all (maybe a few exceptions) pointless. But a pointless internet project is fine if it's not burning nations worth of power, there's plenty of others.
As a coder I feel like there are real, useful possibilities for the blockchain. Not replacing the dollar, not replacing the web ("web3" has to be dumbest over-reach in the history of technology), but for what it IS.
What is it? A decentralized database people can attach permanent scripts to that anyone can interact with, and which is all enforced to be public. An example I'd wish for is concert tickets. A concert ticket platform built on ethereum could be set up to allow easy transfers (no uploading a PDF to stubhub), and more importantly it could enforce a percentage of any resale going to the artist (and venue even). Pretty easy for services to be built on top that hide the whole wallet nonsense from users and let them interact in $. I think there's real potential for a genuine good for blockchain as essentially backend service to replace ugly middle-broker monsters like Ticket Master in various industries.
There's an interesting and potentially useful tech there if all the froth, speculation, and hyperbole would go away. Hope the crash continues so maybe we can see some of that one day.
posted by malphigian at 1:57 PM on September 17, 2022 [6 favorites]
I can’t really imagine doing significant exchange of goods and services atop crypto payment rails without some sort of external insurance to cover fraud, hacking, and disputes.
Also, tragically slow transaction speeds.
posted by GenjiandProust at 3:19 PM on September 17, 2022 [1 favorite]
Also, tragically slow transaction speeds.
posted by GenjiandProust at 3:19 PM on September 17, 2022 [1 favorite]
Also, tragically slow transaction speeds.
Consistency
Availability
Partition tolerance
The problem is that distributed networks only ever get to pick two out of three and real-time payment processing needs all three.
posted by Your Childhood Pet Rock at 3:49 PM on September 17, 2022 [3 favorites]
Consistency
Availability
Partition tolerance
The problem is that distributed networks only ever get to pick two out of three and real-time payment processing needs all three.
posted by Your Childhood Pet Rock at 3:49 PM on September 17, 2022 [3 favorites]
Seriously. Literally every solution to the problem proposed so far has been some variant of "ah fuck it let's just have someone do it off-chain".
posted by Your Childhood Pet Rock at 3:50 PM on September 17, 2022 [5 favorites]
posted by Your Childhood Pet Rock at 3:50 PM on September 17, 2022 [5 favorites]
So if I understand this correctly, now that the ETH merge happened, and the process is that… existing holders of large amounts of this currency can now have transactions quickly arranged by a small number of managing systems. Some of which can in fact block or slow transactions, and prioritize others based on competitive interests.
This structure is .. familiar, somehow.
posted by mhoye at 4:07 PM on September 17, 2022 [3 favorites]
This structure is .. familiar, somehow.
posted by mhoye at 4:07 PM on September 17, 2022 [3 favorites]
An example I'd wish for is concert tickets.
You’ve gotta be living a pretty comfortable life to feel like an immutable public facing ledger of where you’re going to be and what you paid to be there is a good thing.
posted by mhoye at 4:09 PM on September 17, 2022 [12 favorites]
You’ve gotta be living a pretty comfortable life to feel like an immutable public facing ledger of where you’re going to be and what you paid to be there is a good thing.
posted by mhoye at 4:09 PM on September 17, 2022 [12 favorites]
Also there’s literally no reason it has to be on a blockchain and no compelling reason to put it there. It boggles the mind to see all these proposals for the wonderful shit the blockchain enables and then you get down to it and the amazing enabling technology is just a fucking database.
posted by sinfony at 4:16 PM on September 17, 2022 [13 favorites]
posted by sinfony at 4:16 PM on September 17, 2022 [13 favorites]
It boggles the mind to see all these proposals for the wonderful shit the blockchain enables and then you get down to it and the amazing enabling technology is just a fucking database.
The part that gets me is the waste. Just the enormous, tectonic wasted overhead costs of zero-trust consensus transactions.
Once you admit that you’d ever need to correct or roll back a transaction, once you admit that even a _hair_ of trust is acceptable, not only can you abandon the absurd overhead of a zero-trust blockchain entirely, but the entire cryptocurrency enterprise - and I mean _the whole thing_ - can be run off one midrange machine in a rack somewhere.
That’s how wasteful it all was and still is.
posted by mhoye at 4:35 PM on September 17, 2022 [10 favorites]
The part that gets me is the waste. Just the enormous, tectonic wasted overhead costs of zero-trust consensus transactions.
Once you admit that you’d ever need to correct or roll back a transaction, once you admit that even a _hair_ of trust is acceptable, not only can you abandon the absurd overhead of a zero-trust blockchain entirely, but the entire cryptocurrency enterprise - and I mean _the whole thing_ - can be run off one midrange machine in a rack somewhere.
That’s how wasteful it all was and still is.
posted by mhoye at 4:35 PM on September 17, 2022 [10 favorites]
As with the gold rush, the profit to be made was in staking a bunch of claims to parcel off, then selling picks and shovels to the miners, while they trash the landscape.
posted by aspersioncast at 4:40 PM on September 17, 2022 [3 favorites]
posted by aspersioncast at 4:40 PM on September 17, 2022 [3 favorites]
The problem is that distributed networks only ever get to pick two out of three and real-time payment processing needs all three.
I’m pretty sure existing commercial payment systems also don’t actually have all three, though.
posted by atoxyl at 4:45 PM on September 17, 2022 [1 favorite]
I’m pretty sure existing commercial payment systems also don’t actually have all three, though.
posted by atoxyl at 4:45 PM on September 17, 2022 [1 favorite]
Here I come, the world's most tepid defender of blockchain tech!
You’ve gotta be living a pretty comfortable life to feel like an immutable public facing ledger of where you’re going to be and what you paid to be there is a good thing.
That's not how it works. Public ledger doesn't mean publicly identifiable (almost never unless someone opts into that), there's no inherent association at all. As evidenced by all the "investors" who got "rugged" by NFT projects and could not track down the founders despite their best efforts.
Also, tragically slow transaction speeds.
ethereum's plan for this (from the beginning, FWIW) is sharding. Which I do think will work, but will make an already byzantine technology even more so (one of the many reasons I think it only works as a backend). It's also still not going to be able to handle Visa's transaction load, which is why its never going to be a real currency.
is just a fucking database.
Absolutely, it's just a decentralized database + scripts, that's it. That's why I took pains to frame the post the way I did. The immutable nature + public record is limiting but enables some things I don't think are possible with a "rack somewhere" controlled by a single company. If anyone can access the transfer mechanism, the owner of said rack can't block/change it, add fees, or deny royalties. Like I said, I think there's a narrow set of use cases and they are largely back end, but they are out there. Nothing earth shattering, but new and could have done some interesting stuff.
If the technology was introduced as "hey, here's this new decentralized database and some things you might do with it" it would be totally fine and I think potentially useful.
Instead it was built on a tidal wave of libertarian fantasies about non-fiat currencies which I think has probably permanently killed the whole thing. To be clear, no tragic loss, I was just trying to say there at least was some potentially utility there.
posted by malphigian at 5:02 PM on September 17, 2022 [5 favorites]
You’ve gotta be living a pretty comfortable life to feel like an immutable public facing ledger of where you’re going to be and what you paid to be there is a good thing.
That's not how it works. Public ledger doesn't mean publicly identifiable (almost never unless someone opts into that), there's no inherent association at all. As evidenced by all the "investors" who got "rugged" by NFT projects and could not track down the founders despite their best efforts.
Also, tragically slow transaction speeds.
ethereum's plan for this (from the beginning, FWIW) is sharding. Which I do think will work, but will make an already byzantine technology even more so (one of the many reasons I think it only works as a backend). It's also still not going to be able to handle Visa's transaction load, which is why its never going to be a real currency.
is just a fucking database.
Absolutely, it's just a decentralized database + scripts, that's it. That's why I took pains to frame the post the way I did. The immutable nature + public record is limiting but enables some things I don't think are possible with a "rack somewhere" controlled by a single company. If anyone can access the transfer mechanism, the owner of said rack can't block/change it, add fees, or deny royalties. Like I said, I think there's a narrow set of use cases and they are largely back end, but they are out there. Nothing earth shattering, but new and could have done some interesting stuff.
If the technology was introduced as "hey, here's this new decentralized database and some things you might do with it" it would be totally fine and I think potentially useful.
Instead it was built on a tidal wave of libertarian fantasies about non-fiat currencies which I think has probably permanently killed the whole thing. To be clear, no tragic loss, I was just trying to say there at least was some potentially utility there.
posted by malphigian at 5:02 PM on September 17, 2022 [5 favorites]
I’m pretty sure existing commercial payment systems also don’t actually have all three, though.
They do for the most part because the issuing bank is the one providing the credit, not the payment processor. All the payment processor does is connects the merchant to the customer's issuing bank. When someone wants to pay a merchant VISA contacts the issuing bank and say "Your customer wants to pay this merchant $X. Do they have $X available in their credit limit/account?" and the issuing bank is on the hook to give a reply quickly. There's only one authoritative "place" they're pulling the data from. They don't have to check with other banks to make sure the payer's dollar isn't being spent elsewhere because the issuing bank is responsible for that dollar.
Also, if the bank doesn't give a response within a certain amount of time, payment processors have it in their contracts with issuing banks that they'll shove the transaction through and it's now the issuing bank's problem if the customer doesn't have the funds. Can't do that on a distributed ledger because nobody in their right minds is going to take on that level of risk for every single transaction.
posted by Your Childhood Pet Rock at 5:05 PM on September 17, 2022 [2 favorites]
They do for the most part because the issuing bank is the one providing the credit, not the payment processor. All the payment processor does is connects the merchant to the customer's issuing bank. When someone wants to pay a merchant VISA contacts the issuing bank and say "Your customer wants to pay this merchant $X. Do they have $X available in their credit limit/account?" and the issuing bank is on the hook to give a reply quickly. There's only one authoritative "place" they're pulling the data from. They don't have to check with other banks to make sure the payer's dollar isn't being spent elsewhere because the issuing bank is responsible for that dollar.
Also, if the bank doesn't give a response within a certain amount of time, payment processors have it in their contracts with issuing banks that they'll shove the transaction through and it's now the issuing bank's problem if the customer doesn't have the funds. Can't do that on a distributed ledger because nobody in their right minds is going to take on that level of risk for every single transaction.
posted by Your Childhood Pet Rock at 5:05 PM on September 17, 2022 [2 favorites]
There's an interesting and potentially useful tech there if all the froth, speculation, and hyperbole would go away.
I hear this argument often, and my reply is always: no there isn't.
If you're thinking of some kind of blockchain with someone who administers it, that's just a kind of database and isn't very novel, so let's assume we are talking about the novel invention of a public database that anyone can add to, the blockchain, and really ask how that works. The obvious problem is consensus: if anyone can add to the chain, and there's no central verification authority, then you need to have people who will volunteer to verify the chain, and you need some way for malicious actors to not make a bajillion verifiers who all happen to agree that transferring value directly their their owner is a legitimate transaction. (This is called a Sibyl attack. It's important.) The way to stop this is by making the act of verifying expensive enough that the amount of effort you'd need to go to to make fake verifiers costs much more than your return. The Merge moves Ethereum from a system where this was done by burning increasingly large amounts of electricity and graphics hardware into one where the tokens required to verify are just really expensive to acquire in large enough quantities.
Part of the reason that Bitcoin is such an environmental disaster is that, as it's gotten more valuable, the amount of energy each transaction has to cost to stay ahead of Sibyl attacks also has to go up. And that's the thing: there needs to be something making verifying transactions expensive for blockchains to work, and because it's distributed, you probably can't pay verifiers in cash. But you can issue them a token, that is worthless for you to create, and the verifiers can recoup their costs if they're able to sell it on - and because the tokens are inherently worthless, their entire value comes from people who expect it to be worth a lot more in the future. (Compare this to fiat currency: the core value of the US Dollar is that the United States will still be around in some form in 30 years to honour its bonds.)
Put more simply: speculation is necessary for cryptocurrencies to exist, and cryptocurrencies are necessary for a public blockchain to even work. You do not want financial speculation anywhere near anything that humans are expecting to rely on. It's not an interesting and potentially useful tech: we already have a solution for this, called 'trust', but libertarians found a way to make their horrific vision for society almost work, under certain narrow parameters.
posted by Merus at 5:09 PM on September 17, 2022 [13 favorites]
I hear this argument often, and my reply is always: no there isn't.
If you're thinking of some kind of blockchain with someone who administers it, that's just a kind of database and isn't very novel, so let's assume we are talking about the novel invention of a public database that anyone can add to, the blockchain, and really ask how that works. The obvious problem is consensus: if anyone can add to the chain, and there's no central verification authority, then you need to have people who will volunteer to verify the chain, and you need some way for malicious actors to not make a bajillion verifiers who all happen to agree that transferring value directly their their owner is a legitimate transaction. (This is called a Sibyl attack. It's important.) The way to stop this is by making the act of verifying expensive enough that the amount of effort you'd need to go to to make fake verifiers costs much more than your return. The Merge moves Ethereum from a system where this was done by burning increasingly large amounts of electricity and graphics hardware into one where the tokens required to verify are just really expensive to acquire in large enough quantities.
Part of the reason that Bitcoin is such an environmental disaster is that, as it's gotten more valuable, the amount of energy each transaction has to cost to stay ahead of Sibyl attacks also has to go up. And that's the thing: there needs to be something making verifying transactions expensive for blockchains to work, and because it's distributed, you probably can't pay verifiers in cash. But you can issue them a token, that is worthless for you to create, and the verifiers can recoup their costs if they're able to sell it on - and because the tokens are inherently worthless, their entire value comes from people who expect it to be worth a lot more in the future. (Compare this to fiat currency: the core value of the US Dollar is that the United States will still be around in some form in 30 years to honour its bonds.)
Put more simply: speculation is necessary for cryptocurrencies to exist, and cryptocurrencies are necessary for a public blockchain to even work. You do not want financial speculation anywhere near anything that humans are expecting to rely on. It's not an interesting and potentially useful tech: we already have a solution for this, called 'trust', but libertarians found a way to make their horrific vision for society almost work, under certain narrow parameters.
posted by Merus at 5:09 PM on September 17, 2022 [13 favorites]
An example I'd wish for is concert tickets. A concert ticket platform built on ethereum could be set up to allow easy transfers (no uploading a PDF to stubhub), and more importantly it could enforce a percentage of any resale going to the artist (and venue even). Pretty easy for services to be built on top that hide the whole wallet nonsense from users and let them interact in $. I think there's real potential for a genuine good for blockchain as essentially backend service to replace ugly middle-broker monsters like Ticket Master in various industries.This is actually a common pitch for something where NFTs could be useful but there's a key point which those pitches have tended to ignore: ticket sales can only be as decentralized as the owner of the venue wants them to be. No matter how many random numbers you control, the only thing which matters is if they let you in the door.
That might sound like a tautology but it's key to understanding why a blockchain is at best an expensive distraction from the real problem: people have been trying to replace Ticketmaster for decades, and trying to use the web since approximately since the first time time some 20-something went to buy Veruca Salt tickets, saw how many fees were added, and said “I know how to write CGI scripts and could be rich if I charged even half that much”.
There've been a ton of attempts over the years but they've all failed because Ticketmaster doesn't have their position by accident but because they're a cutthroat business with the ethics of sharks and took advantage of an era of lax regulation. Ticketmaster signs long-term exclusive contracts with venues, who care about their customers about as much as you'd expect from seeing how much they charge for a bottle of water, and because Ticketmaster is the same company as Live Nation you have the largest promoter in the US who will refuse to send the best acts to any venue which doesn't sign that exclusivity deal with Ticketmaster. They also have a lot of history & people in common with Clear Channel, so guess which bands are probably going to get bumped into the hinterlands of commercial radio in most of the country?
Pearl Jam tried to buck Ticketmaster at the height of their fame in the 90s and it basically sidelined them. Any artist trying to avoid Ticketmaster/Live Nation is going to ask whether they have more clout than Pearl Jam did in 1994 (answer: no). Any venue is going to ask whether they can get by with bands which are too small to be on Live Nation's radar — and whether they're going to be hurt by the preferential treatment given to Ticketmaster's partners.
Jamie Zawinski of early web fame is a night club owner and has written about this extensively as part of the consolidation of the San Francisco music scene:
Let's say you're an agent trying to book a tour for your band. You decide how many days they want to be on the road, how many cities they want to try and hit, and then you start sending out emails to find out what dates are available so you can figure out the routing. Let's say your first call is to some venue in New York, and the talent buyer there says, "As it happens, I also book venues in 15 other cities, so I can put your whole tour on the calendar right now, how's that?" What a relief! So much less work! But then an independent operator in, oh, let's say San Francisco gets in touch with you and says, "I hear your band is going out on tour soon! We love those guys and would like to bid on the show." But then what happens? The corporate talent buyer says to you, "Look, I was giving you a great deal on these 15 dates, but if you want to take your business to my competition instead of taking the full package that I offered you, the price is going to go up. And also, maybe some of those dates are no longer available for you."
So you write back to the small fry, who may have even offered you more money for that particular date, and you say, "Sorry, maybe next time."
Or, let's say you're an agent and you represent a band with a huge draw, as well as a bunch of smaller bands. You're trying to get your bigger band booked on the summer festival circuit, so you're trying to pitch them as big up-and-comers to the agencies booking the festivals. Maybe these guys have been playing 2,000 capacity rooms and you're trying to get them their big break: a late afternoon set in front of a captive audience of 10,000. So while that conversation is ongoing, you are also trying to book a tour for a different, smaller band. You're thinking of putting them in an independent venue who are offering you a good deal, but the festival buyer also books dozens of smaller venues, and you sure don't want to piss them off, because that could mean your job. So instead, you go with the corporate-controlled smaller room as well, regardless of its merits.
"Well that's just business, that's just playing hard-ball." Sure. It's also bad for art, and bad for local businesses. It consolidates control and profit in whatever company controls the routing, even if they don't live in your town. It homogenizes everything.
This is how you end up with venues in dozens of different cities who all have the same calendar. This venue in Portland has the same lineup as that venue in Seattle, just shifted by two days, and so on. Obviously a venue's character is defined by more than just what's on the calendar... but the calendar is a pretty big part.
If we want to get rid of Ticketmaster, the first question everyone should ask is “how does this break that stranglehold?”. Elaborate systems which tithe to blockchain operators but don't change the business model won't do that — we should be talking antitrust regulation! — and this unfolds in basically every push to use a blockchain, where the underlying problem isn't solved by using it and if you do solve it you don't need a blockchain.
- "Wherein three national corporations control nearly all of San Francisco's live music."
- "Ticketmaster is recruiting professional scalpers who cheat its own system to expand its resale business and squeeze more money out of fans".
- "Live Nation admits putting tickets straight on the resale market".
- "Live Nation and DOJ reach 'settlement' that does nothing but extend the time period of the consent decree, with no fine."
- "Saudi Arabia's Crown Prince Mohammad bin Salman, who personally ordered that Jamal Khashoggi be kidnapped and dismembered alive with a bone saw, now owns 6% of Live Nation / TicketMaster."
- "Big Music Needs to Be Broken Up to Save the Industry".
posted by adamsc at 6:21 PM on September 17, 2022 [39 favorites]
ethereum's plan for this (from the beginning, FWIW) is sharding
Oh wow, that'll definitely solve everything then, because everyone knows sharding makes things web scale! (text)
posted by automatronic at 6:30 PM on September 17, 2022 [3 favorites]
Oh wow, that'll definitely solve everything then, because everyone knows sharding makes things web scale! (text)
posted by automatronic at 6:30 PM on September 17, 2022 [3 favorites]
If we want to get rid of Ticketmaster, the first question everyone should ask is “how does this break that stranglehold?”. Elaborate systems which tithe to blockchain operators but don't change the business model won't do that — we should be talking antitrust regulation!
This was a great post and I can't really argue! Well put, thanks for taking the time to write it up.
To be clear, I was making a tepid defense of something I find technically interesting as an engineer. It's an admittedly weak effort to try to find a use case for a 'solution in search of a problem'. Which is I suppose all it is at its best.
As an aside, I don't really appreciate the folks quoting me, cutting off the long list of 'why I agree this sucks', and then making the same point I just made back at me. But I get it.
posted by malphigian at 6:46 PM on September 17, 2022 [2 favorites]
This was a great post and I can't really argue! Well put, thanks for taking the time to write it up.
To be clear, I was making a tepid defense of something I find technically interesting as an engineer. It's an admittedly weak effort to try to find a use case for a 'solution in search of a problem'. Which is I suppose all it is at its best.
As an aside, I don't really appreciate the folks quoting me, cutting off the long list of 'why I agree this sucks', and then making the same point I just made back at me. But I get it.
posted by malphigian at 6:46 PM on September 17, 2022 [2 favorites]
The robe of this thread seems to be “this is all bad and technically stupid, so it won’t happen.” Which, I dunno, just feels very blithe. I’m not sure what else to be myself, but the tone just feels generally off. Enough money can make a lot of dumb things happen.
posted by Going To Maine at 7:12 PM on September 17, 2022 [1 favorite]
posted by Going To Maine at 7:12 PM on September 17, 2022 [1 favorite]
As an aside, I don't really appreciate the folks quoting me, cutting off the long list of 'why I agree this sucks', and then making the same point I just made back at me. But I get it.
Because this is partly directed at me: I read you as saying 'cryptocurrency sucks, but surely we can salvage something useful from this if we can clean off the crypto grift' and I was saying 'you can't, it stops working if you do that'. adamsc's answer is more persuasive, though.
posted by Merus at 7:47 PM on September 17, 2022 [5 favorites]
Because this is partly directed at me: I read you as saying 'cryptocurrency sucks, but surely we can salvage something useful from this if we can clean off the crypto grift' and I was saying 'you can't, it stops working if you do that'. adamsc's answer is more persuasive, though.
posted by Merus at 7:47 PM on September 17, 2022 [5 favorites]
This was a great post and I can't really argue! Well put, thanks for taking the time to write it up.Thanks, sorry if it felt like I was jumping on you. One of the things I’ve noticed over a few decades in the field is how prone most of us are to chasing the thrill of a technical challenge without asking whether it’s the right problem to solve, and especially whether there’s a thorny social problem hidden inside.
posted by adamsc at 7:58 PM on September 17, 2022 [3 favorites]
The robe of this thread seems to be “this is all bad and technically stupid, so it won’t happen.” Which, I dunno, just feels very blithe. I’m not sure what else to be myself, but the tone just feels generally off. Enough money can make a lot of dumb things happen.
It feels like a lot will depend on whether cryptocurrencies can overcome what I've come to think of as the "Amway hump" - getting enough political support onboard by reason of "here is an activity that makes money for some people therefore it must be good" to get legal protection from anybody who notices how many people need to lose money for those few to make money. Can they get laws passed saying, "This activity could be considered a scam, but if you do it this exact way it's okay"?
posted by clawsoon at 8:04 PM on September 17, 2022 [2 favorites]
It feels like a lot will depend on whether cryptocurrencies can overcome what I've come to think of as the "Amway hump" - getting enough political support onboard by reason of "here is an activity that makes money for some people therefore it must be good" to get legal protection from anybody who notices how many people need to lose money for those few to make money. Can they get laws passed saying, "This activity could be considered a scam, but if you do it this exact way it's okay"?
posted by clawsoon at 8:04 PM on September 17, 2022 [2 favorites]
One of the things I’ve noticed over a few decades in the field is how prone most of us are to chasing the thrill of a technical challenge without asking whether it’s the right problem to solve, and especially whether there’s a thorny social problem hidden inside.
There are a lot of people who believe that social problems are just technical (or economics) problems in disguise.
posted by It's Never Lurgi at 8:28 PM on September 17, 2022 [4 favorites]
There are a lot of people who believe that social problems are just technical (or economics) problems in disguise.
posted by It's Never Lurgi at 8:28 PM on September 17, 2022 [4 favorites]
If the technology was introduced as "hey, here's this new decentralized database and some things you might do with it" it would be totally fine and I think potentially useful.
But if that's what you want, there are other platforms available. Like, I think you could use Keybase to maintain state across multiple nodes in a distributed system, fully encrypted and without trusting the service provider, if you wanted to. I haven't dug into their API but that appears to be their model under the hood, and it operates without any weirdo bullshit faux-currency layer.
Just fundamentally though, building a distributed database really isn't all that hard in 2022. I'm not even sure it was that hard a decade+ ago. I mean, Lotus Fucking Notes was built around the idea of an intermittently-connected, non-relational, distributed object database with lazy updates (very interesting architecture, very bad way to do email) in... 1989.
Providing a "distributed database as a service" doesn't seem like enough of a value-add to justify the sort of transaction fees that blockchain systems do, for the questionable privilege of running your transactions on them. Not when you can take your pick of Big Tech-developed distributed databases that actually run significant workloads in production, have long track records, and are available to run on your hardware or someone else's on a day's notice. (E.g. HBase is modeled after Google Bigtable, Cassandra was at one point Facebook's, CouchDB was started by a Lotus Notes dev and is used by IBM, Accumulo came out of NSA, Voldemort is LinkedIn's contribution, etc. Take your pick based on whatever you're trying to do.) It's a really crowded field, at least to my eyes.
I'm admittedly skeptical, but only because basically every technical discussion with a pro-blockchain person I've had seems to follow this general format:
(Me) Okay, so... what is this blockchain thing actually good for?
(Them) So many things!
(Me) ... Like what?
(Them) [Picks random, plausible-sounding scenario]
(Me) But... wait... if you're doing that, doesn't it already imply that you trust [other actors in the scenario], meaning that it'd be a lot easier to just do [something simple with off-the-shelf software that exists]?
(Them) THAT WAS JUST AN EXAMPLE, OKAY? [mumbles about "early days"]
The only thing "blockchain" systems seem to have going for them is access to a lot of more-money-than-brains investor capital.
posted by Kadin2048 at 11:25 PM on September 17, 2022 [13 favorites]
But if that's what you want, there are other platforms available. Like, I think you could use Keybase to maintain state across multiple nodes in a distributed system, fully encrypted and without trusting the service provider, if you wanted to. I haven't dug into their API but that appears to be their model under the hood, and it operates without any weirdo bullshit faux-currency layer.
Just fundamentally though, building a distributed database really isn't all that hard in 2022. I'm not even sure it was that hard a decade+ ago. I mean, Lotus Fucking Notes was built around the idea of an intermittently-connected, non-relational, distributed object database with lazy updates (very interesting architecture, very bad way to do email) in... 1989.
Providing a "distributed database as a service" doesn't seem like enough of a value-add to justify the sort of transaction fees that blockchain systems do, for the questionable privilege of running your transactions on them. Not when you can take your pick of Big Tech-developed distributed databases that actually run significant workloads in production, have long track records, and are available to run on your hardware or someone else's on a day's notice. (E.g. HBase is modeled after Google Bigtable, Cassandra was at one point Facebook's, CouchDB was started by a Lotus Notes dev and is used by IBM, Accumulo came out of NSA, Voldemort is LinkedIn's contribution, etc. Take your pick based on whatever you're trying to do.) It's a really crowded field, at least to my eyes.
I'm admittedly skeptical, but only because basically every technical discussion with a pro-blockchain person I've had seems to follow this general format:
(Me) Okay, so... what is this blockchain thing actually good for?
(Them) So many things!
(Me) ... Like what?
(Them) [Picks random, plausible-sounding scenario]
(Me) But... wait... if you're doing that, doesn't it already imply that you trust [other actors in the scenario], meaning that it'd be a lot easier to just do [something simple with off-the-shelf software that exists]?
(Them) THAT WAS JUST AN EXAMPLE, OKAY? [mumbles about "early days"]
The only thing "blockchain" systems seem to have going for them is access to a lot of more-money-than-brains investor capital.
posted by Kadin2048 at 11:25 PM on September 17, 2022 [13 favorites]
We'll never imho have humans writes smart contract code correctly, so all smart contract chains like ETH, Solana, etc. shall remain shit shows. There do exist bespoke chain designs like Cosmos & Polkadot, in which any user supplied code requires more human infrastructure and overhead, and do not permit arbitrary smart contract stupidity like flash loans. We'll see if they fair better..
Although ETH cut their energy costs dramatically, they adopted an extremely wasteful proof-of-stake design, in which nodes run but rarely participate. There are many professor coins who make similar mistakes:
As a simple example, Cardano's Ouroboros Praos works superficially like proof-of-work, except you make blocks when your VRF output beats the winning condition set by your state, and you only get one VRF output every half second or whatever. It's far better than proof-of-work of course, but it still means nodes waste most of their cycles.
I think ETH and some professor coins have a massive validator pool from which they randomly select only a few hundred participants, due to limits in their Byzantine agreement (BA) protocol. In theory, those randomly unselected nodes could sell their compute time elsewhere, but in practice they simply track the chain in which they cannot do anything useful, like due to not trusting warp sync or whatever.
Ironically doing this random selection dramatically worsens your 1/3 malicious BA security margin, due to exactly the same concentration inequality argument that make blockchain sharding work, so not all professor coins really do their analyzes properly. lol
As a contrast.. Cosmos is a poster boy for poor BA performance, but afaik they do not randomly select participants, so crappy nodes go away. Polkadot also does not randomly select participants from a pool, but allows 10x as many nodes in BA, which sounds equally bad, except Polkadot's "cut n choose roll up" needs only 40ish validators plus 15ish collators checking each parachain block, making it quite efficient in theory. In fact, Polkadot maybe the only deployed design with some mechanism for not wasting almost all the CPU cycles.
It's plausible the zk roll ups like Mina work out some shared/distributed proving scheme eventually, which then avoids their massive CPU opportunity costs. At least one a16z guy estimated zk roll up provers need one million times the CPU of single verifiers, but a16z means liar so the real number is likely more 10s of thousands.
Also ETH gave up on sharding, likely because they cannot make VDFs work since they cannot make RSA trusted setups work. Instead they adopted danksharding which is purely availability for optimistic and zk roll ups, so they punted the real problem to other mostly less qualified people, but this gives them a big ecosystem.. of projects trying to make their shit actually work. lol
As for blockchain uses, it all boils down to threat models.. academics were designing protocols with trusted third parties or bulletin boards long before bitcoin existed. ARLEAS provides a recent academic example.
We discovered CAs issue fraudulent TLS certs, either by being p0wned or just all by themselves, so we invented certificate transparency (CT). Although CT is not a blockchain, due to not needing consensus, it does contain a lot of blockchain-like elements.
We should expect blockchain-like schemes to be useful if and only if we want more databases to run in nasty threat models than for which we'd ever tailor the database to the applications' actual threat model. Do we want many databases running in nasty threat models? Are we incapable of designing fancy CT-like schemes for most of them?
We've many problems both in-blockchains and elsewhere that require regulation, but realistically regulators should not stop CCP employees from cheating in Eve Online, or whatever, only acknowledging the real threat model does so. We'll never build bespoke CT like schemes for all these, so the question becomes how much we care about the cheating or whatever.
In this, I've not addressed whether blockchains should've tokens, many token-free blockchains like drand appear far more useful than the ones with token, but nuanced penalties maybe help sometimes, like in non-naive sharding, but even this does not require a capitalist model per se. It's messy..
posted by jeffburdges at 5:02 AM on September 18, 2022 [3 favorites]
Although ETH cut their energy costs dramatically, they adopted an extremely wasteful proof-of-stake design, in which nodes run but rarely participate. There are many professor coins who make similar mistakes:
As a simple example, Cardano's Ouroboros Praos works superficially like proof-of-work, except you make blocks when your VRF output beats the winning condition set by your state, and you only get one VRF output every half second or whatever. It's far better than proof-of-work of course, but it still means nodes waste most of their cycles.
I think ETH and some professor coins have a massive validator pool from which they randomly select only a few hundred participants, due to limits in their Byzantine agreement (BA) protocol. In theory, those randomly unselected nodes could sell their compute time elsewhere, but in practice they simply track the chain in which they cannot do anything useful, like due to not trusting warp sync or whatever.
Ironically doing this random selection dramatically worsens your 1/3 malicious BA security margin, due to exactly the same concentration inequality argument that make blockchain sharding work, so not all professor coins really do their analyzes properly. lol
As a contrast.. Cosmos is a poster boy for poor BA performance, but afaik they do not randomly select participants, so crappy nodes go away. Polkadot also does not randomly select participants from a pool, but allows 10x as many nodes in BA, which sounds equally bad, except Polkadot's "cut n choose roll up" needs only 40ish validators plus 15ish collators checking each parachain block, making it quite efficient in theory. In fact, Polkadot maybe the only deployed design with some mechanism for not wasting almost all the CPU cycles.
It's plausible the zk roll ups like Mina work out some shared/distributed proving scheme eventually, which then avoids their massive CPU opportunity costs. At least one a16z guy estimated zk roll up provers need one million times the CPU of single verifiers, but a16z means liar so the real number is likely more 10s of thousands.
Also ETH gave up on sharding, likely because they cannot make VDFs work since they cannot make RSA trusted setups work. Instead they adopted danksharding which is purely availability for optimistic and zk roll ups, so they punted the real problem to other mostly less qualified people, but this gives them a big ecosystem.. of projects trying to make their shit actually work. lol
As for blockchain uses, it all boils down to threat models.. academics were designing protocols with trusted third parties or bulletin boards long before bitcoin existed. ARLEAS provides a recent academic example.
We discovered CAs issue fraudulent TLS certs, either by being p0wned or just all by themselves, so we invented certificate transparency (CT). Although CT is not a blockchain, due to not needing consensus, it does contain a lot of blockchain-like elements.
We should expect blockchain-like schemes to be useful if and only if we want more databases to run in nasty threat models than for which we'd ever tailor the database to the applications' actual threat model. Do we want many databases running in nasty threat models? Are we incapable of designing fancy CT-like schemes for most of them?
We've many problems both in-blockchains and elsewhere that require regulation, but realistically regulators should not stop CCP employees from cheating in Eve Online, or whatever, only acknowledging the real threat model does so. We'll never build bespoke CT like schemes for all these, so the question becomes how much we care about the cheating or whatever.
In this, I've not addressed whether blockchains should've tokens, many token-free blockchains like drand appear far more useful than the ones with token, but nuanced penalties maybe help sometimes, like in non-naive sharding, but even this does not require a capitalist model per se. It's messy..
posted by jeffburdges at 5:02 AM on September 18, 2022 [3 favorites]
If we want to get rid of Ticketmaster, the first question everyone should ask is “how does this break that stranglehold?”. Elaborate systems which tithe to blockchain operators but don't change the business model won't do that — we should be talking antitrust regulation!
IIRC, the only people who ever came close was Grateful Dead Ticket Sales, whose would get 1/2 the tickets for a venue and sold them with a system of a recorded message on a local phone number, index cards, and postal money orders. And that was at their peak when their fanbase could sell out GDTS on the first postmark day AND Ticketmaster within minutes of going on sale. (Anyone else remember going into the office to exploit the multiple outgoing lines when ticket went on sale?)
posted by mikelieman at 5:10 AM on September 18, 2022 [1 favorite]
IIRC, the only people who ever came close was Grateful Dead Ticket Sales, whose would get 1/2 the tickets for a venue and sold them with a system of a recorded message on a local phone number, index cards, and postal money orders. And that was at their peak when their fanbase could sell out GDTS on the first postmark day AND Ticketmaster within minutes of going on sale. (Anyone else remember going into the office to exploit the multiple outgoing lines when ticket went on sale?)
posted by mikelieman at 5:10 AM on September 18, 2022 [1 favorite]
As CAP theorem came up above, almost all proof-of-stake networks loose Byzantine agreement if you partition off 1/3rd of their validators, meaning availability stops. It's best this way..
There do exist differences in how quickly they fall over under smaller non-dangerous partitions, with one chain being absolutely famous for speedy pointless halts. Also conversely, there exist some proof-of-stake designes like pure Ouroboros Praos that could hobble along in the same dangerous & stupid way as Bitcoin, meaning some users wind up being robbed.
It appears "This activity could be considered a scam, but if you do it this exact way it's okay" describes basically all of modern finance and capitalism. Ain't clear how much longer our society survives such approaches.. 33 million people displaced by floods in Pakistan, more & more food export bans, 50% odds of synchronous maize crop failure in the 2040s, etc.
If they want to survive, blockchains should maybe find actually socially useful functionality like drand, and capitalism inspired tokens do not necessarily make this easier.
posted by jeffburdges at 6:14 AM on September 18, 2022 [2 favorites]
There do exist differences in how quickly they fall over under smaller non-dangerous partitions, with one chain being absolutely famous for speedy pointless halts. Also conversely, there exist some proof-of-stake designes like pure Ouroboros Praos that could hobble along in the same dangerous & stupid way as Bitcoin, meaning some users wind up being robbed.
It appears "This activity could be considered a scam, but if you do it this exact way it's okay" describes basically all of modern finance and capitalism. Ain't clear how much longer our society survives such approaches.. 33 million people displaced by floods in Pakistan, more & more food export bans, 50% odds of synchronous maize crop failure in the 2040s, etc.
If they want to survive, blockchains should maybe find actually socially useful functionality like drand, and capitalism inspired tokens do not necessarily make this easier.
posted by jeffburdges at 6:14 AM on September 18, 2022 [2 favorites]
The only thing "blockchain" systems seem to have going for them is access to a lot of more-money-than-brains investor capital.
I’m starting to believe that at this point the main utility of blockchain tech is that it presents an irrefutable argument for a wealth tax. If there’s enough bored money rattling around out there to fund obviously negative-sum nonsense like this, we can as a society choose to spend that money on public education, health care and clean running water instead.
posted by mhoye at 7:58 AM on September 18, 2022 [8 favorites]
I’m starting to believe that at this point the main utility of blockchain tech is that it presents an irrefutable argument for a wealth tax. If there’s enough bored money rattling around out there to fund obviously negative-sum nonsense like this, we can as a society choose to spend that money on public education, health care and clean running water instead.
posted by mhoye at 7:58 AM on September 18, 2022 [8 favorites]
Trust is amazing and is the linchpin of what makes us so magnificent as a species. I caution folks to remember that not everybody has access to being trusted, and there’s lots of really marginalised folks in that category. Ideally we want a world that provides enough for everyone, even those who don’t have access to being trusted by the folks with the resources. Until then, it’s important to remember that some folks use and earn livings in crypto because there’s no access for them to other systems, and to leave room for kindness and acknowledgment of these folks in the context of these very important critiques of crypto
posted by The Last Sockpuppet at 3:38 PM on September 18, 2022 [1 favorite]
posted by The Last Sockpuppet at 3:38 PM on September 18, 2022 [1 favorite]
Until then, it’s important to remember that some folks use and earn livings in crypto because there’s no access for them to other systems
So, uh, who are these folks?
posted by advil at 7:02 PM on September 18, 2022 [4 favorites]
So, uh, who are these folks?
posted by advil at 7:02 PM on September 18, 2022 [4 favorites]
And what happens when they inevitably get screwed?
posted by Merus at 9:17 PM on September 18, 2022 [3 favorites]
posted by Merus at 9:17 PM on September 18, 2022 [3 favorites]
Well, there’s quite a few sex workers and adult content producers, for example. Folks who get kicked off standard payment processors because of laws like FOSTA/SESTA. And then there’s just loads of folks like me who are too disabled to work a straight job. I mean, I could apply for disability instead I suppose but I don’t trust that the state won’t revoke or abolish welfare and disability in future, so I’m trying to build up savings. The milieu in crypto is full of scary politics and I’m scared all the time, and then I feel unsafe bringing up my work at all around folks that ostensibly share my politics. I’m not here because I am a crypto evangelist, I’m here because it is a job of last resort.
posted by The Last Sockpuppet at 3:10 AM on September 19, 2022 [3 favorites]
posted by The Last Sockpuppet at 3:10 AM on September 19, 2022 [3 favorites]
None of this is to say that all the stuff folks say about crypto here isn’t true. It is! It’s awful in so many ways. I just want to make the tiny point that there is no ethical production under capitalism either, and that not everyone has a whole lot of choice.
posted by The Last Sockpuppet at 3:15 AM on September 19, 2022 [1 favorite]
posted by The Last Sockpuppet at 3:15 AM on September 19, 2022 [1 favorite]
danksharding which is purely availability for optimistic and zk roll ups
Crypto has become indistinguishable from MMO loot mechanics.
posted by snuffleupagus at 12:25 PM on September 20, 2022
Crypto has become indistinguishable from MMO loot mechanics.
posted by snuffleupagus at 12:25 PM on September 20, 2022
All crypto-currency, and almost all databases, were always primarily about video games..
Ethereum cryptocurrency arose out of creator [Vitalik Buterin] 'crying himself to sleep' over World of Warcraft nerf
It's clear from Graeber that anthropologically money is always religion. It follows only religion distinguishes video games from "real" money, so even the idiotic religious warfare expressed by bitcoin's original political motivations really makes the most sense in video game terms.
Around bitcoin..
We need investment-externalities taxes of 2% to 7% on owning proof-of-work crypto-currencies, in part to help kill bitcoin by driving investors away to proof-of-stake, but also mostly because it paves a road to taxing investments in coal, oil, gas, meat, cars, shipping, etc.
posted by jeffburdges at 1:00 PM on September 21, 2022 [2 favorites]
Ethereum cryptocurrency arose out of creator [Vitalik Buterin] 'crying himself to sleep' over World of Warcraft nerf
It's clear from Graeber that anthropologically money is always religion. It follows only religion distinguishes video games from "real" money, so even the idiotic religious warfare expressed by bitcoin's original political motivations really makes the most sense in video game terms.
Around bitcoin..
We need investment-externalities taxes of 2% to 7% on owning proof-of-work crypto-currencies, in part to help kill bitcoin by driving investors away to proof-of-stake, but also mostly because it paves a road to taxing investments in coal, oil, gas, meat, cars, shipping, etc.
posted by jeffburdges at 1:00 PM on September 21, 2022 [2 favorites]
« Older "The final dying joke caught in our hands" | Autism is a Spectrum Newer »
This thread has been archived and is closed to new comments
posted by foursentences at 7:41 AM on September 17, 2022 [105 favorites]