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I don't think that invalidates the quote. It's how I came across it in the first place.
I think economists are well aware of the nature of the beast they're studying.
And even if doing the task is daunting, and the landscape changing as it's described, it's still worth it.
Especially if anyone finds fixed points which do have the property that describing them doesn't invalidate them.
IMO, economics is an area that will continually be hampered by models that don't fit, and increasing complexity.
Any model that predicts things simply and well, will be gamed; thus requiring a more complex model.
Or as Goodhart's Law[1] has it: "When a measure becomes a target, it ceases to be a good measure."
That's presuming we never reach some economic state so perfect, that even with an accurate model, no one can find an extra advantage, nor can it be disrupted by natural events.
Deploying via IPFS might also work? Though it'd require having a trustworthy backend storing state ... or I suppose auditing to ensure backend can't inject anything malicious into client layer.
From what I understand, some cryptocurrency DApps like Uniswap[0] are using this route.
In addition to BIP39 cited below, the EFF also published some useful wordlists a few years ago... https://www.eff.org/deeplinks/2016/07/new-wordlists-random-p...
One has the nice property that all words have unique 3 letter prefix. But not as many in prefix list (1296) as their "long" list (7776).
That said I'm kinda partial to BIP39... first four letters are unique, and words are more uniform than EFF prefix list.
But it looks like GPS addressing schemes like w3w need a MUCH larger list by an order of magnitude.
To clarify: I don't think proof of stake is perfect.
I think the original pie in the sky dream, as hinted at in the Bitcoin white paper, was for decentralization through anyone (all the way to students in their dorms) being able to participate in consensus.
I don't think proof of stake gets things all the way there, but I think it does get closer to a linear ROI curve, compared to how proof of work is right now.
History of stuff like Antminers has been stages of private access, high end market, then low end ...
But while products are moving down those stages, more wattage-efficient ones are entering at top.
I think you're right that ROI curve will get closer to linear (utility costs aside), but I don't think it's going to be a very fast progression.
Except under mining, increased investment opens up access to better equipment like ASICs, access to cheaper energy agreements, etc. But no amount of $ unlocks the ability to validate faster (per unit staked).
Reversibility could probably be added on top via smart contract if someone wanted to provide the service, and people trusted the third party.
But you can't make a trustless exchange on top of a custodial framework.
Base layer has to be trustless / permissionless; all manner of third parties can build all kind of things on top of that.
But reverse isn't true - if base layer controlled by small number of third parties; nothing built on top can claw back that control.
Thank you! That's... well, beautiful isn't the right word, given nature of example... But I was hoping to find a simple non-ergodic example.
The situation the article explores was interesting, but made the jump to something mathematically complex before I sunk my teeth into the fundamental bit.
Ethereum is working to address a lot of those points. When it switches to Proof of Stake (beacon chain is already live), energy costs will drop significantly (talking < 100 watts / node)... Just doing minimum to process blocks, no wasteful mining.
That means network has to pay less in block reward under PoS, so inflation drops to 1% or less.
Eip-1559 upgrade this summer will also start "burning" a portion of fees. Estimates have this around 0.5% - 1.5% deflation.
Combine those features together, and Ethereum should have long term issuance at around 0% indefinitely, while still paying for validators to secure it.
It's a feedback mechanism too... If usage goes down, burn drops, supply inflates slightly, stimulating use, increasing burn again.
The idea is to make an elastic self-securing system.
I don't understand where the pyramid scheme is in that... The money being paid out to validators will by nature barely cover costs (otherwise more people will validate, reducing margins to match). Since anyone can join, and the network punishes correlated misbehavior, that incentivizes decentralization and wide disbursement of block rewards.
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In the case of topic here, spare CPU cycles will no longer be valuable to exploit under PoS. The valuble qualities will be availability and uptime... Which won't be had by exploring in-broswer mining scripts, or CI exploits.
Not to find a solution, it was already found. The roadmap plan was always to switch to PoS, the miners and PoW were always temporary until it was developed / ready. Now the beacon chain (core of PoS) is live, with around $6 billion staked. Some of the miners (not all of them by far) are complaining they're no longer going to be needed, going so far as to make a show of "force". Others (like f2pool) have calmly been preparing with rest of Ethereum community, and are transitioning to staking themselves.
I've had the Droid48 app on my android phone for years. It's a little unstable, hope author updates it. But it's so awesome to have a 48GX available whenever, while my real one sits safely on the shelf at home.
When I first got that thing as kid, nearly returned it, RPN seemed so bizarre. So glad I didn't... Really love that language, would never have understood stack based VMs as deeply if it weren't for the things I coded on that calculator.
Droid48 - https://play.google.com/store/apps/details?id=org.ab.x48&hl=...
What would a successful attack even look like?
My understanding was that malicious validator has to publish votes for two different blocks in one round; which then can be used to slash them. Unlike PoW they can't "sit" on their second vote, because voters are known ahead of time, and once vote is done, opportunity is gone.
They also can't choose transactions to go into block unless they're the proposer, so that's only time they can control whether attack will even benefit them.
So they'll have to wait to get randomly assigned as proposer, in a committee where they control enough of the other randomly selected validators, and have pending txns at the ready to double spend (while receiving party has been sitting waiting for funds).
And even then, won't that just create a fork where the minority of the validators recognize the double vote, and slash them anyways? And what users / services will stay w original fork given that proof?
That's pretty much describing Ethereum (once it finishes switching to PoS in the next year or so). Popularity wise it's already doing way more than others in txn or $ volume.
It's NFT market for asset ownership (mainly artwork right now) is huge, there was literally a Christie's auction for an NFT token (and the art it represents) this week.
There aren't official stocks/commodities yet (I think) but a bunch of sythetic derivatives already. A couple of banks have even done test runs of bond issuance.
ETH itself is does have "store of value" qualities in background, but a trick was developed of using it as collateral to back on-chain stablecoins like DAI. That allows on-chain token markets/contracts to rely on USD-valuations for liquidity and baseline reference, independent of general "crypto" speculative fluctuations.
There's also Earnst & Young's "Nightfall" project that trying to bring b2b accounting on-chain using Eth's zero knowledge tools to retain privacy.
Going a bit further, once an object has been confirmed as alien, then it's not really "Unidentified" anymore, now is it?
Almost a linguistic catch-22 version of the "ATM Machine" phrase. Not redundant, but guaranteed to be either colloquially misinterpreted, or technically incorrect.
It's kinda weird how words can just get coopted by popular use. Take calling someone a "Nimrod" -- before Loony Tunes, that would have been a compliment that meant "mighty hunter". But kids growing up in the 50s and on first heard it in when Bugs Bunny used it as an insult, contextually meaning idiot or bumbler or something -- which due to Loony Tunes' cultural influence is now the dominant meaning, supplanting the original biblical origin (https://en.wikipedia.org/wiki/Nimrod#Idiom)
I'm not an expert at the mechanism design, but yeah, that's my understanding. The network's goal is to have a block every X seconds; and the difficulty periodically adjusts if blocks come in too fast / too slow (due to hashpower coming on/off line).
(Ethereum & Bitcoin both add some other year-decade timeframe factors to the difficulty, but don't think it affects this basic principle, which acts on week-to-minute timeframes).
I view it as a race to the margins. Anyone who can do it cheaper, or benefit from economy of scale, will get a larger slice of the pie, but at smaller margins... creating a cycle of consolidation.
I think original assumption was that folks running PoW at home on their GPUs would be able to compete, but due to efficiencies of specialized hardware and regional differences in electricity costs, that's just not the case.
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Others might disagree, but my personal opinion is that this isn't a sustainable way to maintain decentralization, since it seems to obviously trend towards a few large "just turning a profit" players.
There might be some ways to adjust mining incentives to make it work, but this fundmental issue is why I think Proof of Stake has a much more viable future, as it sidesteps this (and the environmental) issues.
Ethereum's Proof of Stake "beacon chain" is already live, with around $6 billion staked (since launch in december 2020). Next year is just formalizing and testing it taking over from the miners. So despite timeframe, there's little uncertainty about the outcome.
https://beaconcha.in/ is a nice explorer to see beacon chain running live.
Pretty much, from what I can tell!
I sorta see this as Nvidia trying to create some market segmentation not for the miners, but so gamers can actually get their cards before Nvidia loses mindshare. (Not that I think that's likely)
I think right now biggest earner for GPU mining is Ethereum. And (I think) it's aiming to move to Proof of Stake sometime in next 12-24 months, which kinda time limits the utility of both Eth-specific mining chips, and large investments in GPU mining (unless mining burns GPUs out really fast?).
Regardless, most proof of work algorithms are already being optimized with ASICs (ala bitcoin)... Or, like Ethereum's ETHASH alg, they have a step requiring high throughput random access to large amounts of memory, ala scrypt or argon (5gb or so for ETHASH right now, and slowly increasing). That's what's kept ASICs from being profitable for Eth, and is probably limiting factor for FPGAs as well. Though maybe there are FPAGs with dedicated memory on par with a modern GPU?
Just to expound on that point here.
While Tether's bank accounts being private is a problem for auditing, even if that were removed, you'd still have to somehow "snapshot" all the bank accounts an transactions, freezing things in time so you could ensure there wasn't a shell game going on while you audited.
This just isn't feasible with a federated system where each bank has their own ledger, and asynchronously tries to align it with a bunch of other ledgers.
Blockchains overall reduce throughput compared to this model, because they enforce a single ledger. But they do this while still preserving decentralized control, resulting in a tradeoff where you lose some scalability, but also remove need for a trusted mediator(s), and now anyone can audit a snapshot of the state at their leisure.
Not OP, but USDT / Tether is an example of something which exists as a proxy for something off-chain; so auditing the chain is obviously not going to work to see how much USD they actually have. Though it is possible to provably audit exactly how many USDT are in circulation at any point.
I think OP's point was more about things which exist entirely on-chain, i.e. the idea of having stock ownership tracked directly there (rather than as a proxy for real shares tracked somewhere else).
In that frame, a better example is something like the DAI stablecoin, which is backed by assets that are on-chain. So at any block, you can audit exactly how many DAI there are, exactly which assets exist to back it, and exactly what the last reported oracle prices are for those assets.
Good Lord, that's a great idea. They'd be able to sell the shares in no time. Soon as it hits public I'm sure a ton of folks who just invest in everything semiconductor would just jump in.
I've been avoiding SoftBank because they've got so many other risky ventures, putting money in company at large seems kinda volatile.
Linux Mint has even removed snap, which is impressive since they're downstream from Ubuntu.
After hearing some of the issues with it (here and elsewhere), I'm kinda grateful to them for making the effort.
Though this concerns me -- I use certbot on some debian servers, I hope that at least stays up to date.
Per other responses, they frequently do charge a special fee (I think Aave charged around 0.09% at one point but can't find good ref right now).
One interesting thing I think is still under dev/consideration is adding the ability for MakerDAO to make "flash mint loans"(https://forum.makerdao.com/t/mip25-flash-mint-module/4400/9) -- essentially a flash loan where the caller can mint an arbitrary amount of DAI without having to back it with anything, so long as they pay it back + fee at the end.
There's a similiar idea being worked out for WETH10 (https://github.com/WETH10/WETH10#flash-loans), a project trying to make a feature update of the WETH (wrapped ether) token.
I'm honestly unsure WTH the impact of something like these would be, but would definitely prevent arbitrage from going too far out of bounds, since there would always be unlimited liquidity.
Multi-party atomic financial transactions are kinda insane.
the stakers only need to make an investment once in the beginning
The whole system could collapse overnight like a domino if something goes wrong
IMO, these two things are one of the main points of tension which PoS uses to operate. The stakers have put up a significant amount of value, and it's in their interest to maintain that value by preventing things from going wrong.
Not only that, but they are actively pitted against each other -- it's in their interest to find any node that tries to violate the rules, and submit an attestation slashing the offender's stake for bad behavior.
There are also a number of incentives (such as the upcoming EIP-1559 upgrade) which are designed to align incentives so that cartel members are encouraged to break away for their own advantage.
I agree that OP is confusing / conflating a bunch of different things.
But to clarify that one bit (I think?) they're talking about -- the code is OP_RETURN. Originally it could return larger amounts of arbitrary data, which was used to effectively store external data on-chain. It was later reduced down to only allow 40 bytes, which would be enough for a hash, but not enough to store larger amounts of state.
This was what Vitalik Buterin and others were using for things like scripting and colored coins, and Vitalik cited (concerns that devs were threatening to constrain it / remove it as a major reason he started Ethereum.
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Vitalik about OP_RETURN (wish I had link w/ more context) - https://twitter.com/vitalikbuterin/status/929808394487320577
I think they meant more system technical risk than financial. as in, a change to prevent bypassing private key checks, or minting quadrillions of BTC / ETH beyond the issuance schedule.
the trust is not in the code, it's in the community and their policies
I can heartily agree with that.
That's why I think having the "layer 0" social consensus of a network aim for maximum clarity, so participants have as few points where there's three potential for surprise disagreement later.
Ethereum is very strongly "no abnormal state changes" starting with the Parity issue. I think there have been a few more similar cases of contract bugs, some even involving client devs, and any suggestion of a new fork has met with strong opposition from all ends of the community.
Another thing I think is useful for a blockchain is to have multiple independent clients... It helps prevent devs from having outsize voice in discussion (though the users and the node runners are always the final vote).
I think working out the meta structure of how to work these social level contracts is definitely something the whole cryptocurrency industry needs to work on.
That is rather misleading to use as an example... It's widely regarded as a one time thing that was agreed upon partly because the system (and testing tools) were so new at the time.
Bitcoin had a bug that was required an organized chain reorg back when it was early as well, but it's not regarded as fatal to putting trust in the chain now (search for "bitcoin value overflow bug", was kinda interesting)
More recently, Parity, one of the main developers of one the Ethereum clients, had millions locked up due to mistake in their smart contract code. They complained loudly, tried to get another roll back, and finally gave up... The overwhelming concensus was that Ethereum is no longer alpha grade, there will be no take backs ever again.
Ethereum's Ice Age is real, but saying it will "implode if Vitalik doesn't intervene" is wrong on so many levels, and is incredibly misleading, if not outright dishonest.
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The "Ice Age" is a builtin feature of the Ethereum chain, where the mining difficulty deliberately ramps up to an unreasonably level past a certain number of blocks. The only thing which can reset this is for nodes to update to a revised consensus algorithm.
The point of this is to essentially force a periodic "vote of confidence" -- instead of nodes passively not updating their software, every few years they HAVE to, or the difficulty bomb comes into play. Which means when a major hard fork update is proposed, no one can sit on the sidelines, they have to either choose the proposed fork, or propose an alternative for consensus to rally around. This cycle repeated every year or so, and has gone pretty smoothly so far.
The point of this is to encourage active participation, so nodes can't sit there and cast "passive no" votes to everything, they're incentivized to actively participate in the network's evolution.
Even if a node doesn't update, mining just slows down. Nothing anywhere in that process will cause the Ethereum network to "implode", that's IMO a rather emotionally charged way of describing things.
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As to "requiring Vitalik's intervention" -- that's just an outright falsehood.
Not only is Vitalik not directly involved in the coding of any of the multiple independent Ethereum clients anymore, but there is a very large group of developers (of which the "founders" are a very small %) which work out the proposals for updates. And anyone can propose an update -- the software and the high level specs are all open source (and most are on github).
Proposing a full milestone update of the Ethereum network is complex, and probably more work than a single individual could pull off reliably -- but that's the whole point. There is no gatekeeper (and definitely not Vitalik), and the only way these things are accepted is because the larger community (validators/miners, folks running nodes, user community) all feel involved enough to accept or reject proposals.
You could remove every single founding developer, every incorporated organization, and the Ethereum network and it's developers would keep going. And the value of the token derives from it's use on the network, not on those companies turning a profit (and most of them are non-profits).
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All of the above, along with numerous other aspects of the new beacon chain, are designed to incentivize decentralization of assets and control, as well as active over passive participation.
I think the SEC was quite well aware of the situation, and made the right call about Ethereum.