Bitcoin Forum

Everyone talks about what can be done with Ethereum et al and the power of decentralized application technology. What I insist not understanding is what makes those applications superior to their centralized counterparts.

I don't claim that Dapps are not important. I just want to learn what's deal with them.

Post Script

Nobody really knows. But enjoy the PnD.

Transparency

I can make my centralized app do obscure things, I can modify it at any time without telling you.

Dapps don't need trust instead.

Thank you! So this could be useful for gambling. A roulette contract may work autonomously without a centralized institution. We may even omit the zero from such a roulette. And what else? I am looking for real-world use cases.

Edit: Cannot open-sourced applications be used to provide the same transparency?

Strength and independence!!!! Your "programs" (contracts) are very unlikely to stop running for any reason other than programmatically intended. Independent in the sense that it is very difficult for ANY group or individual to tamper with the running program. This is like... rise of the machines.

Yes, that is the part everyone knows, but in what real way will this power be utilized?

Cutting out the middleman. Each contract autonomous. Saving money.

No one knows the full power of Dapp's and Dao's as yet. Just like when the Internet first arrived. No one could predict how it would evolve. It took developers to build on the HTML protocol. Just as today developers need to build on the Ethereum blockchain.

Ethereum is useless and just a pump and dump to scam people.  It doesn't matter what you can do inside of the VM when the system that supports it is not valid:

The Ethereum Paradox

http://bitcointalk.org/index.php?topic=1361602.0

i think they are just a new trends, it will fade away when a newer trend will come out, all those coin are there to scam people, some do it in a legal way other in a not-legat way

Your opinions are at extremes, friends. Even if Ethereum may have a limited use, it does by no means mean that it's a pure pump&dump scam. You should know that it's a novel and great thing to achieve at least from a geek's perspective.

On the other hand, the other extreme is to claim that Ethereum will be Web 3.0, or will have as widespread use and functionality as the Internet.

All we need is to think through some real-world use cases. There is a potential in smart contracts; this is the sure part. How this potential can be actualized; this is the question.

Sorry, but no, this is not an "extreme".  Closed entropy systems do not even fall under the category of decentralized currencies in the first place.  All recursive systems are permissioned ledgers.  This means the most Eth could possibly hope to be is a shareholder owned company.  It's like someone going public with a stock from their basement without even having a viable product.  Unless they're somehow grandfathered in, the legal system will probably throw all these people in jail once the law catches up to this sector.

Having said that, even if you don't care about the law at all, Eth cannot scale, and scaling is far more important for Eth than for BTC.  Even if you wanted just a shareholder owned company and not a decentralized currency, it is not a valid product because it would struggle to handle the load of financial services for just one large company, let alone integrate many together.  It is 100% a scam.

Even Gmaxwell finally came out of the closet calling it a scam:

https://bitcointalk.org/index.php?topic=1427885.msg14601127#msg14601127

When I said IOTA is a permissioned ledger extortion scheme, I was not kidding about that either.  I'm one of the few people on this forum that doesn't just flat out lie about everything:

r0ach,

Thank you. I think your analysis is valuable, though I'm still not convinced. I need to think about it more. May I ask if you think the same way as for other Blockchain 2.0 initiatives?

Meanwhile I am still in search of good answers as regards what the possible use cases might be for smart contracts, which will prove to be superior to the equivalent centralized applications. Gambling is one of them. But if that is all, it doesn't make smart contracts very revolutionary.

And one more thing. Even if Ethereum et al will not be useful, calling them scam is still an extreme view. In order for them to be scam projects, the developer team should know about the consequences and disguise the hidden worthlessness of their product under embellished promises. As for Ethereum, all they say is that the platform will allow decentralized applications, and this is a fairly good description of what they have already delivered.

Ethereum smart contracts AFAIK are used increasingly for not so legal purposes such as the idea of a "legit ponzi". As you mentioned, gambling could also be a good use of it. But the coin that it's based on, that is, a shitcoin, makes it completely not worthwhile to use this system.

Cyaren,

What do you mean the coin which the system is based on makes the system worthless?

Ethereum. As many people suggest, I believe too that Ether is too much of a pump & dump scheme for it to work.

Just my opinion.

I don't see any reason why ETH price should be pumped for the Ethereum platform to work. I am not interested in the price of ETH, but in the usability of the platform.

...you still refused to put your money where your mouth is, revealing your real motives.

That's used car salesman marketing speak.  The phrase means literally nothing.  Nobody in altcoins has improved on Bitcoin in any way except maybe anonymity purposes such as ring signatures and zk-snarks (monero and zcash).  I once thought some proof of stake systems like DPoS might have promise, but once you figure out the complete picture in how these systems works, you can walk away with no other conclusion than them being a step BACKWARDS compared to plain Bitcoin.

Although I would not recommend buying any altcoin such as Monero or Zcash until a few months after BTC halving or you will likely get financially raped.  The drawbacks of Zcash also kinda outweigh the pros of increased anonymity set over Monero to me.

Maybe the task is not to improve bitcoin, but to build something different based on the same technology on which bitcoin depends. This is why it is called Blockchain 2.0, and not Bitcoin 2.0. What is improved is not Bitcoin, but the blockchain technology. This is also why your post is not an answer to my question. "Nobody in altcoins has improved on Bitcoin in any way," you say. Should they? Does Localbitcoins.com improve bitcoin? Does Bitfinex improve bitcoin, or let me ask: Does Bitfinex improve Localbitcoins.com?

I suggest you to read this article, it will help you understand what smart contracts are for and what they are not for, good read  :D

http://www.coindesk.com/three-smart-contract-misconceptions/

Seriously man, you are confused.  The buzzword you constantly see spammed by bankers now, "blockchain not Bitcoin", is them trying to co-opt and hijack cryptocurrency.  The only purpose of this propaganda is for them to try and create their own permissioned ledger or federated chain, "GoldmansachsCoin" that they create out of thin air and try to sell off to mindless idiots for profit.  There is no Nash equilibrium in such a system, thus it has zero value.  It provides zero benefits over Bitcoin or the digital fiat already in use and will go nowhere.

Bankers are mad they weren't early adopters of Bitcoin and are now trying to weasel their way out of having to buy at higher prices.  That's all there is to this discussion.  They will fail in this attempt because their federated chains and permissioned ledgers have no value.  There's Antonopolous talking about the same subject:

http://news.bitcoin.com/antonopoulos-banks-blockchain-romance/

I think if something is too hard to understand to explain in just one sentence, the majority of people will never even care the slightest bit

Bitcoin has been operating out of a Nash equilibrium for several years already. Maybe you should start to critically analyze words you are parroting?..

Please, no China conspiracy theories.  Everyone knows China is not a long term threat to Bitcoin due to commoditization of ASIC occurring.  Having lots of hash power in China right now is only a symptom of everything on earth being manufactured there - people using their slaves as global labor arbitrage.  This is something that will end by tariffs or war, or both, and it's going to happen soon.  The US already put enormous tariffs on China steel to protect that industry.  Tariffs on everything else from China by every nation on earth is what comes next.  China knows this is coming, this is why they're trying to prop up domestic spending.

China is completely irrelevant here.

Since when has our topic been the bankers? Bankers do what they do. They use blockchain-inspired decentralized ledgers; they hijack bitcoin, etc. etc. What they do has nothing to do with what we can do with blockchain.

yelllowsin,

I'll definitely check out that article. Thank you.

Come-from-Beyond,

Are you the CfB that I know from Nxtforum?

I posted on Nxtforum under the same name for a while.

Are you saying that any transaction with (say) Bitcoin that's not a cryptographically-sound circle jerk requires at least one outside trust-based input?

FWIW, I saw on a very old thread that the first iteration of Mt. Gox (when Jeb McCaleb owned it) accepted deposits from PayPal.

I'm saying that Bitcoin operates out of a Nash equilibrium. This shows that words of r0ach ("There is no Nash equilibrium in such a system, thus it has zero value.") is a nonsense. Or Bitcoin has zero value.

PS: Btw, This kinda shows that r0ach didn't put much thinking into that phrase. Probably it's indication that he doesn't understand what he is talking about. I'm not surprised, though.

Okay. I'm not much for game theory - I know only the rudiments - but I do know enough rudiment to figure out that the first-ever Bitcoin transaction (10'000 BTC for a pizza) presented a classic prisoner's dilemma situation. A has to send the 10'000 BTC to B and B has to pay for a pizza and send it to A. Unless both A and B co-operate, there's no transaction.

In this case, there's one trust-based outside input required. B has to be trustworthy enough to both pay for and send the pizza. There's also a trust-based inside input required: A has to send over the 10'000 BTC. And of course, if [C,D] or [D,C] is the outcome then the Defector walks away with a freebie. It has to end in [C, C], else there's no transaction with Bitcoin as a medium of exchange. 

This tin foil hatter!
http://www.yoism.org/images/LaughingCat.gif

I don't think you understand the issue.  A related subject is, it is clear no cryptocurrency solves Byzantine generals, otherwise number of confirmations wouldn't be entirely subjective.  You would be able to say, at a specific number of confirmations, I now have objective proof, but it's not possible.  All that matters for the end user is likelihood of transaction reversal past a certain point, and that there's no permanent monopoly on transaction validators.

Unless you believe it's possible to permanently monopolize mining (from pool turnover rate, looks highly unlikely so far), you will get your "good enough" number of subjective confirmations eventually that most humans agree is not going to be reversed.  No other system will be able to improve on that metric either.  Closed entropy systems tend to monopolize transaction validators by default, and IOTA is just a train wreck in general.  Talking abut Nash equilibrium over the course of 1 confirmation is pointless since Bitcoin (and every other cryptocurrency) is technically unable to objectively solve such a problem with proof in a decentralized manner.

Good read, really! So in a sentence, Ethereum has a little or no use case apart from what can be done by other crypto-platforms that allow user-generated tokens.

@r0ach,

You stop answering my questions?

I was talking about http://arxiv.org/abs/1311.0243

Hahaha, now I see that you still don't understand cryptocoins well enough but you, for sure, read Vitalik's blog. Man, go back to trading, your mindset is not for scientific researches.

It is obvious that you don't since you made IOTA...and no, I don't read Vitalik's blog.  It's a scamcoin, why would I read it?

@r0ach,

It is obvious you ignore my questions but let me ask a few more, if you favor to answer.

Can you give me a source where it is clearly stated that if there is no Nash equilibrium in a system, then it has zero value? What kind of a value theory is it? What does "it" refer here? To the system? What does it mean for a system to have zero value?

You need to answer those questions to make a sense.

That paper does not demonstrate any party is necessarily operating out of a Nash equilibrium. Selfish mining is detectable (http://hackingdistributed.com/2014/01/15/detecting-selfish-mining/), so mining pools, being visible and identifiable entities, face reputational costs for engaging in it. That very plausibly makes it unprofitable. Also, some forms rely on network conditions that may not exist.

If there were some sort of undetectable or unattributable selfish mining known to be compatible with the current network conditions, and we could tell that weren't happening then you could correctly make the argument you did, but that is a contradiction.

I guess one time we might see a valid experiment would if a big pool does an exit scam. Under the reputational-cost theory, such a pool should selfish mine right before the exit, though it still might not be worth the trouble to actually implement for relatively modest gains.

So you came to those thoughts by yourself? Well, I don't have a reason not to trust your words... Probably you are smart but sometimes switch into retard mode, I don't have a better explanation.

We had Deepbit which got 51% of hashing power and noone detected an abuse attempt. We had GHash.io which got 51% of hashing power and an abuse attempt was detected.

What did keep Deepbit operator honest (they are Russians BTW, half of BTT thinks Russian = con-artist)?
How much reputation did that doublespending against a casino cost to GHash.io operator?

r0ach = Half of BTT? Well maybe there are lot of sock puppets on here, lol. 

Anyway, I don't think you can easily answer "how much reputation" cost, but you can't say that failure to take short term advantage is not a Nash equilibrium when reputational costs exist, because that is an alternate consistent explanation.

Miners can be anonymous, they can collude, frankly saying, this "reputation" topic doesn't look as a solid counterargument against the claim that Bitcoin operates out of an equilibrium.

Miners can not operate anonymously nor do anything useful with selfish mining or double spends as long as they are mining on pools, which the huge majority of the hash rate is currently doing. Only the pools themselves could do that, and they aren't anonymous.

If a large anonymous solo miners existed and had the opportunity to engage in selfish mining but didn't, your theory would be validated, but how could this ever be tested? I think it is impossible.

You could argue that a bunch of large miners would be better off on private pools or something, and by choosing to use public pools they are not in a Nash equilibrium, but the whole argument becomes complex, since pools benefit when other miners join them, so there is an incentive to be public, large visible actors such as Bitmain might be better off using a visible public pool since it isolates them from false accusations of misconduct, etc.

Also, the theory of selfish mining has some repeated game problems, since it assumes everyone else doesn't selfish mine. If others selfish mine, the defense is to selfish mine yourself, and if multiple large miners of equal size all selfish mine, then it is obvious none retains any advantage. If there are several large miners (or pools), they may be better off not bothering to start the conflict, especially given even small potential for reputational consequences.

Incorrect. Just by being on a large pool, they inherently are mining on the correct block more often than the minority of the hashrate, which instead have to wait for propagation delay.

Also a mining farm mining (or oligarchy of them) with 33% of the hashrate even if mining on a pool, can still do the selfish mining attack without informing the pool. Remember Bitcoin never implemented Meni Rosenfeld's oblivious mining shares fix to prevent share withholding attacks. This is assuming the pool supports getblocktemplate (https://en.bitcoin.it/wiki/Getblocktemplate) so the miner can set his own transaction block hash (however I guess most pools would do something to prevent a miner from pool hopping so I am not 100% sure about this).

Also miners could own the pool and pretend not to. They could obscure their selfish mining by hopping around to different pools they own. You can bet mining farms have looked into all these techniques. The Chinese are very clever.

Why? https://socrates1024.s3.amazonaws.com/consensus.pdf: "Abstract—We present a formal model of synchronous processes without distinct identifiers (i.e., anonymous processes) that communicate using one-way public broadcasts."

I haven't read that paper but from the abstract it isn't obvious how this would relate to miners on a pool which is almost all Bitcoin mining right now.

That's not evidence of Bitcoin operating outside a Nash equilibrium, which was CfB's argument. Most of the hash rate 80%+ obviously mines on very large pools. The rest may do something else, and it might even be a bad decision on their part, but that little 20% doesn't really affect how Bitcoin operates.


I don't know which pools support getblocktemplate, but there's no evidence of anyone using it (most if not all ASIC gear just connects directly to the pool and uses stratum). Seems like that concept mostly died when Luke-Jr lost the original argument with slush.

smooth I tend to agree they don't need to. They are already amassing massive profits and they just need to make sure they can control the block size to maximize their transaction fees.

I don't think they'd rock the boat with selfish mining, unless they were 100% sure they could do it undetected.

Well, if both our arguments are not obvious then let's wait while one of us writes a whitepaper. For now, the fact that people keep talking about 51% attack while the threshold can't be above 33%, shows how little they care about anything except speculation on BTC price.