The Ethereum Paradox

[TPTB_need_war]

Ethereum could change the trend.
See there : https://twitter.com/jaxx_io?ref_src=twsrc%5Etfw

The UI and wallet availability has nothing to do with the "Paradox" we are writing about in this thread.

[1715276322]

1715276322

[YarkoL]

The point is there can't be partitions with programmable scripting. Coasian boundaries are subject to destruction by entropy.

Beautiful.

suppose we have shards, or islands, or whatever domains with something resembling
a partial order, can we have a possibility of an asynchronous stable protocol that can keep them afloat?

[r0ach]

Since this coin has so many somewhat intelligent people working on it, they had to of known for a long time it was not comercially viable.  This brings up the questions:  Was it a scam from day one?  Is it a bunch of compartmentalized retard savants all working on different pieces that somehow can't put the big picture together and think that once each one finishes their module it's going to magically work?

Without partitioning (which it's obviously not going to have), the load bearing capacity will be so small, it will only serve a subset of one tiny industry maybe.  Anything involving finance is usually high volume, so their hopes of being Jamie Dimon's personal fluffer are not realistic at all.  I haven't determined just how much capacity Ethereum should have without partitioning, but maybe someone else has.  Let's say users could justify the fees (the fees would likely go way beyond what they would think is reasonable for the market), could Ethereum replace the backbone of only Kickstarter with nobody else even using it?

The real Kickstarter would be able to offer a cheaper service due to operating in a centralized fashion, which brings back the question, why or would anyone bother using Ethereum Kickstarter?  You don't use Kickstarter as a store of value, so it's not like Bitcoin where decentralization is some kind of great benefit.  The risk of having your money stolen by the real Kickstarter isn't really high enough to force people into paying more to do it in a different manner, and it's not like Ethereum removes the counterparty risk of a Kickstarter delivering on it's actual product anyway.

As I mentiond upthread, at the end of the day, there will likely be only one specific, tiny sector that can justify the fees for it's use case scenario.  At that point, the coin would be more like a corporation instead of a general purpose platform.  This is assuming the use case scenario actually exists.  Nobody knows if it does.  The likelihood of it being economically unviable for all sectors is high, which would make the coin value zero.  Bitcoin can scale on-chain, it can scale off-chain, it can scale through bundling, there are numerous tricks to scale Bitcoin.  Ethereum has few if any means of scaling, while relying on scalability even more than Bitcoin does.

[TPTB_need_war]

r0ach, Vitalik did not respond to my challenge.

I genuinely believe based on listening to their presentations which I linked upthread, that they sincerely didn't realize that partitions are unbounded due to externalities. Math nerds tend to see every nail with their math hammer and don't think of other perspectives such as the following bolded by one of the very smart mathematicians (Greg Meredith) working on Casper (he is also the author of Synereo's white paper):

4. Most fundamentally to Synereo's design is I don't see how Greg's math model for the attention model (Reo & AMPs impacts) can be enforced on all nodes. I admit I didn't dig into the math and research he cites in the 56 page white paper (I do sort of understand it conceptually), but i think I don't need to because there is no way to enforce that all nodes will run the same math model. Additionally I think the concept of paying with AMPs to force content to move uphill against Reo is the wrong model, because the value of advertising is orders-of-magnitude smaller than the value that users get out of social networks. Thus the only model that makes economic sense is Reo. Removing AMPs of course destroys Synereo's funding and profit model, so would kill the project. Thus I don't expect them to adopt a corrected design.

We'll see how they react to this, whether they ignore it, offer a "solution", or capitulate honestly.

On throughput, smart contract block chains can't even exploit parallelism of the CPU! So without partitions you can only use one thread for validation. Basically it isn't scalable for anything. Completely useless.

I quoted Vitalik upthread and linked to that multichain.com page and indicated he had a had solution in mind for parallelization, but I suppose he is thinking along the lines of what I quoted upthread:

programming languages with formal verification systems backed by state-of-the-art theorem provers

Ah so Vitalik does realize there is a problem like the sort I am pointing out. But perhaps he has not yet realized that even 100% dependently typed scripting won't fix the problem I am claiming is inherently insoluble.

Edit: thinking about this more while eating, I think parallelization could be exploited within a block if the scripts can provably not depend on each other w.r.t. to the data in the prior blocks (e.g. employing partitioned data stores or 100% dependently typed scripts) because the prior blocks are static data so no cross-partition indeterminism can be introduced by externalities (all scripts submitted for the block are computed based on inputs from the historic static data which can't be impacted by running any script for the current block). So then the externalities wouldn't apply within the block. This still won't allow partitions to span block boundaries because externalities across block boundaries will apply in that case as I explained upthread.

So thus I guess you could scale this as a centralized service as r0ach wrote.

[CIYAM]

On throughput, smart contract block chains can't even exploit parallelism of the CPU! So without partitions you can only use one thread for validation. Basically it isn't scalable for anything. Completely useless.

Although I am admittedly not familiar with the low-level details of their design the way that AT was designed does allow for parallelisation of AT processing as communication between ATs does not occur "whilst they are processed" (any token amounts or messages sent from one to another don't apply at the point that they are executed but effectively after all the ATs have been processed for that block).

It may be that the Ethereum design doesn't work the same way but for sure you can design "smart contracts" that allow for parallel execution (you simply cannot have the state of one affect any other within the bounds a block).

[TPTB_need_war]

On throughput, smart contract block chains can't even exploit parallelism of the CPU! So without partitions you can only use one thread for validation. Basically it isn't scalable for anything. Completely useless.

Although I am admittedly not familiar with the low-level details of their design the way that AT was designed does allow for parallelisation of AT processing as communication between ATs does not occur "whilst they are processed" (any token amounts or messages sent from one to another don't apply at the point that they are executed but effectively after all the ATs have been processed for that block).

Correct. Agreed. See my edit. I realized that also while eating after posting my prior post. I was rushing because food was on the table waiting for me.

[TPTB_need_war]

There appears to be a conceptual solution for smart contracts which could enable partitions.

That is to lock down input to the block chain. In other words do not allow any data to be input into partition state from external source, i.e. not even allow a new script (which can contain new constants) to be added to run in the locked down partition. So this means no new user accounts in the locked down partition, no new contract instances, etc..

Not sure how useful that is though. Seems basically useless.

[TPTB_need_war]

The problem is that partitions destroy the Nash Equilibrium because validators can't be sure they can trust other validators and yet it is also impossible prevent state transitions from one partition from leaking into another.

Even exploiting the fact (explained our prior posts) that the scripts in a block can be computed in parallel if they only reference block chain state in prior block, or even extending this restriction further into the past history, will not fix the prior sentence in that the parallel computations can't be split up among different validators because once they can cheat each other on validation (another game theory with externalities) then the Nash equilibrium implodes (and PoS adds more Nash equilibrium failure modes).

Also ETH appears to me to be illegal:

Public ICO or Crowdsale of Tokens = Illegal unregistered investment security.

[TPTB_need_war]

I've maintained for weeks now in my comments that the verification/validation will always become centralized for crypto currency (including smart contracts) and the cost of verification is more acute for long-running scripts.

I've also written that I think the problem can be solved by controlling centralized verification with decentralized UNprofitable proof-of-work.

Thus I believe smart contracts are still plausible on public decentralized block chains. Ethereum is pursing the wrong design though. And they are running out of funding.

[monsterer]

The problem is that partitions destroy the Nash Equilibrium because validators can't be sure they can trust other validators and yet it is also impossible prevent state transitions from one partition from leaking into another.

Partitions weaken the network overall, so there must be an incentive to merge partitions (whether that be by including unrelated partitions into a single block, or by actually merging branches). If you incentivise this merger, the miner's cost of creating a partition must be greater than the reward for merging otherwise the rational behaviour for a miner is to create and then merge partitions over and over. Moreover, this can only work when the path of largest cumulative difficulty is rewarded more than the other branches, otherwise the incentive is still to diverge instead of converge.

[CIYAM]

For those that aren't kids: https://bitcointalk.org/index.php?topic=1364594.0

(AT has been running "live" for over one year on two separate blockchains without any serious issue and supports parallelisation of smart contracts)

Let the others "play with their Lego".

(and don't forget that the Myth Busters did show that you can't make too big a ball of Lego and expect it to roll properly)

[Mvann]

TPTB_need_war, I can't for the life of me figure out if you have completely lost the plot, or if you are some sort of wizard able to see what all these other "geniuses" can't..

I mean, for this to be true, that Ethereum is built in such a way that it will not work, at all. Then this is some elaborate scam from prominent and thus far honorable community members, or some incredible naiv "hive mentality" of pure wishful thinking from seemingly very intelligent people. The amount of hype Ethereum has atm is unreal, just to give an examples, my occupation atm consistent of answering questions from friends and colleagues about this new drug called "Ethereum", questions with perhaps even more wonder and entusiasme that I saw for bitcoin 2012/13.

I wish someone could chime in and just bury this, just so regular Joes like myself could rest assured that Ethereum is not fundamentally flawed and doomed as you are claiming..

I feel you have little credibility though as you seem to present arguments that are not factual as facts and you have your own competing project under development..

And those point you make that I understand fully such as:

And they are running out of funding.

Are blatantly wrong, as you know given the fact that VB said himself that the foundation have been selling Eths all the way up to $6 to ensure economical safety for the years ahead.

[rokkyroad]

Are blatantly wrong, as you know given the fact that VB said himself that the foundation have been selling Eths all the way up to $6 to ensure economical safety for the years ahead.

That is an interesting tidbit the eth shills and bagholders would not want public.

I wonder how much VB brought in dumping eth? No one will ever know the true figure. Another 18 mil to piss away?

It all about the money. It always is. 

[tempus]

(...)

And they are running out of funding.

Are blatantly wrong, as you know given the fact that VB said himself that the foundation have been selling Eths all the way up to $6 to ensure economical safety for the years ahead.

As far as I know that is not correct. What he said was:

The foundation currently has ~1.65 million ETH, plus ~$750k in non-ETH assets. 1650000 * 6.1 + 750000 = $10,815,000. Based on our current ~$200k/month burn rate, that will last us ~54 months ~= 4.5 years. That said, we are planning some substantial expansions which will increase our expenses but also get casper and other fun stuff out the door much faster, and we are also starting to get interest for corporate sponsorships coming in, which could secure us a more sustainable funding path in the long term.
https://www.reddit.com/r/ethereum/comments/45bhus/so_the_ethereum_foundation_can_now_fund_itself/czwpr04

They did not sell. And the price of $ 6.1 was correct two days ago but after the price drop it's currently at about $ 4.90. Makes less 2.7 Mio Dollar and I expect it to go down more.

The problem: They are highly dependent on the ETH-price.

[Mvann]

(...)

And they are running out of funding.

Are blatantly wrong, as you know given the fact that VB said himself that the foundation have been selling Eths all the way up to $6 to ensure economical safety for the years ahead.

As far as I know that is not correct. What he said was:

The foundation currently has ~1.65 million ETH, plus ~$750k in non-ETH assets. 1650000 * 6.1 + 750000 = $10,815,000. Based on our current ~$200k/month burn rate, that will last us ~54 months ~= 4.5 years. That said, we are planning some substantial expansions which will increase our expenses but also get casper and other fun stuff out the door much faster, and we are also starting to get interest for corporate sponsorships coming in, which could secure us a more sustainable funding path in the long term.
https://www.reddit.com/r/ethereum/comments/45bhus/so_the_ethereum_foundation_can_now_fund_itself/czwpr04

They did not sell. And the price of $ 6.1 was correct two days ago but after the price drop it's currently at about $ 4.90. Makes less 2.7 Mio Dollar and I expect it to go down more.

The problem: They are highly dependent on the ETH-price.

In that reddit thread you are quoting VB says "Have been negotiating ETH sales going all the way up "

Which is obviously the smart thing to do as it is in the best interest for the foundation. If I'm not completely mistaken it implies that companies or private individuals who are looking to buy a lot of Eth have contacted Ethereum foundation and made deals. Nothing wrong about that, in fact if they didn't consideer that then I would seriously question their ability to run and develop something as major as this.

Anyways my point is that the "war" guy said Ethereum was running out of funding, which couldn't be more untrue, especially now.

[tempus]

(...)

And they are running out of funding.

Are blatantly wrong, as you know given the fact that VB said himself that the foundation have been selling Eths all the way up to $6 to ensure economical safety for the years ahead.

As far as I know that is not correct. What he said was:

The foundation currently has ~1.65 million ETH, plus ~$750k in non-ETH assets. 1650000 * 6.1 + 750000 = $10,815,000. Based on our current ~$200k/month burn rate, that will last us ~54 months ~= 4.5 years. That said, we are planning some substantial expansions which will increase our expenses but also get casper and other fun stuff out the door much faster, and we are also starting to get interest for corporate sponsorships coming in, which could secure us a more sustainable funding path in the long term.
https://www.reddit.com/r/ethereum/comments/45bhus/so_the_ethereum_foundation_can_now_fund_itself/czwpr04

They did not sell. And the price of $ 6.1 was correct two days ago but after the price drop it's currently at about $ 4.90. Makes less 2.7 Mio Dollar and I expect it to go down more.

The problem: They are highly dependent on the ETH-price.

In that reddit thread you are quoting VB says "Have been negotiating ETH sales going all the way up "

Which is obviously the smart thing to do as it is in the best interest for the foundation. If I'm not completely mistaken it implies that companies or private individuals who are looking to buy a lot of Eth have contacted Ethereum foundation and made deals. Nothing wrong about that, in fact if they didn't consideer that then I would seriously question their ability to run and develop something as major as this.

Anyways my point is that the "war" guy said Ethereum was running out of funding, which couldn't be more untrue, especially now.

Ah, I see the comment you mean - didn't recognize it. Not sure what exactly he means with that but either way, I agree with you that money won't be the problem any time soon. But I also agree in some points with the "war-guy". I'm not a programmer and without a deep understanding of the technical side, but I recognized that there seem to be some uncertainty about the Casper-solution, even in the team. Or to say it with other words: It's maybe just my personal impression after reading discussions about it, but for me it seems that they don't exactly know how to do it and what could be the result in longterm - for the entire eco-system. And everytime I've asked about Casper it seems nobody wants to discuss it - I did not ask ETH-Devs, but several times in the german ETH-Thread and also in the official one. Either way I'm kind of surprised that Ethereum wants to switch to PoS. In my eyes that's a bad decision because PoS, even if it's a modified, must lead into economically centralization. I also recognized that V. Buterin did not reply to TPTB about Casper - as if he doesn't want to discuss it deeply.

At the moment I'm not invested, just watching and "analyzing" communication and also the market to figure out if I should buy or not. And I believe to see a lot of uncertainty and risk and I also believe that the market is highly manipulated. Can't prove that and it's not even because of the price but more because of the extremely high volume. Polo just has a little bit over 100k accounts and I never saw more than about 4000 active users at a time. I doubt that that is enough to maintain >30k BTC over several days. And if it's manipulated it won't be a usual pump group.

[TPTB_need_war]

The problem is that partitions destroy the Nash Equilibrium because validators can't be sure they can trust other validators and yet it is also impossible prevent state transitions from one partition from leaking into another.

Partitions weaken the network overall, so there must be an incentive to merge partitions (whether that be by including unrelated partitions into a single block, or by actually merging branches). If you incentivise this merger, the miner's cost of creating a partition must be greater than the reward for merging otherwise the rational behaviour for a miner is to create and then merge partitions over and over. Moreover, this can only work when the path of largest cumulative difficulty is rewarded more than the other branches, otherwise the incentive is still to diverge instead of converge.

Correct, but ostensibly you are missing my point. My point is that if validators must trust validators of other partitions[1], then they can't achieve a Nash equilibrium because they must compute the game theory incentives that the other validators have to lie. For example, shorting the coin. Thus the rational action is to no longer assume that other validators are honest. Thus the Nash equilibrium collapses. And thus consensus-by-betting is no longer a rational Nash equilibrium convergence, e.g. the loss of the deposit is not a loss so then validators can't trust others validators (and need to validate everything themself which thus means there are no partitions).

This is really a high IQ point. You've got to visualize the issue at a meta abstraction level.

And if all validators (from all partitions) compute the validation for all partitions themselves, then there are no more partitions. Thus no scaling (at least not decentralized and scaling).

[1]

because partitions impact each other due to externalities of data that can be transported between partitions as I explained upthread, e.g. the output of a state transformation on one partition becomes the input of a state transformation on another partition, not directly on the block chain but due to an externality.

[TPTB_need_war]

Guys about the issue of whether Ethereum is running out of funding, my point is that they were running out of funding, except for the ETH they own which before this recent rise in the price was not valued very high. Moreover, there was not sufficient volume so if they had tried to sell, they would have driven the price down (especially factor in the amount of ETH being created from mining ongoing).

Thus I am saying this recent shrilling for the Casper vaporware is likely to drive the price AND VOLUME of ETH upwards to take more money from speculators.

And I am saying they have wasted the $18 million they got. Heck I could probably design a solution for ~$20,000 (or not more than $100,000). It doesn't take $18 million to make smart contracts work with a centralized verification which is what they will eventually realize is the only way to make it work (per my upthread posts explaining why).

They will waste more $millions, because that is what they do. The pattern is already clear. People/organizations don't change (until they are forced to by economic reality, which apparently is discipline the market is unwilling to do as you all are giving Vitalik more money to play with).

How new Alts / Scamcoins steal your Bitcoins


It seems every day a new alt coin pops up. They are easy to make - most are just clones of coins
that were programmed by someone else and just given a new name, a few graphic tweaks, etc. to make it look new.
It doesn’t take much work - a new scam coin is born.   Most of the devs who create these coins have only one intention - to steal bitcoins from others.  This explains how they do it. 


First they clone an existing coin, make a few tweaks, make a website (which helps scam coins look legit) then they pre-mine a good amount of coins which they will dump later on.
After the coin is up and ready for launch it is  Announced on various sites - bitcointalk.org, reddit, etc.


They get the coin listed on an exchange or two and then deposit a portion of their pre-mine coins they already
have saved up. They may make a few Bitcoins after their coin gets listed, but this is not the way they
intend to get your Bitcoins.   They let their coin do whatever the market wants for a month or two, maybe try to hype it up a little thru various forums and trollboxes to help legitimize it.  They don’t want to pump it as soon as it gets listed on an exchange - this would be obviously suspicious.


Then the day comes where they decide to make their move. They start by buying up the orders on
the exchange(s) to start driving up the price to give the illusion that their coin is starting to take of.  This doesn’t cost them anything because they pre-mined the coins for free and the Bitcoins they are using to buy up the orders go back to them because they are buying the scamcoin from themselves anyways.  After us innocent, unsuspecting users see that this alt
is moving up a large percent is when we start putting our bitcoin orders in so we don’t miss out on this coin that seems to be really taking off.  As soon as enough orders are put in / coins are bought - when the scammer devs are happy with the amount of BTC they have acquired, they dump the rest of their pre-mined coins on the order book to buy
up any lower bitcoin orders still on the books.   Congratulations, you have just become a bag holder of a worthless scamcoin that is back to its previous price of next to nothing, the devs have conned you out of your bitcoins and will let their scam coin die to start working on their next scam.

Btw, note how the ETH price rises when I am sleeping and someone makes comment doubting whether I am correct. Then I post again reinforcing my points, and the ETH price falls again. The speculators are really confused. And this is going to be an evidence that Ethereum is an illegal unregistered investment security. I don't know if the regulators will do anything about it though. Depends if speculators file a legal case perhaps.


As for whether I am correct and Vitalik is wrong, he will probably go off some tangent trying to devise some algorithmic way to address my point about the Nash equilibrium collapse with partitions due to the externalities of scripting. Because that is who his is. He is not pragmatic. He is unable to see the reason to give up and ship code that is centralized.

Or he will ignore and obfuscate. Yeah I did notice they are sort of trying to hide the fact that they also doubt themselves. They hide it in layers upon layers of complexity of technobabble. But I am able to dig through that. You guys can't easily.

Note I do agree the Vitalik writes some tantalizing blog posts. He is mathematical and he incorporates academic level understanding and terminology. I am not criticizing him in every facet. Researchers are often not good in business. We need researchers. But we typically don't hand them an $18 million budget.

People don't change. Vitalik is a research complexity machine. I am a person who created CoolPage for millions of users and was an early developer of Corel Painter which has shipped to millions of users. I've been very ill for the past 3 years, thus I changed.

If I am healthy, I will do what I do, which is make real products for millions of users and "SHIP IT". And Vitalik will do what he does, which is make complexity, live in fantasy land in his mind, and waste money.

In other words what I mean is I find a way to cut through the chaff and get down the final generative essence, which in this case is:

VALIDATION MUST BE CENTRALIZED. Any one who says different is deceiving you (and possibly themselves).


Btw, the decision to use PoS (i.e. deposits for consensus-by-betting) is to avoid the problems with PoW such as electricity consumption. My point about Nash equilibrium failure modes for partitions with programmable scripting applies even if they tried to use PoW.

So some issues are orthogonal. It is difficult to explain all the ways of thinking about this to others. I surmise that r0ach and enet may understand. monsterer understands some of it. CIYAM may understand, but I need to study his AT before I can comment on his level of understanding.

I was hoping smooth would comment but he may feel he hasn't yet spent enough time analyzing Ethereum.

[r0ach]

They just built a teaching tool to help evolve the crypto app space

If Ethereum was a "teaching tool" it would not have had a many millions of dollars IPO cash grab.  By having an IPO, you're insinuating that you have a commercially viable product, thus Anonymint's complaints about things like the Howey test come into play.  If they knew it would not work at all from day one, or that they had no idea how it would work and attempted to do everything on the fly, it would be irresponsible at best and a scam at worst.

I mean, for this to be true, that Ethereum is built in such a way that it will not work, at all. Then this is some elaborate scam from prominent and thus far honorable community members, or some incredible naiv "hive mentality" of pure wishful thinking from seemingly very intelligent people.

I wish someone could chime in and just bury this, just so regular Joes like myself could rest assured that Ethereum is not fundamentally flawed and doomed as you are claiming..

I feel you have little credibility (Anonymint) though as you seem to present arguments that are not factual as facts

There are obviously some conflicts of interest in this space, but if you do even a tiny bit of research, you'll discover this is not me or Anonymint suddenly trying to rain on the Eth parade out of nowhere for no reason, and there existed an almost unanimous bearish sentiment on Eth from people like Gavin, Adam Back, Gmaxwell, etc, from the start.  What I'm saying is, outside of the Eth team itself, there are not many, if any, big names in crypto who seemed to think it would be good or even viable at all.  Going further down the crypto ladder, even the lowly Monero dev Smooth believes the market for these contracts is vastly overstated because of lack of demand to expand Bitcoin scripting (op_return does not count).

I was hoping smooth would comment but he may feel he hasn't yet spent enough time analyzing Ethereum.

Fluffy and Smooth have already commented on Eth a lot.  Fluffy thinks it's the worst thing ever and Smooth is pretty bearish.

[StinkyLover]

Maybe all this is true but it just reminds me of the 1MB blockchain disagreement around BTC. All sorts of technical arguments going back and forth.

What's the ultimate aim of this discussion thread? Are people meant to pull out of ETH? Abandon it? Or fix forward (if it can be fixed)? Or is it just to educate the masses? All cryptos have their critics and supporters. I bet some people just see this as ultimate FUD.

What's the bugbear?

You're bringing out your contribution to the industry soon. I'm interested to see what it is. If it does everything you say it'll do then then I'll be more than happy to support you and it, and to see it flourish.

I'll tell you one thing. I'm in software, and I'm yet to see any product released (from any manufacturer or any visionary) that does what was promised on it's first release. Just be careful. You might be building a rod for your own back with this thread. If your contribution isn't super-duper on the button perfect on release you might get slaughtered before you've even had a chance to do anything.