So what's the deal with smart contracts?

[yelllowsin]

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.

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  

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

[r0ach]

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?

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/

[Laniakea]

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.

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

[Come-from-Beyond]

There is no Nash equilibrium in such a system, thus it has zero value.

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

[r0ach]

There is no Nash equilibrium in such a system, thus it has zero value.

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.

[Come-from-Beyond]

Please, no China conspiracy theories.

China is completely irrelevant here.

[JollyTrades]

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?

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/

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?

[Come-from-Beyond]

Come-from-Beyond,

Are you the CfB that I know from Nxtforum?

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

[Nxtblg]

Please, no China conspiracy theories.

China is completely irrelevant here.

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.

[Come-from-Beyond]

Please, no China conspiracy theories.

China is completely irrelevant here.

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,

The contribution of Nash in his 1951 article Non-Cooperative Games was to define a mixed-strategy Nash equilibrium for any game with a finite set of actions and prove that at least one (mixed-strategy) Nash equilibrium must exist in such a game.

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.

[Nxtblg]

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.

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. 

[ProfessionalGoogler]

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?

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/

This tin foil hatter!

[r0ach]

I'm saying that Bitcoin operates out of a Nash equilibrium.

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.

[JollyTrades]

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.

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  

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

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?

[Come-from-Beyond]

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. 

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

[Come-from-Beyond]

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.

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.

[r0ach]

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.

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?

[JollyTrades]

@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.

[smooth]

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

That paper does not demonstrate any party is necessarily operating out of a Nash equilibrium. Selfish mining is detectable, 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.

[Come-from-Beyond]

I don't read Vitalik's blog.

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.