7 ms·

What is surprising is how large the number of techies who don’t get this. It’s not about crypto currencies as much as it is about the game theory that allows it

by tzumby 5y ago

What is surprising is how large the number of techies who don’t get this. It’s not about crypto currencies as much as it is about the game theory that allows it to run a distributed self replicating state machine that is Byzantine tolerant - this is the true innovation

xpe 5y ago
Your comment is unclear. > What is surprising is how large the number of techies who don’t get this. What do you mean by "this"? Do you mean all of the points made by the author in the tweets? Or do you mean "the following" instead of "this", referring to what you think is most innovative about Bitcoin?
- tzumby 5y ago
  this = blockchain + proof of work / proof of stake , in my comment. The crypto currencies are a requirement to fulfill the Byzantine tolerance. They need to have value in order for the incentives to make sense
  - xpe 5y ago
    > The crypto currencies are a requirement to fulfill the Byzantine tolerance. I find this writing to be unclear and/or circular. Are you saying the following? _If_ the primary goal of a system is Byzantine fault tolerance, using a cryptocurrency is a requirement?
    - tzumby 5y ago
      Sorry, you have a point. I re-read my comment and it's not very clear. We need two things to achieve the Byzantine fault tolerance: - a way to ensure that users of the system can't cheat by creating a vast number of nodes and inflate their "voting power" (think of a poll where you can get behind a proxy to vote multiple times because the only security is weather or not the IP voted): this is the hash-cash, proof of work computation that ensures you have real hardware behind your "vote" - an incentive to mine and secure the network: the cryptocurrency. The amount of cryptocurrency you mined is just a translation of the energy and work you did to secure the network the same way as a banknote is a conversion of X number of hours you worked for someone. The question, like I stated in another comment, is whether or not this distributed ledger is useful. Let's say we haven't discovered the killer use case for this yet (putting my skeptic hat). Is it fair to dismiss it just because of all the scams related to its current use ? Do we do the same for email just because there's so many phishing attacks that happen on the protocol ?
- Graffur 5y ago
  I've been asking for similar clarification on other comments. I think this whole thread has become useless.
- tzumby 5y ago
  If you don’t believe that there is value in a distributed self replicating Byzantine tolerant state machine, that’s fair, everybody is entitled to their opinion.
  - yannoninator 5y ago
    what? english please? edit: why the flagging? do I seriously need to go get a PhD from MIT to understand this and why this is important?
    - dang 5y ago
      If you genuinely want to understand something, you need to ask about it in a way that expresses that intent. A snarky putdown in the form of a question does the opposite. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=disambiguate%20burden%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
  - onlyrealcuzzo 5y ago
    Considering that it hasn't produced any value of note in 13 years, I'm gonna go out a limb here and say I don't think it's worth 2% of the entire world's wealth - and certainly not 3% of the world's energy.
    - xpe 5y ago
      From what I can tell, much of this discussion seems to be characterized by people miscommunicating. > Considering that _it_ hasn't produced any value of note in 13 years... What do you mean by "it"? Do you mean (a) Bitcoin in particular; (b) some/many/most/all cryptocurrencies; (c) a distributed self replicating Byzantine tolerant state machine? Or something else? The comment by tzumby meant (c). Generally, the HN thread was about (b), best I can tell.
    - xpe 5y ago
      In this comment, I'm assuming you are talking about Bitcoin. > I don't think it's worth 2% of the entire world's wealth Taken literally, if 2% of the world's wealth is in Bitcoin, so isn't that its value, by definition? I'm not trying to nitpick. I'm trying to push back on what seems to be a glossing over of the fundamentals. I wonder if what you mean is that you don't think it is _wise_ for people to put so much of their assets in the form of Bitcoin. Now, if we want to have the discussion of "how has Bitcoin affected the economy?" it is not enough to only look at a snapshot of how wealth is allocated at one instant of time. We should be looking at a differential view; i.e. before and after. In particular, an economist would ask questions such as... 1. How has Bitcoin changed transaction costs? Who bears these costs? Over what time frame? 2. To what degree does the structure of Bitcoin provide advantages relative to other assets? 3. How does the development of Bitcoin factor into a longer-term view of experimentation and innovation? 4. To what degree has wealth been reallocated due to Bitcoin? To what degree did it disrupt existing wealth patterns? And so on...
deleted 5y ago
[deleted]
qualudeheart 5y ago
Right. The hilarious volatility and scams are imo much less interesting than this.
shieVae4I 5y ago
It's not a particularly interesting Byzantine mechanism. Like every other such mechanism (in the absence of trusted computing and similar tricks) it has a n = 3f+1 limit. See the selfish mining paper for why it's not n=2f+1. It's just the Byzantine mechanism that happened to win. If anything, its innovation is that its n is based on hash power, not on number of users or nodes. And the cost? Having to drag an immutable database around that can't be simplified; and, obviously, the opportunity cost of all the energy that's being used to support the consensus. The game theory part is likely to be inexorably intertwined with the cryptocurrency part. The incentive to defect is blunted by people's investments, either in terms of hash power machines (for PoW) or in coin holdings (PoS). It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way.
- xpe 5y ago
  > It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way. Can you clarify what you mean by "the same way"? I wonder if you meant "reward the early-comers in _some_ way." Yes, early miners of a cryptocurrency have an advantage, in the sense that there is less competition in computing resources. However, when you factor in risk (i.e. likely return on investment and opportunity cost), this "advantage" may not seem worth it. It depends on one's risk profile, awareness, opportunity, and skills. Thinking along game theory lines, when designing a system that requires up-front work, it seems clear that early participants will look for risk-adjusted rewards downstream. I don't know if I agree with the "very difficult" aspect of your comment. Many real-world systems exist that are not clearly explained by game theory; humans are more complex than their theories. Just to give one example, family genealogists typically are more than happy to share their historical research and family trees with others without expectation of personal gain. They do it largely because they want their ancestors to be remembered in the context of history. Of course, there is also some incentive for the _ genealogist_ themself to be remembered and perhaps to be perceived as important. But my point stands -- family genealogists don't expect to be compensated at all, much less in a pyramid-scheme kind of way. They are happy to create something of value and share it. Of course, a big difference between these family trees and cryptocurrencies is that the former are non-rivalrous.
pornel 5y ago
I think part of the problem is that mining was a very clever solution to a logical puzzle that seemed impossible to solve. Like bloom filters, it's tempting to find a use for it, because the algorithm is so cool. However, the theory and practice turned out to be very different. Neat algorithm can't be used as an excuse for the whole ecosystem that emerged around it: insatiable electricity usage of PoW, pump and dump, ransomware, money laundering, etc.
- tzumby 5y ago
  Yes, this is the kind of discourse I would expect to see around blockchain technology from a group of smart nerds. I can't argue with that, the oldest blockchain kind of failed to prove itself valid in significant ways.

by tzumby 5y ago

xpe 5y ago

Your comment is unclear. > What is surprising is how large the number of techies who don’t get this. What do you mean by "this"? Do you mean all of the points made by the author in the tweets? Or do you mean "the following" instead of "this", referring to what you think is most innovative about Bitcoin?

tzumby 5y ago
this = blockchain + proof of work / proof of stake , in my comment. The crypto currencies are a requirement to fulfill the Byzantine tolerance. They need to have value in order for the incentives to make sense
- xpe 5y ago
  > The crypto currencies are a requirement to fulfill the Byzantine tolerance. I find this writing to be unclear and/or circular. Are you saying the following? _If_ the primary goal of a system is Byzantine fault tolerance, using a cryptocurrency is a requirement?
  - tzumby 5y ago
    Sorry, you have a point. I re-read my comment and it's not very clear. We need two things to achieve the Byzantine fault tolerance: - a way to ensure that users of the system can't cheat by creating a vast number of nodes and inflate their "voting power" (think of a poll where you can get behind a proxy to vote multiple times because the only security is weather or not the IP voted): this is the hash-cash, proof of work computation that ensures you have real hardware behind your "vote" - an incentive to mine and secure the network: the cryptocurrency. The amount of cryptocurrency you mined is just a translation of the energy and work you did to secure the network the same way as a banknote is a conversion of X number of hours you worked for someone. The question, like I stated in another comment, is whether or not this distributed ledger is useful. Let's say we haven't discovered the killer use case for this yet (putting my skeptic hat). Is it fair to dismiss it just because of all the scams related to its current use ? Do we do the same for email just because there's so many phishing attacks that happen on the protocol ?
Graffur 5y ago
I've been asking for similar clarification on other comments. I think this whole thread has become useless.
tzumby 5y ago
If you don’t believe that there is value in a distributed self replicating Byzantine tolerant state machine, that’s fair, everybody is entitled to their opinion.
- yannoninator 5y ago
  what? english please? edit: why the flagging? do I seriously need to go get a PhD from MIT to understand this and why this is important?
  - dang 5y ago
    If you genuinely want to understand something, you need to ask about it in a way that expresses that intent. A snarky putdown in the form of a question does the opposite. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=disambiguate%20burden%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
- onlyrealcuzzo 5y ago
  Considering that it hasn't produced any value of note in 13 years, I'm gonna go out a limb here and say I don't think it's worth 2% of the entire world's wealth - and certainly not 3% of the world's energy.
  - xpe 5y ago
    From what I can tell, much of this discussion seems to be characterized by people miscommunicating. > Considering that _it_ hasn't produced any value of note in 13 years... What do you mean by "it"? Do you mean (a) Bitcoin in particular; (b) some/many/most/all cryptocurrencies; (c) a distributed self replicating Byzantine tolerant state machine? Or something else? The comment by tzumby meant (c). Generally, the HN thread was about (b), best I can tell.
  - xpe 5y ago
    In this comment, I'm assuming you are talking about Bitcoin. > I don't think it's worth 2% of the entire world's wealth Taken literally, if 2% of the world's wealth is in Bitcoin, so isn't that its value, by definition? I'm not trying to nitpick. I'm trying to push back on what seems to be a glossing over of the fundamentals. I wonder if what you mean is that you don't think it is _wise_ for people to put so much of their assets in the form of Bitcoin. Now, if we want to have the discussion of "how has Bitcoin affected the economy?" it is not enough to only look at a snapshot of how wealth is allocated at one instant of time. We should be looking at a differential view; i.e. before and after. In particular, an economist would ask questions such as... 1. How has Bitcoin changed transaction costs? Who bears these costs? Over what time frame? 2. To what degree does the structure of Bitcoin provide advantages relative to other assets? 3. How does the development of Bitcoin factor into a longer-term view of experimentation and innovation? 4. To what degree has wealth been reallocated due to Bitcoin? To what degree did it disrupt existing wealth patterns? And so on...

deleted 5y ago

[deleted]

qualudeheart 5y ago

Right. The hilarious volatility and scams are imo much less interesting than this.

shieVae4I 5y ago

It's not a particularly interesting Byzantine mechanism. Like every other such mechanism (in the absence of trusted computing and similar tricks) it has a n = 3f+1 limit. See the selfish mining paper for why it's not n=2f+1. It's just the Byzantine mechanism that happened to win. If anything, its innovation is that its n is based on hash power, not on number of users or nodes. And the cost? Having to drag an immutable database around that can't be simplified; and, obviously, the opportunity cost of all the energy that's being used to support the consensus. The game theory part is likely to be inexorably intertwined with the cryptocurrency part. The incentive to defect is blunted by people's investments, either in terms of hash power machines (for PoW) or in coin holdings (PoS). It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way.

xpe 5y ago
> It would be very difficult to construct something that would be self-replicating/hype-incentivizing but not reward early comers the same way. Can you clarify what you mean by "the same way"? I wonder if you meant "reward the early-comers in _some_ way." Yes, early miners of a cryptocurrency have an advantage, in the sense that there is less competition in computing resources. However, when you factor in risk (i.e. likely return on investment and opportunity cost), this "advantage" may not seem worth it. It depends on one's risk profile, awareness, opportunity, and skills. Thinking along game theory lines, when designing a system that requires up-front work, it seems clear that early participants will look for risk-adjusted rewards downstream. I don't know if I agree with the "very difficult" aspect of your comment. Many real-world systems exist that are not clearly explained by game theory; humans are more complex than their theories. Just to give one example, family genealogists typically are more than happy to share their historical research and family trees with others without expectation of personal gain. They do it largely because they want their ancestors to be remembered in the context of history. Of course, there is also some incentive for the _ genealogist_ themself to be remembered and perhaps to be perceived as important. But my point stands -- family genealogists don't expect to be compensated at all, much less in a pyramid-scheme kind of way. They are happy to create something of value and share it. Of course, a big difference between these family trees and cryptocurrencies is that the former are non-rivalrous.

pornel 5y ago

I think part of the problem is that mining was a very clever solution to a logical puzzle that seemed impossible to solve. Like bloom filters, it's tempting to find a use for it, because the algorithm is so cool. However, the theory and practice turned out to be very different. Neat algorithm can't be used as an excuse for the whole ecosystem that emerged around it: insatiable electricity usage of PoW, pump and dump, ransomware, money laundering, etc.

tzumby 5y ago
Yes, this is the kind of discourse I would expect to see around blockchain technology from a group of smart nerds. I can't argue with that, the oldest blockchain kind of failed to prove itself valid in significant ways.