I just... do not understand how smart, even _brilliant_ people, the sort of people who know enough to make something like this, can look at Bitcoin... the waste, the way it has utterly failed to achieve what it set out to do[1], everything, and thinks, I know, I want to do that, but instead of blowing up the market for GPUs it'll be SSDs. Why? To get rich? It even seems doubtful to me that the people who developed Chia are the ones who'll make the money off it, if there is any to make.
[1] Who uses Bitcoin for peer-to-peer payments? And the cryptocurrency ecosystem as it exists right now, far from allowing people to transact without third parties, is driving a cambrian explosion in third parties, because most people are incapable of transacting Bitcoin themselves.
> It even seems doubtful to me that the people who developed Chia are the ones who'll make the money off it, if there is any to make.
Oh I wouldn't be so sure about that. From their FAQ:
"
Why are we pre-farming?
Chia has a novel business model to both, lower volatility of the coin and increase adoption. By loaning Chia and managing the interest rates of those loans as well as other tools like buying our stock with chia coins, we hope to lower the quarter to quarter volatility of the coin. To drive adoption, we intend to loan Chia to Global 5000 companies who will use it to pay their international vendors quickly, less expensively, and more securely. We also intend to use the strategic reserve to aid development and adoption. We plan to do things like invest in promising startups in the Chia ecosystem, potentially increase farming rewards during limited periods of time to spur additional farming, and fund corporations paying 105% of the value of their international payables in Chia instead of fiat currency.
Is Chia doing an ICO?
No. Chia is not planning an ICO. Instead, our goal is to take the company’s equity public on an American stock exchange. This way, shareholders can share risk and return with management with transparency and disclosure and we can use well understood corporate controls to make binding statements about how Chia Network intends to use the Strategic Reserve. The Chia digital money is meant to be a useful payment instrument and not an investment opportunity. Chia intends to complete a fully compliant SEC registered equity IPO and will come to market as market-timing is amenable after the launch of mainnet.
"
> Who uses Bitcoin for peer-to-peer payments? And the cryptocurrency ecosystem as it exists right now, far from allowing people to transact without third parties
Bitcoin may not be what it set out to be, but how is that a bad thing? The market decided whatever it should be.
What bitcoin did is inspire creation of many, genuinely interesting currencies, some even learning from bitcoin's failings: Stellar.org that aims to form a new kind of backbone for instant worldwide asset transfers; Monero that enables anonymous payments; and MakerDAO that makes it possible to transact across borders with a stable digital-currency, DAI.
Banks (like eco, onjuno, dharma) and other financial instruments on the Ethereum network (like curve, aave, compound) are a reality today. The space is far more than just currencies. Besides, networks like Cosmos, Polkadot are going to enable an even richer crossover among various currency networks that today is exclusive to Ethereum altcoins via uniswap, mdex et al.
I agree that mining seems like a lot of waste but Delegated Proof of Stake and other advances aim to address those issues.
Is there an accessible introduction, a YouTube video perhaps, to crypto instruments beyond Bitcoin? I have a basic understanding of how bitcoin works from SecurityNow and would like to learn just a bit more to test the waters.
DeFi, today, is poised to grow beyond Ethereum. Check out cross-chain networks like Polkadot (https://archive.is/GZVlM) and Cosmos (https://archive.is/1pWHF). matic.network (now Polygon) is another interesting side-chain network that seeks to take Ethereum tokens cross-chain.
If you're looking to build a DeFi product on Ethereum, docs at 0x.org, aave.com are good places to start (since they integrate out of the box with decentralised exchanges like Uniswap, Balancer etc). Circle.com, Sendwyre.com, Simplex.com, and Nowpayments.io are some of the leading providers for fiat <-> crypto-currency transfer. I am sure Binance has some offering in this space too.
The real meat of any the cryptocurrencies is in their consensus algorithm, which can be difficult to understand. Chia has these resources listed:
> We have academic papers and presentations that give detail about our new consensus algorithm and blockchain software. In 2019 we revealed our Green Paper outlining the construction of Proofs of Space and Time and illustrating many of the design choices of Chia.
>
> We have updated our consensus algorithm and you can review and commment on our working document.
>
> There is also a 2019 talk from Mariano Sorgente at MIT on how to achieve Nakamoto consensus with Proof of Space and VDFs.
>
> Bram Cohen presented at Stanford on February 2018 on Proofs of Space. Our advisors, Dan Boneh, Benedikt Bünz, and Ben Fisch published a survey of VDFs which are the underlying technology of Proof of Time. Lipa Long published an explanation of class groups that our Proofs of Time is based on. Bram presented Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space at BPASE ‘18 in January 2018 based on the academic paper and these slides by Hamza Abusalah. Ben Fisch gave a talk at BPASE 2018 in January 2018 on Verifiable Delay Functions. Bram spoke at Blockchain at Berkeley (which starts about 20:00) in March 2018 with slides. Bram gave a talk at BPASE 2017 in January 2017 on removing waste with Proofs of Space and Time (slides).
>
> Bram gave a talk at SF Bitcoin Devs Seminar about data structures for scaling Bitcoin with slides and Merkle Set code. Bram gave a talk at SF Bitcoin Devs Seminar about removing waste from cryptocurrencies.
The people who developed Chia hold a massive pre-mined collection, and plan to go public (as in stock, not ICO) later, so definitely seems like they could profit.
These people likely believe they are getting in on a trend that's comparable to the internet/web pre 2000. They're getting in on the ground floor of something that has the potential to drastically change a lot of things. The number of opportunities someone gets to do that in their lifetime is very low.
That means you actually wanted to do those things, even if you hadn't thought of them before. Money is inanimate, it can't force you to do things you don't want.
That's not true at all. Most cryptos aren't clones of BTC at all - they have wildly different consensus systems, interaction models, goals and capabilities. They all have their own issues and capacities, but saying they are all clones of BTC is like saying all existing programming languages are clones of FORTRAN and have the same problems as FORTRAN does. There's a huge variety, and we're still in the very beginning of it, nobody knows what emerges out of it and what would be successful and what would fail. It's probably decades in the future, maybe more.
I run a Bitcoin lightning node on a small Raspberry Pi, and I use Bitcoin for p2p payments. So from my perspective, Bitcoin is both a great store of value and a good currency.
But since this thread is about an altcoin: Almost no other altcoin enables me to run my own fully-validating node on cheap hardware. And that is 100% a requirement I have since the whole point of crypto to reduce trust to a minimum. I don't know about the details of Chia, but as far as I know most coins with "smart contracts" built into the blockchain require expensive full nodes, so I personally do not see much appeal.
Can you? It seems the adtech makes a lot of money, but also gives businesses, especially small businesses, far greater reach than they could achieve 20-30 years ago. Seems like an apples to oranges comparison IMHO.
If these people actually cared then I'm sure the same effect could be achieved without the shitshow that is advertising today. Also, ads likely cause overconsumption and thus impact the climate. And the big companies (some of them in adtech) gobble up all the wealth so small businesses are not necessarily in a better position.
You can't prove that you wouldn't be able to advertise as much without adtech in its current form because 1. since the 90s the internet happened and 2. nobody ever did research into an approach which would serve society better. Which tells me that these smart people are after the money, and not in pursuit of a service that actually helps society.
For example: a simple switch on my browser to turn on/off all ads would be much more consumer friendly, and would still allow consumers to find products if/when they wish to find them. And this is just a simple example that just popped into my head.
Many people keep suggesting Chia will cause the next storage shortage crisis the same way current crypto-currencies are with GPUs. This is understandable given that the article describes this is already starting to happen. However, everything right now is all due to _speculation_. When there is liquidity in the market and people actually know the value of the coin, the economics might look very different.
Why? Because by the very nature of storage, it is infinitely more profitable to farm only unused extra storage than it is to buy new storage specifically for farming. I'll follow with a more detailed explanation below.
Since the marginal cost of using extra space on a hard drive you already bought is near zero, this should theoretically drive the farming rewards for Chia so low that it's not economical to buy a hard drive specifically to farm Chia.
In contrast, consider compute. If I try to use extra cpu power on an average computer or server to mine bitcoin, compared to the high end GPUs and ASICs this extra amount of compute I have within my average computer is so small it would barely generate any rewards. Given that using more CPU also causes more power consumption, it also costs more.
So putting this together, due to the existence of specialized/more-performant hardware and the fact that using more CPU/GPU incurs a cost, most of the people buying high end GPUs (or definitely ASICs), are buying it primarily for mining. In contrast, with space, since it's always near free to use storage you already bought, and everyone is on a near-level playing field, the market is only profitable for those with no sunk costs. At least, that's just a theory.
"Begging the question"[0] is a logical fallacy where you provide an answer to a question that depends on first assuming the answer is correct. i.e. a circular argument.
I think many of us underestimate the power of FOMO and the desire to get rich quick.
The latter isn’t necessarily greed, lots of people just don’t have the good fortune to make a comfortable amount of money (as those of us in tech do) so are more susceptible to bubbles.
My understanding is that the way they intend to operate it, the coin will start out rather highly valued, won't have too much capacity to grow in value, and the number of coins that can be "farmed" is already known, and will reduce in the future. At the rate it's growing, it'll probably be at the point where it isn't worth it to buy new SSDs for this sometime this week or next. And it will likely rapidly get to a point where it isn't worth it to buy HDD soon thereafter.
I don't understand how a forum called Hacker News is so dismissive of an invention that should be right up a hacker's alley. Innovative, technical, cryptographic and decentralized. Cryptocurrencies feel like something straight out of a cyberpunk novel.
I wish it worked! It does feel like something out of a cyberpunk novel. I loved "Crypronomicon." There's nothing punk about Bitcoin anymore, though. IBM, the least punk organization in the history of mankind, wants to sell you a blockchain. The promise of Bitcoin is the idea that individuals, not large financial concerns, have the power. Coinbase just IPO'd for an eye watering amount of money on the premise that people who want to buy and sell Bitcoin are probably going to have to do it through them. What's less punk than an IPO?
> The promise of Bitcoin is the idea that individuals, not large financial concerns, have the power.
Bitcoin is not the only cryptocurrency out there.
Besides, the fact that coinbase just had an IPO doesn't mean they control bitcoin, I don't need them or anyone else to move around cryptocurrencies however I want.
That's the weirdest take on why blockchain doesn't work I've seen so far. The entire point of these projects is that people do whatever they want with them. Monero exists if you want a purist approach and so does ergo.
> At least among ones that I encountered cyberpunk is strongly dystopian.
Back in the day when we were sitting in dark basements with big Unix beards drinking Jolt cola, we all dreamed of living in a crypto-anarchy, becoming cyborgs with chip implants and fully submerge in the Metaverse. I guess times have changed.
As someone who started reading cyberpunk as a young teenager this is definitely the future I imagined, just with different names.
Cryptocurrency, the internet, mobile devices, huge powerful corporations, Anonymous, black hat hackers, hi tech protests like DDoS, electric vehicles, shady IT security companies, Moxie Marlinspike, billionaires going into space...
Wasting massive amounts of mostly carbon-producing electricity as the planet dies to do absolutely nothing productive is a pretty cyberpunk evil megacorp thing to do, agreed.
Theres nothing wrong with exchanges on top of bitcoin, in fact, that will be the solution for the tx costs and energy problems. But HN is too stubborn to get it, remember, if you do the opposite of what HN youd become rich :-)
Bitcoin did solve the problem it alleged to be solving: money which is not controlled by state, and a system which us pretty hard to seize.
It does allow you to have an "account" outside any jurisdiction, and allows you, given good opsec, to transfer huge amounts in transactions not controlled by any state. Like, millions of USD.
Bitcoin is obviously useless to pay for daily goods, like a coffee. But gold would be also impractical for such a case.
Crazy speculators pumping the value of bitcoin may look unreasonable, but again, for those who have millions (and maybe even billions) in bitcoin, they are weirdly... useful.
It does not, at any point in there, say that the benefit is to avoid state control. It talks about how the cost of requiring a third party in transactions discourages microtransactions, for instance (there are other touted benefits as well). But it's not an anarchist manifesto. And all of the benefits of Bitcoin listed in the original paper require it to be a useful medium of exchange. The Bitcoin paper posits that it should be useful for transactions _much smaller_ than a cup of coffee. It isn't. It so obviously isn't that even Bitcoin advocates can admit that.
Okay, so maybe you think that it's okay that Bitcoin doesn't meet its original goals given that it meets these other goals. But the goals you state, the lack of state control and the difficulty of seizure, are... like, Bitcoin does not put you the person outside of the state's law enforcement mechanisms, including the taxation people. Ironically, if Bitcoin was actually useful for small microtransactions, like the paper says it should be, that might actually be useful for avoiding state control. It's not! And nothing about Bitcoins makes them hard to seize if you are within the physical jurisdiction of the state.
On Bitcoin you can do micro transactions using the lightning network. On Ethereum you have a plethora of layer 2 scaling projects that are gaining traction as we speak. Other networks like Avalanche achieve high throughput and low finality out of the box. It seems to me that there are plenty of things to be excited about in the space but you have to keep an open mind instead of being a stickler about the verbiage used in the original Bitcoin white paper.
Random fun fact: the EU Investment Bank just did a 100 mln bond issuance on Ethereum.
The financial rails of the world will be moving to crypto asset networks, slowly at first, and there is nothing that can stop this shift.
I'm not asking for a pitch deck or a prospectus. I'm asking for a little bit of humility and learning from history. Like, credit where credit is due, the original Bitcoin paper posed a real problem (real in the sense that solving it could actually be net beneficial for society as a whole) and proposed a novel, clever solution to it. That's great! And from the perspective of when the paper was written, it was hard to see the ways in which Bitcoin would fail to actually solve the proposed problem. But now, not only can we see how Bitcoin failed to deliver on its initial promise, we can see how someone who is clever enough to come up with Bitcoin could fail to grasp the implications of it.
Like, from where I sit, Chia looks like it's trying to solve the unintended consequences of Bitcoin, which is a tacit admission from the Chia people that Bitcoin has those problems. It also looks like Chia has an easily foreseeable set of unintended consequences as well: doing to SSDs what Bitcoin has done to GPUs. It doesn't seem to me like the Chia people are worried about that, and I don't know why.
I understand your argument, but Bitcoin hasn't been mined on GPUs since 2011/2012. Broaden your argument from Bitcoin to "proof of work schemes" more generally, and from GPUs to "profligate (mis)use of resources", and it will land more effectively.
If you are against cryptocurrencies more broadly, inclusive of proof of stake and other more recent approaches that aim to address the resource consumption issue, then that position didn't come across clearly.
It's all right. For every unjustified cryptocurrency sceptic such as myself, there are 10000 cryptocurrency zealots pumping and dumping every day. Hodl, right?
I am not against proof of stake, exactly. But proof of stake has been around for a long time, and is a very small part of the crypto market right now. I don't really understand why, but until proof of stake is able to get adoption, I don't think the existence of proof of stake is a very good defense against the accusation that cryptocurrencies are wasting resources.
[1] Who uses Bitcoin for peer-to-peer payments? And the cryptocurrency ecosystem as it exists right now, far from allowing people to transact without third parties, is driving a cambrian explosion in third parties, because most people are incapable of transacting Bitcoin themselves.