Number of nodes is a poor metric that is easily gamified (pumped up), presenting an artificial picture. If a blockchain's economics purposefully incentivizes nodes, then number-of-nodes is entirely subsidized, in one common example.
Further, the "Sybil" factor - which one party controls many nodes - and other centralizing factors - e.g. 90% of nodes are on Big Cloud - also complicates the number-of-nodes use as a simple metric and useful comparator.
It's funny because the whole point of proof-of-work (and proof-of-stake etc) is because the number of nodes is a completely untrustworthy. If a there are very few nodes then that's a sign the crypto isn't very popular/decentralized, but other than that there's not much to say.
And his involvement in SegWit2X, which was dead in the water because of an off-by-one error by his hand. Had that code been run in production, the entire bitcoin ecosystem would have ground to a halt.
>Number of nodes is a poor metric that is easily gamified (pumped up), presenting an artificial picture. If a blockchain's economics purposefully incentivizes nodes, then number-of-nodes is entirely subsidized, in one common example.
I'm not sure that this dynamic would compromise the metric's usefulness. A cryptocurrency can only offer such incentives in-protocol if it's made the currency have real-world, persistent value. So any ability to bribe users to run nodes would itself be a validation of the cryptocurrency's success/influence/etc.
(That is, being paid 1000 ScamCoins a week to run a node won't be much of an incentive if they're only worth trillionths of a penny each.)
I do agree your next paragraph identifies a real problem though:
>Further, the "Sybil" factor - which one party controls many nodes - and other centralizing factors - e.g. 90% of nodes are on Big Cloud - also complicates the number-of-nodes use as a simple metric and useful comparator.
It's definitely hard to identify how truly independent the nodes are.
Even if the nodes are independent, I don't think it really matters as much as the distribution of the hash-power. The non-mining nodes will not be able to resist a re-org by antagonistic miners.
Is this true for validating full nodes on a proof of work chain?
>> The non-mining nodes will not be able to resist a re-org by antagonistic miners.
A full node can pick whatever block it wants as the tip of the chain. Many nodes choosing the same would be a UASF. That would resist, by ignoring, the antagonistic miners.
It does not matter because any new node joining would only need to connect to a single node that doesn't do the USAF in order to be converted against the USAF. The default behavior is to resist the USAF unless otherwise programmed.
Additionally, different nodes could receive different blocks at different times, meaning they will decide to do a USAF at different block heights.
The idea that non-mining/staking nodes do anything for decentralization or network security is basically cope for cryptocurrencies in which it is difficult for regular users to actually participate in mining/staking.
"The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate."
-Satoshi
Full nodes validate the rules. They check and enforce that minded blocks follow the rules. This could be rules of a UASF which a group could take to ignore the antagonistic miner.
Also from a service provider / architecture view there is a huge concentration on AWS [1]. So while the nodes might appear large in numbers, if AWS goes down (which is not entirely unheard of), the nodes go down with it.
I mean to me the problem is how do you define a node? A node participating in consensus or any node? And if it's participating in consensus, is it counting only the nodes that participated in consensus since genesis or since some time in the past? All of these technologies are completely different.
The problem, if you go that route, is how you define participating in consensus.
Say I have a fully synced and always up to date Bitcoin node, running on a Pi in my closet, that I only use to make and receive payments, which I very rarely do. Then yes, that node did participate in consensus for those payments but it was practically asleep for all the other transactions happening in the network (it did validate all blocks, but it didn't have anything meaningful to say to the network).
I think a better metric is nodes that are economic actors, but that is hard to measure, since, like my example above, my node could be sitting in the closet and very rarely being used for actual transactions.
So maybe a even better metric then is potential economic actors? How many nodes that could, if needed, be practically used by people in carrying out actual useful transactions. But how do we measure that?
> it did validate all blocks, but it didn't have anything meaningful to say to the network
That is a bit of an understatement of its function. If a miner produced a bad block (with, say, 51 btc block subsidy), and it pushed that block onto the network to my node, it would reject it and not propagate that block to others. This is a meaningful feature that is often overlooked.
Looking at metrics like Realized Price and Illiquid Supply helps far more than looking at how many nodes are online.
Very good point, I didn't think about the propagation function of the nodes. Indeed, a node would only propagate blocks it accepts as valid.
But how does that help the network except by saving some bandwidth?
In the end, "bad" blocks will and should propagate and should be rejected by every node that decides that the block is "bad". There isn't one node that is a gatekeeper for "bad" blocks.
I think that whenever people talk about consensus, they think about it in terms of how a democracy works - and that is wrong, because Bitcoin is not democratic. It's not like if you nave n nodes, you need n/2+1 to agree on something and all the rest will be forced to agree to their decision. It's up to every individual node to enforce rules for their own transactions.
Nodes automatically forward valid blocks to all connected peers. This means that the initial miner would send it to, say, 100 peers, all of whom would reject it. Why send that block to anyone else, wasting resources and posing an attack vector (spamming the network with bad blocks, hogging resources and slowing/breaking the p2p network layer).
I start a new coin call $FOO. I release 1,000,000 coins. I sell one coin to a friend for $1,0000, and keep the remaining 999,999 coins for myself. The market cap is now $100M.
> Number of nodes is a poor metric that is easily gamified (pumped up), presenting an artificial picture.
Firstly I don't understand who you are "answering" to, the GP didn't talk about Market Cap as a relevant metric.
Secondly, Market Cap is only relevant when reported by popular metrics websites which vet their data sources a little... nobody relevant is listing your coin anywhere, sorry if it disappoints you.
Thirdly, I'm sure that in your first year as a veteran you will learn to care for coins/token which have liquidity/volume either on reputable CEXs or in tokens/networks with a good track record on DEXs.
You can't really game liquidity for long without risking your capital.
I know this is HN, so I would expect less low brow criticism... but who am I kidding this is about cryptocurrencies, rules don't apply.
> Firstly I don't understand who you are "answering" to, the GP didn't talk about Market Cap as a relevant metric.
No but they were clearly refuting the alternative suggestion (nodes) was game-able. That was my point.
> Market Cap is only relevant when reported by popular metrics websites which vet their data sources a little
> you will learn to care for coins/token which have liquidity/volume either on reputable CEXs or in tokens/networks with a good track record on DEXs.
This is hilarious, because your idea is that:
- It's a popular metrics website
- You believe they are vetted
by a centralized web site, is the exact antithesis of cryptocurrencies. What happened to decentralization?
> You can't really game liquidity for long without risking your capital.
Sure, but why is that relevant here? We're not talking about liquidity as being the relevant metrics, we're talking about market cap.
Market cap is such a hilarious concept for cryptocurrencies because it converts everything to a fiat, which, again, is the antithesis of cryptocurrency.
> I know this is HN, so I would expect less low brow criticism... but who am I kidding this is about cryptocurrencies, rules don't apply.
Meeting low brow comments with low brow comments, chapeau!
> by a centralized web site, is the exact antithesis of cryptocurrencies. What happened to decentralization?
A centralized cryptocurrency is an antithesis. I don't care if any of the products or websites in the surrounding ecosystem are centralized: all I care about is that bitcoin remains decentralized.
Decentralization is a force that limits usefullness. Bitcoin is useful only as a base layer; digital gold that higher layer (more centralized) systems can use to settle down to. Being more centralized offers features Bitcoin doesn't have (high throughput, easy onboarding, etc) at a cost of new risks (counterparty risk, etc). Settling down at the behest of the user allows those users to mitigate that risk, and get the best of both worlds.
Gold bars are technically "decentralized". No one controls the supply (e.g. there isn't a sovereignty that creates/destroys them), and I can technically just dig them up out of the ground.
Because while gold bars might be technically decentralized, that doesn't mean they are practically decentralized too. In fact, gold bars are probably 99% centralized in corporate and governmental vaults, neither of which are openly audited. Also; lots of 'paper gold' is sold, suppressing the value of it.
Crypto can be secured and transported much more cheaply and easily - as opposed to gold, where many people would rather own/trade a receipt for gold kept in a secured vault.
It doesn't work that way. Market cap depends on circulating coins/tokens. This is an opportunity for you to learn some more though, which is always good!
In your dreams only. Good luck finding any serious (aka "smart") money willing to take your valuation seriously. With such due diligence you're likely to be the only one hodling $FOO ;)
Thats exactly why market cap is a bad metric - it does not encode market depth (how much you can actually sell before the price moves) or velocity (how many units are changing hands in the wild in a given period).
Worst of all, currencies do not have market caps - equities do. Market caps are measured in currencies.
Only works on congested networks, or those that burn fees: in original bitcoin style, without congestion, generating dummy transactions is free for miners (the fees come back in block reward).
A public ledger only ensures that you can see through this if you can verify ownershp of wallets, because as we've seen repeatedly, you can programmatically create an entire eco-system of fake wallets trading back and forth. What's the cost? I can trivially create a series of bots that just trade their coins back and forth with each other forever. It'll create huge volumes. Now the reason you don't do this on real chains is because the transaction costs will cripple you. But transaction costs aren't real if the currency you're paying them in was entirely fictional to start with.
From the outside there is no way of verifying that any chain has any real activity without verifying ownership of the wallets.
Your counterargument here only applies when exchanges participate in the scam. Of course that does happen, and for a long time you could even pay OKeX to do this for you. But it's much less common than obscure coins faking volume off-exchange or faking node activity.
And yet so many instances of crypto coins that did this. I’m pretty sure they all had public books. The challenge isn’t I sell one coin. It’s wash trading. You create sufficient volume from multiple different anonymous accounts continuously. That’s impossible to decipher because ownership is impossible to untangle.
Why does the exchange need to be in on it? If it’s not a KYC exchange, they would have no way of knowing all the Sybil accounts doing the wash trading were being run by the same individual.
Almost all limit order books required posting the assets on the book and take a fee on trades. You can read off the amount paid to generate the fictional market cap and judge for yourself if it's likely to be fake activity. For thinly traded books with low liquidity, it's cheap. For thick books with high volume, it's expensive.
Also exchanges that are not participating in scams, actively or passively, will attempt to detect wash trading and stop it.
It's much easier to fake the initial activity, then start to have "real" users pile on. The only value I created in my ICO was that I created fake demand and the lemmings followed.
Wait isn't each collection of 32 eth considered a separate validator no matter the source? If that's the case then wouldn't that mean that coinbase and other exchanges make up the massive overwhelming majority of those validators? If that's the case is it really good faith to claim that there are 400+ thousand validators and then arbitrarily put ethereum in first place?
Yes, its not genuine to say Eth has 400,000 validators as many of them are the same entity.
It's a similar story for nodes as well. A ton of the reported nodes are actually running on AWS and ultimately its a fairly worthless metric.
For a while the crypto community valued node count as a meaningful number for measuring decentralization, and naturally from that moment forward people have been fully shameless about running hundreds (at some points in history tens of thousands) of nodes just to boost metrics.
Move them where? As we've seen more recently with the OFAC list blocking... once one big player starts to block, the rest follow suit pretty quickly.
Remember also that a lot of the large staking players are staking on AWS and also have other external factors which dictate where they can host (taxes, corporations, shareholders, etc).
Many of the large players are also tied to AWS deployment APIs... moving means rewriting those. Ever worked with terraform before? It isn't just some trivial thing to point at another provider.
Google Cloud, Azure, deploy a server yourself, etc.
> As we've seen more recently with the OFAC list blocking... once one big player starts to block, the rest follow suit pretty quickly.
There's a big difference between something that is made illegal (eg the OFAC sanctions) and a private action by a company. If your service is illegal then you are going to have other problems than just AWS refusing to host.
> Many of the large players are also tied to AWS deployment APIs... moving means rewriting those.
There's a big difference between using AWS as dumb compute and using AWS features.
The more AWS features you use the more control AWS has. The same applies to any software you use - if a license can be withdrawn there is an element of control. These things are much more important than if the physical machine you are running on is owned by Amazon.
> Google Cloud, Azure, deploy a server yourself, etc.
My point is that if AWS decides to follow Hetzner, the rest will too. If it was so easy to just deploy a server yourself, then more people would be doing that already. Right now, AWS is the lowest bar cause that's what half the people running this stuff know already [1].
> If your service is illegal
PoS / staking is a grey zone right now... there is a lot of discussion over the legalities.
> There's a big difference between using AWS as dumb compute and using AWS features.
Correct, but even the dumb compute involves setting up VPC's, networking, disk, monitoring, logging... etc... and each provider does it differently. For one staker, no big deal... but for the larger ones... it gets a lot more complicated.
At a minimum I would group PoW and PoS coins separately, as the incentives for each category are quite different. This site acknowledges that in a way with separate lists at the top for "nodes" and "validators", but underneath they still have the main list sorted by max(apples, oranges)
Currently there are 79,717 distinct depositor addresses. They list 36 known entities validating, accounting for about 75% of staked ETH. So that leaves about 100K validators split among small unknown entities. Many of those would be home stakers.
Some of the known entities are staking pools, representing lots people who own the stake. But it's only the pool producing the blocks. Bitcoin is similar: lots of home miners but they're mostly in pools, not attempting to create blocks on their own.
For the number of entities creating Bitcoin blocks, I just found this paper, which doesn't give a total number but says 55 to 60 miners control at least half of Bitcoin mining: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181
I wouldn't expect the number of independent (i.e. unpooled) Bitcoin miners to be especially large, since a fairly large investment is required to have a chance of producing a block in a given year.
I think cryptocurrencies should be ranked by the mass in kilograms of the actual, real, physical products and the weight of people performing actual, real, services that have been paid for using them.
Arbitrage and exchange, and all of the people and infrastructure surrounding those, would have no mass in this ranking system.
"What about online stuff?"
Well, yeah. If you pay for a small instance VPS using bitcoin then you get credit for 1/64th of the weight of that PowerEdge R7525 you're renting and the 375 lbs dev you hired to run your site. Unless it's an exchange or trading platform, of course.
One decent metric are the fees[1]. Basically how much money people are actually spending to use the cryptocurrency.
Raw usage (as in number of transactions) is meaningless because it can be trivially manipulated by wash trading if the fees are super low (typical of a barely used chain).
Can someone explain to me why any of these values truly matter?
My background is in game development both on Facebook and mobile, and I spent a lot of time paying close attention to the growth of the web and its various startups. Number of nodes and market cap both look a lot like vanity metrics to me - numbers that sound good in a market/tech-specific way but don't actually reflect the true value or growth potential from a business perspective.
Cryptocurrency, AFAIK, has network effects, so the true value should likely be measured in common KPI's like DAU, MAU, and some kind of replacement for ARPU - likely average transaction volume per daily/monthly user.
The numbers I've seen for crypto games - DAU in the tens of thousands - are absolutely laughable compared to the numbers on Facebook and mobile games even in the first year or two of the platforms. If crypto was truly going to be a revolutionary mass-market phenomenon, I would expect to see hundreds of thousands to millions of DAU on any individual currency and AFAIK that's just not happening.
The number of nodes doesn't really matter as long as it's sufficiently high. The network security is mostly based on how decentralized the hash-power is (or staking-power) is.
You're right that better measures are number of transactions-per-second, merchant acceptance, etc:
I agree that crypto games have been pretty pitiful in their current incarnation, outside of gambling applications (thanks to provable fairness). They have a bad reputation of being too centralized and pay-to-win, which is really the only problem cryptocurrency is supposed to solve.
Because crypto is banned on every meaningful platform. I can’t use my phone to mine, I can’t use defi on IOS or android. In the US I can’t access shorting on CEX, am not allowed to use tornado cash to gain privacy, I am platform locked everywhere I go and yet crypto hangs on the fringe.
Crypto is heavily censored in the US from multiple directions.
I can use my phone to CPU mine with https://github.com/XMRig-for-Android/xmrig-for-android albeit at a very low hashrate. IDK about GPU mining though, seems like that could be more useful. But if you root your android device you can pretty much install anything you would on a linux system, with exceptions.
Also, I don't see why you couldn't just distribute a defi app on android as an APK, including tornado cash. I don't really know if trading on leverage is a critical part of using cryptocurrency, but I don't really see how you would be prevented from doing that on mobile unless your CEX distributes a different desktop app.
Crypto is not heavily censored in the US. I mean maybe, but it depends on what state you live in. Also, you can't legally mix coins as a service like tornado cash or coinjoin server, as that constitutes money laundering.
What you are describing is against androids terms of service and can find your entire google identity banned.
> Crypto is not heavily censored in the US. I mean maybe, but it depends on what state you live in.
There are major roadblocks being put in place by powerful entities. I have to use VPNs, different distribution/ platforms, .onions, NATS, and other bits of technology to get around those roadblocks and use the technology as I see fit.
> tornado cash or coinjoin server, as that constitutes money laundering.
Ensuring privacy is money laundering? Please tell.
>What you are describing is against androids terms of service and can find your entire google identity banned.
Distributing an APK? There is nothing google can do about this. I never accept google's terms of service because I use an AOSP distro like calyxos or grapheneos
>There are major roadblocks being put in place by powerful entities. I have to use VPNs, different distribution/ platforms, .onions, NATS, and other bits of technology to get around those roadblocks and use the technology as I see fit.
The cryptocurrency is only as decentralized as its development infrastructure.
>Ensuring privacy is money laundering? Please tell.
It can be prosecuted as money laundering if you are offering a service (tornado cash, wasabi, coinjoin, etc.). If it is a passive feature of the network (zcash, monero, etc.) then there is no one to prosecute.
Massive premine on Chia, didn’t know that. I have a hard time believing that many nodes are reachable, there are probably about that many users in general, if that. Looking at the latest dozen blocks right now, they’re completely empty.
Their software runs a full node and a wallet, so most users are a node by default (if I’m not mistaken) and rewards are double for the first couple years. You can run their software and just about anything, low powered CPU’s, pi’s, NAS, etc. So I don’t doubt their numbers are too far from the truth, esp considering how much China supports them. Nodes have been slowly dropping over time as the crypto boom cycle has died down.
As far as real transactions, they’ve got a way to go. Just releasing NFT support a few months ago.
In the beginning everyone had to run a full node even if they weren’t farming (in Chia instead of mining it’s 2 stages, first plotting and then farming) but earlier this year Chia released a new light wallet which doesn’t run a full node. Now it should be mostly actual farmers that run full nodes. Chia currently has 22 EiB of netspace which would be more than 1.5 million of 14 TB hard drives.
Probably the same reason PoW is wasted on "useless calculations" instead of calculating protein folding or whatever.
Because these useless calculations have cryptographic properties (one way functions) that make the process secure. Useful calculations instead of just calculating a simple hash function would either be risky in term of future security (because of unknown properties), or outright insecure.
Completely off topic and not really relevant to your comment buuutttt Banana coin’s ‘POW’ is based off protein folding and contributing to medical research. It’s a joke and you aren’t enabling consensus but you are getting banana emissions for ‘noble causes’, which I found was fun and regularly run it when I go to sleep.
The process of plotting the data is strenuous on SSDs. You might kill an SSD if you are plotting a petabyte or so. But if you are that serious, you can plot in RAM (or just eat the cost, which is insignificant compared to the cost of a petabyte).
The process of farming/mining doesn't stress HDDs in the slightest.
The point is to save energy during operation in exchange for spending more energy on manufacturing the equipment. Since equipment manufacturing is bounded by more than just raw energy the end result is a net decrease in energy consumption.
And in reality much much less than a Datacenter would. Once plot files are written they use a cache to look up their hashes. The utility of those files on the other hand are a whole different conversation.
and then places at #2 because it erroneously just divides the ethereum stakable supply up by 32 and counts that as 'validators' when it's really just a small number of entities. That would be like claiming that bitcoin has some number of trillion 'validators' because it performs that many sha256 operations per unit time, or counting each 1e-8 btc as a 'validator' because anyone that owns bitcoin at all is incentivized to validate and protect the network or other such meaningless metric.
Always surprised at how few nodes there are relative to how loud the noise is about crypto. I don't mind deploying a service and running things myself, it seems there are only a few thousand of us in the world. Even Tor only has "a few thousand" nodes.
It might be cute to also see some derived statistics like "market cap/node", average size of transaction, and "estimated cost of 51% attack". ;-)
The count is "reachable nodes", which is a fraction of the number of total nodes. Most people don't open a port to allow incoming connections and their node will only make outgoing ones. Bitcoin has closer to 50k users running Bitcoin Core, with many others using SPV wallets like Electrum.
I mean maybe if you try to double-spend on purchases that you make with cryptocurrency, but small reorgs happen all the time and they would have to prove you intentionally caused the reorg in order to double spend.
Those prices are derived from a site called NiceHash that tries to commodify hashpower. Most people who want to monetize their mining hardware, just... use it to mine, not lease it to a reseller. So both the supply and demand are low. It's a weird market imo.
The last column is important to understand. It's answering the question: if you rented NiceHash's entire supply of compute power, how close would that get you to launching an attack? For any crypto worth caring about, the number is 0% or close to it. And for the others where it's >= 100%, attacks are a common issue for exactly this reason.
It is a common issue. ETC was 51'd 3 times in a month not too long ago... that said, with the upcoming merge, it'll soon be the largest hash GPU/ASIC coin.
If I recall, the problem was that they were using the same PoW function as etherium was, so people could just use their old ETH hardware to attack ETC. Pretty sure the fix was to switch to a slightly different PoW that entails re-designing the ASICs.
For security reasons, there can only be one top coin per class of hardware.
sha256/bitcoin = asic
ethash/ethereum = gpu
randomx/xmr= cpu
Yes, there are ethash asics, but they are effectively just asic gpus with ram... the memory controller is the gating factor because ethash is memory hard [1].
The gpu balance will shift with the merge... all the hash will go to ETC and other shitcoins. $21m a day in rewards will go to $1.2m a day.
A lot of GPUs will be turning off as the profitability drops. As profit drops, large miners will sell to the retail market to cover their costs...
ETC will trend towards zero... miners will try other coins, but those will also trend to zero since they have no actual use (utility) other than speculation.
These next couple weeks are going to be fascinating to watch. This merge is not only the end of ETH mining, but it could also be the end of speculation profit for a lot of other (shit)coins.
However, I think you could have multiple competing cryptocurrencies in the ASIC class, because the ASICs are not as generic as GPUs or CPUs, so they cannot be easily repurposed for attack unless they are FPGA-based (doubful).
Anyways, I'm looking forwards to the new supply of GPUs. Hopefully we don't get the same thing again with Chia hogging up all the storage on the market or Monero hogging up all the CPUs.
Correct, asic's could have multiple, but in reality, don't. There is litecoin with scrypt. I was the 3rd largest scrypt miner there for a while. But these are all speculation coins without any solid utility. Nobody is going to build asics for coins that don't have demand. We saw this happen with Grin coin.
Another little tidbit for you... GPU mining didn't really impact the supply as much as people like to talk it up in the press. Maybe for a short while, but it was more just a lack of manufacturing than anything.
Because ethash is memory hard, older (4-5 year old) gpus are actually the most ROI profitable. It isn't the same nm hardware race as asics. People buying up the most expensive GPUs for mining were not helping themselves at all.
CPU based mining is kind of a shit show... less about people buying CPUs and more about bot networks being used to mine.
> But these are all speculation coins without any solid utility. Nobody is going to build asics for coins that don't have demand. We saw this happen with Grin coin.
Not only is Grin the one coin, out of many thousands, that strongly deters speculation with its pure linear emission, but it did in fact have ASICs built for it (the Ipollo G1/G1-mini).
I still stand by what I said... grin doesn't have any demand (the price is in the dumps and it has no utility)... nobody is going to pay $9k for an asic to earn pennies. how many of those things have people actually bought?
Despite its anti-speculative emission, Grin still has more demand than all but 25 PoW coins [1] and a G1-mini ASIC miner costs as little as $289. Since 1 miner does about 1.2G/s the overall graph rate of 8830 G/s suggests about 7360 of these have been bought.
No wonder the price is so low... all the miners just dumping on retail in order to make their capex back.
I appreciate that you tried to make a coin and that your algo is actually pretty interesting... but it is also too bad you didn't do a memory hard algo and be in a position to capture the 18m+ GPUs that are about to need a new home.
Many miners are not selling (dumping is when you unload your big premine, which Grin doesn't have), which is why there is limited liquidity on the few exchanges that list Grin. I
The Cuckoo Cycle PoW family is memory hard and Grin supported GPU mining in its first two years, but long term everything turns to ASICs...
How would you know who's selling and who isn't? Given the limited liquidity, it would have to be miners since that is the only way to get it. I use the word dumping to mean that they are mining and selling.
ethash held out surprisingly well. certainly a lot of asics were sold, but it didn't fully knock out GPUs like say sha256 did with btc. where as grin... you changed your original tone on it and decided to embrace asics with specific changes to CC to support that.
Yes, it's pretty much only miners selling, but only a small fraction of them sell on exchanges as apparent from the low volumes.
The original Cuckoo Cycle turned out to be rather ASIC friendly; the Cuckatoo variant even more so. But it's the Cuckaroo variants that saw the most changes to make them substantially more ASIC resistant.
So then that explains the price being as low as it is... nobody is actually using it... just sitting on it in the hopes that it might go up some day. Sigh.
update: removed comment about ROI cause I didn't do the full maths.
> So then that explains the price being as low as it is... nobody is actually using it
That comment makes no sense, since most cryptocurrencies have no use except speculation. The price is low (well, no lower than Doge) because Grin deters speculation, and hence much fewer people are willing to speculate on it.
That's just how much electricity it will cost you to sustain the attack for 1 hour. You still need to find the hardware. You'll also need to find someone to accept your transaction (that needs to be bigger than those 2 costs combined to make it profitable) and give you cash in return. Then you can defraud them keeping the cash and coins by reversing the transaction.
It’s surprisingly complex to run a node unless you’re a seasoned developer, and even then when you add things like updates and potentially even slashing for mistakes it’s not worth it. I spent around two years contracting building test infra for different crypto companies by creating throwaway networks with potentially up to three different cryptos (for bridges) and it was a nightmare. There’s a definite startup idea there to make it easier like spinning up VMs
I think this is misleading, because every 32 eth stake is considered a validator. If you look at the top depositors by entity, you see that there are just a few entities controlling most of the stake, i.e. there's only a few validator nodes with most of the stake: https://etherscan.io/dashboards/beacon-depositors
Also, the number of nodes doesn't actually matter that much. It's more important that people can run nodes.
Market capitalization of a currency is not a defined quality. That's a quality of an equity. You measure market cap in a currency, you do not measure the currency in terms of market cap. Currencies only have supply, velocity and exchange rates.
There's no market cap of USD. There's only the supply. It's value is derived from how much you can reasonably anticipate exchanging one USD for in an economy. Fundamentally that requires goods and services to be priced in USD so that you can derive a value for the dollar from a basket of goods and services. But nothing is priced in BTC, it's priced in local currencies and converted in real-time at the point of a transaction since generally speaking you can't exchange BTC for anything directly, cost of inputs is determined local currency and taxes are due in local currency at the spot price at the time of the transaction.
This is an aspect of the holy trinity of crypto where it's all things to all people.
It's not a currency, it's a high-beta speculative play on US dollar liquidity in the market as determined by the Federal Reserve.
Nodes are gameable, market cap is gamed for sure. The only way to more forward quantitatively is to actually treat BTC for what it is. That's why none of these definitions fit.
If you want to treat it as a currency compute its GDP, which is supply times velocity converted at spot to international dollars.
It would require to be more accurate. Talking about my blockchain Moonbeam, it should "at least" use https://moonbeam.subscan.io/validator and not our testnet :p
If you google Chia launch it says it started with more than 100k nodes already
If you zoom out that dashboard it says at one point 200k nodes that than very sudden changes but in a general trend downwards. Data might not be accurate
I don't understand much of Chia or other coins, but it does not look very organic
So in fact market cap was the reason Satoshi Nakamura I divine ended up immolating in 2015, like Lycurgus of Sparta who founded Sparta said don't change the laws until I return, left and starved himself to death, and the laws never changed. Went very well for Sparta. Similar concept of unchanging laws of high integrity in the case of Bitcoin, it was about getting them right from the beginning. Same problem, bad for integrity for the founder to stick around because he can lead, the goal is for the system to be beyond appeal, airtight.
Like it worked out way too well by 2015 and too poorly at the beginning, he thought he would get traction right away (hence the second block taking like a week, this indicates it's the first thing he released) but it didn't. Overshot the difficulty. So he was stuck pre-mining until he again selflessly stopped mining, he could have mined more. And he was an all-around cryptographer, so very very paranoid (job requirement) very hidden, Bitcoin wasn't the only code he wrote I divine the only code he published, similar to the Truecrypt author, went by alias John Smith that guy, who is getting out of prison for murders based on his code, in like five years. That's one alternate universe of Satoshi.
Number of nodes always and necessarily > number of people in control of those nodes, never the other way around. Node count is an extremely cheap pseudo-signal that implies decentralization of control, but is in no way correlated with it.
There is no way Bitcoin has only 11k nodes. There are currently 17k public Lightning nodes, so there must be at least that many full nodes, and certainly many many more.
You can't, that's why miners vote with their computing power (or their staked coins in PoS) instead of the number of nodes. The second metric is gameable by spinning up many nodes (Sybil attack).
ELI5: they are databases where writing costs a payment in that database’s token
people write to it
ELI16: they are public utility state machines that people pay to use, there are other metrics sites that show what people are willing to pay for. in many cases, the payments themselves make the token more scarce permanently, and anyone needing to make payments in the future has to buy it as a higher price from someone else. There is a lot of activity on the Ethereum network.
so despite the more familiarity with speculation, there are many users that acquire the cryptocurrencies as short term inventory when needed to perform state operations
I would claim that would be just as bad if not even worse, as the biggest sin in the marketing of cryptocurrencies is that people create a circular value pump that starts with VC money to subsidize "rewards" for people running nodes and then they claim "we already have hundreds of nodes!!" which causes the value of their token to go up... which then means they have more value to continue providing subsidies. These rewards are paid out using the token, and to run a node--and thereby earn rewards--you have to "lock up" (aka, commit to not selling in the near future) a bunch of the token, which means people like to "reinvest" their rewards (to earn more rewards, which they mentally be model as an APY on their capital) rather than converting it immediately back into another currency.
This causes a massive--and very unsustainable--"pump" in the value of the token, as more people rush to invest in the token so they can get paid rewards by staking it (to set up more nodes and earn more rewards), which is then used to market the product saying "look how many more nodes we have! we keep getting more and more nodes!" causing others to rush to invest in the token to speculate on the value increase, which adds up to the value of the token going up and thereby either the value of the treasury held by the company going up or the value that can be extracted via inflation going up, which can then be used to pay for more rewards.
The ONLY correct metric by which to judge a cryptocurrency project is by the amount of legitimate--not "I am going to subsidize our nodes by acting as a client and using the network a ton randomly to make it look like there is a lot of usage"... which, yes, means this is a difficult metric to correctly measure--traffic, as probably measured by revenue (but maybe "untainted income" or something would work? I have stared at the question some but never managed to figure out what the best exact figure is... which is of course even harder of a problem than valuing a normal stock/company).
To draw an analogy: would you want to decide the value of a restaurant chain by the number of locations they have around the world--or a gig economy company by the number of people providing service--if you knew the company took a billion dollars in VC money and could quite literally just be paying people to set up locations or drive in circles without a single user in sight? You'd want to know how much people were actually willing to pay for the food people are buying or how much they are willing to pay for the rides they are getting, and if that answer were somehow not only $0 but NEGATIVE--as cryptocurrencies often set up unsustainable VC/pump-funded incentives focused on the USER as well!!--you'd hopefully be skeptical of the company.
(But, of course, I use those examples to explicitly include the ilk of Uber or DoorDash, as the question for SOME of these cryptocurrencies is "if we can get enough providers in enough places, only then can we unlock revenue and value". But that is then more of a progress check on their ability to build out their network as opposed to a real understanding of whether their product has any value or not... an ecosystem where you have a ton of supply and almost no actual demand is not an ecosystem which is functioning or one which will be sustainable.)
I agree. It's sort of analogous to a Multi-Level-Marketing scheme wherein the most profit comes from selling the business (by offloading inventory onto the franchisees), not by selling the actual "product".
Re "not a defense" - I realize it's hard to believe; you kind of have to go through the experience. But I don't have the energy to care about what people are arguing anymore, especially not on the most worn topics.
What is valuable to one person may not be to another. Does that make it a scam? Most people are adamant that gold is a fundamental unit of value, and yet it's paper value (by volume) is 10x the real thing¹. Does that make gold a scam?
Personally, I'm much more interested in the value inherent in the Human Spirit, but others place almost no value on human life. Insurance companies place a dollar value on human life. I look at words like human resources and see how it collectivises individuals and turns them into cattle, putting a dollar value on something I think is priceless.
People addicted to power are really interested in how many people they can control. Using this metric, managers, ceo's, etc are all buying into the scam that people have value but they're worth less than themselves. Using this metric any job is a scam, & it rides on the back of the notion that a piece of paper with $100 marked on it, formerly backed by gold, is actually worth anything.
Number of nodes is a poor metric that is easily gamified (pumped up), presenting an artificial picture. If a blockchain's economics purposefully incentivizes nodes, then number-of-nodes is entirely subsidized, in one common example.
Further, the "Sybil" factor - which one party controls many nodes - and other centralizing factors - e.g. 90% of nodes are on Big Cloud - also complicates the number-of-nodes use as a simple metric and useful comparator.