Very weird submission, the linked post is 2 years old. Received no attention whatsoever, then the Copyright is updated to CC0 4 hours ago and suddenly gets posted to Hackernews.
Furthermore, the proposal is a bit non-sensical. It's still possible to fork Ethereum, as a staker you must choose which chain you want to stake. You cannot stake in both because you would get slashed. But if you decide that Ethereum-fork is your preferred version of Ethereum you can turn-off your Ethereum validators and only validate on Ethereum-fork. That's OK.
The market will decide which network is most valuable.
The money is owed to our future selfs or generations to come, who pay the interests.
If the money obtained through debt is well invested such that it creates growth that outpaces the interest rate then all is good, as future tax payers will have a larger economy to be taxed in order to pay that debt. But if it's not, we are just stealing from the future.
When a country acquires debt to finance its pension system, that's just plain and simply inter-generational robbery. It's pensioners voting to give themselves money at the expense of the younger generations. It will become more and more pervasive across the west given our demographics and is crippling entire economies across Europe.
Money is the way we divide up the productive capacity of a country. To become richer as a nation, you increase the productive capacity of a country, you don't collect little pieces of paper.
Debt is not money though, debt is a future claim on some portion of that output and that claim is to the whole comingled basket of productive capacity that took out the debt so in a country's case itis a claim on all of it because a country can income tax and/or wealth tax up to 100 % of the income/wealth. So a coubtry can get richer by increasing capacity more than the claim on capacity or it can decrease the claim on capacity freeing up output for the country.
Which is why who holds the debt is more important than the existence of the debt. If the government owes the money to a pension fund that's a good thing. If they owe it to a foreign adversary, it's not.
Thats just not true at all. If the debt was incurred inveating in s(mething thatcpays higher yields than tge debt service or possibly inlfation cost it may be a good thing. If its mallinvested or wasted on current consumption its a bad thing in almost all instances. Who holds it is only relevant as far as what sort of financial damage they can do selling it off.
What I said is a subset of what you are claiming and it's the actually true part. There are lots of investments that increase productive capacity that are bad on pretty much any sane metric (i.e bridges to nowhere, sweetheart deals for new professional sports stadium construction, speculative factory subsidies, especially in rapidly evolving technology fields like the travesty that happened in solar panel manufacture a few years ago).
No you said "s(mething thatcpays higher yields than tge debt service or possibly inlfation cost"
That's nowhere close to the same thing. Productive assets like road infrastructure often has no payback because the government gives them away for free.
And the reason we're losing to China is because China invested in hundreds of Solyndras. You're learning the wrong lesson from Solyndra.
This response does not address the parent's question, and ignores that issuing currency with a debt mechanism isn't anything but an artificial constraint (not an immutable law of nature).
Physics is practiced by hand, pen and paper or chalk and blackboard. There is no IDE or auto-completion.
The short hands, abbreviations, and obscure syntax raise the difficulty to enter into the field but simplify its practice a lot. In fact, it would be nightmarishly verbose if you had to use more explicit terms to the point of making it almost not feasible.
Furthermore, the complexity of learning a few shorthands is incomparable with understanding the underlying concepts. Just because you name things in a more verbose manner and used a more explicit type system you wouldn't be any closer to understanding what any of this means. The effort of learning a short-hand notation to express a concept that takes years of advanced math to grasp is negligible in comparison with the speed up it offers day to day.
The notation is not what is stopping you from understanding it.
How do the rich become gradually richer under PoS? I'm flabbergasted by the level of math education.
Assume we have 2 validators in the network; the first one owns 90% of the network, the second one owns 10%. Lets call them Whale and Shrimpy, respectively.
To make the numbers round let's assume total circulating supply of ETH is 100 initially and that the yield resulting from being a validator is 10% per year. After the first year, 10 new ETH will have been minted. Whale would have gotten 9 ETH, and Shrimpy would have gotten 1 ETH. OP is assuming that as 9 is bigger than 1, Whale is getting richer faster than Shrimpy. But, let's look at the final situation globally.
At year 0:
Total ETH circulating supply: 100 ETH
Whale has 90 ETH. Owns 90% of the network.
Shrimpy has 10 ETH. Owns 10% of the network.
At year 1:
Total ETH circulating supply: 110 ETH
Whale has 99 ETH. Owns 90% of the network.
Shrimpy has 11 ETH. Owns 10% of the network.
Whale has exactly the same network ownership after validating for 1 whole year, the network is not centralizing at all! The rich are not getting richer any faster than the poor.
TL;DR: Friends don't let friends skip elementary math classes.
Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing.
Also, only ~30% tokens are staked. The 30% who chose to stake essentially tax the other 70% in use. Each of the validator do the same amount of work (ok, strictly speaking you get to do more when you have more ETH staked, but being a validator is cheap and does not cost significantly more energy even if you are being selected more frequently because running one proposal is too cheap, that's the whole environmental point, right?) except what they receive is proportioned to how much they stake.
I hate being mean, but sorry, remembering to check one's assumption is a habit I gained after elementary school, so maybe that's too hard for you.
> Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing.
This changes absolutely nothing of the calculation. Furthermore, the change in circulating supply last year was of 0.07%.
> Also, only ~30% tokens are staked.
Correct.
> The 30% who chose to stake essentially tax the other 70% in use.
There is something called opportunity cost. With the existence of liquid staking derivatives the choice to stake or not is one of opportunity cost. Plenty of people may consider the return observed by staking insufficient given the opportunity cost and additional risks. Participating in staking is fully permissionless, stakers are not taxing non-stakers. They are being remunerated for their work.
> Each of the validator do exactly same amount of work (that's the point, right) except what they receive is proportioned to how much they stake.
Incorrect. A staker does proportionate amount of work to its stake. That's why it gets paid more. A staker gets paid for fulfilling its duties as defined in the protocol (attesting, proposing blocks, participating in sync committees). For each of those things there are some rewards and some punishments in case you fail to fulfill them. If a staker has more validators running you simply fulfill more of those duties more often, hence your reward scales linearly with number of validators.
> Participating in staking is fully permissionless, stakers are not taxing non-stakers. They are being remunerated for their work.
That's just a more polite way to say tax. Being permissionless is cool, but it's still tax in my dict.
> There is something called opportunity cost.
And, who is going to be able to have a larger percentage of their funds staked, a poor or a whale? You need a (mostly) fixed amount of liquidity to use the thing.
> Incorrect. A staker does proportionate amount of work to its stake.
Apologies, I edited my original reply which should answer this.
In short, I don't see anything preventing me to run 10000 validators with 32 ETH each with very similar cost to running just one. It's certainly not linear.
> That's just a more polite way to say tax. Being permissionless is cool, but it's still tax in my dict.
It most certainly is not. They are doing a work for the network and getting remunerated for it. That's not a tax. That's what is commonly referred to as a job. A kid that delivers newspapers over the weekend is not taxing the kid that decides not to. Both make a free decision on what to do with their time and effort given how much it's worth to them. Running a validator takes skill, time, opportunity cost, and you assume certain risks of capital loss. You are getting remunerated for it.
> And, who is going to be able to have a larger percentage of their funds staked, a poor or a whale? You need a (mostly) fixed amount of liquidity to use the thing.
Indeed, the protocol cannot solve wealth inequality. That's an out of protocol issue. It cannot cure cancer either.
> In short, I don't see anything preventing me to run 10000 validators with 32 ETH each with very similar cost to running just one. It's certainly not linear.
There are some fixed costs, indeed. But they are rather negligible. You need a consumer-grade PC (1000 USD) and consumer-grade broadband to solo stake. Or you can use a Liquid Staking Derivative which will have no fixed costs but will have a 10% cut. The curve of APY as a function of stake is very flat. Almost anything else around us has greater barriers of entry or economies of scale.
> And, who is going to be able to have a larger percentage of their funds staked, a poor or a whale?
This is a truth that's fundamental to all types of investing. Advantaged people can set aside millions and not touch it for a year or five or twenty. Disadvantaged people can't invest $20 because there's a good chance they'll need it to buy dinner.
Stocks, bonds, CDs, real estate, it all works like this. You've touched on a fundamental property of wealth.
Wel, but at least in PoW you burn actual money (and in the end, actual resource) proportioned to your profit to keep the network running. In PoS you burn nothing.
> Also, only ~30% tokens are staked. The 30% who chose to stake essentially tax the other 70% in use.
And in PoW miners tax 100% of holders.
> what they receive is proportioned to how much they stake
Wealthy miners with state of the art ASICS benefit more than some kid mining at home with an old GPU. Maintenance/cost of mining equipment benefits from economies of scale too.
I hate being mean, but sorry, remembering to check one's assumption is a habit I gained after elementary school, so maybe that's too hard for you.
Yeah, PoW is bad too. But I'm happy to pay a tax to those who burnt energy to keep the networking running and converted USD to the native token, proportioned to their effort.
I'm less happy to pay someone a tax just because they are rich and they did barely anything.
>I'm less happy to pay someone a tax just because they are rich and they did barely anything.
As the operator of a single validator node you can get out of here with that take. I'm using up very significant bandwidth, having to keep a computer running 24/7, updating node and OS software, troubleshoot it after a power or internet outage and at some point I will have to replace the SSD since it is constantly reading and writing and will need replacing after a few years.
Is it a full time job? Absolutely not, but is it free from responsibility? Definitely not. If anything, I could be making more than 3%pa elsewhere if I weren't also in it for ideological reasons.
>But I'm happy to pay a tax to those who burnt energy to keep the networking running and converted USD to the native token, proportioned to their effort.
Why? That's doubly bad for non-mining holders: not only does your share of supply get diluted with newly printed coins, but it also get devalued relative to USD when these coins inevitably get sold to pay expenses
In Ethereum's post-merge world, non-staking holders can keep their share of supply the same (or even have it passively increase) when total supply shrinks. And if the supply does increase by ~0.5-1% and you as a holder aren't okay with that amount of dilution, the barrier of entry to stake profitably and protect your share of supply is much, much lower than the barrier of entry of profitable bitcoin mining.
And the total newly issued coins (which are nominally much lower than pre-merge) have a much lower need to be sold off. If you view issuance as a tax on holders, Ethereum's model wins on all counts
>just because they are rich and they did barely anything
But stakers also "keep the networking running", just like miners under PoW. In both cases, it's gonna be the amount of capital involved that decides how the rewards are proportioned, there's no way around it - these permissionless systems ultimately use the inherent scarcity of economic capital as the anti-sybil mechanism with economic incentives to keep everyone honest. PoS just bypasses the need for burning a huge amount of energy and the embarrassing quantity of single-purpose e-waste to indirectly calculate who has how much at stake. It goes straight to the point: the capital at stake is simply measured in the value of the coin itself instead of external energy/hardware.
On the outside it does kinda look like stakers get rewarded passivly for doing nothing, but there are definitely costs involved, they're just mostly economic instead of physical - think of all the usual risk involved in crypto's volatility, now compound that with slashing risks, illiquidity, opportunity costs – staking yield is like 4-5% atm (and has been down only for quite some time), if you're a billionaire whale you definitely have other investment opportunities available that yield way more than that. I mean just the fact that the net supply growth can go negative shows that even internally in the blockchain itself there can be better things to do with your ETH than stake it; these people aren't burning their ETH on transactions fees for fun, they're actively using their ETH to do stuff that gets them some economic utility.
> but it also get devalued relative to USD when these coins inevitably get sold to pay expenses
Good point. It invalidates the "good" part but does not make it doubly bad IMO.
And for ETH, well, I don't think it's about protecting value, it's more about:
> In both cases, it's gonna be the amount of capital involved that decides how the rewards are proportioned, there's no way around it
Yes. The difference is, PoW requires you to BURN resource proportioned to your rewards, while PoS just requires you to HAVE (but not burn) it. This makes a huge difference IMO.
For example, I would consider it more "ethical" (whatever that means) to add a light PoW part (with constant or slowly increasing difficulty, that is chosen to reduce environmental impact) to the ETH PoS protocol as-is: the random-chosen validators have to solve a PoW in addition to make their efforts proportioned to how much they stake, instead of being mostly constant.
Okay so startup capital aside, you like PoW because there's an ongoing cost to participating in consensus and don't like how PoS is more or less free.
I'm not sure how you arrived at this when your initial complaint was the rich get richer with PoS. PoW has much higher costs to participate and after a few years you have more costs when you need to upgrade your mining rigs because they're either burnt out or outcompeted by newer hardware.
Aware - and kudos to them for using Ethereum - It's a word play to confuse the market. Notice they don't say on Public Net. The installation is permissioned. I was involved with the first Yankee CD trade in 2018 with JPM. No investor can buy this without the KYC/AML checks, means if there's a wallet it's just a brokerage account - the underlying security is at a custodian not on-chain and the TA is still involved in registering the ownership of the share.
Very likely, but if they get it sorted out one day he will be using it without knowing.
If you have no interest whatsoever and they start explaining to you all the cryptography behind establishing a secure connection to your bank most people would dismiss it as mumbo-jumbo. But now you can tell your grandma to look out for the little green lock on the web that makes her account secure.
I will know. Not because of the "little green lock".
I will know in the same way I know this site is secure. In this case, because of PKCS #1 SHA-256 (aka CKM_SHA1_RSA_PKCS_PSS). Cert issued by DigiCert Global Root G2 and valid until one second before midnight UTC on 3/29/31.
That's where I guess I'm losing sight of the vision.
It's tested, it's proven, it's secure, it works, no "gas", no fees ... I don't know. Maybe I'm just missing something.
If you ascertain some value to the permissionless and self-custodial value of cash. And you see value in the internet's ability to connect the entire world. Then it follows immediately that you see value in cryptocurrency.
Because you cannot use cash to transact globally, and you cannot use digital forms of central bank issued currency permissionlessly or have self-custody. Cryptocurrency gives you all those three properties.
So you must give up something. HNers typically are willing to give up the permissionless and self-custody properties. After all, most of HN audience lives in developed democratic countries where personal freedoms are considered fundamental pillars and protected. But at a minimum you should consider that, not all the world lives under those circumstances. And that there are no guarantees that those circumstances will always be preserved in your cozy first world country. Certainly if you are willing to give them up so easily.
Don't be so quick to assume it cannot happen where you live. One day they may go after some fringe truckers protesting in Canada. Another day they may go after some camgirls earning a living in ways that some executive board of a payment processor considers reprobable. Maybe one day they will tell you in what you can or cannot spend your money or where you can invest it and how much.
> If you ascertain some value to the permissionless and self-custodial value of cash. And you see value in the internet's ability to connect the entire world. Then it follows immediately that you see value in cryptocurrency.
Those two separate sentences do not immediately team up to somehow lead to the third sentence.
> After all, most of HN audience lives in developed democratic countries where personal freedoms are considered fundamental pillars and protected.
As do most crypto proponents who imagine the world outside the "enlightened West" as barbaric lawless lands governed by roaming bands Mad Max-style.
Even though than we can take a popular online service that people pay for and see in which countries it's available. For example, Spotify says it's available in 238 countries and territories: https://support.spotify.com/us/article/where-spotify-is-avai.... It does not accept any form of crypto currency as payment. This means that people in these countries have enough financial institutions and methods, and enough security to be able to pay for an international music streaming service [1].
> Maybe one day they will tell you in what you can or cannot spend your money or where you can invest it and how much.
Or some day the Mad Max-style roaming gang will break down your door and steal all your cash. Or break all your fingers until you give them access to all your wallets.
What's coming... With the current number of blobs Ethereum will likely be able to do up to ~500 tps on average. ~1000 tps in burst mode. But in coming upgrades the blobs will be sharded through Data Availability Sampling, allowing validators to verify only a subset while being sure that the rest of blobs are validated and available by the rest of the network. This will allow to scale Ethereum up to 256 blobs. Which will give Ethereum a throughput of around ~100K tps.
For context, Visa and MasterCard combined average 10k's tps, and are capable of processing 100k's tps at peak. So if it works out, that would put Ethereum in the same ballpark.
Thank-you for the helpful links. Can you share some resources to learn about data availability sampling?
Also, have folks invented a cheap/fast way of going from L2 <-> L2 without having to do an L1 tx?
I fear that L2s may never be adopted due to network segmentation, but if it's possible for all L2s to interchange with each other cheaply, then it's just as good as L1 IMO.
To transfer assets from L2 to L2, of course the naive implementation is to use a centralized intermediary, of which there are currently many that are reasonably priced. There are ways to go between zk-L2s without any central broker in theory; I’m not sure whether that’s also true of optimistic-L2s.
Attempts to do this trustlessly without relying on a liquidity provider do exist, but they're not mature enough to mention yet. They usually rely on zk proofs to validate that an asset was bridged from one chain to another.
L2s are presently already supporting more activity than L1, with 4 L2s regularly doing more TPS than L1. Agreed that fragmentation is a concern, but I think we'll get there soon where the UX is abstracted away for users and the assets flow cheaply.
Furthermore, the proposal is a bit non-sensical. It's still possible to fork Ethereum, as a staker you must choose which chain you want to stake. You cannot stake in both because you would get slashed. But if you decide that Ethereum-fork is your preferred version of Ethereum you can turn-off your Ethereum validators and only validate on Ethereum-fork. That's OK.
The market will decide which network is most valuable.