This is an ad. "Jack du Rose is a cofounder of Colony, an Ethereum-based operating system for open organizations."
Whatever that is. (It seems to be a scheme for monetizing StackOverflow rankings.[1] Or something like that. If it even exists. The web site is all pretty pictures with no content.)
Most altcoins crash after a while. See Coin Market Cap.[2]
Colony is a well known organisation in the Ethereum community. Giving presentations on multiple devcons of Ethereum. Knowing that they have been around for a while gives him the authority to share his opinion.
I don't have access to the beta (yet) but friends do, and it is a legitimate product. They also have a slack channel where they're happy to answer questions.
I signed up for the mailing list a year ago, and I don't think they've ever offered me access to their alpha. They've been around for 2+ years and don't seem to have a product that's accessible yet.
> As a “hard fork” looms, which looks set to split Bitcoin into two separate currencies that will have to fight for custody of the Bitcoin moniker
This already happened to eth when the creators hard forked the chain in an effort to roll back operations of an eth application that was used in a way that the creators did not anticipate. If this didn't kill ethereum why would it be a problem for bitcoin? Fortunately for bitcoin, there isn't a highly influential and transparently self-interested creator lording over the project.
> Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is.
An unsolved growth problem for the reining incumbent that remains unsolved by ethereum. Transactions take a long time because decentralized proof of work verification is slow. A lot of people will say "proof of stake is coming!!!" but it's essentially vaporware and all signs point to the conclusion that it will remain that way for the foreseeable future. Yeah, people are working on it, like all vaporware.
> Ethereum is actually a platform for new kinds of decentralized (often financial) applications (dApps) that run on a peer-to-peer network of computers
Except this isn't actually happening in practice. I am yet to see any "new kinds of decentralized applications", just toy applications that have no practical purpose besides internet roulette
> TL;DR: Bitcoin’s dominance is slipping because its utility is limited and weakening versus other more recently developed, less politicized cryptocurrencies.
Bitcoin's dominance is not slipping because it's utility was marginal to begin with and eth certainly doesn't offer much in the way of compelling improvements over bitcoin.
> Here's the ethereum proof of stake code that will go live on ethereum sometime this year
Until it goes live, it's vaporware. The issue isn't "can proof of stake code be written" the question is "will eth continue to function safely and correctly using a proof of stake system"? We'll talk when it hits production.
> The UN uses an ethereum app to send aid to Syrian refugees via vouchers:
The details are not really clear from the article. How does this work? Why was this possible with eth but not with bitcoin or dogecoin or any other cryptotoken? How do displaced Syrian refugees accept, manage, and spend digital currency? I am highly skeptical of this without lots of details.
That's a ridiculous definition. So nobody can advertise that they plan to add a novel feature to a piece of software, even if the code already exists in draft form, without being labeled a vaporware peddler?
The standards are higher for the cryptocurrency sphere which is notorious for extreme hyperbole, tons of hype, and poor results to match it, especially when you're talking about code that is supposed to solve the single most difficult problem of blockchain currencies.
I agree with you insofar that cryptocurrency protocols involve economic game theoretic challenges that are impossible to fully validate without running in full production. It's 100% fair to remain skeptical of POS until we see a successful launch of the system... but that's different than saying something is "vaporware".
I think root_axis draws an important distinction between normal software and crypto currency software. Until it is live it hasn't been proven whether it's resilient or requires a hard fork.
That could be worse than vaporware. There probably needs to be a term for touting a feature that may turn out to be like the DAO.
I'm still trying to find out how this all worked. There have been articles saying this was their plan in various sources for over a month, though. I'd like to know as well. It's at least clear there was a program involving digital vouchers.
Found one --- here's Wired Germany outlining that it was in fact Ethereum the UN/WFP used with IrisScan to provide a benefit payment method for refugees. They are still scant on specific technical details, but if you are really starved, then it sounds like you should contact Parity.
> If this didn't kill ethereum why would it be a problem for bitcoin?
The situations simply aren't analogous. At the time ethereum was still seen as speculative and didn't have another project nipping at its heals for dominance in the turing complete contracts space. But now, ethereum is nipping at the heels of bitcoin to be the dominant blockchain currency. If bitcoin falters and money starts flowing out of bitcoin and into ethereum, there is no reason to be confident that it'll retain dominance.
> Ethereum is actually a platform for new kinds of decentralized (often financial) applications (dApps) that run on a peer-to-peer network of computers
And that's the crux of it. As I said, I'm yet to see anything that's actually useful. There are a lot of claims about all the amazing things that will be possible at some point in the future, but besides internet gambling, I've yet to see a demonstration or even a coherent explanation of something useful that these systems are capable of that isn't already possible and less complex with existing systems. (Just so you know, I was already aware of status and augur, but I examined your other links as well before responding)
Indeed, most of the things created on the Ethereum platform are just shittier versions of things that exist - while decentralization can be a huge boon to some things it needs to combat its inherent complexity increase for users. Ethereum does not lend itself well to that, as such almost everyone is there for a get-rich-quick scheme, not for the higher applications on its platform.
Wait for the hype to run out, then look at it again when it's not at a peak value.
You could have said the same thing about many things that in the end resulted in a technological paradigm shift. Ethereum is only a couple of years old.
My observation is not pointless, it is literally the point of the argument, namely that crypto projects blast out tons of hype but never pan out into anything useful. Your rebuttal was "well, other things that people said were overhyped turned out to be paradigm shifts", but what I'm telling you is that your rebuttal does not tell us anything meaningful because it is equally true of all the failures as well.
Indeed, it's interesting that existing applications are never cited, it's always future potential. Sounds like a great way to kick the can down the road.
Invest now! Someday the network is gonna be really useful. You'll see!
Skepticism in this realm is certainly warranted and undoubtedly healthy.
However, I think I should share this because the above two comments seem to have not caught wind of it. A number of enterprise-level organizations both within and without this org are working on projects and experiments both utilizing the public blockchain and private chains using the technology.
I think there is some validity to the project that is simply not yet mainstream yet.
So you've linked to a huge list of projects begging for donations. If you don't mind, can you pick just one project out of that list that actually has a product or service I can use today and explain to me why this wasn't already possible without cryptocurrencies?
On a technical note; the transaction(s) in question have not been rolled back, rather, the faulty contract was deprived of it's funds and the money was put into a new contract that distributed the funds to the original investors.
It's not a rollback since the original contract is still on chain, just without money. If you fuel it with some money you can use it.
Except this isn't actually happening in practice. I am yet to see any "new kinds of decentralized applications", just toy applications that have no practical purpose besides internet roulette
So, uh, how about all those ERC20 ICOs? I admit that you may wish to classify them as "Internet roulette."
What do they actually do? I understand the purported significance of ERC20, but it is not clear why these tokens are actually useful. Literally anyone can mint them... in fact that's the point.
Sure, the idea is that now it's easy to mint your own currency to do stuff with. That wasn't so easy before! So Kik is minting a currency to serve as Weird Premium Kik Points, and GameCredits is minting a currency that you get by playing Candy Crush or whatever, and BAT is minting a currency that represents attention you paid to ads, and Augur is minting a currency that makes an incentive structure for reporting prediction market results, and so on.
This is plausibly better than if they had just rolled it by hand outside of Ethereum for a few reasons, e.g.
- You automatically have a way for users to trade real value for your currency via ETH. (This is probably easier for devs than setting up Paypal or Stripe integration, but harder today for users.)
- The currencies are something you have that's more tangible and auditable than an entry in some company's bespoke centralized database. Everyone can see it and believe in it.
- Users can easily send the currency to each other by default without all the transactions having to go through you. (I don't actually know whether this is a pro or a con for many use cases.)
- It's trivial to make interoperable software that accepts or holds or sends these currencies, like exchanges and wallets.
- The above facts probably mean that there is something like an open liquid market for your currency, if anyone cares about it. That means people can perform mutually beneficial trades! Mutually beneficial trades are mutually beneficial.
As to whether it's useful to have a bunch of currencies for different things, I think so? I mean, there already are a ton of things like this in software which behave as de facto currencies -- free-to-play games and MMOs are a good example -- and those seem like they would be well-suited to be ERC20-style tokens. And as someone who believes in incentive structures, I'm excited about the prospect of quantifying more things which are currently vagaries ("attention", "reputation", "compute time") into currencies with a market. Augur's design is a good example of this.
WhalePanda in not an economist, not a digital coin developer, nor a professional coin analyst. At his website he describes himself as: "...I’m a Belgian Brand/Online Marketing/UX consultant with a passion for Bitcoin..." https://twitter.com/WhalePanda?ref_src=twsrc%5Egoogle%7Ctwca...
Obviously partial to bitcoin but has no more "street cred" that I do: "a California fine artist, UI designer, with a passion for Ethereum."
That is to say I am using Ethereum for my art catalog or Catalogue raisonné as an ad hoc copyright tool and historical archive. What does he or most people use bitcoin for?
I couldn't give two shits about 'who' he is; the points he makes are rock-solid. The ICOs are the only 'real' thing currently going on in the Ethereum space, and those ICOs will have costs that they actually have to pay. They are astoundingly fragile.
My best estimate is that the ICO market as a whole will have to be at least 3-4 times more successful than VCs if the house of cards is to stay standing. We're talking about a process that has to churn out unicorns to stay afloat.
Do you think smart contracts really make every business that uses them 3 to 4 times more valuable?
> That is to say I am using Ethereum for my art catalog or Catalogue raisonné as an ad hoc copyright tool and historical archive.
Calling Ethereum a house of cards is terribly hyperbolic but to clarify, here is what Ethereum has going for it.
These are some of the companies, banks and countries interested in the technology.
J.P. Morgan
Credit Suisse
CME Group
British Petroleum
UBS
ING
Microsoft
Thompson Reuters
Bitcoin was ment to be money which is good in the store of value part. Etherum has a higher inflation for all I know, and it is not primarily meant to be money.
Tulips have SOME intrinsic value. If doomsday comes, the world is over.. a toolip can be planted outside your house and it looks a little bit more pretty. Or maybe you can eat it.
Gold has SOME intrinsic value. It is very good for certain applications, I believe trace amounts are used in compute parts. Worst case you can make something shiny to look at, that will be rust proof and easy to shape.
What is the intrinsic value of ETH or Bitcoin? It literally has nothing to back it.
"Tulips have SOME intrinsic value. If doomsday comes, the world is over.. a toolip can be planted outside your house and it looks a little bit more pretty. Or maybe you can eat it."
That's an argument that they don't have intrinsic value, but only value contingent on their ability to look pretty or eat them, both things which themselves will depend on where you are on the Maslow hierarchy and your needs for food vs. decoration.
Same for your argument about gold.
Intrinsic value is not contingent on your needs, and, well, this is why it does not exist and there isn't anything that has intrinsic value and indeed the very concept is incoherent when you try to nail it down. Nothing has intrinsic value; it is all relative to some entity's desires or needs.
People want to have something as "a formal token of delayed reciprocal altruism (Richard Dawkins)" and these tokens have probably existed as long as language (~100k years) first starting as shells of a specific size and species. The first DDG hit of this phrase[1] brings up an essay that looks interesting, although I have not had time to read it yet. Gold and silver (and credit based on them) have been that token for most societies since around 600BC. Fiat currencies have been used but flame out spectacularly. I don't think one has lasted more than 100 years. Private gold was made illegal in the US in 1933 and the dollar debased. State exchanges of gold and currency at a fixed rate ended in 1971 with the dollar going full fiat. People are looking for the new token.
For ETH, that's not really true: you can use it to pay for computation on the Ethereum blockchain. The value you assign to that computation may not be very significant, but it's hard to justify the notion that it's zero.
thats like saying that the value of gasoline is less than zero because you could just walk the distance without polluting the environment.
computing power is inherently valuable. the value of AWS is less than zero because you could just buy a computer and do the computation cheaper at home. duh.
The value of the trickle of gasoline to get me to my kitchen is less than zero. To use it I would have to waste considerable money architecting a way to get my car indoors.
The value of AWS is greater than zero because spending my day monitoring my server would be exponentially more costly than paying Amazon to do it at scale.
And Ether is worth less than zero (as a computation engine) because I could develop and run the computation in less time by opening vim, even if the Ether was free.
Gold glitters like pyrite, but the latter is not scarce and therefore not valuable. For both gold and ETH, it is scarcity, in combination with the network effect, that is critical.
For gold, scarcity is enforced by laws of nature, which encourages networks to treat it as valuable. For BTC, is there a similar constraint? I'm pretty sure the tokens can be reverse-transmutated by the software that counts it. This is true for all cryptocurrencies. Gold today and pyrite (or worse) tomorrow, which would make all of them unsuitable as long-term stores of value.
> What is the intrinsic value of ETH or Bitcoin? It literally has nothing to back it.
The brand and the places where you can pay or donate with it, or exchange it. The fact that it can't be seized by the authorities, the limit on inflation wired into the software and system. And thats most likely not all of it.
People spent most of the 2000s predicting the collapse of the housing bubble.
Coins are strange, because appetite for non-speculative legal use seems to remain low, but appetite for coins continues to be strong. It does seem to be valuable as an unregulated speculation platform...
Just because the bubble is going to pop, doesn't mean that it will pop to 0.
If bitcoin prices crashed to 1000$, everyone would call THAT a "pop", but it would still leave anyone who bought in a year ago ahead on their investment.
And it will leave a lot of investors with a loss. That's the nature of market crashes, and it'll hit the smallest and most inexperienced investors the worst.
The ICO mania definitely contributes to this, but so does the worry about a Bitcoin split. I've read a lot about it and could not give you a coherent answer of what is likely to happen and what would be the impact if it does or does not happen. So people like me (probably in top 5% of knowledge among Bitcoin holders about the technical aspects) put holdings in other coins to wait and see.
The coins that stand to benefit most from this are the ones traded on GDAX -- Ether and Litecoin. And Ether has the most breathless hype going for it right now. And this is the same advice I give to the non-technical people in my life who've jumped in late and don't have a Poloniex or Bittrex account to trade other coins (sign up for GDAX, balance things with a wait-and-see attitude towards August 1st).
BTW - my 89 year old farmer grandpa who can't even get wired internet at his house now has a crypto portfolio, in case you're looking for bubble indicators. (And if you ask why my advice wasn't to avoid an investment you don't understand -- well, I am bullish on crypto long term and they really wanted to get in, and view it as a gamble, so . . .)
The split, and there will be a split but not with UASF, is the perfect proving ground for Bitcoin. The entire purpose of the whole experiment is to see whether it can successfully generate consensus, even in the face of intense disagreement or attack.
In this regard, I see it as inevitable that a chain will emerge that permits greater transaction throughput, and that consensus will organize around this chain. If it doesn't, then in a very real way the experiment will have concluded.
He sold himself just on whatever is said on Bloomberg etc. And he views it about like laying $$$ on the Georgia Bulldogs to cover against Alabama, so I'm not going to put up a fight.
It would damage the brand of being the premier cryptocoin, having the most marketplace acceptance, secured by the most hashing power. Regarding hashing power -- I don't know; can the UASF and the original chain be merge-mined?
It's pretty clear what's happening. Ethereum (ETH) is rising because people are buying into initial coin offerings (ICOs). They aren't holding ETH, so they don't care about the price of ETH rising in terms of Bitcoin (BTC) or dollars. The ICOs are the significant holders of ETH. They haven't sold their ETH because 1) the price of ETH is still rising rapidly, 2) they don't yet need to access the funds for development, and 3) smart contracts connected to token sales usually allocate ETH for future use. Eventually, ICOs will begin to sell or distribute their ETH to fund the development of their projects.
It's not about "most people," it's about "most cash."
The "whales" are buying ICOs left and right, and dumping their Bitcoin/other altcoins. That's the main reason for ETH's rise.
Eventually some of these ICOs will prove to be scams, or will get hacked with catastrophic results, and ETH's price will fall again. It doesn't necessarily mean it won't rise back-up again, but by then we'll just have to see if ETH is still a top 2 coin to get.
Ok show me data on what percent of the market cap is from ICOs. Bancor's recent debacle raised 150 million and that is the largest ICO yet. Ethereum has a 36 billion market cap as far as I know.
ICOs lock away ether, which makes the price rise - but there are 5x the amount of ether than BTC, so I am skeptical this is even a large % of the reason
There are approximately 92 million ETH outstanding. It's much harder to measure market liquidity on the various exchanges and over-the-counter (OTC) markets.
With hundreds of ICOs popping up, it's difficult to say what impact they have on the market. Bancor raised approximately 400,000 ETH in their recent ICO, or 0.4% of all ETH outstanding, and the BAT sale raised 156,250 ETH. Prior to the attack, the DAO had attracted over 11 million ETH, or nearly 14% of all ETH outstanding at the time.
The fun thing is indeed that neither the Ethereum optimists nor the sceptics have concrete numbers to back up their statements.
The skepticism is healthy, the optimism interesting, the discussion unfortunately remains fairly immature, on both sides. I hope we'll get more academic and professional insight soon.
Could someone that understands crypto better than me explain why Bitcoin's fees and transactions times have become so high all of a sudden? Is it just a matter of network congestion, or does it have as its root some underlying mathematical factor instead?
Hoping to get a better answer here than on reddit. /r/bitcoin and /r/btc are both biased echo chambers.
Early on in bitcoin, a 1MB limit was added to the block size, which puts a cap on the number of transactions that can be included in each block. Now that bitcoin is more popular, there are more transactions then can fit in each block, which means miners will only include the transactions that include the highest fees. There are a number of ways to solve this (the easiest being expanding the block size), but the community is split on the best way forward, so the congestion is getting worse
Bitcoin blockchain has a limit of 1MB of transactions in a block. This was set in 2013, when Satoshi put it in place. He didn't give much explanation for it, but it was probably to avoid a spam attack. He said it could be raised later: https://bitcointalk.org/index.php?topic=1347.msg15139#msg151...
There are arguments for and against increasing the blocksize.
For:
- Support more transactions per second
- Lower fees for users
Against:
- Hardfork requires all full node operators to upgrade, or they could see incorrect balances
- Lower fees mean that miners make less money
Also, generally, there are some philosophical differences between the sides. The big-block side usually wants bitcoin to be more like a payment network, wherease the small-block side typically views it more as digital gold and store of value.
"Lower fees mean that miners make less money" - not really. There are two mechanisms:
1. The congestion would mean bigger fees
2. In bigger blocks there will be more transactions - so more fees in the block
The most probably cancel each other.
Actually the big miners seem to be in favour of the Bitcoin Unlimited big blocks. What they want to stop is SegWit which is needed for scaling bitcoin off chain with Lightning etc. There is a conspiracy theory about that - and it actually makes sense to me - which is that SegWit would eliminate ASICBoost (which is an optimization technique that is implemented in some ASIC miners). But there is also another narrative that Lightning would mean banking entering the Bitcoin community - and that is why it should be stopped.
Bitcoin can never become a good payment processor - this would require many orders of magnitude bigger blocks (now bitcoin can process about 7 transactions per second, VISA can process 50K transactions per second). And while storage for bigger blocks grows linearly - the other algos have probably worse complexity.
There are a few things that contribute to this bitcoin has a block size of 1MB and they only add new blocks every 10min. There are only so many transactions you can fit in that block size. The other thing is as the block reward gets half'ed miners will ask for more fee's as well as miners will mine blocks with higher fee's first. So as a way to combat some of the congestions people increase the amount of fee they are willing to pay to get included into a block faster.
The miners only process transactions that have higher and higher fees. This makes lower fee transactions take forever to be processed or never happen at all. Since bitcoin limits how many transactions that can occur in a set amount of time it creates this awful fee-based backlog. The self-serving and shortsighted bitcoin community has argued and bickered amongst itself so long about how to fix this that it may be too late now.
A good contrast is that Vitalik Buterin, one of the founders of Ethereum recently said the gas fees for Ethereum are too high (they were still quite low compared to bitcoin) and the miners voluntarily just lowered the gas fees, which determine the transaction costs. It seems to be a very different community running each currency.
The limit on transactions per second is a function of the block size, currently 1 MB. Based on what the miners say, they would be interested in increasing the block size. Understand that the miners like high fees but they like high bitcoin prices even more. The fees are only a fraction of the block reward. If the system becomes too expensive then the miners will lose a lot more than just some fees.
The 1 MB limit is set by the bitcoin software. The software that most everyone runs is developed by a group called the "bitcoin core". That group has mostly been taken over by the company Blockstream (this is my opinion, others would argue the team is diverse and not controlled by any one company). Blockstream's business is based on off-chain transactions (i.e. the Lightning network).
It is in Blockstream's interest to get a feature that enables Lighting into the Bitcoin software (SegWit). Miners have been refusing to upgrade. One theory is that SegWit will disable a special optimisation that one of the biggest miners uses (ASCIBoost). In any case, Bitcoin core team refuses to increase the block size and the miners have been refusing to enable SegWit.
The SegWit upgrade is a good thing, IMHO, even though it seems like a pretty complicated feature. Having the ability to open "payment channels" and make cheap transactions off the main chain would be great. However, I feel that a block size increase to 2 MB or 4 MB is long overdue. I don't understand all the technology issues so maybe there is some really good reason not to do it.
It is clear to me that Satoshi (founder of Bitcoin) and Gavin (previous leader of Bitcoin core group) felt that the block size could be scaled to keep fees low. Both software improvements and hardware/network improvements would progress quickly enough to scale with demand. The current core team does not think so and think off-chain transactions are the only way to scale now.
the miners are running software that decides which transactions to include, and I'm sure the software has some logic where it will pick the highest-fee transactions when they can't include them all
There's a discontinuity in transaction pricing caused by the fact that Bitcoiners are hitting a hard 1MB limit on the blockchain.
It's kind of like the situation with airliners: If there are empty seats left, it's cheap to add another flier. However, once the seats are all taken, it gets extraordinarily costly to get another passenger on board, to the point that they have to violently evict someone to make a spot available.
First, most people want Bitcoin to scale such that more people can use it. This can be done directly on the blockchain by allowing more transactions to be recorded in each block. Or it could be done with '2nd layer' solutions that periodically resolve on the Bitcoin blockchain. Such solutions require some changes to the Bitcoin clients people operate; the current 'most popular' version of this is called Segregated Witness, aka SegWit.
Right now, more people want to create transactions than can actually do so, thus a fee market has formed to get transactions included in blocks. This is why fees have increased.
It's a debate that sounds like a technical detail, but in reality it goes straight to the core of what Bitcoin is and how it will work. There is the debate over what changes will be made, but there is also a debate about how this decision will be made. Some feel that all changes to the Bitcoin protocol should be made with strong consensus, a conservative approach that has worked alright up to this point. Some still hope that this can be done, but the deep ideological division that belies this debate makes that seem unlikely. The alternative view is that Bitcoin is designed to handle these disagreements naturally by hard fork.
A hard fork is a split of the Bitcoin blockchain into different incompatible chains. In this case, it would be a split over the maximum permissible block size; one group would allow larger blocks, and another would refuse them. This would lead to a situation where miners choose which chain to mine on. Miners are incentivized by mining rewards (coinbase rewards), and thus have an economic incentive to mine on the chain they believe will have the greatest market value. This will likely result in a positive-feedback mechanism where one chain dominates the other; this has played out on the Ethereum chain where 'classic' ether is worth far less. A stable split is also possible, and thus there would be two versions of Bitcoin with different rules. Any coins generated or transacted pre-fork would be valid on both chains, but post-fork would commit to one chain or the other.
As for the bigger blocks, it comes down to predicting how the network will behave with larger blocks. It would permit more transactions, without question. It would also increase the bandwidth and data storage requirements of full-node operators. Basically, it would be more expensive to operate the Bitcoin network (which is distinct from the cost to secure it, which is scheduled coinbase inflation and txn fees). It would also mean that miners that are closer to each other on the network (via latency and throughput) would have a competitive advantage as they would confirm each other's valid blocks more quickly, and thus there are concerns about miner centralization. Such centralization presents a point of failure for the network.
Make no mistake; it is very difficult to predict what will happen with different protocol parameters. There's a lot of game theory that you can do to try to understand it. For instance, miners may mine larger blocks to include more transactions, and thus transaction fees, but risk slower propagation of their valid block through the network. In the case of valid blocks being found at the same moment, the one that propagates faster will 'win' and the other will be orphaned. Some argue that the risk of orphaned blocks is an effective limit to blocksize, and thus no blocksize limit is needed. It would also peg transaction fees to the marginal risk of a block being orphaned.
It's simple - Bitcoin is stagnant and full of politics and holy wars where as ETH is implementing everything Bitcoin promised 5 years ago.
Bitcoin is facing an existential crisis August 1st (UASF) that some view as liberation and others as extortion. As if BTC wasn't high risk enough!
Yes we haven't seen a single ICO that has resulted in anything worth anything yet and we probably shouldn't any time soon. Yes the rise in ETH the last few months is comical. Yes there are plenty of scams out there right now and some we don't even know are scams yet. But it's damn exciting.
Anyone with an imagination can see this. It's the wild west and it's fun and crazy. And there's a real opportunity here to do something different. 99.9% of these early things are going to fail but there will be a breakthrough eventually I believe. And when that happens...
And we should add to that that the exciting parts of ethereum may never fully exist in ethereum itself: It's totally plausible that this tech could instead be adopted by another project before becoming wildly successful. However, this doesn't make ethereum tech any less interesting.
Between this and Fred Wilson's recent comments, it's pretty neat seeing a meme take shape right before our eyes.
I'm not saying this article is wrong, but that it offers little substance.
My pet theory is that Ethereum will transiently surpass Bitcoin in market cap in the next weeks, triggering a 5x surge in Bitcoin's price. Ethereum will then follow, and what happens next is anyone's guess. Why do I think that? Uh..heuristics.
why would it trigger a surge in bitcoin's price? The event is unprecented, and will happen during a time of uncertainty in BTC's future, due to the impending hard fork. It would seem to me that the event would cause ETH to surge instead.
My thinking is that certain parties with vested interest in BTC may attempt to drive up the price to prevent ETH from stealing the spotlight. Of course, several large firms now have a vested interest in ETH as well, so the best option might be to own both.
The tech is still in its infancy. Most of the developers that have heard of Ethereum heard about it within the past couple months. Communities like r/ethdev are growing rapidly and the tools required to develop feature-rich dapps easily are still being fleshed out. It takes time to realize the potential and learn to develop for a new paradigm. Trustless smart contracts are an incredibly powerful concept and I don't expect them to go away.
There is real movement in the ethereum space. I'm on mobile right now but check out the ethereum enterprise alliance. The other big thing would be ICO's, for better or for worse.
And? You're remarking on a surface-level resemblance to the greatest communication and economic innovation in human history. It's a disingenuous comparison.
Judging by the size of financial industry, the electronic money which could be programmed to do things with money without human help 24 hours per day is a serious threat to many companies in finance.
> do things with money without human help 24 hours per day
This was already possible before cryptocurrencies, hence how I'm able to buy anything online at any time of day and have it delivered to me within 24 hours.
A lot of articles mention the likes of Intel, Microsoft, Infosys, Samsung, J.P. Morgan etc — are building software using Ethereum or some other blockchain platform. But I wonder if they actually are just forking the code off of Github and creating their own blockchain or ethereum-based Microsoft token, or Intel token for their own internal use and this is being misrepresented by cryptocurrency-owning journalists.
It seems to be too risky for big companies to build DApps for the authentic Ethereum when they can't predict that the price of gas won't quadruple again. Creating their own blockchain could mean cheaper or free gas with all of the upsides to using ethereum and an added customization ability.
If this is true, then the price increases in ethereum have been unfounded.
Other companies use private ethereum blockchains. The worst part is that Ethereum community called Ripple a scam coin because banks don't actually use it for transactions but they didn't care to realize that ethereum is the same
> Ethereum has raced ahead with technology that not only does everything Bitcoin can do faster, in higher volume, and at lower cost — it does a lot more besides.
Statements like these frustrate me, because they paint a picture as though Ethereum is a strict upgrade to Bitcoin, without depicting the many sacrifices that Ethereum has made to get its advantages. The word blockchain in general has completely changed meaning - no longer does it specify systems where there is no trust involved, instead it specifies systems that create a high interoperability between money and applications.
There's a huge difference in the security and decentralization model of Bitcoin and Ethereum. Bitcoin has no central leadership, actively rejects the pursuance of one, and works hard to build a network that simply can't be attacked.
Ethereum on the other hand has a powerful central leadership, and moves faster and does things that are in general far less secure. When they hit road bumps like the DAO attack, the 'Spurious Dragon' chain split, or other major network events, they fall back on their central leadership to resolve the issue quickly.
That's really not decentralized, and it's completely different from the vision that Bitcoin originally painted. It's a completely valid model, and it's a step up from using a fully centralized platform like the Google Cloud, but ultimately the Ethereum foundation and surrounding leadership has the ability to push through controversial changes, something that is strictly rejected by the Bitcoin philosophy. It's also not clear what will happen if someone like the US Government leans into the Ethereum Foundation asking for things like capital controls. Bitcoin doesn't have a leadership for the government to lean into - it's going to be a lot harder to add captial controls to Bitcoin than to Ethereum. Depending on who you are, that's either an advantage or a disadvantage, but at the very least it's a very clear distinguisher.
For that reason, Bitcoin is far more interesting to me as a technology. It's the first and really only, technology that allowed something like a monetary system to stand completely independent of a leadership or a governance structure. Ethereum hasn't achieved the same thing, that much is made obvious by the fact alone that they don't know what the core consensus algorithm of the network will be in 18 months (maybe it will switch to a yet-undefined Proof-of-Stake, maybe not).
Don't get me wrong. Ethereum is doing interesting things. They've completely changed the way people thing about money and applications, and made it possible to apply money to everything. But it's far less secure, and it Ethereum today simply wouldn't work without its central leadership. To me, that makes it not much different from any other technology out there - its giving us new and more efficient ways to do things that we have already been doing.
But anybody who thinks that Ethereum is a strict upgrade to Bitcoin has completely missed the point, because Ethereum does not have the core value proposition that Bitcoin provides. Bitcoin is a complete financial system that you can use without needing to trust anybody. Not the developers, not the miners, not the government. Bitcoin is extremely impressive, and definitely is a technology in a class of its own.
"In a world where people are used to online payments being confirmed instantly, Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is."
Online payments (via traditional means) are by no means "confirmed instantly". The authorization happens more-or-less instantly, but that's only the first of multiple steps in the transaction process; the actual transfer of funds often takes at least one business day, if not more.
There's two ways of interpreting "online payments" here. Through the lens of ACH/wire payments, your point is spot on.
However, I suspect the author meant Venmo/Paypal etc.; that's certainly how I interpreted the sentence. I'd argue that those services are better comparisons for P2P payments, especially in the US, where most consumers are not able or inclined to give out their bank information to receive an ACH payment.
Compared to those incumbent online P2P payment services, Bitcoin really is starting to lag behind in that regard.
"However, I suspect the author meant Venmo/Paypal etc."
And my remark is still applicable there, since they're basically just frontends to the traditional ACH/wire payment system (at least in the case of Paypal; I haven't used Venmo much, so I'm not as familiar with how it works). Unless Paypal is paying the seller before receiving actual funds from the buyer, I'm not really seeing how this would be any different of a situation.
From a user's perspective, the transaction is confirmed when the app says "transaction confirmed", i.e. the second you press the "send money" button. I think that's what the OP was getting at.
As you correctly point out, the transaction could still bounce if the user has insufficient funds, but that's not in the happy path. Most users' experience with Venmo/Paypal is that they get a "confirmation" immediately, and then they move on. The happy path for a BTC transaction involves minutes to hours of time without even getting a _provisional_ ACK from the network, at any point in which your payment could fail and require a retry, or the payor could cancel.
(The time taken to finalize the payment is much less with BTC, but since modern payment systems paper over that detail, I argue it is not relevant to the user-facing concern that the OP is commenting on. Perhaps it is something that users _should_ be more concerned about, but consider the use-case of trying to buy a cup of coffee with BTC. Nobody is going to wait 2 hours for a transaction to complete in that use-case.)
Kind of. It's at least the part that matters if you want to walk out of the store with your merchandise. It's not the part that matters on your card statement, though.
the only way to be in on ether is to hold it. That's true for individuals and for large institutions joining the Enterprise Ethereum Alliance. Behind the scenes, large institutions are buying up Ether and anticipating that it will become a part of the financial system (either that or it will become a shadow financial system, and they are therefore incentivized to be early adopters). There's no way to short ether or bitcoin. Everyone who is in is long. dapps don't do much right now (and there's a lot of writing about ponzi scheme dapps), but this is very early days and the flexibility of the ethereum platform is just starting to be fully understood. The article is right about the limitations of the bitcoin blockchain. Some commenters here are right about pieces like these being great advertisements for the platform and driving more buying. 1 Ether > $1000 USD in a matter of months, if not weeks.
Do you have a citation for large organizations buying up ether? I only came across articles mentioning corporations forking ethereum code and testing it out for other purposes.
I have a question regarding the morality of buying these coins:
1. In buying I provide liquidity and add to the perception they have value.
2. I am aware they are a big Ponzi scheme and vulnerable people may lose money they cannot afford to.
3. However altcoins may be a "too big to fail" Ponzi scheme, which like the property market, will rise seemingly forever.
4. I would rather be on the inside than the outside if it does. I'm on the outside of the property market in the UK after correctly assessing it was a pyramid, but wrongly believing it would crash and not be propped up.
5. Good and vulnerable people might lose their savings because I have enabled a perception that these markets are not pyramid schemes.
Research the exchange Poloniex. They have played a major role in the creation of tens of billions USD in "value" in altcoins over the past 2 months. There is zero transparency on their operations or ownership or supposed licensing.
The pace of adoption leaves much to be desired. And if you think bitcoin is hard for the layperson to understand, ethereum is a whole other can of worms.
Ethereum's adoption has already surpassed Bitcoin's with several metrics: number of transactions, trading volume, mining reward, and number of nodes. ETH also has ~80% of BTC's market cap.
True, it does not have the name recognition that Bitcoin has, but its not just a price bubble that is driving this.
I don't follow the cryptocurrency world much. The last time I tried to really look into all the coins I bought some Monero. Monero seems the most sound technically and cryptographically.
Can someone explain to me why one alt coin like etherum gets more attention/value than others? What is it doing that is novel, or makes it more secure, or more anonymous than say Monero?
Absolutely agree, and Ethereum is a great platform for building those stable currencies. Check out Stabl and Maker for two orgs trying to make this happen.
But its also trivial to issue fiat-backed tokens on Ethereum (at least from a technical PoV). See Digix who is doing this with Gold.
Whatever that is. (It seems to be a scheme for monetizing StackOverflow rankings.[1] Or something like that. If it even exists. The web site is all pretty pictures with no content.)
Most altcoins crash after a while. See Coin Market Cap.[2]
[1] https://colony.io/ [2] https://coinmarketcap.com/