Echoing the other comments, this is a pretty naive understanding of how a general purpose smart contract blockchain works and the incentive models involved that keep the kind of censorship described here from happening. They also don't seem to fully grasp how smart contracts that are in-fact decentralized work, and are cherry-picking the ones that have an authoritarian controller because of the nascency of the technology.
The article isn't really detailed at all, so it's hard to know where to start with why these "services" aren't in fact "centralized."
It's effectively the equivalent of someone saying "you can't keep your password secure from hackers if you store it in a database, if someone hacks it then they can steal it and use every site you used that password on": it's just obviously false to people who know how this works, but now I have to explain how hashing works and such.
I'd just encourage reading up on how Ethereum transaction mining works before just taking the article's claims at face value.
Your comment doesn't address the point of the article. The author isn't talking about Ethereum itself, which they acknowledge up front can comfortably be considered decentralized.
The point is smart contracts. They are code, and they have to get updated if there are bugs. How do they get updated? Well, in the simple (and common) case somebody holds the private key and updates it. That's centralization, obviously.
You can get arbitrarily complex with how smart contracts are updated. You can have multisig, where 2:3 have to vote to update, or you can have actual voting, or you can even do voting by stakeholder in the contract.
But whatever you choose, it's fully a function of the smart contract itself what level of decentralization it achieves, and not at all about Ethereum.
Sort of..an individual smart contract is completely immutable; the code cannot be updated. You can create a proxy smart contract that points to the contracts actually handling execution, and update those pointers to point to new, updated version of the code which is what I assume you're referring to.
Plenty of popular smart contracts do not do this though, and are fully immutable. Rather than updates, the developers upload a new version. Users can use the new version, or stay on the old one forever (the developers cannot delete it).
Regardless of which one, though, this is known ahead of time. A user (or, more likely, a community of users) can inspect the code and see to what extent the key holders can modify functionality.
I think the DAO hack is misrepresented in the crypto community lore. The network simply decided to follow the main developers and those that did not, kept with what is now ETH classic. A hard fork can happen in absolutely _all_ cryptocurrencies, and I see it as a feature rather than a bug.
While I generally agree, I will say that the ability to dictate a Schelling point is a form of power.
Imagine a first past the post election, where there is no official list of candidates (one simply writes in a name), but where a particular person has the position that they are always the first person to publicly recommend any candidate, and all voters hear this recommendation.
This would be a powerful position, even if that person was not eligible as a candidate, and even though everyone can vote for whatever candidate they want.
When in a position of significant power, even if this power is only of the form of one’s reputation and/or one’s influence on Schelling points, one has a responsibility to, when exercising this power, to take into account the effect it will have on others.
I don’t mean that he failed to do so. I imagine it must have been a difficult decision! And I do hold Vitalik in high regard.
But if one presents such a fork as being merely the the result of independent choices of each user, I think one is mistakenly omitting the power used by big names which promote one fork or another.
I don’t mean to say that this power being present is a problem that needs to be solved, making this power not present. I don’t think that is possible.
Like I said, I do largely agree with much of the “people are free to choose what fork they use” framing.
But while I think it is probably basically the best that can be achieved, I do think it is best to acknowledge that even without authority from things other than social influence and such, that there is still power through said social influence + Schelling point influence + etc. , and it is possible for this power to be misused (though I don’t claim that it was misused in this particular case).
In addition, I do think it seems prudent and good to avoid exercising this power unless the reason to use it is especially compelling (e.g. either part of an upgrade which basically the whole community has been expecting for a long time, or which has overwhelming support, or to handle something which , if not handled, could have an existential impact on the chain, or things like this) . (And, while I haven’t kept up with his latest writings and actions, I suspect he kind of agrees?)
I think you are spot on, with the addendum that exercising this power comes with costs - see the very DAO hack we talked about. So while I fully agree this power exists, it is not unlimited and is invested by the users of the network. I also think Vitalik is aware of all these and they are actually using these principles in the ETH governance.
This just means that as far as users are concerned there is no such thing as an immutable blockchain. That's because people don't interact with chains directly, they use "Bitcoin" and "Ethereum", and those names have an inherent mutability in what they refer to.
The Ethereum developers convinced enough players of the crypto ecosystem to change what chain the name "Ethereum" refers to, not unlike a dns change (but to a large extent, done manually; there were humans in the loop to activate the hard fork). So wallets and exchanges changed the chain that the name "Ethereum" pointed to. Nodes migrated, and miners too. And it just happened that this fork was made specifically to revert a certain transaction.
Those that were left on the original chain had to pick another name for it, and build another branding. It was now called ETC instead of ETH, even though it was ETH that changed; ETC points to the old chain that used to be called ETH.
From the perspective of users, the transactions on ETH were truly reversed. Immutability is a mirage. (This is not necessarily a bad thing though.)
They cannot roll it back. Anybody can create a hard fork, and nobody is forced to use that version. In fact, the version that was not rolled back still exists, and we are all free to use it if we wish!
This ignores network effects at play. As soon as large parties or developers of popular front-end software announce their support, the majority of smaller users will quickly follow - simply because not following would put them on a massive disadvantage.
The developers of the clients do have a massive advantage here.
I disagree, a fork with a non-Google app store could absolutely threaten Google.
The Oculus Quest runs an Android fork for example. Are you saying if Google gets into VR Facebook will not be able to compete because of the fact they are using Android?
Yeah I mean look at Uniswap. Billions of dollars in liquidity locked up and it is immutable. Software development in this context is much more similar to hardware engineering, the cost of rolling back is exponentionally more than rolling put a django app or whatever. But weve been doing this type of engineering for millenia, what happens if there is a bug in the design of a bridge? Its cratastophic, yeah so what do you do to prevent that? Should we not have bridges?
I think it’s a little different because people do regularly maintain bridges without replacing them and rerouting all traffic. But I get your drift. What a crazy thought to have these completely autonomous programs moving billions in value.
> Well, in the simple (and common) case somebody holds the private key and updates it.
I will grant you "simple", and maybe even "common"... but only because most people don't really understand decentralization and many of the ones who do don't care about it.
The "actual" way this happens, for the protocols and contracts that "actually matter" (certainly almost everything you would have heard of, as opposed to the long tail of tiny pet projects) is that, in the case that a bug is found, all of the users have to vote with their feet to move to and accept a new one.
Essentially, this is equivalent to saying "decentralized contracts simply aren't upgradable", but of course everything is upgradable if you accept the idea of people giving up on old software and using new software ;P.
(If this sounds familiar, it should be: this is in a very real sense similar to how Wireguard intends to deal with cryptographic breaks in its chosen cipher suite, as they aren't some centralized power able to upgrade everyone's computers remotely.)
(FWIW, there is something else you can do, but as it would be implemented by still more contracts that themselves might have bugs I don't consider it the answer here as it begs the question: you make a contract--hopefully a simpler one that is less likely to have a bug--that lets people vote on which contract is the current accepted one, assuming they can all have compatible APIs.)
> I will grant you "simple", and maybe even "common"... but only because most people don't really understand decentralization and many of the ones who do don't care about it.
So assuming that this is mainly an issue of people not understanding versus understanding and not caring (though you said there’s some of that) how is the Ethereum community going to get the word out so that this becomes a mainstream success versus mainly for speculation as it is now?
A common issue and one that I personally feel crypto in general suffers from is that neat tech isnt a a criteria on which most people flock to use something so what are the reasons end users need to know to be like ah yup I will drop my regular finance interactions for this or heavily augment them with this?
It helps to consider the context of finance as glue that helps make the real economy move by reducing fraud. Deciding to use a crypto solution is like deciding to use double-entry accounting: it creates a quick and reliable record of transactions in a certain context, this context being one of consent. Putting consent mechanisms on-chain gives many of the benefits of a trusted third party without designation of an actual fallable, corruptable person or institution. That allows the surrounding regulatory framework to be streamlined and take on more and smaller cases with a lower footprint. But there is a chicken and egg scenario there since the norms have to shift towards these solutions before they gain all the desired efficiencies.
That said, I was paid in crypto the other day through a DAO. I was told how to submit a proposal to be paid, and then the funds were released through a vote within hours. It was transparent and the only hiccup was in needing a 70 cent bond fee to submit the proposal - it wasn't "controlled" in the usual sense of assigning a person to handle funds. So I already see some benefit in organizational structure.
Hmm yeah that is certainly interesting in the sense that it was easier to receive payment than it otherwise may have been in current financial systems. Easier to trace and such too I imagine if it was needed.
To your point about transparency and trust for general transactions, I can see how that will be useful but don't you lose the ability that most trusted entities have now which is to roll back the transaction or correct a situation if fraud has occurred, given what I understand to be the finality of a contract? That said, I'm personally not really worried about making a transaction over say VISA's network but I am concerned about the end party I'm interacting with and I feel like crypto in general doesn't do well to address that, which I almost feel like is the real issue. I don't think I understand why people feel like it's an issue if they have to transact over a bigger central authority, perhaps I'm just too far removed from the group of people not served by classical finance.
I question your premise. If you analyze "by weight instead of by volume" then I maintain that all of the important projects you hear about--think of the decentralized exchanges or lending platforms, such as Uniswap--do not have back doors in their contracts for centralized code updates: when Uniswap wants to build a new version, they release a totally new system that happens to share a name.
That there are a large number of silly projects most people haven't heard of, or random tutorials on the web for getting started in crypto, that involve building contracts with backdoors is no different from any technology... most stuff isn't scalable or even slightly secure, even if the products from the biggest companies and used by the most people tend to be: like think how many websites have ubiquitous SQL or HTML injection attacks... only "by volume" (looking at the total number of such websites, irrespective of how much use they get) as "by weight" (looking at the websites you use during the course of a day by how much you use them) I bet almost none of them do.
> to deal with cryptographic breaks in its chosen cipher suite
Interestingly, this is actually almost doable in the context of a decentralized contract/computing system (with bug bounties to incentivise reporting[1]). You can include in the contract a interface where someone provides a proof[0] that a given cryptographic primitive is broken (eg a pair of colliding messages for a hash function), and the contract self-modifies to no longer trust that hash function.
The other half of the process - adding new primitives - is harder, since you want to prevent the addition of deliberately broken primitives. Obvious ideas include requiring a machine-checkable proof of hardness from some reasonable axioms (eg ZFC + P!=NP + whatever else), although most primitives don't have such proofs, and that doesn't look likely to change. Or requiring a quorum of reliable-seeming cryptographers to vouch for it (refutation: NIST endorsed Dual_EC_DRBG). A escrow period, where a new primitive is accompanied by a deposit that's paid out to anyone who breaks it, might help, but you'd need a seperate mechanism to prevent NOBUS backdoors (again, see Dual_EC_DRBG).
0: Ideally, you want a semi-zero-knowledge proof such that someone who has the option of putting in a tractable but significant amount of work to prove it (eg hash collision in 2^64 operations) will expect to be able to recoup their losses without getting sniped by front-runners, but once such a proof has been used, it's only a matter of time before front runners recover it and warn every contract.
For hash collisions, probably the easiest design is a two-phase model, where the reporter provides a zero-knowledge proof to commit to a particular hash collision, but then has to provide the actual collision to get the bounty. This can also work for preimages of a Schelling point like all-bits-zero. I'm not sure what a good Schelling point for typical public-key cryptography like curve25519 would be though; zero is almost always algebraicly special.
1: Cryptographic primitives are generally broken incrementally, so this incentivises even malicious parties to report a not-yet-exploitable break immediately (and thereby neuter it), rather than spend time trying to develop a working exploit (and risk both the large and small rewards disappearing out from under them because someone else was either honest or just less patient).
Axie as a product isn't even remotely decentralized, as far as I can understand (though I haven't tried to really pull it apart or anything, though I did spend way too long researching it a couple months ago): the majority of its product is a centralized gaming server that uses classic cheat-protection and rate limiting strategies, along with a game client that they require you to be using--they even ban bots! think: how can a decentralized game ban bots?!--which is important as it is effectively centrally minting its SLP token (by way of how that token comes from points you earn in the game from game play; this "should"--if it were actually decentralized--result in everyone using bots to play each other constantly for maximum SLP earning, instead of hiring people in the Philippines to play your characters for you). One would do better to ask "in what ways is Axie Infinity even a blockchain project?", as I feel like the answers are mostly going to suck.
Not really. By default, smart contracts can’t ever be edited or taken down. They’re permanently written into the Ethereum blockchain forever. They can only be modified based on any included state-modifying functions you originally wrote into the smart contract.
There’s some fancy complex stuff where you can deploy 2 smart contracts with one being a proxy contract. Here, the proxy contract functions a lot like DNS does on the Internet. In this case, the contract CAN be (almost) fully updated but the proxy contract has to be setup at the very beginning. In like 80% or more of the smart contracts I’ve seen, smart contracts do not utilize proxy contracts for (almost) full updatability due to the extra complexity it adds, the less trustworthyness, and some other reasons.
Author here. You've probably read more smart contracts than me, but this hasn't been my observation. Rarible, for instance, is very popular and uses proxy contracts. Axie as well.
Some projects avoid upgrading contracts at all. They deploy a new version, create a new UI and point this new UI to new contracts. Uniswap V2 vs Uniswap V3. This way users are actively opting into new set of contracts.
This makes sense to me and I think can be considered decentralized. How common are completely immutable contracts though?
It seems like for any contract that holds significant value it would be insane to make it immutable, particularly when it's written in a turing complete language like Solidity.
That was blocked at the web interface, if you wanted to use one of those tokens you could directly interact with the smart contract to get around those blocks
The Uniswap devs created a standard called Tokensets to allow different front-ends to curate which tokens are available without actually censoring anything.
Holders of large amounts of funds often value simplicity. Take old Gnosis Multisig vs new Gnosis Safe. While lots of projects migrated (moved funds) to Gnosis Safe, some are still using old Multisig contract, which was so simple it could be audited by anyone in an hour. Old Gnosis Multisig is immutable and can definitely be considered a huge success.
It's a tradeoff. There have been cases where an immutable contract was hacked, but there have also been cases where an admin key was compromised resulting in loss of funds. Users also have to consider the possibility that the admin is corrupt.
> But this fails to hold true for general purpose chains acting as a VM, including the front-runner Ethereum. Ethereum nodes can in theory filter modifications to the smart contracts they execute, but in practice, node operators have no reason to inspect or reject these upgrades, because they have relatively little stake in the success of individual contracts or their ecosystems. If an owner of a smart contract publishes a new change, nodes will mindlessly run it. Ethereum is blockchain AWS.
This part does talk about Ethereum itself. It's just a conflation that, I agree, the author probably didn't intend, but nonetheless demonstrates the lack of understanding.
What specifically are folks here reading up on regarding Ethereum?
I'm looking for interesting takes, generally growing exhausted from the various eth subreddits, cryptocurrency and bitcoin that are commentary on pricing. Sites like cointelgraph are also just barren of anything interesting. It seems like such an exciting time for cryptocurrency but not seeing the level of rigorous thinking I want.
I wrote a piece on the topic earlier this year in my blog [1] since I was also interested in learning more on the topic of Ethereum and DeFi, and not interested at all in the speculative take that attracts most people.
In my post I write about an open source project I implemented using smart contracts that acts as an options (derivatives) exchange, and all the components required for making it work (ex: stablecoins, price oracles, collateral management, liquidity pools, etc).
The /r/ethfinance daily is much more focused on interesting technical and social developments and has a higher level of discourse than any other crypto sub I'm aware of. Still some price talk/memes, but there's some consistently thoughtful and well informed posters there, and I'd recommend checking it out.
I don't think you'll find what you're looking for. I spent several years on the same quest. Ultimately I found the answers by finding people who know what they're doing and then talking to them (for a long time). Going to conferences was helpful. Reading source code can also be useful.
I would have fleshed this out more if I knew this was going to reach the front page. Yes, many smart contracts are deployed with distributed upgrade mechanisms, and I mention them briefly at the end of the post. I mostly wrote this to start a conversation with friends about a) how many internet services can be practically operated with the friction that such upgrade mechanisms create, and b) the potential to use the blockchain only for the voting protocol, then to sign and deploy the service on a traditional cloud.
I do not have any comment to make on the validity of the article, but this comment made me think of exactly why I dislike todays censorship friendly media so much.
I can read the article, gather my initial thoughts and come to some sensible comments within that articles posting to further navigate.
If this article is garbage, the way to dispense with it is with comments such as these. (I'm not making any claim to the validity or lack-thereof of the article)
Then traditional systems better start attempting to compete.While Western Union charges fees to cover network operating costs for remittances, companies like Strike are leveraging Bitcoin to bring those fees to zero.
All things they consider risks are definitely possible and for some of them if regulators or mobs push for them plausible. It's not like there aren't e.g. blacklists already.
Ethereum enthusiast are quick to disagree, the author of the article might not have a deep understanding of how everything works but headline of the article holds somewhat true.
Metamask is a centralized service with centralized team, if Google removed this extension from Chrome as they temporarily did before, it would make adoption for new users harder.
Open Sea has centralized operators, the orderbook is not on the blockchain I believe.
Uniswap the "decentralized exchange" has acentralized team with vc funding and registration with the SEC.
Infura is another centralized service, that so many Ethereum projects depend on.
It is hard to call these services decentralized. Although the small mainstream success of these services and markets, show that fully decentralization is probably not needed for most mainstream users.
Uniswap the protocol lives in a contract address which will outlive uniswap labs if hey get shut down. Now thats an amazing feature. If they forced Uniswap labs to ban transactions of Iran, like they might with paypal, Uniswap labs would be unable to enforce that. No matter how willing they would be. Thats massive in my opinion. Perhaps not perfect, but a much more favorable model than what we have.
I largely agree with your points, it's difficult to build truly decentralized apps, since most people don't run a local node. But at least you could build an interface that falls back on the different possible providers, including a local node if it is there. So if someone really wanted to access the Blockchain, they could - regardless of centralized web3 providers.
Uniswap is completely decentralized. Uniswap Labs cannot prevent any one from listing any token on the Uniswap smart contract, or prevent any one from setting up their own frontend to access it.
Oh yes definitely. But there are numerous other front-ends available. People can even run their own front-end locally. People generally don't because so far there has been little need.
The option to use other front-ends, and the inability of any central authority to shut down the Uniswap smart contract, is what makes it censorship resistant.
This blog post is pure nonsense. Nobody can alter an Ethereum smart contract unless they control all full nodes, or can convince all full node operators to install a fork of the software that reaches into the database and modifies that contract.
It is possible for smart contracts to contain code that allows them to update themselves when receiving a message signed by a certain key, but if this is the case, then it is obvious to anyone inspecting the contract.
Most heavily used Ethereum contracts such as Uniswap and Compound for example do not contain any updating code because users do not trust it.
I read quite a lot of smart contract code, both on Ethereum and Binance Smart Chain. It seems to more common on BSC the deployment using the upgradable proxy pattern. This is probably because is more attractive to incoming devs (lower fees, faster) and this seem to be encouraged in tutorials and such.
Upgradeble proxy contracts with an active admin completely change the premise of a decentralized service. At that point it's just using the blockchain as a database, which is the worst choice of db for a centralized service
Compound had a huge bug which lead to the CEO (lol decentralized) to threaten users that got the airdropped tokens he will report them to the IRS. This is decadence at the highest level of this "new era".
This will likely be controversial, but tech like bitcoin is a big step backwards from payment systems we currently have.
All the rules and regulations were created because someone was bad enough for people to agree on a rule to prevent something from happening again.
Block chain money loses all of those protections to stop a bad actor from, say, a hacker draining your wallet with no recourse.
So we find ourselves back to step one. I do think it's inevitable layers of regulations and rules will crop up, either from governments, or power holders requiring layers of smart contracts to respect transactions.
It will just be a matter of time till the modern banking systems "port" themselves onto the chain.
It's a mistake to think that the exciting thing about bitcoin is as a new kind of payment system for consumers.
Instead, it's a rock solid foundation for a new global financial/monetary system in which every nation state, organization, and individual can participate without the permission of any privileged group.
It's a neutral, digital money, like gold was a neutral, physical money.
I fully expect that if it becomes a new money standard, we will in fact see higher layer payment networks (like Visa, Paypal, etc) that provide consumer protection services (for a fat fee) on top of the bitcoin network. Those people who don't want the responsibility of self custodying their money in a way that can't be recovered if they are robbed, can choose to bank with these services.
I wouldn't call it neutral. It still has a development team made up of people who decide the direction of the technology. You don't like a decision and use a fork - now you're isolated from everyone else who is still transacting on the main chain.
The validation of transactions is a red herring in these discussions - the real question of decentralisation is who is responsible for making decisions about the future of the tech and what happens when people disagree. In that respect Bitcoin is neither decentralised nor neutral. Same as Ethereum.
The development team doesn't have the power to decide the future direction. If they release a highly controversial change, no one is obligated to use their code. They could continue using an old version, or switch to an alternative node implementation led by different developers.
Every change to the network is a complex dance between the power of the developers, the miners, the exchanges and services, and the actual coin holders. If any significant segment of these forces don't agree with the direction, then the default is to change nothing and maintain the status quo.
This is what makes it neutral. No major changes to the network can happen without supermajority support among all players, otherwise you risk severely fracturing the network, which is bad for everyone.
Unlike the development teams at a software company, though, the development teams here do not have any special privileges over the software. They only have "control" for as long as their users continue choosing their forks.
If a second "development team" sprung up and had more user support than the existing team, there is literally no advantage the current team has to control the software.
And if a second government sprung up with more support, the old one would be out of luck, too.
I don't think we can simply discount the power these developers wield. They have a lot of explicit and implicit (as in "just install the latest version") trust. Sure, they could loose it, but they can do a lot of damage before doing so.
With software you need to consent to perform each update (I don't think bitcoin core has auto-update yet). This is nowhere comparable to a government in power, which has enormous power and can't be easily deposed. Even recall elections take some time, and can theoretically be interfered by government controlled security forces.
"I wouldn't call it neutral. It still has a development team made up of people who decide the direction of the technology."
The development team has no such power. They can raise a BIP (Bitcoin Improvement Proposal), which goes through rigorous cycles of analysis. A huge amount of paranoid eyes will obsess over any change proposed.
As for the development team itself, there's no THE development team. Rather, it's a highly diverse set of crypto businesses, non-profits, and individual volunteers. This diversity too helps to preserve common interests, rather than specific ones.
Should the BIP survive the first round of extreme scrutiny, next a whopping 95% of miners need to signal that they support the change. But not even that is enough, nodes (validators, of which there are an extreme amount) can still reject the change. Which is what happened in 2017, when miners wanted to increase block size (which reduces decentralization) and the community blocked it, despite a 95% miner approval.
Surely there's no such thing as 100% decentralization or neutrality at a theoretical level, but this is as close as it gets.
Good luck getting any change into Bitcoin that isn't good for every participant of the network. The last time people tried this, users, not even those users with the most Bitcoin at stake, were able to produce enough chaos and generate enough risk that they failed. Ethereum is capable of full consensus mechanism changes that hurt subsets of the network who don't hold the majority of Eth, the latest of which just further entrenched that ability.
I personally prefer the former for that reason, but by your critique, Ethereum is practically conducive to keeping the people who control the protocol small. Bitcoin is probably headed to a version freeze this decade, which is great.
Right now blockchains are essentially being incubated by centralized authorities as they mature.
Eventually, we'll see the ideas behind Decentralized Autonomous Organizations (DAOs) mature and become a viable alternative to centralized authority.
I think that's the plan at least with Ethereum. However, Ethereum 2.0 is still being deployed and what I'm talking about is probably more like 4.0 or beyond.
However, right now there is just no mature alternative. Someone has to own the keys.
Edit: Also, what others have said regarding being able to choose your development team. That's one of the cool things about crypto. Blockchains can be forked with enough support.
I don't see why anyone would want to build an international monetary system on top of something like bitcoin which was designed and developed by people who clearly know nothing about finance or monetary economics, but maybe it's just me...
The boring wisdom is that a bigger economy needs more money.
I will rephrase it. The unit of account should remain stable in respect to what it tracks. If the unit of account is grains and grains spoil then capturing that spoilage in the unit of account does not constitute a breach in stability. E.g. persistent background inflation is often caused by "natural" processes.
If you have a limited quantity of the unit of account then the unit of account will have to change and then people start betting on how the unit of account changes, rather than do productive work.
Here is a makeshift analogy:
A court is in charge of the unit of account and can set it directly and arbitrarily.
A family has borrowed 120 units (representing 10 years of labor) to build a house.
One year later the judge changes the unit of account so that 1 unit = 2 months of labor.
The family has to pay back 20 years of labor to pay off the house.
People now stop borrowing and start speculating on the unit of account because it is other people who have to work and they hope that the unit of account goes up to 1 unit = 10 months of labor so that they can retire.
There is an obvious problem. The family can simply default and the obligation to work 100 years vanishes into thin air.
The lesson here is that work should be more profitable than speculation.
You're explaining why deflation is bad and why growth in money supply is good.
I'd say deflation is okay as long as it is consistent with deflationary expectations. Unexpected deflation is bad, expected inflation is built into borrowing costs.
I don't understand how this is in contradiction with what I'm saying.
_Any_ database can be foundational, digital money if you get the enough people and their governments to agree that it is. The database part is not the hard part.
Bitcoin is trustworthy in the way that gold or beads or shells in a vault are trustworthy - if you have it, you have it, and if you give it to some else, they have it and you don't[1]. That doesn't make it easier to get people and world governments to agree to construct value (and accept payments and taxes) in terms of Bitcoin, or to trust that Bitcoin will continue to be exchangeable for a predictable amount of real goods and services in the future.
It's a sort of stable system if everyone already measures value in terms of bitcoin, since the database itself works well enough, and users are incentivized to make choices that sustain it as a store of value. That's true of _any_ unit of account though, nothing inherent to bitcoin makes it more stable in that regard; the energy usage, transactions costs, and distinction between miners and users probably add risk on that account.
Also (and this is not directed at you personally, but the arbitrary bitcoin maximalist) its hard to take one with millions of glass beads seriously when they argue the world should measure value itself in terms of glass beads, which then by pure happenstance will make them fabulously wealthy.
[1]: and I do appreciate the social and software engineering that allows a purely abstract quantity to have those properties.
> Instead, it's a rock solid foundation for a new global financial/monetary system in which every nation state, organization, and individual can participate without the permission of any privileged group.
Everybody needs "permission" from miners since they have the power to include/exclude transactions from the block chain. They can easily start using a blacklist/whitelist if they already aren't.
> (for a fat fee) on top of the bitcoin network. Those people who don't want the responsibility of self custodying their money in a way that can't be recovered if they are robbed, can choose to bank with these services.
Of course they have to be rich enough to be able to pay the fee.
Lol without permission?
All it needs is a fork and after fork between two govts and we know where we are headed back to. Bitcoin is safe as long as govts dont see significant adoption.
I forget the source but I once heard a quote that really resonated with me "corruption festers in the dark but tends to evaporate once it's brought to light". With that said, imagine a government where you can audit every transaction they make...
> a big step backwards from payment systems we currently have.
Just yesterday lawmaking initiative in Russia proposed to give police and FSB an ability of pre-judicial freeze of all assets belonging to a person, including all personal accounts and all accounts of all linked businesses.
Good luck living in our increasingly cashless society where corrupt police officers can suffocate you with a single press of a button.
Indeed. From our first world perspective, we don't understand the humanitarian life raft that crypto can be.
Lebanon is currently facing extremely high inflation whilst at the same time, governments close banks. Imagine that, your life savings being decimated whilst you're locked out of accessing it.
With a proper setup, crypto could be a solution. Access to it can't be realistically blocked and it is unconfiscatable. Furthermore, it can be used by those that are unbanked, all it takes is a smartphone.
Another story is from a guy whom recently fled from Venezuela to Colombia, and blogged about his experience. On his journey, he was shaken down by police officers, local tribes, traffickers, basically everybody.
Here too crypto could have played a humanitarian role.
> Another story is from a guy whom recently fled from Venezuela to Colombia, and blogged about his experience. On his journey, he was shaken down by police officers, local tribes, traffickers, basically everybody.
> Here too crypto could have played a humanitarian role.
How would crypto help if the police officer says "we'll keep you locked up until you make a payment to this address"?
These local cops just want a quick grab of free cash from people passing by their roadblocks and to do so with as little noise as possible, as it's corruption. They don't know you and don't know what you have. For them to detain you for any length of time, they have to spend an insane amount of time and effort for a completely unknown result, whilst not being able to do shakedowns on other people passing by. It makes no sense.
With crypto, they have no idea what you have. It would probably still be wise to have tiny amounts of cash on hand to make for a believable story that you own little, rather than nothing (which is suspicious). Also, you should play dumb, like a person not remotely able to comprehend any tech.
In the rare case where such officer is somehow suspecting you own crypto and is really eager to spend a lot of time confiscating it, you go with the distraction wallet strategy. A small crypto wallet which you give up whilst your real wealth is in a bigger wallet. On the bigger wallet, you enable delayed withdrawals and multi-sig. Confiscation will be physically impossible.
The police officer will have to know you have money. Bitcoin is anonymous, so tracking down people with money is hard. Also, he'll have to find you first, which is much harder than just input your tax number and press 'block' button.
> All the rules and regulations were created because someone was bad enough for people to agree on a rule to prevent something from happening again.
It's a bit more nuanced than that. Current KYC/AML regs that you're referring to in banking, and are being applied to crypto, actually come from the Patriot Act, Title III.
Why this is relevant: KYC/AML have stuck around as a perceived common-sense thing to do, and your comment is good example though. However, that evaluation deserves some inspection with the knowledge that it comes out of the Patriot Act. The Patriot Act is known for some historically challenging overreach and various parts of it have been overruled, repealed, deemed unconstitutional, and generally disliked by all aspects of the political spectrum. That's not to say that a few good things came out of it - perhaps KYC/AML is an example. But, I think specifically because of the Patriot Act ties, it's a bit of a misnomer to call KYC/AML as a sort of bland, unambiguously good thing that's just always been around. The Patriot Act is very much "not that," was passed in a fairly turbulent time in US history, and has not aged well. As current KYC/AML came out of that time period and law, perhaps it should be shaded by that.
Contrary to the mainstream narrative on Bitcoin, it's not purposefully designed to bypass regulation, depending on which type of regulation we're talking about.
Bitcoin's power lies in its controlled supply that is absolute and guaranteed. As such, you can argue that Bitcoin is regulated in its monetary policy (by verifiable software), whilst the traditional system isn't. The entire reason Bitcoin now has a trillion dollar market cap is the unstable traditional system where savings have a negative return.
This is the step forward, not backwards. At least to those believing in Bitcoin. You gain protection against central debasement and you gain a brand new ability: Bitcoin is unconfiscatable.
You're right that crypto custody is harder than a traditional bank account, although it doesn't have to be. People can chose between die-hard self custody (cold wallet), hot wallets, and soon there will be more fool-proof mainstream options, I believe Twitter is working on one.
> Bitcoin's power lies in its controlled supply that is absolute and guaranteed.
Bitcoin's supply limit is only as guaranteed as the community consensus around what the supply limit should be. Now that consensus is unlikely to change, but there is no magic or law of physics that makes it so.
>The entire reason Bitcoin now has a trillion dollar market cap is the unstable traditional system where savings have a negative return.
One would think that people would simply invest their money instead of holding onto it. If anything, negative yields on savings are just a case study of why trickle down economics is a myth. The rich consider holding onto money more profitable than investing it.
The supply of bitcoins can be inflated in the same way that the supply of dollars is inflated, namely by fractional reserve banking. In fact the amount of dollars created by the federal reserve is a small proportion of the total dollars in circulation. The other thing is that the quantity of money, which is one of the key variables influencing the price level, does not remain constant even if the supply of money does, because of trade imbalances. For example, any trade deficit is necessarily offset by an outflow of money, thus reducing the quantity of money in the economy. Therefore if you think that the adoption of bitcoin as currency would prevent your cash balances from losing value in any way, shape or form you're completely wrong.
There is no such thing as fractional reserve banking in Bitcoin.
Say you have a wallet with a balance of 10 BTC and decide to act as if you're a bank. The first lender comes, requesting a loan of 30 BTC.
You don't have 30 BTC, and it basically already stops there. You can't transfer the 20 extra BTC to the lender, since that BTC does not exist. You can't make up your own BTC as it's all on-chain.
You can make up however much fiat money you want. You can own 10 BTC and loan out the USD equivalent of 30 BTC in USD, but that's traditional fractional reserve banking, which has nothing to do with Bitcoin.
If a significant amount of consumers would not hold their BTC on-chain but at some institution (which, if BTC would become very popular, would very likely be the case for most users - these mainstream users are very different from the groups which use BTC now) then they would effectively be holding IOUs-denominated-in-BTC issued by that institution, and the supply of those would be likely be much larger than real on-chain BTC, just as in the fractional reserve banking scenario.
I.e. I strongly believe that any widespread mass adoption of BTC would actually result in a mass adoption of BTC-flavored-fiat and a relatively smaller use of actual on-chain BTC; simply because of the preferences of the mass consumer market which aren't really aligned with the advantages of keeping stuff directly on-chain.
Right now, a lot of Bitcoin is held at exchanges, which you can consider an IOU. However, it's still real Bitcoin reflected on-chain. As a user, you basically bought your Bitcoin from the supply of real Bitcoin the exchange holds in aggregated wallets. Should the exchange run short in supply, they buy real Bitcoin from other parties. It's all on-chain. Exchange wallets are well known and actively tracked.
Theoretically, an institution could let you buy Bitcoin that doesn't exist or which they don't own. This strategy would fall apart in mere weeks.
Say there's a new bull run and people are mass buying Bitcoin, for about 50 billion USD per week. You, the exchange, don't actually have this Bitcoin, yet in your books you pretend that you do. The customer is none the wiser. Your revenue is 50 billion USD.
Bitcoin doubles in USD value and customers are now mass selling and/or withdrawing their Bitcoin (which you made up). So now you have to either payout 100 billion USD or actively buy real BTC at its high price, which just doubled. Unless you have an additional 50 billion USD at hand, your exchange collapses and goes bankrupt.
Can an exchange sell slightly more BTC than they own? Technically, yes. Can they do many multiples of actual supply? No.
What you describe is a currency exchange risk, which would be the same of a bank holding a position in (for example) Japanese Yen but not covering it and holding their assets in USD instead.
The fraction reserve banking is a bit different issue, it's mostly about working in a single type of currency but backing short-term liabilities (e.g. account balances) with long-term assets (e.g. mortgage loans). So a customer A deposits 1 BTC and on-chain it gets transfered to the institution. Then when a customer B gets a loan of 1 BTC there's still just 1 on-chain BTC but 2 BTC-denominated IOUs, so the effective supply has doubled. Obviously, both of them can't withdraw the same coin at once, but the institution is not bankrupt as it has enough assets to cover all their debts, it may be temporarily insolvent though if a bank run happens.
The key difference from ordinary banking, of course, is that noone really takes loans denominated in BTC, so right now there's not much that an institution could have on the asset side other than "real" BTC. However, in a hypothetical world where BTC becomes the "mass market money" in some countries, then there would be BTC-denominated loans which would (among many other interesting effects) drive the pressure towards an equivalent of fractional reserve banking.
A clarification: IOUs are not money, bank deposits are. The money supply is the money issued by the central bank (aka monetary base) plus bank deposits.
> There is no such thing as fractional reserve banking in Bitcoin.
Wrong. There's such a thing as fractional reserve banking in bitcoin. Any entity that takes bitcoin deposits from customers can engage in fractional reserve banking and create new bitcoins out of thin air. Fractional reserve banking works perfectly well with bitcoin just like it works perfectly well with gold or with any commodity. It doesn't rely on fiat money at all, in fact fractional reserve banking was invented long before fiat money was a thing.
You don't know how fractional reserve banking works? It's quite simple. An exchange, or any institution that takes bitcoin deposits, can take a fraction of the deposited bitcoins and lend them out, so far as the depositors don't withdraw all the bitcoin deposits at the same time. As soon as this happens, the amount of bitcoins in circulation goes up by the loaned amount.
Nope. The only amount of Bitcoin in circulation is in actual wallets. Including deposits at exchanges, which are just aggregated wallets.
There's no such thing as loaning out a Bitcoin. You can loan out the fiat equivalent of it or a synthetic token (wrapped Bitcoin), but these are swaps, which is not the same thing as a supply increase. Truly loaning out BTC means moving the actual coin to the customer's wallet.
Say I run a bank that has 10 depositors that deposited 1 BTC each. My balance is 10K. Next, I assume they won't claim this BTC anytime soon so I "loan" out this 10K 10 times, for a total loan value of 100K BTC. Hence, I created 90K out of thin air.
This doesn't work. You didn't give the loaners BTC, you gave them something else. No new BTC was created. With fiat, actual new money would be created this way, not with BTC.
Wrong on all counts. Bitcoins can be lent out, just like anything else can be lent out. All you need to make a loan is a loan agreement, and any asset can be lent out with a loan agreement, including bitcoins. There's nothing magical about bitcoins that prevents them from being lent out.
You're stilling missing a very basic concept. You cannot loan out BTC that you do not have. If you have 50 BTC, you cannot loan out more than 50 BTC in actual BTC as loaning out BTC involves MOVING the BTC to me, which means you no longer own it.
Yes, you can loan out BTC. The point is that you can't loan out BTC that you do not have.
An exchange has 1000 BTC in deposits and holds 100% of the deposits as reserves. The exchange makes a loan for 500 BTC. The 500 BTC come from the reserves. Now somebody has 500 BTC. The depositors still have 1000 BTC, except that the deposits are now backed by 500 BTC, instead of 1000 BTC (hence the name "fractional reserve"). The supply of bitcoins has gone up by 500 BTC.
The supply DID NOT go up. You can do as much shadow book keeping as you like, but you didn't create a single new BTC. Nobody but miners can increase the BTC supply.
Just count how many coins everybody has before and after the loan and the only possible conclusion is that the supply has gone up. If you still maintain that that the supply has not gone up, you have a lot of explaining to do. This can't just be dismissed with a handwave.
The explanation is pretty simple actually: you created unbacked paper Bitcoin. Not a single new real Bitcoin was produced. The initial depositors no longer have the BTC they deposited, you loaned it out to somebody else. Yet you count their deposits as if they still own it, which they don't. It's a paper lie that does nothing to BTC supply.
You can write anything on a piece of paper, it doesn't affect Bitcoin supply. Miners mint new coins, nobody else.
Bank deposits are legally enforceable claims on money, which means they're... money, regardless of whether they are fully backed or partially backed by reserves. It doesn't make any difference. And the same applies to bitcoin deposits on exchanges, which are nothing more than legally enforceable claims on bitcoins. In other words bitcoins. Why are you struggling so much with this? I mean... it's pretty basic stuff.
You're the one struggling. You just agreed with what I said earlier: you did a swap from real Bitcoin (actual BTC that was mined and sits in a wallet) into a "promise" of said Bitcoin.
That doesn't increase the BTC supply. It's just shadow book keeping outside the blockchain. You made new "money", not new BTC.
Replacing an asset (reserves) with another asset (a loan) is not "shadow book keeping". But anyway... there is no such thing as actual bitcoins sitting in wallets. A bitcoin "wallet" is not a wallet but an ID. And there are no bitcoins either. There is only a transaction record of fictional tokens. These tokens (aka bitcoins) are created by appending an unbalanced transaction into the transaction record. This is shadow book keeping. But conceptually it shows that bitcoins are created with a simple bookkeeping entry. And more bitcoins can be created with the process that I described earlier known as fractional reserve banking. Again, this is all simple stuff that can be corroborated easily with minimal effort. This conversation is over as far as I'm concerned.
I somewhat agree, and I think it's largely already happening. For the most part I think it's unlikely anybody who's not somewhat tech savvy would ever move their coins off of a service/exchange like CoinBase, and such an exchange already provides some of those guarantees and could easily provide more. All the benefits and drawbacks of bitcoin pretty much go away if you never actually use any "physical" bitcoins and just go through an exchange. That said I have my doubts about it ever actually getting all that big for everyday use, everybody is always going to need dollars so I don't think there's all that much of a reason for big banks and payment systems to "switch".
People have different perception of "regulations" as a concept (as opposed to myriad different good, bad & ugly implementations).
To some, "regulation" is a bad, 4-letter word. It's somebody else, some strange entity, infringing upon my freedoms. "Let us make our own decisions and use our own judgment and experience, and this will work better!".
The naive view of "regulation" as a concept, to which I subscribe, is collective memory. Something bad happened, and we said "Well let's not do THAT again". Hence regulation against pyramid schemes in many countries; sure you can say "let me make my own mistakes", but that's basically what happened: pyramid schemes were allowed, we made a mistake, and said "well that sucks". A lot of financial rules, that may be inconvenient, go back to edge cases and bad actors and real-life scenarios.
NOW... bureaucracy absolutely has a life of its own, and there are a lot of bad regulations, but the way I see it, from a high enough perspective, any fresh, naive system (whatever technology underlies it) will either:
a) Actually and seriously not have any regulations ever, which means we'll all keep repeating same mistakes and have issue with same edge cases / bad actors forever; it'll be a wild wild west and some people will have high risk appetites and some won't.
or
b) will eventually have regulations making it same as old system but with different technology.
An transparent open source platform with a globally decentralized payment mechanism at protocol level could be the one reason blockchains could win, despite everything else of them being "just worse AWS".
>>All the rules and regulations were created because someone was bad enough for people to agree on a rule to prevent something from happening again.
The rules and regulations were not created because they are in the public interest. They are there because control over an industry is profitable and appeals to the superficial analyses of an emotional and manipulable public.
Look at Elizabeth Warren saying cryptocurrency is dangerous because it's controlled by "shadowy super coders", when all blockchain code is open source, and developed in the open on Github, for maximum transparency, while regulatory bodies, legislative offices and traditional corporate bureaucracies are completely opaque to the public.
I mean no one in Congress has even fully read the trillion dollar plus infrastructure bill. New worrying provisions are being discovered in it every day. This is a bill that Warren had no scruples about voting for. And she has the audacity to call smart contracts "shadowy".
It's demagogues like Warren who bring regulatory restrictions, that transfer massive amounts of power to centralized bureaucracies, into force. It's not sound informed analysis. Their intervention leads to massive wealth inequality. Look at the impact of SEC involvement in token sales.
Ethereum, Cardano, Cosmos, PolkaDot, Tron, EOS and Tezos all had their initial token sale before the SEC's involvement in 2017, and consequently have majority public/community ownership of their tokens:
The rest of the platforms in the graphic, like Flow, Solana and Avalanche, had their initial token sale occur after SEC involvement, and the majority of their tokens are consequently owned by insiders, who got to monopolize the initial token sale and thus enjoy 1,000X+ gains.
This amounts to an obscene exacerbation of wealth inequality in the crypto space, due to SEC enforcement of securities regulations.
Look at the AML industry for an example of a sector that has grown to spend hundreds of billions dollars year, and impose trillions of dollars in costs in the form of financial exclusion and friction, with no evidence that it has had any effectiveness, and continues to grow unabated due to the institutional inerta that is sustained by the special interests that profit from it:
Since then Eth has proved to be a successful investment, so this is not a commentary on the performance of this digital asset. But rather a comment on the false immutable, decentralized claims of this blockchain.
It's bizarre to me that one would gauge the credibility of Ethereum today based on an event that occurred less than a year into the existence of the protocol, and despite massive performance with respect to digital assets since then (algorithmic stablecoins, AMM's, etc.).
It's certainly fair to debate the strength of immutability guarantees with respect to a given blockchain, but in practice no blockchain is perfectly immutable given that humans still write and deploy the clients that run them. Consider the 184 billion Bitcoin hack from 2010, a similar straw man about the _current_ immutability claims of Bitcoin.
It's bizarre to me that one would NOT gauge the credibility of Ethereum today based on what the developers actually did vs what they said they would do. What exactly have they done to redeem themselves from their previous scandal?
The idea that a blockchain with thousands of nodes requires redemption from some historical act seems to ignore the very nature of how it functions at a protocol level. Ethereum exists as a collection of nodes who choose to participate using certain clients, not a computer in Vitalik's closet.
Credibility is the fact that Ethereum has succeeded with sufficient immutability since The DAO hack to convince billions of dollars of transactions for various use cases. Proof is in the pudding.
What assurance do we have that they won't do it again when it suits them?
That "credibility" metric is meaningless when the core devs can rug-pull at any time. "Jude-, go run Ethereum Classic if you're that bent out of shape about it" isn't a compelling argument either, because if the vast majority of the Ethereum economy goes along with the core devs' whims, then there's no point of having a blockchain at all. Might as well just replace Ethereum with a replicated PostgreSQL database, and give only the core devs permission to change the schema and UPDATE rows. If we're trusting core devs to not rug-pull in the future, after they have done so in the past, then there's really no need for the current low-trust environment -- after all, the things that make it low-trust also make it slow and expensive.
Weird, I didn't make an argument to use Ethereum Classic. I am arguing that given humans are still the ones who develop clients perfect immutability is impossible.
I do belive that Bitcoin is more immutable than Ethereum. I also don't buy that Ethereum is unusably mutable. But hey, looks like the market thus far agrees with my position on this.
Wake me up when it happens. The Bitcoin project's developers still get the benefit of the doubt because unlike Ethereum, they haven't betrayed the trust its users placed in them. Also, network upgrades happen through a miner voting process, which checks the power of the project's developers. Ethereum provides no such check.
> But hey, looks like the market thus far agrees with my position on this.
Bitcoin is worth considerably more than Ethereum, and that will likely be the case for the foreseeable future in part because in each Ethereum hard fork, the monetary policy changes. Why would anyone park capital in Ethereum for the long term if they can't even be sure what their dilution will be next year?
> The Bitcoin project's developers still get the benefit of the doubt
Doesn't seem like a sound argument for perfect immutability. Sounds reasonable as an argument for better immutability.
> Bitcoin is worth considerably more than Ethereum
Ethereum is the second largest cryptocurrency. To imply that it hasn't been successful is disingenuous. Of course Ethereum doesn't need to "flippen" Bitcoin to still have demonstrable value.
> Why would anyone park capital in Ethereum for the long term if they can't even be sure what their dilution will be next year?
I guess its $400bn of irrational market participants then. Funny, because most of the institutional world would say the same of Bitcoin. One can ignore both at their own financial peril.
> Doesn't seem like a sound argument for perfect immutability. Sounds reasonable as an argument for better immutability.
It is a fact that Ethereum's developers altered the consensus rules to revert the DAO (after touting "code is law" for some time prior to it), and it is a fact that Bitcoin's developers have done no such thing. It is also a fact that subsequent Ethereum hard forks have altered the token emission policy, whereas no such alterations have occurred on Bitcoin. Furthermore, it is a fact that the whole selling point of using a blockchain -- a very slow, inefficient, expensive, power-hungry, unforgiving time-series replicated database -- to implement world-class financial instruments is that in principle, the code decides what happens, and alterations to this arrangement only happen with the support of a majority of network voting power (e.g. hashrate, stake). The Ethereum project's behavior is in violation of this core principle, whereas the Bitcoin project is not.
I'm sorry, but your attempt to convince me that Ethereum's behavior here has been in any way comparable to Bitcoin because "nothing is immutable" comes across as weak nihilism. It's like saying that Ethereum's decision doesn't matter because eventually we'll all be dead and the heat death of the universe will render mining inoperable. Like, yes, this is true, but it's also not germane.
> Ethereum is the second largest cryptocurrency. To imply that it hasn't been successful is disingenuous.
Where did I say that Ethereum wasn't successful in an absolute sense? All I said was that it isn't as successful as Bitcoin, and that I don't think it will never be until these unresolved governance questions get addressed.
> I guess its $400bn of irrational market participants then.
Okay, two things.
First, if everyone sold their Eth right now, would they collectively receive $400bn? Is the buy side of the market actually that deep?
Second, you're actually correct here -- markets are irrational. The crypto markets are especially so, since they lack many of the hard-won investor safeguards that traditional markets have gained over the years to defend against the bad consequences of irrational behavior. Also, markets can afford to remain irrational far longer than either of us can remain solvent, so caveat emptor, DYOR, and so on.
This is painting a rosy picture of history Bitcoin client consensus that whitewashes over events like the block size debate. Social consensus is required between core devs, miners and exchanges -- Bitcoin came out stronger from these events (far less catastrophic than The DAO), although it wasn't perfectly apparent at the time that it would.
I've never argued that Ethereum is more successful than Bitcoin, but you've continued to deflect any point where I've indicated that it has any merit as a network at all. Seems pretty irrational -- or purely agenda driven.
The block size debate wasn't about retroactively changing the outcome of a valid network transaction, was it? That's a pretty substantial difference between this and the DAO disaster. Retroactively changing things without the majority consent of the system's voting power defeats the purpose of using a blockchain at all.
> you've continued to deflect any point where I've indicated that it has any merit as a network at all.
That's because the minute the Ethereum project leaders retroactively altered the transaction history the way they did is the minute the project lost all credibility with me (and hence my original comment about why Ethereum should just switch over to a PostgreSQL database if their stance is that the devs should be able to invalidate prior transactions on a whim). I've outlined a set of reasonable governance safeguards in a sibling thread that I believe could restore confidence in the project by bringing it back in line with the aforementioned core principle of operation that justifies building it as a blockchain (and not just a database), but I'll point out that the project has enacted nothing like them to date.
I'm not opposed to hard forks on principle. I'm opposed to hard forks that get pushed through without measurable majority stakeholder consent. Even if Ethereum had done a very simple miner-based vote to upgrade the system to disable the DAO contract (something they could have done in the time between the attack and the time the attacker could have exited with the DAO's ETH), it would have been enough to satisfy this requirement. But they didn't.
>The idea that a blockchain with thousands of nodes requires redemption from some historical act seems to ignore the very nature of how it functions at a protocol level.
And the idea that it doesn't seems to ignore reality as a whole. Ethereum already had thousands of nodes running when the DAO scandal was perpetrated, that didn't change a thing.
As for your second statement, it stinks of a bag holder grasping at straws. There is zero credibility in the project after the DAO scandal. But you are welcome to convince yourself otherwise.
The difference is that the Bitcoin chain was not retroactively and incompatibly modified -- that fork still (ostensibly) exists and can be both mined and validated by the same software rules today. The system soft-forked; it didn't hard-fork.
The implementation of the fix was done by a small, early community who moved to effectively eliminate the 184 billion Bitcoin from circulation as humans, fixing a client. As noted, I think its a similar straw man (read: not the same).
Really, it just seems intellectually lazy to me to use The DAO as a way to gauge Ethereum today. Folks should instead focus on what devs are doing now (e.g. EIP 1559 would be something of concern) to have an honest debate about mutability today vs. whinging about Vitalik then.
The reason this keeps coming up is because Ethereum has not taken any concrete steps in its governance process to make it so that either DAO-like rollback will not happen again, or if it does, it happens with the measured consent of all stakeholders. Hard forks are still a regular occurrence in Ethereum, and most of them change the ETH emission rate (which makes it really hard for anyone who wants to park capital in ETH long-term to make informed decisions). Also, hard forks are executed entirely at the discretion of an in-group of core developers, whose decision-making powers stem from an inscrutable who-knows-who social graph (as opposed to the consent of the governed). The best assurance they seem to be giving that the funds they manage are in good hands is a statement to the effect of "trust us, it won't happen again." Forgive me if I'm not so willing to give them the benefit of doubt a second time.
Here are a few things Ethereum could do to reassure the world that the DAO disaster won't be repeated. I think that even if only a subset of these measures were adopted, it would at least demonstrate that the project has learned something from the experience.
* Create a representative "hard fork board" in the core developers group that procures and shepherds all future changes to the codebase that could create hard forks. Hard forks may only originate from this board, and membership in this board is decided through regular free and fair elections by individuals in the ecosystem (there would need to be a KYC-like process to verify that these individuals are actual, real Etherians).
* Make it so any hard forks proposed by this hard fork board can only take effect if a large amount of the total circulating supply of ETH to vote for the upgrade. This serves to allow the anonymous masses to check the power of the board.
* Involve miners (or block-producers in ETH 2.0) in the vote-to-upgrade procedure, such as by giving them veto power if they can muster enough mining or staking power. This ensures that developers can't make changes that would boot off marginalized miners/block-producers.
* Involve users in the vote-to-upgrade procedure. Make it so exchanges cannot vote with their users' funds; the users themselves must vote with their keys.
He can’t do it today. The sheer size of the ecosystem and layers of real world assets that are (supposedly) tied to it would make any such rollback all but impossible.
I'd argue he CAN indeed do it again today. Perhaps not in the exact way as the DAO fiasco, but lets be clear, the fundamental transgression was selling one story "the code is law" and then not abiding by that law when it affected him and his friends aversely.
So can he still commit such an egregious breach of trust in this timeline, despite having done it before? Absolutely, though that and the DAO instance may indeed look different from one another.
Huh given the context (especially given that this was post DAO hard fork) I read that as vitalik saying that "Code is law" is a principal, not necessarily saying that "code is law" is a principal held by himself/Ethereum.
I don't think you read that very well. His response is to Samson Mow (CSO of Blockstream) claiming that Vitalik was "Pivoting to 'Principles are law' from 'Code is law?'". This is because anyone who is even remotely familiar with Ethereum/Vitalik knows how many times Vitalik has said he believes "Code is Law".
Vitalik goes on to defend against Mow's claim that he is "pivoting" by saying that it is indeed a principle. It's extremely clear with basic reading comprehension that Vitalik is claiming that as a principle of his.
Not sure how you extracted the meaning you did. If I'm being honest, you seem to not really be researching the subject in good faith, as a simple google search will turn up many times he's either stated he believes that in text or even video.
You are welcome to believe what you'd like to though, I unfortunately don't have the time to do your research for you, nor do I care to change your mind. So cheers and good luck!
> The people who continued with Ethereum Classic advocate for blockchain immutability, and the concept that "code is law" against the pro-fork side (Ethereum) which largely argued for extra-protocol intentionality, decentralized decision-making, and conflict resolution.
Nope Vitalik believes code is law, just like any simple google search will show you. You just seem to be avoiding that all all costs. Strange really, wonder what your true motives are, good luck buddy!
Social consensus should _always_ override rule of law. Society is not formed around people's relationship with the law, it's based on people's relationship with each other. The hard fork required social consensus to trump rule of law, and they got it.
"but what about eth classic?"
The ETC chain exists, yes, however it is not "Ethereum". There's a timeline where the majority was against the fork, and ETC would have remained "Ethereum", with the forked chain taking on a new name like Ethereum Cash or something.
> On 15 July 2016, a short notice on-chain vote was held on the DAO hard fork.[8] Of the 82,054,716 ETH in existence, only 4,542,416 voted, for a total voter turn out of 5.5% of the total supply on 16 July 2016; 3,964,516 ETH (87%) voted in favor, 1/4 of which came from a single address, and 577,899 ETH (13%) opposed the DAO fork.[8]
Most replies to this comment of mine are debating whether this was the right thing to do, or was it a 'blunder'.
I don't care about the morality of rights and wrongs. I'm making a limited categorical claim: this event by itself is proof that Eth is not immutable nor is it decentralized.
Is Medium playing games with browser history? When clicking the back button after clicking "read more" it kept refreshing the same page. I hate when sites do that.
Medium has a lot of dark patterns by now - like seriously they expect me to pay perpetually to read somebody’s random rants?
Needing to login or register just read something etc
I’ve moved my blog off Medium a long time ago to ensure the content stays in the open for free
As other commenters have said, this article largely appears naive on how contracts work. Looking past that, the main thrust of the argument is that if "the market" wants things like chargebacks and censorship, then there will exist large blockchain "startups" that fulfill that need. They also make the argument that such a progression is likely inevitable.
What they fail to understand is that is not important. What is important is that blockchain enables people to vote through their choices. If they prefer decentralization, they can have that. If they prefer centralized features, they can have that. Until blockchain, it wasn't even possible to have the choice of decentralization because it simply technologically didn't exist. Crypto-hopefulls believe this choice will better society. Maybe it will, maybe it won't. But even a subset of society can benefit from having more choices. Just because your candidate loses doesn't invalidate the benefits of having a democracy.
> Ethereum nodes can in theory filter modifications to the smart contracts they execute.
This is the crux of the point, and as far as I'm aware is incorrect. A transaction to change a smart contract must be signed, a node cannot modify a transaction. A miner can in theory refuse a transaction to change a contract, but the only way to reliably prevent a change is a 51% attack. A node could refuse to accept a change, but it would fork the network and the node would be running a non canonical chain, which makes it pointless.
> But this [knowing that an internet service will behave exactly as advertised] fails to hold true for general purpose chains acting as a VM, including the front-runner Ethereum. Ethereum nodes can in theory filter modifications to the smart contracts they execute, but in practice, node operators have no reason to inspect or reject these upgrades, because they have relatively little stake in the success of individual contracts or their ecosystems. If an owner of a smart contract publishes a new change, nodes will mindlessly run it. Ethereum is blockchain AWS.
The author fails to define "VM" here. The only thing that makes sense is "Virtual Machine," which is a thing, but only barely makes sense in this context.
The fact that node operators have little incentive or ability to inspect or reject changes to contracts beyond what the protocol dictates isn't a problem in itself. That is, after all, the entire idea. Code is law. It doesn't matter how desperately a single miner might want to change the rules. At least in principle.
This is more of a problem on systems like Bitcoin where miners of side chains literally have no knowledge, from the protocol itself, of what the hashes representing transactions on other chains mean.
The bigger problem, not addressed in this article, is that the vast majority of things you want to do to make a block chain useful outside of financial transactions requires something called an "oracle."
What does that NFT actually secure? Go consult the oracle. Want to know the exchange rate of some non-ethereum token? Go ask the oracle. Want to know what that land title says? Go ask the oracle.
The problem is that an oracle is just a server. Maybe it's a group of servers - doesn't matter. Servers are corruptible in ways that Ethereum is not (or at least should not be) through hash chains and proof-of-work. Servers use logins, admins, and undocumented security procedures. And they offer little protection against Sybil attack.
The post is mostly nonsense, but that said, I'm always astounded by how few nodes there are out there. Checking now and there's just 2,713 of them - though this number is low because of a bug in the latest software which removed thousands in September for some reason. It's never been higher than 7,000 or so.
How long would it take you to write a script which DDOS all of them? How many are run by organizations which can protect against attacks? My guess is not enough. Considering the amount of money relying on those measly ~3k servers out there? It's truly frightening.
The soft underbelly. That said there are people building dedicated networks for blockchain node connectivity (similar to the data transit networks run by Google, Amazon et al). Private lightpath.
"Ethereum nodes can in theory filter modifications to the smart contracts they execute, but in practice, node operators have no reason to inspect or reject these upgrades, because they have relatively little stake in the success of individual contracts or their ecosystems."
>If trust on the blockchain boils down to trust in a mere social system, what has been gained?
This has already happened once when the original DAO project got hacked and the community decided to undo all of those transactions with a fork. The changes on chain were completely valid from a code point of view, but the community around the project decided to undo it.
>If an owner of a smart contract publishes a new change, nodes will mindlessly run it.
Utter nonsense, contracts can be both immutable and mutable. There's inbuilt owner capability, code has to explicitly implement upgrade capability. All nodes do is run code.
This lacks an understanding of how Ethereum contracts can function. He’s assuming that a single person or entity must own a contract, and that’s not true.
That’s the whole point of DeFi. Uniswap is a great example, which is a fully decentralized exchange.
Find people that are skeptical about the benefits of blockchains/cryptocurrencies AND have a strong technical understand is so rare. This is not one of them.
So far the best person that has that intersection I have found is Angela Walsh.
True decentralization means that every end user can choose which version of the software they want to run and how the software runs. This is only possible if they can run the software on their own hardware, in the event that they don't agree with the remote service provider.
That's why general purpose blockchains like Ethereum are doomed to fail. They can never be both competitive with centralized trust-based services and lightweight enough to be run by end users.
Ethereum researchers have worked very hard to meet both requirements, for exactly that reason. You can run the beacon chain plus execution node on very modest hardware, and L1 scaling will be based on sharding to keep it modest.
It's looking like L2 scaling will end up mostly zkrollups, which are easy for modest clients to verify. The only heavyweight hardware then would be zkrollup block producers, who could potentially engage in censorship, but the nice thing about zkrollups is that users have a cryptographic guarantee that they can exit with their funds without a waiting period.
All this together would take Ethereum well into transaction rates comparable to legacy banking.
Not to remove from some of the valid concerns made in the article, but I find it ironic that a post decrying centralization of Ethereum services is written on Medium.
I'm actually not taking a pro or anti centralization stance. I'm only pointing out that many services people think have decentralized power in fact don't.
It’s centralized in that the developers are now bankers; we have to trust and empower them with a Byzantine abstraction to do daily routine?
We’ve already seen how that worked with bankers. Nope.
I’m really looking forward to the day computer science folks finally accept if it involves human participation it will come along with human bias.
Biology has not gone anywhere, folks. We cannot decouple ourselves from this existence and be information; yet? Maybe. For sure not now.
And networks like Ethereum are not going to enable that.
It may be a nice and clean abstract in their head, but everyone has that privilege. Bringing people aboard Ethereum is putting a new cognitive burden on people. But the goal is to not do that?
Environment issues aside, blockchain is like nuclear powered rocket car hype and not anywhere near as cool.
I’ll stick to a Wireguard tunnel between people I trust literally before running this stuff for a bunch of randos profiting big off my effort.
after reading the article and some comments, i thought i would comment my own grievance with the article. i think there is a disconnect between the quantifiable trust a blockchain offers and the authors interpretation. specifically, he mentions that "the code these nodes are running is available for anyone to inspect (trust)" and that "smart contracts can be trusted to a large extent because they operate in the open, are kept in check by the ecosystem, and even often have voting protocols in place to govern changes."
yeah, that's actually a good enough explanation of what's going on there. yet, this doesn't seem to be enough for the author. i guess my biggest annoyance is that they seem to think a smart contract is just a series of if/else conditionals that can be ported onto an AWS instance.
The basic premise is true. Ethereum nodes do not provide even basic search/querying features out of the box so you have to rely on centralized services to index the blockchain data for querying. So if you want to build anything useful which integrates with Ethereum in any way, you need to trust a centralized service provider to accurately report the data... I was shocked when I tried to integrate with Ethereum for the first time. It almost seems as though they have made it difficult to integrate with on purpose.
It's been over a decade. Couldn't they have written some kind of open source service which exposes the Ethereum node's data via a simple REST HTTP API? This would not be a difficult project to implement.
What data were you looking for? geth provides a JSON RPC interface. Ethereum is general purpose so you'll need to know how a particular contract works to get information out of it but some contracts adhere to standards like ERC-20.
Ethereum launched six years ago, by the way (not a decade).
Does geth provide a basic search/querying feature? For example like searching for a list of transactions sent to and from a specific account.
But doesn't geth require me to setup and sync my own Ethereum node from scratch? I heard it consumes 300GB minimum. It would be great if I could just query some random node on testnet for example for testing my service before I commit to launching a node.
There are schemes for verifiable query services against the chain (e.g. VulcanizeDB) but most folks seem to just connect to someone else's node and hope it answers truthfully.
I feel that they should promote this more. Not everyone can afford to sync their own 300GB DB... Especially for testing. As a developer, I want to test things with someone else's backend before I even bother setting up my own.
This wasn't making sense to me, then I got to the meat:
> The real risk is that blockchain Twitter will begin to censor dubiously defined “hate speech”, or that blockchain Mastercard will add support for chargebacks.
This is just culture warism. In fact moderated discussion forums[1] and reversible payments are DESIRED FEATURES of products in the real world. Of course that's going to happen. But to the author that constitutes "centralization", but what it really means is "not the libertarian utopia I imagined".
I think we need to start being more specific than "decentralized".
My critique of most crypto projects is that they aren't partition tolerant. Does that mean that they aren't decentralized? I don't know.
I'd love a taxonomy of decentralization techniques so I can say: "crypto project X has decentralization characteristics Y and Z, but only Y is consistent with its stated mission so it's less viable then project W which...
But instead we just decentralize=good centralize=bad and continue with politics as usual.
It's like how Git is decentralized. Yes, it is indeed decentralized and that has enabled a lot of interop (eg. git push heroku) but for anything public, people want a nice way to view code, have the README front and center, etc. so they often prefer their main datastore be GitHub or GitLab. It helps that they do some maintenance automatically for you, eg. garbage collection and effectively guaranteeing you won't lose data (besides when the services break and it's down for $x hours).
To respond to the title: yes, yes they are, if you consider how many live in infura or an AWS geth instance and/or quorum by JPM. Doesn't mean its not a better means for data security...just that yes, the publisher of said smart contract can just replace or change to contract if they really wanted to if it were not part of the mainnet. There are many infura nodes though that are part of the mainnet, so that's unlikely unless some company just forced all users to their own ETH network.
Odd and inaccurate take. Some or many services have admin control. But it doesn't matter.
If you are exchanging time for food and shelter, you need to be building smart contracts. That's where we are right now, it is the most lucrative use of time possible.
Put down the Shopify widget development book, put down the dropshipping tutorial, and start deploying smart contracts.
Decentralization is a spectrum. A truly decentralized network, one pure from every angle of analysis, does not exist.
Ethereum itself is more decentralized than all traditional value-transfer networks of the old centralized financial world, and the applications built on top of Ethereum are also a spectrum of decentralization.
But how do you measure it? What is the degree of centralisation of the "traditional value-transfer networks of the old centralized financial world" (your words)? You said it was greater than that of the ethereum network so you must have measured both.
They were not my words, I was merely inserting a lame joke.
As far as I know, there's no technical metric to measure decentralization, instead it's something to reason about, as it can touch many aspects.
However, if you insist on finding a key aspect that indicates how centralized or decentralized a protocol is, the answer typically lies in nodes. How many are there and more importantly, how accessible is it to run your own?
With Bitcoin, anybody can run their own node, even on modest hardware.
With Ethereum, considering the future PoS switch, only rich people can run a node, unless you join a pool. The minimum ETH required is 32 ETH, which make it an elite thing. Worse, those elites will get even more ETH as a reward. This doesn't necessarily mean ethereum is not decentralized at all, just less so compared to Bitcoin.
A worst example may be ICP (Internet Computer) where running your own node is close to impossible.
There are plenty of smart contracts where the admin destroyed their access, and where the admin never had any privileged access.
Are people so out of touch on this topic that they would ask "source?" after being presented with negative information that matched what they wanted to read
> If an owner of a smart contract publishes a new change, nodes will mindlessly run it.
This is only true if the contract specifically allows that, right? And that's disclosed in the contract itself. So if you don't want that, don't use that contract.
Meta: Unsure what is happening on the front page today. This isn't even a link to the article[1], and somehow it rocketed to #10 in under an hour. A nearly 2-year-old announcement about SHA-1, posted 20 minutes ago, is in 3rd place.
I may be wrong, but I’ve felt for a while that there are some pretty strong vote rings avoiding the HN systems. There’s always a lot of strong downvotes or upvotes for specific subjects, but not that many voices in comments to go with them.
You could also just be doing real-time sentiment analysis of the readers of hackernews right? I wonder how you'd prove or disprove this. I know I get a similar feeling lately about Reddit, that some topics seem to be machine generated due to pretty surprising typos (not the existence of them, but the kinds, and not the kinds you get used to from ESL students).
These perceptions can be very unreliable so it would be good to ask us to look at specific links. If voting rings are getting around HN's anti-abuse systems, that would be a huge problem and would instantly become our top priority.
That tweet has nothing to do with voting rings. People clearly upvote those submissions because they're interesting, and the threads [1] have usually been quite high-quality once we pull the weeds of people perennially complaining about the Twitter format. If you want to hunt for voting rings on HN I can tell you with confidence that those are not the right place.
If there are other links I'd be happy to take a look.
You’ll notice that, that account also has numerous random links to products, probably farming traffic to those as well. In the ad business this is a strategy to foster network effect traffic signals.
And then there’s karma. I don’t have direct evidence because I don’t have the time to investigate, but this quote rings true to me, and I’m sure other here:
“hacker news is a nexus of karma farming bot activity”
Here’s an example of what I’m referring too. In this case it’s not a bot, but a human run vote system:
I’ve been in the advertising space for a long time. It’s very hard to combat this type of stuff. There are basically sweat shops in places like India devoted to these things, and it took google years to rid its ad system of it, and they threw enormous money and AI at the problem.
So when you say with 100% certainty it’s not happening, but you have many serious users complaining, it feels like an issue.
I truly think that social media companies are not really aware of the depth of what they are fighting. Here’s a report from Oxford university:
Where did you hear 100% certainty? what I said was if people have specific links they should share them so we can investigate. What's needed is concrete evidence.
Your first and third links don't seem to me to have any specific relevance to HN. Your second link certainly does (thank you!) - on the other hand I can tell you that in other cases when people have used such spam outfits to buy upvotes on HN, the result is that their accounts and sites have gotten banned here.
I'd never claim that there's no abuse happening on HN that we don't know about. That would be absurd! We don't know what we don't know. All I can tell you is that we put a high priority on catching it, and we do catch a lot. Also, I can tell you that many people come up with all sorts of fanciful imaginations and grand, but substanceless, claims about this—that's an internet pastime. Whether or not they're serious users I'll leave to you, but the prevalance of imagination in this area is why we need concrete evidence to go on. When we get it, we take it seriously and act on it.
That first link is a Twitter bot account. There’s a bunch of them under different names. You’ll notice the #HackerNews hashtag, and all the links are HN posted articles. Again, the same bots also seem to double duty product traffic spam.
The third link’s relevance is that there is a very large body of evidence from respected institutions that social media is targeted by influence campaigns. I don’t know why anyone would think that the campaigns are targeting Facebook, Twitter, Reddit, but not HN.
From that article
“The platforms removed more than 317,000 accounts and pages from ‘cyber troops’ actors between January 2019 and November 2020.”
Perhaps you guys don’t believe these studies? They aren’t always obvious things, that’s the whole point. For instance with Facebook foreign governments were pushing not just obvious political misinformation but trying to marginalize groups by making them seem less rational in online topics.
Perhaps you might want to survey the HN community. I honestly believe that it’s become more toxic and divided, and it’s becoming clear to anyone paying attention that social media is being manipulated by large well funded groups.
Again, not sure if your in a position to do anything about it. But maybe do some hard research in the area. It’s not “fanciful imagination” when there are studies from respected outlets.
Here’s a starting point I’ve used for my own research:
“Specifically, this study examines a collection of tweets relating to a much-publicized fan dispute over the Star Wars franchise film Episode VII: The Last Jedi. This study finds evidence of deliberate, organized political influence measures disguised as fan arguments. The likely objective of these measures is increasing media coverage of the fandom conflict, thereby adding to and further propagating a narrative of widespread discord and dysfunction in American society”
And from another.
“Despite being outnumbered by several orders of magnitude, just a few thousands of bots generated spikes of conversations around real-world political events in all comparable with the volume of activity of humans. We discover that bots also exacerbate the consumption of content produced by users with their same political views, worsening the issue of political echo chambers. ”
I have a bunch more to say about this but unfortunately I have to run out for a training. A couple super quick points though:
> Facebook, Twitter, Reddit, but not HN
HN is orders of magnitude smaller. Sites face qualitatively different problems at each order of magnitude. I'm not saying that proves anything, but it's a sensible reason why we don't see the data they do.
> just a few thousands of bots generated spikes of conversations
I can tell you from deep familiarity with HN's data that it isn't bots that are generating these conversations on HN. It's established users, who are divided on divisive topics. It's easy enough for us to ban accounts that are behaving like bots, and we certainly do. But the odds that a bot was posting about Julia in 2014 (I always use this example) are minuscule—no?
> I honestly believe that it’s become more toxic and divided
Yes, but because of the point I just made about established users, I believe this is explicable by divisions in the society at large. People (and especially internet users!) have a strong tendency to look for external factors here—blaming outside enemies, spies, shills, foreign agents, and so on—for our own problems. This is also a well-established historical pattern. I'm not saying it doesn't happen! I'm just saying we need to see specific evidence. If anyone has a link they think might lead to that, we're always willing to take a close look. But people should at least look at the public commenting history of such accounts before jumping to conclusions.
I wrote a bunch about this here: https://news.ycombinator.com/item?id=27398725. If you think there's a problem with the argument there, I'd like to hear what it is. I'm not closed at all to the possibility that we're missing something and we need to do more. I just know what we've found after the last several hundred (if not thousand) requests for investigation that people have sent to us.
I think you may be underestimating 2 things, just from my previous experience.
First, unless you are using sophisticated AI and behavioral data mining practices, you are not able to spot current bot activity. It is nearly undetectable from human activity by standard systems (ip address, browser fingerprinting, JavaScript systems, etc.). I know this because I worked in a space dealing with this. Google developed the tools to catch a lot of it, but does not disclose how they work. Their success at this is also why they now control most online advertising avenues. I know HN is small, and it may not be within your budgets for such systems, but perhaps there’s someone in the space willing to lend a hand?
Second, a lot of this comes from non bot traffic, and regular user accounts. Even regular users on other services have admitted being paid by various “advertising agencies” to post or comment on certain topics.
And I do get that HN is not the size of Facebook or Twitter, and so the issues are not the same. However, again, HN reaches some of the brightest minds in an important field of the US economy, so it’s not exactly an unimportant target.
Anyways, if you see my comment history you’ll notice I’m extremely skeptical and science minded. I appreciate and applaud your need for hard evidence, which I can’t offer since I don’t have all the data.
I do have experience with this stuff though, and on top of that, if you’ve gotten several thousand requests for recent investigation, I wouldn’t be so quick to chalk it all up to increased divisions in society. In fact it certainly is part of it, since that’s the whole point. It’s a feedback loop.
Thanks for taking the time reading this and replying. I do appreciate it.
Why should it be against the rules to openly discuss these issues in a thoughtful manner? That kind of silence would only encourage proliferation of the rings since no one is allowed to talk about it.
It’s one thing to just randomly spout accusations, but if a number of users are seeing consistent problems, I think people and mods would want to know.
Anyway, see my other reply to dang. If you search on Twitter you’ll see rando accounts posting weird formated links to HN articles, and things auto posting to HN, etc etc. I avoid Facebook alltogether, but I can only imagine there’s more of the same.
> These accusations seem to have accelerated a lot since the 2016 election and related claims around astroturfing.
Don’t we know for a fact that social media sites have been and are targets of influence campaigns?
As for what's happening on HN - it seems to be just the usual stochastic churn. Who knows why people post old things? if they're interesting they're welcome, and a lot of people decided that one was interesting.
The article isn't really detailed at all, so it's hard to know where to start with why these "services" aren't in fact "centralized."
It's effectively the equivalent of someone saying "you can't keep your password secure from hackers if you store it in a database, if someone hacks it then they can steal it and use every site you used that password on": it's just obviously false to people who know how this works, but now I have to explain how hashing works and such.
I'd just encourage reading up on how Ethereum transaction mining works before just taking the article's claims at face value.