It takes time to learn but it isn’t obtuse. It’s extensively documented, with multiple open source clients being built in tandem. Besides, it is not the only PoS system running today.
All fields of engineering are complex to those that have an not studied them.
The mechanics aren't extremely complicated but they also make no sense. Proof of work or proof of stake are both solving an abstract and meaningless problem. Crypto makes more sense if you study psychology than engineering.
Their actions would most likely be visible on the network because it is transparent. The community can then decide whether to activate a fork and punish the colluding nodes.
I still don't understand how consensus works off the chain. If 51% of the stackers just decide to run their own software and do their own thing. How does something off chain change that? How does something off chain penalize a majority of staked ETH?
If the 51% is a single staker or small group of colluding stakers attacking the chain, the rest of the users will probably not want to continue using that chain. The users can activate a soft fork, just by changing the rules of the code to burn the attacker’s funds, and running the updated client software. The remaining honest stakers can then continue to follow the head of the non-attacked chain, and the attacker would be the only one left on their chain.
Most crypto including Bitcoin is governed off-chain. People come to consensus on a set of rules that allows them to create a public and permissionless BFT ledger. Attacking the ledger then costs millions or billions of dollars. If one dishonest node or a group of colluding actors decide to spend this much to amass majority control of the network, the rest of the network can decide to fork the protocol to burn their staked capital.
The main goal of crypto - the base token and protocol rewards from PoW or PoS - is to secure this network and keep it permissionless and decentralized.
Why? PoW can only afford to be attacked twice. It even has a name: “spawn camping.” In proof of stake, this is pretty easy to defend against repeatedly.
If you are accepting that the network can hard fork to change the hash algorithm, then why not accept that they can do a soft fork to blacklist UTXOs or any one of who-knows-how many possible defenses? Changing the hashing algorithm is a nuclear option and probably not necessary in the astronomically unlikely event that someone managed to get 51% of hash rate for any amount of time.
edit: Blacklisting UTXOs is entirely possible as I mentioned, and as I said, it should be achievable by soft fork. This would be the proof of work equivalent of slashing. I have a hard time believing Vitalik doesn’t know this. Is he being dishonest? I don’t know.
You can target the UXTO so that their value in crypto starts back at zero. But because they still have the mining hardware, they still control 51% of the hash power that secures the network. They can just mine from a different address and it won’t be clear who to target until they once again begin to produce majority blocks on the chain. This way they can continually attack the chain and render it useless.
When you burn a PoW miner’s crypto addresses, you aren’t burning their capital and stake, because it’s in the form of mining hardware, not tokens. When you burn a PoS staker’s crypto, you are burning their capital and stake which is in the form of tokens.
I don't understand how PoS changes this. Also, that blog post does not consider CPU-mined PoW which is unprofitable for miners and sustained attackers.
In PoW, if you control 51% of mining the users can defend by switching to another hash algorithm, meaning the attacker needs to re-buy a lot of new hardware. If they’ve anticipated this, and attack again with new hardware, there is not much further defence. In PoS, users can coordinate a soft fork to burn the attackers funds, each time they re-attack the chain, until they eventually run out of capital.
Except in in PoW it only means delayed transactions, because only one miner has to "sign off" the block - everyone else accept it passively. A single miner, even with 0.1% mining power is enough to keep the network censorship resistant.
In PoS majority of validators has to actively approve a block containing "illegal" transactions, leading to permanent censorship.
The exact interpretation of validation vs mining responsibility in face of law and passive vs active is fuzzy , but it leaves miners is better legal position.
Interesting, so this is a problem if 66% or more decide to reject a transaction. How many blocks are currently signed by solo miners in PoW? Almost all blocks are signed by pools which looks like the PoS committees in practice yo my naive eyes. A miner with 0.1% hash power would probably be a very long delay.
I do agree this is probably the most concerning thing that Tornado Cash sanctions have shown us. Still don’t think the energy cost of PoW is worth it, and would rather see PBS and crList solve this problem.
The difference is that PoW pools are made up of individual miners who are free to go elsewhere if their pool misbehaves. Pools do not have their own mining hardware, and so they have an economic incentive to be well-behaved. If they misbehave, everybody leaves and they vaporize their business overnight.
PoS is tyranny of the majority: You cannot take your business elsewhere.
It’s the same with staking. If you aren’t solo staking, you are just delegating to a staking pool. And you can withdraw that and deposit it elsewhere if they do not align with your values.
Again, it is not possible for staking pools to differ on "values". If a validator does not vote with the majority, their funds will be slashed by the protocol.
Trying to understand how this differs in practice. Anyone delegating to a staking pool is forced into their values. Ethermine recently started blocking OFAC transactions, so does the majority of miners in that pool agree with this? If so, what is the defence against censorship in this scenario except for some to exit the pool and use another that aligns with their values?
Ethereum is still using PoW as of today, so anything Ethermine did recently isn't really relevant to discussions about PoS. As long as Ethereum is using PoW, pools of any size can pick and choose what transactions to include in a block. Once Ethereum switches to PoS, that will no longer be possible (without further protocol changes)
PoS seems very similar to PoW, and if one is fine (as we seem to think), the other is fine too.
In POW there are only block producers, and producing a block requires actively choosing transactions and transaction ordering.
Ethereum POS includes an additional attestation step where validators confirm that they have seen blocks without exercising any control over the contents of those blocks.
But this is exactly what PoW miners do when they extend the chain: every block is a vote for all previous blocks in the chain.
A better legal position, until that is it's made illegal to accept unapproved blocks. PoW is not immune to the exact same regulatory pressure. The US gov can just force a fork of the chain by requiring US miners to only accept approved blocks.
You are wrong about the majority of validators having to approve a certain transaction for them to be included. Even if 80 % of the network were censoring, those transactions would, on average, make it into every fifth block.
Because not attesting is against the network's fork-choice rules. If that censoring majority chooses to avoid said block, because it contains transactions that should be censored, they will perform an illegal re-org around the block. Sure, it won't be "illegal" as a majority of the network follows said re-org.
It's an extremely nuanced topic, and it was extensively discussed in the last core-developer call on Thursday. Every single operator has been warned that going against the fork-choice rules could, and ultimately will, result in social mitigations against spec-deviating behavior.
This could be set of socially executed slashings of validators that don't respect the fork-choice rules, or an honest-minority executed hard-fork that effectively causes misbehaving validators to bleed until they start respecting the protocol's rules.
I could be wrong on multiple counts, especially regarding re-orgs, but this is how I've understood the issue.
Same argument can be made for key management. A typical user could use non custodial wallet, but they don’t. But that option exists, for when they become unsatisfied with their centralized wallet custodian, or when they want to change custodians, or when they want to use a multi sig that allows for a mix of custodial and non custodial.
Importantly: the option exists. The option to use non custodial EOA and smart contract wallet, DAI or RAI, Alchemy or a custom node RPC, Kraken or another CEX or DEX, the option is present and is chosen by plenty of users.
Is there any evidence that almost 100% of transactions use Infura? There are several other popular nodes as a service since the cited 2018 article was written: Alchemy, Quicknode, Moralis. Anybody running a full node, including home stakers, can point to their own RPC endpoint.
When one of the popular nodes as a service goes down, many dApps and users will need to change their endpoint to another. I think the author might be overstating the concern of this centralization.
The solution to RPC centralization is well known: light clients. It is on the developers roadmap but obviously they are prioritizing proof of stake and scalability.
In 2012, you could presume cryptocurrency users had some idea what, say, cryptography was.
In 2022, you can't presume a damn thing.
As I noted in another comment, users could do all manner of things they don't do. In practice, defaults are overwhelmingly important.
When Infura blocked all of Venezuela in March, due to an error in over-applying sanctions against Russia, some wondered if the Ethereum network was being blocked. No, it was just the app everyone depended on for almost everything.
In the fabulous future, I'm sure it'll be great. In present-day reality, things are as I described them.
Nobody actually cares much about Infura or other points of centralisation because approximately 100% of Ethereum participants in 2022 have a firm and unshakable ideological commitment to being in it for the money, on an extremely short-term horizon.
So your main argument is that people are too stupid to understand that Ethereum is not the same as Infura, and so when one goes down you may as well call them both down? Lol.
Lack of education can be fixed. You can even help: instead of spreading poor information, try to educate your readers about the difference between a node as a service and liveness of the blockchain.
How dare I describe the network as it is, rather than in a fantasy world where people suddenly care about things they've shown no signs of caring about en masse in a decade? You'll excuse me if I keep doing that.
Feels a bit odd to rail against tech companies extracting dollars from artists, and then use Amazon, Kickstarter and PayPal as a sales mechanism. Could be worse I guess.
Edit: included Amazon as he is also selling his product through it.
Honestly comments like this really depress me. Maybe consider why you immediately have knee jerk thoughts about why this is bad or hypocritical and negative and reflect on that
He does not need to sell his anti-Amazon book on Amazon, it is laughably hypocritical and goes against his entire message in his Twitter announcement:
> it's an action-oriented look at how tech and entertainment monopolies steal creators' incomes, with detailed, shovel-ready plans to unrig creative labor markets and pay artists
That's not hypocritical. A hypothetical example of him being hypocritical would be if he owned an comparable business to Amazon and enacted the same practices he complained about Amazon doing.
In what sense is Doctorow himself causing the same sort of suffering against which he's inveighing? The parallel makes no sense.
Doctorow does not sell only on Amazon[0]. He also has a history of giving his books away for free[1], and insists on every release of his books in any format being DRM-free. Since those are the issues he is passionate about, that doesn't seem hypocritical to me.
It's more like PETA protesting in front of shops that sell furs, rather than only in places where people are already 100% anti-fur. Which... they probably do. Obviously.
The ultimate point of the book is to gather support for legislation that would give teeth to antitrust. It needs to reach sufficiently many people for that, and only the likes of Amazon can provide that kind of outreach. If it succeeds, the meager profits off the book that Amazon will skim in the process won't matter. Of course, whether it succeeds or not is a gamble, but it's a reasonable one.
Crikey. That comic is nearly 6 years old now. Heck, it was at least 16 years ago that Tom Morello pointed out:
> When you live in a capitalistic society, the currency of the dissemination of information goes through capitalistic channels. Would Noam Chomsky object to his works being sold at Barnes & Noble? No, because that's where people buy their books. We're not interested in preaching to just the converted. It's great to play abandoned squats run by anarchists, but it's also great to be able to reach people with a revolutionary message, people from Granada Hills to Stuttgart.
Doctorow himself has also said that he'd like to be able to sell his anti-Amazon audiobooks on Amazon - if Amazon would agree do so without DRM. Because that's where a lot of his customers are.
It's just that he, the author, doesn't want DRM on his audiobooks, and neither do his customers. He sells his audiobooks without DRM to his customers through other channels. All he wants from Amazon is for it to be a reseller, selling the thing he has to sell, to the people who want to buy it, in the place that people buy and sell things.
You can pre-order his anti-Amazon book on Amazon. You don’t need to sell your book on Amazon just to live in a capitalist society. To me this is hypocrisy, but I guess not everybody agrees.
He sells a lot of his books to spread a message. If you're spreading a message, the important thing is that it gets to as many people as possible. And it's important that it gets to lots of people who haven't yet heard that message yet. That means lowering the barrier for people who aren't yet invested in the message to be able to hear it. It means spreading the message to people who don't know how terrible Amazon are, to people who do most of their shopping on Amazon and wouldn't even think to look anywhere else to find a copy of the message.
Sure, it's great if the insular group of people who've already boycotted Amazon can get a copy of his anti-Amazon book on not-Amazon, and all clap themselves on the back about how smart they are for having already boycotted Amazon. Yay, us! But that doesn't spread the message to anyone else. It won't change any new minds. It won't change public opinion. It can't be part of a movement.
OK, to make up some ballpark numbers, assume Amazon make roughly $1/book sold, and 20% of the sales of Chokepoint Capitalism on Amazon will get the anti-Amazon message to someone who hasn't heard it before.
The question then becomes, given how awful Amazon is, is it justifiable to fund Amazon by $5 to get someone new to seriously reconsider their whole future lifetime usage of Amazon, and possibly to join the anti-Amazon crusade? (Basically, it's a trolley problem. https://en.wikipedia.org/wiki/Trolley_problem )
And there are plenty of reasons that the answer might be "No". I think it's reasonable for someone to say that funding Amazon, by any amount, for any reason, no matter the outcome, is inherently immoral and unjustifiable.
Or, someone could reasonably say that it might be moral in some circumstances, but not at that price. Or that my numbers are wrong, my price is way off, and at the actual price of $X/convert (for whatever value of X they come up with) it's wrong.
Or, I think someone could reasonably say, "Yes", at that price, it's worth it.
I even think someone could reasonably say "I can't decide if it's worth it, and I refuse to choose."
I think reasonable people can disagree about where the line is. Your position appears to be pretty firmly on the "Never" side of that line, and while I don't agree with your conclusion, I don't think that part of your position is unreasonable.
However, I think that labelling anyone who doesn't agree with you as "delusional, cognitive dissonance in action" is unreasonable, and lacks a certain amount of empathy. I think it's also unproductive, in that it's unlikely to make anyone who doesn't agree with you to even listen to your counterargument (did you make one?), let alone consider it seriously.
OTOH, if your goal is not actually to convince anyone to listen to you, but to just bathe smugly in the warm feeling of moral superiority, you're doing fine.
It's very possible that an EVM-compatible L2 eventually captures this space, or a subset of it.
Harder to imagine any L1 blockchain ever being able to reach the throughput needed without dramatic trade-offs in decentralization, censorship-resistance and security. At that point you might wonder how it would be any different than a centralized Visa or Mastercard network.
This is why Tornado Cash was built, to provide privacy. But oops, government does not want you to have that freedom. Users are now forced to mix with a centralized service at cost of giving up privacy to them.
Freedom is not free, nor are you free to do whatever you want. We have rules and expectations as society, we elect officials to codify these into law. Most of us do not want anonymous money because of the downsides. It's not so dissimilar from seatbelt or smoking laws.
Tornado was shutdown because they were knowingly supporting sanction violations. The developer was arrested in a country that does not have the same freedom of speech we do in USA
The crypto commodity community will have to learn that they are part of the larger society and accept that they will not always get things their way. If you want things to change, you'll have to adjust how you approach these differences, and more than likely give up some of the absolutist views to meet in the middle.
Code is free speech though. The rules and expectations the western world has set around speech doesn’t align with sanctions that target code and open source software. The sanctions are not against an individual person, and it isn’t clear yet why the developer was arrested. If it was for knowingly publishing open source software, that would be scary.
You do not seem to be up to date with the details. The developer was arrested for running a money laundering service, not because of the code they wrote, but because of the money transfer service they ran, which happened to use the code they also wrote. The developer helped sanctioned entities bypass restrictions.
The code was taken down by a private company, freedom of speech is not protected on GitHub or Twitter. Additionally, American laws do not extend to other countries. It was the Dutch who arrested him.
You should start by understanding the basic facts and relations and not engage in hyperbole like "knowingly publishing open source software, that would be scary" because this is not at all what happened here.
Very familiar with the situation, the tornado cash code, and the details of the case that are public so far.
I appreciate your optimism about freedom of speech being unaffected but this is not as cut and dry as an individual running a money laundering business, if that is what you think Tornado Cash is. We do not hold Tor exit nodes responsible for the illicit activity on the dark web and we definitely do not hold Tor developers responsible.
that source is quite biased, do you have any links to content which is not in the crypto camp?
He's actually wrong in that it executes on the ethereum blockchain. It actually executes on Optimism, a layer-2 solution, and they are quite concerned for their own situation.
He also says that there aren't people tied to it, but who was collecting the contract fees (beyond gas)?
Huh? It does execute on Ethereum, and the contracts are still accessible at the same addresses if you run your own node. This is where it was first deployed. It also runs on other EVM chains and L2s including Optimism, Avalanche and others.
The first reports on this situation originated from non-crypto sources so it should be easy to find them. A lot of the more in depth discussion is coming from crypto camp because it negatively affects all those users and their privacy.
Eventually, the crypto community will have to step back from their extreme positions.
A human paid to deploy these contracts, a human keeps the fees. This is not a "fully autonomous" contract. It is not an attack open source. There is a difference between writing code and running code, or making it runnable. Blockchain creates new scenarios we hadn't considered before, but common sense can still be applied.
The sanctions are not targeting a human or a group of humans, they target an open source project and its autonomous smart contracts. Look up the sanctions and project source code yourself.
The only fees taken are relay fees, which can be anybody - not necessarily the developers. The conversation steers back to whether it is illegal to run a Tor exit node and whether it is illegal to develop Tor the open source project. Tornado Cash can be republished without relay fees, with zero governance, no token, would that be acceptable?
To a reasonable person, Tornado Cash is not acceptable, which is something the crypto commodity space will have to accept. Technical details do not matter, Tor has nothing to do with it. The sanctions impact people and their financial transactions, even if there is some code in there. Sure they listed addresses, it's not the first time, and it will be people who get in trouble for interacting with these addresses. That there is "autonomous" code is besides the point, most code is autonomous anyway.
If you support evil, there will be repercussions. Your participation in the pool is sufficient material support. We have laws, adjust to obey them or risk getting in trouble.
Sad and troubling that so many people hearing this will equate privacy with evil and illegal behavior. This is why I am pointing out Tor, because there are many licit users of it.
Tornado wouldn't be needed if Blockchain wasn't so flawed to begin with. Bunch of techno utopians thinking their way is better for everyone and don't want to hear any criticism or that their ideas aren't actually good... smh
What is sad is that you use and reuse hyperbole as a talking point
Legally yes, with legal precedent set in court. Morally depends on your perspective. Some people advocate for privacy, others advocate for surveillance.
Typically this is followed up with a misunderstanding of the DVD-CSS decision, or a misrepresentation of Marilyn Hall's decision that code is speech somehow means code is free speech, but I'll bite. What precedent do you imagine holds that code is somehow free speech?
Please understand that I'm going to look it up and I'm going to push back.
The debate is pretty settled that code and language should be protected by 1st amendment as free speech. Based on this precedent, we should not be cheering on the barring of the open source project and it’s developers.
It is less clear if the execution and use of code should be free speech, and how to regulate code and language when the sole goal is illicit. Like anarchist cookbook, 3D printed guns. But to argue this, you will have to argue the sole goal of Tornado Cash is to aid in illicit behavior. There are many licit users of the protocol, like with Tor, who just want to seek privacy in their online communication.
The issue comes down to whether sending and receiving private keys in an encrypted way over the internet should be protected or not.
> Bernstein v. the U.S. Department of State, landmark legal decision (1996) that set two important precedents in the field of digital technology. First, it ruled that U.S. government regulations that barred the export of encryption software were unconstitutionally restrictive; second, it declared that software source code can be a form of protected free speech.
> The district court found that the Source Code was speech protected by the First Amendment, see Bernstein v. Department of State, 922 F. Supp. 1426 (N.D. Cal. 1996) ("Bernstein I")
The code was taken down by a private company, where your free speech does not apply. This is closer to the debate about content moderation on social media, because after all, github is more like a social media site than most realize. GitHub suspended the developer accounts of their own accord, likely to cover their ass.
The Tornado Cash case is all about money laundering, the fact that there was code to automate the process is besides the point.
The bigger problem is whether republishing the source code would make you a target of the sanctions. If a user republishes the source code on Ethereum, pirate bay, Gitlab, or another host then it is reasonable to assume their actions might be interpreted as “supporting the Tornado Cash project” which makes them a target of the sanctions. If a user modifies the code and republishes it probably will fall under same risks.
US sanctioning an Ethereum contract address and unrelated source control providers deleting user accounts and repositories is a good example of chilling effect in action. The individual developers are not in scope of the sanctions, and are not sanctioned entities. Not even the source code or its many individual repositories are directly sanctioned, but chilling effect is leading hosting services to erase it all as a precaution.
Considering they still make up a significant portion of Ethereum’s daily activity, I would say pretty well! The NFTs are “here to stay” as long as Ethereum continues to fill blocks, which might be years or decades.
FWIW, “a significant portion of Ethereum’s daily activity” doesn’t sound nearly as impressive to people outside the crypto bubble as you seem to think it does, especially those who are aware of the extent to which unregulated wash trading dominates NFT markets, rendering most of this activity imaginary at best and fraudulent at worst.
This is a very common trend I see when speaking with cryptocurrency advocates. When asked to point to success stories or real world use cases, 9/10 times the answer is related to some other cryptocurrency scheme: a swaps smart contract or a decentralized market maker, wallet software, etc. It seems like most of the use cases for cryptocurrencies are just more examples of the snake eating its own tail.
If you view all crypto activity as only imaginary or fraudulent, I doubt either of us will be able to change each other’s minds.
The NFTs that artists minted in the boom in early 2021 are still being traded across different platforms, curated in physical exhibitions, indexed and hosted by multiple competing companies, and talked about in online magazines and podcasts. Sales on OpenSea and other platforms continue to pay royalties back to creators and sometimes non profit charities that they set in splits. Hundred-year-old art auction houses are now in competition with open source platforms that take nearly a hundred percent less commission on sales, have a lower barrier to entry, and provide higher artist royalties.
Blockchain hasn’t given us flying cars or replaced corporations or whatever boosters say, but it has given us some new tools to imagine transactions and ownership differently than just whatever Stripe is doing.
>>>especially those who are aware of the extent to which unregulated wash trading dominates NFT markets, rendering most of this activity imaginary at best and fraudulent at worst.
Thank you for your response. I agree that the art market deserves much more scorn than it receives.
Regarding your friend, I’m curious to know how competitive crypto is for your use case. Western union charges about 2% to transfer $5000 from the US to the Philippines and can deposit directly in a bank account. I understand that international wire transfers are comparable. Services like remitly appear to be even cheaper. How does crypto compare in price and convenience?
>>>Western union charges about 2% to transfer $5000
That is absolute extortion. I sent ~0.05 BTC in May and the transaction fee was 0.067%. Eyeballing the transaction screenshot she sent, she wasn't getting hammered on the exchange rate to pesos either (via coins.ph). There was some KYC involved (sender name/address required to release the funds on her end) that slowed us down a little. It wasn't a requirement several years ago. I bet we could have fed the form fake info but didn't want to risk the funds being frozen, she needed cash in hand in less than 24hrs to purchase new inventory.
All fields of engineering are complex to those that have an not studied them.