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Move Over, Bitcoin. Ether Is the Digital Currency of the Moment (nytimes.com)
51 points by cookscar 175 days ago | hide | past | web | favorite | 40 comments

What is the advantage in creating an Ethereum smart contract over a regular contract in our legal system (using a lawyer and some pen and paper)?

If code has bugs (and sufficiently complex code will always, always, always have bugs) you simply have to suffer the consequences (sorry for your loss) or the entire community can choose to execute a hard fork and rewrite history (see DAO). If a vanilla legal contract has some typos or even some semantic differences that lead to ridiculous outcomes, lawyers and judges will hash it out. People, not computers, make the final decisions in our legal system, so human errors are mostly tolerated. If I sneak a clause into a contract saying that the other party must pay me their entire salary every year, it would be voided in an instant. Not so if placed in a "smart" contract.

Perhaps you could say that Ethereum is better than our legal system because it's decentralized. But I don't think it's enough to say something is better simply because it's decentralized. Why should I be afraid of a centralized legal system? We elect politicians, who choose judges (who have to be confirmed by legislative bodies whose members we also elect). Sure, it's not perfect, but it's hardly the tyrannical system that would make me turn to the bug-ridden wild west of Ethereum smart contracts.

I think the only reasonable argument in favor of Ethereum contracts is that they are easier to create (less friction, don't need to hire a lawyer, etc), but that's hardly a good thing. Real life contracts are expensive for a reason, not because Rothschild & Co. have some other nefarious plans. You need lawyers to write good contracts and think through their consequences, as well as reasonable, human judges to decide issues when they arise. Ethereum, to me, seems a purely ideological creation, not one rooted in actual needs that people have. Sure, it's decentralized and immutable (unless a contract hurts the wrong people, lol) but did anyone really want that (except for those with ideological reasons, i.e. libertarians)?

Not trying to start a flamewar, I just want to hear a strong opposing viewpoint on this.

I think the term "smart contract" is a misnomer. Sure, you could write a code similar to one I use: Store money and confirm that I am alive every year (by means of me sending a transaction to the contract). If I don't send this transaction, all money is released to my daughters account. This looks like a standard contract.

Now, dApps (distrubuted applications) also use "smart contracts" as the backend, but they do so much more than act as "contracts". For example, Golem is a computation market, Augur is a prediction market, etc. There is a whole universe of applications that can be written on Ethereum that do not quite fit under a simple "contract that you can write using a lawyer and some pen and paper" umbrella.

How much money does the contract have? If it has enough money, it's an interesting target for a cyberattack.

Let's hope we have to wait a long time until you die. Can one of you daughter change her receiving address meanwhile? Can you change it? (Perhaps someone stole her laptop with the wallet.)

Did you (1) write the code, or (2) copied it from ethereum.stackexchange or (3) use a webpage that writes the smartcontract for you?

Are you sure the contract has no bugs??? Can someone else change the her receiving address?

(1) If you write the code, probably nobody else review it. Let's hope it has no bugs or it's small enough to be unnoticed.

(3) If many people are using the same code, and someone finds a bug it can be used to steal the money from all the contracts. So you get hopefully more code review from the creator and users, but also more unwanted code review.

(2) If you just copied the code from a forum or something, you can have the best or the worst case of the previous scenarios, I'm not sure.

One "feature" of Bitcoin is that the programming language is so horrible that nobody tries to write code in it. So you have a few types of standard transactions (send money, post a message burning a small amount of bitcoins, ┬┐multisignature wallets?, ┬┐┬┐escrow service??) but all (most) of them are extremely straightforward and extremely carefully reviewed.

An Ethereum smart contract can be automatically executed, with no party, including no government, being able to stop that execution. The weaknesses you noted are serious and limiting, but that doesn't mean an automatically executable contract has no value.

Ethereum is a bet that contracts will be able to become digitized, decentralized and trustless to a greater degree. Forget about the technicalities for a second. If it's theoretically possible - what's the value of that tool?

In theory you could deploy a democracy as a contract. You could deploy a currency with a deterministically democratic central bank. You can create crowdfunded employee-owned work communes that pay dividends to member holders.

From a global perspective, if you ask yourself - is there anywhere that could benefit from such a system - and the answer is "yes" - then I think crypto is a great hedge against legacy systems.

Unlike stocks which are regulated and you are not suppose to promote if you already own some. There is no such thing for crypto currency. I always view every article promoting digital currency like a pump and dump scheme.

As a third world citizen, Bitocin is godsent to me, never have I been able to purchase stuff online and pay for books and services like a normal 21st century human being. the feeling of being connected in that way to the rest of the world is priceless and I owe it all to Bitcoin.

Does the fluctuating value change how you spend or keep your Bitcoin at all? Do you convert and cash out quickly after every transaction? Haven't come across many on HN who actually use Bitcoin as tokens of exchange.

It does! I tend to use Bitcoin directly when its value is high but I use USD when the value is low, I know it might seem counter-intuitive but that way I get to save on Bitcoin whose value has been increasing. For Bitoin to USD I use online banks like Neteller or AdvCash.

What bookstores do you buy from that accept bitcoin?

You can buy gift cards for lots of major retailers with bitcoin. You can even buy from amazon via purse.io.

Everything I have ever read about purse.io indicates that the gift cards there are purchased with stolen credit card details.

A lot of people use cash to buy giftcards, in order to pay for bitcoin anonymously. So now it's cash -> giftcard -> bitcoin -> giftcard -> physical thing. The future is odd.

purse.io is a money laundering operation for stolen credit card numbers. If it hasn't been shut down yet and its operators arrested, it will be soon.

I haven't come across any so far. I convert BTC to USD and use that.

Okay. I'm curious about how you use BTC and why it means so much to you?

It means so much to me because I live in a country with no Paypal or easy access to credit cards that can be used online. Bitcoin is the only way I can pay for servers and books.

That's right. In fact that has been happening with just about every cryptocurrency that trades on crypto-exchanges (and even those that don't).

1. Ethereum will always have more consensus failures than bitcoin. It has a larger attack surface, and competing implementations. 2. Ethereum will always be more risky because they abuse the "default option" power over apathetic nodes. Thus any regulator can just have them make aml/kyc/sec reg a requirement and bye bye efficiency. 3. Ethereum was always have more down time than bitcoin, check out 2017 for instance. (see point 1.) 4. Ethereum has 3x less reddit users, a couple x less twitter mentions, a few x less wallets, a few x less press, a few x less years of testing, less hardware wallets, less adoption in nearly every way. 5. Ethereum tricks devs into loser far more money with "smart" contracts that have bugs, than bitcoin does with accidentally sending change to the miner instead of to a new address. 6. Smart contracts will always be dumb as long as you have to trust a signal from the real, non digital world (oracle problem.) If you have to trust anyway, then just let the oracle do it all. 7. There's nearly no demand for the gas you're supposed to buy with ETH to make ETH valuable at all, unless you like it's speculative platform utility. Gambling on gambling. 8. Their blockchain is bloated grows faster than many users can download it. It's transactions per a second is maybe 3x bitcoins. It's very likely sharding and other solutions will not "work" if you care about immutability/trustlessness. 9. Ethereum is more centralized, more risky, down more often, and always will be.

Ethereum is an obvious ponzi pump and dump scam.

I like how they frame the DAO hack as an opportunity for growth rather than a gross display of incompetence followed by a breaking of the original promise of immutability of the platform, which is what it was.

I think it's more accurately described as a platform for Ponzi schemes and pump and dump scams.


Immutability is really the key to the whole cryptocurrency system. Unlike every previous currency system that has existed, duress can not be used to have a transaction reversed.

cough The DAO fork.

care to post a TLDR?

It has this as a summary:

"Ethereum is an unsecure, trust-requiring, centralized, mutable platform that runs stoppable apps and censors people Ethereum Foundation (EF) dislikes - the opposite of what it advertises itself as. Ethereum Foundation misrepresents what Ethereum is to prospective investors for increasing the value of the traded asset ETH while profiting financially. This means, by definition, Ethereum Foundation is participating in fraud by continuously misleading investors. Furthermore, the act of suddenly changing the properties of the unregistered security after the sale of the security in the initial coin offering (ICO) and/or on exchanges while profiting personally constitutes securities fraud. Additionally, Ethereum Foundation is connected to damaging the value of sold assets, damaging the value of competing assets, theft from competition, and market manipulation of competing assets for profit."

No it is not, and as far as crypto is concerned - mainstream media is almost always wrong. This really reads like PR for vitalik.

Eth is great as a developer platform, and it can/does have a future. However, btc will remain the true king because of its decentralized nature.

Ethereum has over 4.5x as many full nodes as Bitcoin, how is it more decentralized?

This is a common argument, but the state is quite different.

Ethereum has supposedly 34k nodes, which includes light-nodes which merely hold the last state of the blockchain, that is not a full-node and heavily reduces the trustlessness and security of a cryptocurrency. Light-nodes are closer to an SPV than a Node. I haven't seen any source reporting only full-nodes which would be the proper comparison.

On the other side the number ~7.5k nodes popup for Bitcoin, but that's wrong as well. Those are the full-nodes that are listening for new connections publicly. Not all the nodes of the Bitcoin network.

Following [1] you can see the data from a seed DNS node of Bitcoin, which shows a number closer to reality which is 86k of actual full-nodes.

[1]: http://luke.dashjr.org/programs/bitcoin/files/charts/softwar...

Bitcoin also only has one client with one development team whereas Ethereum has multiple clients with multiple development teams. Tell me more about that legendary Bitcoin decentralization.

Having one or more clients doesn't mean much. Eth is organizationally centralized because of the eth foundation. It literally has a dear leader (vitalik), and no different from crypto issued by, say, the fed.

The entire point of crypto is that it tries to solve the problem with existing currency (fiat), which is too tightly controlled by a few individuals.

Is this actually solved by bitcoin? Is this actually solvable? I feel we're butting up against the Iron Law of Oligarchy, here.

What I mean is, Ethereum Foundation or not, only some small set of people will have commit access to the upstream bitcoin repository. Additionally, because of economies of scale, it makes more sense to pool resources under one central roof to solve the proof-of-work.

There might be a convoluted and informal political process involved before merging changes to the protocol. Mining companies might choose to limit their size in order to protect the network and thus their income streams. But ultimately, the number of core developers and miners, i.e., those with real power, is much, much less than the number of merchants and users.

This! Everyone seems to be forgetting about this aspect, which is very important IMO.

What are the absolute numbers?


That's a big statement. Expand on it.

Careful about predicting the future!

nice bitcoin maximalism

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