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Prior to the merge ethereum’s trust was controlled by the organizations with the most money who bought/built massive data centers to mine it.
With the merge & staking that abstraction layer has disappeared and it’s still the organizations with the most money who control it.
Sure it’s great that non-productive math problems no longer need to be solved & consume so much energy and hardware to make it all work. And it may be an incremental improvement over traditional global finance because there is a much greater ability to publicly scrutinize what goes on.
But no one should consider this a fundamental paradigm shift & democratization compare to traditional financial systems controlled by a a very small number of big players. Their influence still can override the mining process that’s supposed to be the final word on transactions.
Although I’ll clarify a bit: I’m actually a proponent of having a layer of human judgement that can fix a problem when things go off the rails. The issue is that in crypto this layer is even less accessible to smaller players than in traditional finance. The DAO was able to throw its weight around and get a hard fork, but how many other groups with much less influence have suffered from similar problems and exploits without that same benefit?
Yes, even in traditional finance there are some types of irreversible fraud. But for every day transactions, for using money as a daily part of transactions necessary to live your life and not just as a speculative investment, crypto falls far short.
If a criminal spies on my credit card # as I make a purchase and uses that to go on a spending spree I can fix it with the credit card company with little cost but a few hours of time and frustration. If my wallet is pick pocketed or I simply lose it by accident I have a similar recourse to mitigate the fallout. Crypto? No. It may, eventually, have some other benefits though that’s yet to be seen. But as a major change & liberation of people from massively powerful banks and governments there seems to be nothing more that shouted rhetoric and wishful thinking.
Not using up a goat load of electricity is like 99% of why this change is great. Let people speculate on their funny money without harming everyone. A lateral move on the other details is rather unsurprising.
My view is that crypto's goals (e.g. decentralized, deflationary, no transaction reversals) are non-goals, but even if those non-goals were goals, both PoW and PoS fail to effectively solve them, especially the decentralized part. PoS sucks more than PoW on this axis: PoS encourages centralization within the system (those with more ETH control the chain), and PoW encourages centralization outside the system (those who command more assets to buy GPUs and energy controls the system), so it's really silly and funny and pathetic both fail at the same thing, with PoS moving the needle in the wrong direction, but also, it was a non-goal to begin with so who cares I'll just go with the one that doesn't set the planet on fire please.
> liberation of people from massively powerful banks and governments
The difference between business and governments is that in business every dollar has a vote, whereas in a democracy every adult has a vote.
"liberation of people" can only happen by having a working democracy. And a working democracy can only exist when there is (democratically elected) government. So it's not like people should be liberated from government, people should be the government.
Therefore I think the best situation is where government controls the money, and we the people control the government.
> If a criminal spies on my credit card # as I make a purchase and uses that to go on a spending spree I can fix it with the credit card company with little cost but a few hours of time and frustration.
I'll take this one step further.
My credit card company has caught every instance of fraud on my card. So I've had zero hours of frustration yet multiple instances of people trying to use my credit card number. One time they even had the card - they had stolen it that night and tried to use it at a local gas station. A fraud alert woke me up.
> And it may be an incremental improvement over traditional global finance because there is a much greater ability to publicly scrutinize what goes on.
The flip side is that it’s creating new opportunities for massive privacy problems which would be irrecoverable. People who are trying to hide their activity will take precautions like using shell companies but normal people won’t think to do that or realize that they’re making that level of trust by using a wallet, exchange, etc.
There are some obvious big problems (“do voters know you paid for this porn site 15 years ago?”) but also more personal ones: imagine if employers, insurers, dating apps, etc. started data mining? Again, there are possible ways to mitigate that risk but I’d hesitate to make a lifetime commitment on those being effective and perfectly operated.
How i see it, when a group of powerful people wanted to control ETH to some direction or block a party, they needed to do some physical work , which acted as a time-delay lock. Now all they need to do is think about it. I m not sure why the second case has the same level of trust as the first.
I think this begins the search for another trustless transaction system that is neither PoW nor PoS.
>If a criminal spies on my credit card # as I make a purchase and uses that to go on a spending spree I can fix it with the credit card company with little cost but a few hours of time and frustration.
However, if a much more powerful criminal spies on your credit card # as you send money to Wikileaks or a bunch of truckers who drive to Ottowa for a protest you can never fix it when your card is cancelled and your bank account is seized. Or when you face a variety of other sanctions and persecutions for spending or donating your own hard-earned money.
>Crypto? No. It may, eventually, have some other benefits though that’s yet to be seen.
These benefits have already been seen and realized by people targeted by authoritarian governments and banking cabals all over the globe.
Your concerns are valid. And you're free to commit to projects that align with your values.
To me, the immutability of an actual blockchain is non-negotiable. I've given up on Ethereum after the DAO fork out of principle.
But that's the beauty. Unlike our current financial system, you're not bound to use Ethereum. You have sovereignty and can make your own choices (and drive change).
-- (I only discuss part of your comment, don't have time for the rest)
Just FYI, the biggest problem for crypto fraud is phishing, not theft. A thief can't get your private keys from a hardware wallet. And there are many, many, MANY strategies you can use against phishing.
> Their influence still can override the mining process that’s supposed to be the final word on transactions.
Any attempted tampering would be highly visible and why would anyone with control of that much ETH risk loss of trust in their valuable asset?
> It's like Finland has suddenly shut off its power grid
So, have we observed global energy usage go down by about one Finland?
Shouldn't that be observable somehow? Shouldn't there be some power stations reducing their output as a reaction to reduced demand?
Anyone know how this would be visible, and on what kind of time frame we expect it to become visible?
I'm not claiming it hasn't happened. I just feel surprised to not see more coverage of that in this article, nor here in the comments. Energy efficiency is largely the point of this major change. Shouldn't there be graphs of the power grids everywhere showing a big drop? Maybe my expectations are just off on that.
> The Merge is one of the largest technological events in the industry to date.
I feel kinda ashamed. I work in the IT industry and I claim to have knowledge about ("good") software engineering practices, distributed systems, compilers, algorithms, etc. Nevertheless, I didn't understand a word of what the article is saying. Could you recommend serious references (preferably books and not random blogs) I could read to catch up with what's going on with crypto these days? I'm not planning to "buy" crypto; I would like to understand the technicalities.
I appreciate it wasting less precious energy. But this change also means that "Decentralisation" and "Power to the people" are fading away right?
The wealthy actors are the ones dictating the transaction now and they also on top get paid for being rich. This does not sound like a "better financial system" for me. Also, don't forget the DAO Fork[0] where with the "ungovernable Blockhain" it was decided a transaction was not ok and it was removed?!
It looks like the new Blockchain is quite centralized. 45% of blocks are mined by just two addresses:
https://twitter.com/santimentfeed/status/1570339602346684416...
There are two interesting things I want to watch from this. The first is I'm interested to see what kind of bull run ETH goes on. The merge has been incredibly long coming, it has huge risks and I think that puts downward pressure on price, you really don't want to be doing stuff in ETH at the moment because there's a fairly good chance something goes wrong, someone stealds $XBn and runs off and the Ethereum guys go "Well I guess we're going to have a centralized intervention and reset the chain back to date Y" (this famously happened with the first DAO). So as that risk dissipates I would expect a decent price run. I'll be very interested if that doesn't happen since it says a lot about broader market conditions.
The second thing I'm interested in is that ETH was the vast majority of revenue for GPU miners. I read an article on HN a few months ago about how once ETH is gone the rest of the PoS chains put together won't yield enough revenue to be profitable for the vast vast majority of current ETH miners. This alone could have a massive ripple effect on the used GPU market. Interesting to see where that goes.
Quote from the article:
> “I feel very proud, you know, that I'll be able to look back and say I've had a role to play in removing a megaton of carbon from the atmosphere every week." -- Edgington
There's a very important difference in not emitting carbon into the atmosphere and actively removing carbon from the atmosphere.
Both are critically necessary and complementary, but I don't see how Edgington thinks that switching off PoW suddenly makes Ethereum carbon-negative.
The validator of the first proof of stake block earned just over 45 ETH as everyone clamored to get their transaction in this historic block:
For those interested in understanding the tech rather than the typical bashing things as beneath them, I wrote up a detailed technical explainer of how Ethereum PoS works: https://0xfoobar.substack.com/p/ethereum-proof-of-stake
Yes, it did work. No missed slots and high participation rate. Exceeded expectations. Congrats to all the devs!
Does this mean GPU prices will go down? At least according to this article the validator nodes can be run on a Raspberry Pi [1]
> “Proof-of-stake is like running an app on your MacBook,” he said. “It's like running Slack. It's like running Google Chrome or running Netflix. Obviously, your MacBook plugs into the wall and uses electricity to run. But no one thinks about the environmental impact of running Slack, right?”
People do think about that. But definitely an improvement!
The bottom just fell out of the used GPU market. NVidia Tesla 80 24GB on sale for US$79 in quantity. [1]
[1] https://www.ebay.com/sch/i.html?_from=R40&_trksid=p2380057.m...
I think this is nice, it forces people that want to participate to have skin in the game.
With proof of work there is incentive for people not invested in crypto to mine as much as possible and sell everything.
If a big enough computer is created, someone not interested in crypto can take money away from it, or if the computer is big enough even destroy it, a quantum computer for instance, should make a 51% attack on a network as proof it is a quantum computer.
I know it is unlikely, I myself think is impossible. But the incentive is there.
With proof of stake there is no incentive to do it, a 51% attack is idiotic since you have to buy so much.
I assume it has been debated again and again, but since I don't know the answer I'm going to ask:
We often complain people hold cryptocurrencies instead of using them as money. Isn't this change going to make this worse ?
What boggles my mind is that there is no withdrawal from staking and almost no one talks about it. That is, staking right now is a one way street with a promise to be able to withdraw some time in the future and returning only about 4% gross annually, which is laughably low for something that risky. It's well hidden in Ethereum press releases, the only mention I can quickly find is the FAQ entry titled 'Misconception: "The Merge enabled staking withdrawals."' here [1].
It's not just about transparency either. The whole system's security rests on game theory. Not being able to withdraw must affect incentives, which means the introduction of withdrawals will change the system in ways that were not tested yet.
Congrats to the devs. This is a historic moment for computing and distributed tech, and will pave the way for Ethereum’s next updates: scalability, privacy, stronger censorship resistance, easier UX and account abstraction.
I’m really curious what the GPU miners are going to be doing with their cards. Today may be as big a moment for gamers as it is for ETH devs.
Great!
Unlike BTC the miners can sell their gear so they are not down on their investment.. I imagine BTC miners putting up a good fight if this was on the table and they stand to lose all their asics
I gotta say, I’ve been really cynical about this and honestly thought Ethereum would keep putting off the move to PoS forever. I’m very very happy to be wrong.
I still don’t see the value in cryptocurrency as a project, but now that it’s not rolling back years of renewable energy development, I’m down to have some much more interesting conversations about Ethereum, and I may even be willing to buy some and try it out.
Intuitively to me it seems that PoS can never work.
With PoW the physical reality of scarce energy secures the chain - you can’t spend energy on one computation and another.
With PoS we secure it by holding Ether, but what determines who holds Ether? The chain! But that’s what we are trying to secure. Is this turtles all the way down? Can anyone enlighten me?
So there's an article with information about how to run a validator from home [1]. But my question is, what the typical ROI for this sort of thing? Not just from your stake of 32 ETH, but from the hardware depreciation, electricity costs, etc?
I like the idea of a non-PoW blockchain, and I don't mind taking some risks, but before I invest $60k in becoming a validator, I'd like to know what the potential payback might be.
Can we have our GPUs back now?
> Edgington, who began his career researching climate science before eventually landing in crypto, understood where his daughter was coming from. “Rightly or wrongly, she'd absorbed a very toxic environmental narrative,” he said. “I mean, it's kind of hard to defend ‘stickers for grownups’ that emit, by some estimates, a megaton of [carbon dioxide] a week.”
A good moment of humility I hope for all those HN experts who implied Ethereum's transition to Proof of Stake would never happen.
Merge is confirmed. "It went as well as it could". It eliminated 0.2% of global energy usage (bitcoin at 0.5%)
Bitcoin is using too much energy, and this energy is needed for more important things like heating and transportation.
These guys seem to think so:
Ethereum Mainnet Merge Viewing Party
Congratulations miners, validators, and hosted validator services!
Big win for sustainability and industry!
wow! It did work, the merge is confirmed, no transactions dropped! Congratulations to all the devs!!!
Proof-of-stake does not solve the Byzantine General's Problem. Therefore, it does not provide decentralized consensus.
PoW is the only known solution: https://gist.github.com/oleganza/8cc921e48f396515c6d6
This paper attempts to provide proof but fails (https://eprint.iacr.org/2016/889.pdf), they effectively assume away the Bizantine Generals Problem.
The Ethereum people were very clever to call this extreme fork a merge :)
It worked.
And it reduces the world's energy bill by 0.5%:
https://twitter.com/JonathanBeuys/status/1570305323629527046
I feel a great disturbance in the force. As if a million miners cried out all at once and then were suddenly silenced.
This article is biased:
"That innovation was the essential ingredient behind decentralized finance (DeFi) and NFTs"
as if defi was already globally in use! And later:
“Rightly or wrongly, she'd absorbed a very toxic environmental narrative,”
I am actually very glad that new generations have a much better understanding of environmental risks and I find very difficult to sympathize for a ecosystem that is such energy greedy.
Are there resources that tell you how to do moderately complex things in ethereum/crypto properly/safely?
I've dug in every once in a while, but the people doing things in crypto seem to have crypto "stacks", and those stacks aren't transparently obvious. I haven't been able to find the useful entry point into these things.
I think this is great news because it reduces wasted energy. The sooner cryptocurrency stops boiling the ocean, the sooner the rest of us can ignore it.
I have no problem with weird nerds having their own hobbies (I have a model train set!) as long as they are not actively hurting anyone.
Now do the same for bitcoin.
> “Rightly or wrongly, she'd absorbed a very toxic environmental narrative,” he said. “I mean, it's kind of hard to defend ‘stickers for grownups’ that emit, by some estimates, a megaton of [carbon dioxide] a week.”
What was the "toxic environmental narrative"?
This doesn't really change anything, I still cannot find any legitimate use cases for blockchain, Proof of Stake or not.
I would happy to be proven wrong, but this is extremely rare as I can't find any legitimate actual useful use case since Bitcoin and Ethereum's existence.
Congrats to the devs. This is a historic moment for computing and distributed tech, and will pave the way for Ethereum’s next updates: scalability, privacy, stronger censorship resistance, easier UX and account abstraction.