Hacker Read top | best | new | newcomments | leaders | about | bookmarklet login

I'm not an expert, but if 51% of the existing hashpower doesn't want a change, it sounds less a 51% attack and more like miners voting against something that isn't in their interest. The whole point of blockchains is that the incentives are supposed to be aligned between miners and users. If that isn't the case here, it sounds like a problem.


view as:

Crypto miners and and crypto users are aligned in the same way banks and customers are aligned.

It is a problem. That's a big reason for moving from proof-of-work to proof-of-stake- to more directly make the _holders_ of Ethereum in charge of the chain.

It's a difficult thing to do, though. Hashpower based mining is easier to get going. Proof of stake has issues like the nothing-at-stake problem, where theoretically you could stake-mine on multiple chains: https://ethereum.stackexchange.com/questions/2402/what-exact...


Isn’t half of our current money supply controlled by 1% of people? If the asset holders controlled things, why wouldn’t they just demand everyone else hand over their cash?

https://www.cbsnews.com/news/richest-1-percent-control-more-...


(1) even a 51% attack can't generate fake transactions to transfer that money

(2) social power with blockchains (i.e. having people's ears on the social networks) is far more important than $$ power: If nobody wants to install and use your blockchain, no amount of $$ can fix that.


Re (1): True, in that the committed transactions would not be fake. But calling eth “money” is...not accurate. It has value but lacks moneyness.

Because the 1% isn't homogenous and a lot of them will want to keep the system working instead of killing the goose that lays the golden egg. The 1% is about 1.5 million people. Good luck getting most of them organized for a certain cause that will result in destruction of wealth mid term at the latest.

The 1% Is 1.5 millions iff the 100% is 150 millions, which is what population exactly?

Bangladesh? (160 mln actually)

I think they could mean a total number of crypto users, recently estimated to be over 100 mln.


The people that file tax returns in the US https://www.irs.gov/newsroom/filing-season-statistics-for-we...

I picked that because I didn't think if babies and non-earners were included when calculating the top 1% of highest earners.


That's a good question.

Imagine what would happen if one person held literally all the money. It may be easier to imagine a 100-person community rather than the whole world.

One thing that would have to happen is everyone else would develop their own money/currency, which would turn mean that the one person with all the money is no longer the one person with all the money.

A thing quite likely to happen is that everyone would decide that whatever the money is that the one person has, everybody would decide it is not money.

It isn't entirely dissimilar from me claiming I have all the Jerfoleans on the world, and what the world is really doing about that currency right now. They're worth a zero so zero-y that even an infinite number of them is still worth a flat zero. Someone who has "all the money" might find themselves in a similar boat.


More likely the one person would hire some people to convince the rest that it in their best interests that all money belong to the one person or even more likely to provide to the people some distraction, destroy the notion of the facts, so they wouldn't even know to ask inconvenient questions.

Money used to represent the value backed up by gold in bank storage. Nowadays its just a paper, so indeed its easy to create new money.

Not that gold has a massive magical intrinsic value. That was also arbitrary.

It is hard to mine and hard to find.

If you make a fresh piece of gold and show it to the world, you are proving that you have done some known — or at least bounded — amount of work.

In gold’s case, that work is gas, electricity, and human labor. If someone shows up with gold that cost less to produce, the price goes down.


> proving that you have done some known — or at least bounded — amount of work

Work for the sake of work is not valuable.

You could record video proving that you dug a hole 20 feet deep with your bare hands and then filled it up again.

That's a lot of work, but it wouldn't be valuable to anyone, except maybe as comedy.


The video wouldn't be valuable, because it's trivial to duplicate.

However, should it be impossible to copy videos and the only way to do a video would be to capture the events as they happen, then perhaps your video would have value.


I'm surprised there aren't a ton of NFTs for videos of people digging holes and filling them up, riffing on both "proof of work" and keynesian ideas.

Why do actual work when you can just sell somebody elses as your own?

The reasoning behind keynesian gold digging is that rich people will not accept that the government hands out money to poor people because that would threaten private businesses who are dependent on cheap labor. To make sure that the government money doesn't compete with private money you just force people to do worthless work so that working as a waiter for minimum wage is still more attractive than digging holes in summer heat. The entire point is that digging holes sucks. Meanwhile cryptocurrencies glorify digging holes.

Well cards against humanity did that and the hole was worth over 100k!

https://www.theguardian.com/technology/2016/nov/28/cards-aga...


And exactly that happened to aluminium. After its discovery its cost was bigger than gold. Until more effective ways to ectract it were discovered. That does not mean that aluminium is useless.

> If you make a fresh piece of gold and show it to the world, you are proving that you have done some known — or at least bounded — amount of work

Making origami pirate ships also requires a certain amount of work. That doesn’t give it value.


Much like Ethereum, gold has an actual use post discovery/creation but your origami crane does not (outside of artistic value and testing for replicants) - GP did not go into the details, but they chose an appropriate analogy - origami cranes, not so much. Fun trivia: NASA uses a bunch of gold https://spinoff.nasa.gov/spinoff1997/hm2.html

Value density is the differentiator. The amount of work required to produce a single ounce of gold is many orders of magnitude greater than the ancillary costs of storing or transporting that ounce.

Here's a couple of reasons why it probably wouldn't go this way:

1) Ethereum already has a market cap of $73B [0]. That's a lot of money.

2) Controlling 51% of Ethereum would probably cause the value of it to drop [1].

So you'd spend a lot of money to control Ethereum and then end up with something that's far less valuable than it was before you took control. Not really sure what you'd get out of doing that.

[0] https://en.ethereumworldnews.com/ethereums-market-cap-is-big...

[1] https://ethereum.org/en/developers/docs/consensus-mechanisms...


>2) Controlling 51% of Ethereum would probably cause the value of it to drop [1].

I think you're misinterpreting the paragraph. It's not that controlling 51% will cause the value to drop (it won't, see bitcoin miner control), it's that controlling 51% and trying to pull off an attack will cause it to drop.


> To do so, you'd need to control 51% of the staked ETH. Not only is this a lot of money but it would probably cause ETH's value to drop

To me "it" is pretty clearly referring to controlling 51% of staked ETH.

I don't know about the economics behind whether that would cause the value of ETH to decrease, but Bitcoin seems like a different situation altogether since miners don't control the the cryptocurrency itself.


And how does the ethereum network differentiate two people with different wallets and one person with two wallets? Short of attaching some sort of real world identity to ethereum wallets it's impossible to tell whether someone controls 51% of staked ETH because it's trivial to split that up.

The article is about wealth, not money supply. Those are completely different concept. There could theoretically be a lot of wealth and very little money (if no one wants to trade there isn't much needed) or not so much wealth and a lot of money (a lot of people need loans to trade and build wealth).

It's convenient to measure wealth in dollars in a "how much you could get if you still it" way and it's possible because dollars are very stable but there is very little reason for the amount of dollars circulating to represent existing wealth.


Yeah.

That's what they do. That's what inflation is. We work hard and save up $100,000, they (the 1%) turn that into $25,000 in 25 years.


Nobody forces you to hold cash for 25 years. In fact, you are given many incentives to invest it, inflation being just one.

This is true.

> why wouldn’t they just demand everyone else hand over their cash?

Because it's not in their best interest. If the 1% pulled something like that off, the price would drop a lot and therefore their ETH would be worth less.

It's one of the core pillars of any blockchain, that the incentives are aligned in a way so the best outcome for people is the one where the gain the most, so it forces them to go for that way.


Imagine if you owned a billion dollars, and that allowed you to say if someone spent 10 dollars at the gas station.

Are you suggesting censorship might be an issue?

can you tell us more? what are you refering to?

Nothing-at-stake is a solved problem in Ethereum's PoS.

The basic idea is that stakers' deposits act as security bonds. If a staker commits to two conflicting chains, any other staker can see that they did so, and get rewarded for publishing a proof of that. Then the cheating staker gets their stake destroyed on both chains.


There is a deeper problem with PoS, which is about where the value of the staked token comes from in the first place. PoW ties this to the burning of real-world value, specifically electricity which is about as close to distilled economic value as you can get. Ethereum is trying to bootstrap value with PoW and then switch, but I have strong doubts that this is a sustainable solution.

Coin value is not based on electricity usage in PoW. Due to difficulty adjustment, electricity usage is an effect of coin value, not a cause. If coin value goes up, mining becomes more profitable, more miners jump in, and electricity usage goes up. If coin value drops, the opposite happens.

Coin value is a social phenomenon anyway, so it’s kind of meaningless to assign cause and effect. My point was that electricity usage in PoW provides an external metric for assigning exchange value to the coin which is not self-referential, unlike in PoS.

It's the same when currencies around the world stopped using the gold standard and became floating across each other.

I'd say the value of currencies is that you have to pay your taxes in one that is legal tender. In that case, the value of Eth is that you have to pay transaction fees in Eth. You decided how valuable those transactions are.


Governments have a monopoly on issuing fiat currencies, but for PoS cryptocurrencies there is no enforced scarcity—any DApp that can run on Ethereum can easily run on any of an infinite number of Ethereum clones, so why bother using the expensive congested network?

I think you have the chain of causality wrong.

The Ethereum network is congested because it has users. Ethereum has the critical mass and first mover advantage.

The clones need to be sufficiently attractive (10x ?) to break that hold, it's not a technical problem but an economic, marketing and educational one.

Scarcity is unrelated to network congestion or usage.


When you sell your Bitcoin for Ethereum you have to pay taxes in dollars. The specific value is dependent on the ability to exchange it for goods and services but the fact that it will remain valuable (but not how valuable) in the future is secured by taxation. Who knows what is going to happen with Bitcoin? It may get replaced by Ethereum entirely.

> it sounds less a 51% attack and more like miners voting against something that isn't in their interest

We also used to call this situation a potential "fork" (as in, the thing with two prongs) before the word "fork" was somehow redefined to mean "protocol update everyone agrees on, with a linear history without any prongs".


Ethereum developers are hard forking Ethereum, but 51% of the hashpower disagrees and doesn't want to go with the hard fork.

Yup, it's a combination of new people not understanding it and media slander dirtying the word that has caused it to be avoided because it's gained a bad connotation.

It's still a fork in both cases. One path is taken by almost noone, but it's still an open possibility to keep it alive.

Yup. See: ETH Classic.

Precisely. Vitalik wants to fork ETH (as he's done before when they rolled back the DAO hack) to make a new version of ETH that is proof of stake.

The miners, as I've predicted here before, disagree, because this fork obliterates their entire business model. Shocking.


As an ETH user and holder (and former miner), I want Ethereum 2.0. Describing it as a fork is ridiculous. Proof of stake is the future and miners have known that for years. Proof of work is a dead end that ends with a Dyson sphere harvesting all power from the sun to process a few transactions.

If miners want to make another Ethereum Classic dead chain let them do so. The innovation, the users, and all the developers will be on Ethereum 2.0.


> ends with a Dyson sphere ...

Just because too much of a thing is bad doesn't mean the thing is bad in lower quantities.

Drinking ten liters of water in an hour is bad. That doesn't mean you shouldn't drink any water.


That's the plan for PoS, no? It's not that mining gets eliminated altogether, but doesn't play as much of a central role.

No, mining is gone in a proof of stake chain.

The point is that ever increasing hash power is a consequence of the design of the system.

This isn't strictly true.

The protocol ensures that there is on average a block produced every 10 minutes.

As hash rates increase, and blocks are found slightly faster, the difficulty is adjusted upwards to ensure that the 1 block per 10 minutes is maintained.

We've seen difficulty drop in the past, it doesn't necessarily rise forever. It only makes sense to increase when it's still profitable to mine at the current difficulty.

If the difficulty rises to a certain level and the price falls, and it becomes unprofitable to mine for some miners, they switch off their rigs and the difficulty adjusts downwards after a period of time to compensate.

Over the years we have seen the price rise and hash optimizations made, which have both driven the difficulty upwards.


It's every 15 seconds for Ethereum blocks.

https://ethereum.org/en/developers/docs/blocks/


It's not strictly true in the sense that if the price were to fall over long enough periods of time, you would expect the hash rate to eventually fall, too.

But that's not plausible in the scenario where the world's financial system eventually runs on a proof of work cryptocurrency.

Since all miners compete over the same finite profits, each miner individually has an incentive to increase their hash power and therefore power consumption.

Even if the price was on average constant, the game theory would predict a competition over finding the cheapest way to burn the maximum amount of power.

Empirically, there were some transient drops in hash rate for both bitcoin and ethereum, on top of a constant massive run up.


>Describing it as a fork is ridiculous

Why? It's a fork.

Monero has pre-planned hardforks every 6 months or so, is it ridiculous to describe them as forks?


ETH is a fork, ETC was the original chain. ETH 2.0 is a proposed fork.

Describing things accurately should be the norm.


Did Ethereum never have breaking updates before the ETC split? If no, it’s pretty disingenious to describe ETC as the “original” chain.

What are you talking about?

The fork that left ETC as the original chain was a rollback of the chain that destroyed the concept of its immutability for the purpose of fixing a massive financial mistake.

There were no other chains left as a result of such a fork. It is a fork, and ETC is the original chain. Those are facts.


ETC is not the original chain as the homestead hardfork predates it.

Which chain was left as the result of that fork? If the earlier chain is abandoned, then the new chain by default becomes the valid chain.

ETH2 is the ETH main roadmap, not a fork.

It's a fork. By definition.

It will be interesting to see how the situation develops if they really do attempt to fork and if normal users want to use ETH2. Miners could potentially want to keep the blockchain going and the value could be artificially high, but with transactions falling down and holders migrating, they couldn't keep it up forever... <insert "dis gon' be good" gif>

There will almost certainly be a split chain that continues to run on pow. Eventually it will die off, like Eth classic

The whole point of blockchains is that the incentives are supposed to be aligned between miners and users.

If this were obviously true, there wouldn't be a problem. I think a better formulation talks about distributed ledgers working better when the interests of users and miners are aligned.

And of course they never quite are (miners want profit, users want minimal transaction costs with high security).


You should think of miners as bodyguards. They aren't intended to be active participants on the network, they are intended to provide the service of securing the network and serving the interests of the users of the network.

If a group of bodyguards at a concert vote democratically and 51% of them decide the singer shouldn't be allowed to go on stage and sing (because of a grudge or whatever), is that a problem? Yes absolutely that's a problem, and probably all of them are going to get fired.

Same sort of idea here. If the miners aren't serving the best interests of the network, the network has no obligation to continue paying the miners tens of millions of dollars per day (no joke, that's how much miners on Ethereum make in revenue right now) to continue sticking around.


The difference is that a single bodyguard at a concert can quit or not, and likely won't (to pay rent). The Ethereum miners have unionized, however, so now you are negotiating with the miner unions to pay what they think is their "fair share."

These people are spending millions of dollars in electricity keeping things ticking away. If they stop, Ethereum's vested interest drops significantly. Since it is a fiat currency, less participants make it, unfortunately, less valuable.

Telling 60% of holders their currency (or income toward driving that currency) is not how you keep them on your side, just like old mining town scrip is only worthwhile if the mine works. The second the mine shuts down on a union strike, the scrip becomes paper.

On a personal note, I hope the miners get their due, because it was the initial philosophy of Ethereum. If they don't, I am curious to see how Ethereum moves w/r/t proof of stake vs proof of work guarantees. PoS seems at odds with the initial platform, and possibly long-term problematic for their "contracts-first" architecture.


>>The Ethereum miners have unionized, however, so now you are negotiating with the miner unions to pay what they think is their "fair share."

Unlike with employers and real world unions, the Ethereum network is not bound by labor laws to negotiate exclusively with unionized miners, or refrain from replacing them with non-unionized miners. Without those laws, unions are pretty powerless, which is why the late 19th century had such low unionization rates.

>>I hope the miners get their due, because it was the initial philosophy of Ethereum.

The initial plan of Ethereum was to launch with Proof of Work, and very quickly afterwards switch to Proof of Stake. Miners have already gotten much more time to earn from ETH issuance than was originally planned.


> The initial plan of Ethereum was to launch with Proof of Work, and very quickly afterwards switch to Proof of Stake

And that’s the problem... it’s a bait and switch, because the miners had to bear the capital costs of investing in mining rigs, which would suddenly lose a lot of value in a switch to PoS. I think this is the original sin of Ethereum, and the network will be forever plagued by conflict because of it.


Not really a bait of switch though since Ethereum has always been very clear that this is the plan. Anyone who bought a rig should have known that they had a limited investment horizon.

The miners do not give Ethereum its value; the market does.

It has no value without security and transactibility which is what the miners provide.

Not in proof of stake (which provides it through stakers instead), which is what this whole thing is about.

Well, this is about a 51% attack by the PoW miners and PoW is the law of the land. That’s why I replied in that way.

They are paid fairly in exchange for providing it. If the current set of miners decide that they don't like Ethereum anymore then those profits are sitting on the table for anyone to take.

You think that proof of work mining was the initial philosophy of Ethereum? It’s the exact opposite. Ethereum was always intended to be proof of stake, they just couldn’t get it shipped in time to launch, and then the schedule slipped a bunch more.

If the current group of Ethereum miners decide to stop mining, why wouldn't new parties come in to take the profits they are leaving behind?

It’s not like there’s a giant pool of mining hardware waiting in the wings to take over... I think we can assume that all hardware is always in use mining something as long as marginal revenue exceeds marginal cost.

Ethereum is typically mined on GPUs so I would argue there really is a giant pool of hardware waiting to take over. On Bitcoin where ASIC mining is common that is indeed a concern, but consider even then, each hardware owner has stronger incentives to just lie about participating in such a strike while keeping the increased profits for themselves.

A decentralized network doesn't care for vision, it functions as per what its participants want. What you are describing, is a problem in centralised network, which Ethereum is. So, you are technically right, but let's not confuse the interests of the creator is same as the interests of the users of the network.

Miners are not supposed to serve anyone but themselves. Everyone for themselves. A right system economically incentivize the right action by design, like in Bitcoin. Important to understand the first principles before judging any distributed system.


> A decentralized network doesn't care for vision

I'm not sure how this can be true as long as conditions are met:

1. original creator of decentralized network still exists

2. people still respect and give authority to creator

Bitcoin is visionless because it was theorized anonymously. Not so with Ethereum


No it's very much decentralized as the miners are threatening a fork. This is not unlike what Bitcoin went through in 2017 when it split between BTC and BCH. If it were centralized a fork wouldn't be possible.

The miners are mercenaries. They have no loyalty to the network and the network has no loyalty to them (hence the push for proof of stake).

For what it's worth, EIP-1559 wasn't Vitalik's idea, but the change is almost universally supported by the Ethereum application developers and users.

At any rate the sooner we get off proof of work the better. Users are spending $20M a day on transaction fees. Let's put that money back into the ETH community by switching to proof of stake and burning the transaction fees.


That bodyguard narrative is yours and I think it makes little sense. Hash power is required to form consensus. If anything, non-mining full nodes run by users would be the closest to “body guards”.

Miners would be the ones who settle and publish the lineup.


The point of the analogy is that they are being paid to provide a service, and if they have a disagreement about it, then their only choice is to forefit their profits and let someone else come in to extract them instead.

Tbh, I don't get your analogy, why should the miners be looked at as bodyguards? While I agree the miners are responsible for protecting the network, I don't think you can draw a distinction that easily between an eth holder vs a miner, because anyone can become a miner and anyone can become a holder and an entity can be both a miner and a holder. Everyone who participates in the eth network should have the power to vote in this blockchain, if its actually decentralized.

The problem here is with the design of eth, eth was a rushed blockchain from the start, now vitalik is trying to rush the release all of a sudden because the people managing his network are not happy with the up coming changes?

What the hell kind of decentralization is this if vitalik can escalate major decisions about network? Eth is not a decentralized project if one individual(or a few) can decide to go against 51% of the stakeholders of the network.


Miners don’t dictate protocol rules. Miners do one job - hash blocks. And they get rewarded for it.

Miners are only one participant in the ecosystem, there are also users, merchants and developers. Governance of any cryptocurrency is extremely touchy subject and one thing you don’t want to do is setting a precedent for making a controversial change. If you justify such change by “majority of miners want it” - you’re basically handing over the protocol to their hands. Nothing will prevent miners to adopt changes that eventually centralize currency control, increase rewards(inflation), etc.


>> Miners don’t dictate protocol rules. Miners do one job - hash blocks. And they get rewarded for it.

What? Not really. Miners do indeed dictate the protocol rules, its is the miners agreeing to following a certain version of the consensus algorithm that makes a blockchain do what it does. So they are partly responsible for more than just mining blocks. Like I said initially it is hard to say who the actual decision makers of the chain are because it is not defined properly by eth.

>>Miners are only one participant in the ecosystem, there are also users, merchants and developers.

Like I mentioned in my previous comment, my whole disagreement with the OP of this comment chain is, their analogy calling miners bodyguards only, my argument is that its hard to tell, because anyone can play any role in this network, on eth the incentives are set up in such a way that each actor can be multiple actors, and there isn't any clear distinction as to who gets to decide what on the network.

>>If you justify such change by “majority of miners want it” - you’re basically handing over the protocol to their hands. Nothing will prevent miners to adopt changes that eventually centralize currency control, increase rewards(inflation), etc.

I am not trying to justify it as majority miners want it, my criticism of the eth chain is they have done this sort of nonese in the past (remember the DAO hack where vitalik and co decided to serve their own interests and rolled back a blockchain? )

It clearly shows eth hasn't grown or come up with a solution as to how to govern their blockchain in a decentralized manner. At the moment, a small select group of people, rather than the majority of its stakeholders get to decide what happens to the blockchain, and that to me doesn't look like decentralization.

Whats to stop a powerful government forcing vitalik and co to implement or remove what they want in the future?


> What? Not really. Miners do indeed dictate the protocol rules, its is the miners agreeing to following a certain version of the consensus algorithm that makes a blockchain do what it does. So they are partly responsible for more than just mining blocks. Like I said initially it is hard to say who the actual decision makers of the chain are because it is not defined properly by eth.

Who dictates the rules is who controls the logic of the chain where the value resides. The miners can create their own fork, and Vitalik can create his own fork. I think we know where the value will go.

> Who dictates the rules is who controls the logic of the chain where the value resides. The miners can create their own fork, and Vitalik can create his own fork. I think we know where the value will go.

Vitalik only has this power because he appears to be choosing freely and the public agrees with him. If it appeared he was being forced to do something, or he did something that people didn't like, the value wouldn't follow him.

It is in this economic sense, and only this economic sense, that crypto is democratic. The only votes that matter are the dollars people trade to buy Ethereum.


> its is the miners agreeing to following a certain version of the consensus algorithm that makes a blockchain do what it does

You have cause and effect mixed up.

The miners that follow the same consensus rules that the merchants and exchanges do, get paid. The others do not.

A majority of miners following incompatible consensus would look like a huge drop off in mining capacity from the end users perspective. Similar things have happened multiple times.


There aren’t “merchants” in eth, really, there are dapps. Exchanges don’t care about protocols beyond send and receive. Still, I agree with your larger point: The value goes where the dapps go, and many will go to eth2. (But some will move to more stable and sustainable platforms.)

> But some will move to more stable and sustainable platforms.

This is why I refuse to hold ETH... when the financial big boys finally start moving to blockchain rails, they are going to look at ETH and think “WTF is this?” and pass it up for more principled designs like Cardano.


merchants and exchanges do not exist in blockchain terms, miners come first since they literally make the chain run. Everything flows from here.

> Governance of any cryptocurrency is extremely touchy subject and one thing you don’t want to do is setting a precedent for making a controversial change

This got me thinking. How likely is it that, if and when crypto grows into a significant financial sector, the actual government will take over the governance.

It seems likely that the public (or their representatives) will grow increasingly uneasy with such an important matter being handled by random internet people and foundations. Especially if these institutions are not willing to include themselves into other policy making processes.

I believe that sooner rather than later effective control will be wrestled away from people like Vitalik, through laws and regulations.


If a big government seized control of a coin's development, it would surely lose most of its value and users would likely just create a fork which is not under that government's control.

Miners would try to fork it.

Users would be overjoyed, and the user base would grow dramatically.

People aren't using bitcoin day-to-day because it lacks a government backing.


I will reply to this despite the fact that it's an obvious troll and has nothing to do with the topic at hand (this thread isn't even about Bitcoin).

People are actually using Bitcoin strictly because it lacks a government backing. For those users who want an asset that is government-backed, there are already lots of options and there is little need for cryptocurrency to try and compete in that space.


Venezuela has a government-backed cryptocurrency, the Petro, which failed spectacularly:

- https://en.wikipedia.org/wiki/Petro_(cryptocurrency).

In fact colleagues at Status went to Venezuela to check how payments worked there:

- https://www.figma.com/community/file/780788775246577039?prev...


The switch to PoS was known for years, miners know they’ll be phased out. The chain is decentralized, but that switch is not (it’s part of the initial chain dev/vision).

Decentralized blockchains are entirely opt-in. If you are a participant in a blockchain that isn't serving your needs, you can opt out of that blockchain and into a new blockchain.

A hard fork is essentially a large coordinated migration from one blockchain to a new blockchain, generally with a shared history.

Vitalik does not have the sole power to go against the stakeholders of the network and make massive changes to Ethereum. The power that Vitalik has is one of leadership. If he attempts to coordinate a mass migration from one blockchain (old Eth) to another (new Eth), Vitalik actually needs to convince everyone that this is a good idea. He can't force it to happen if people disagree that it's the right thing to do. If Vitalik launches a hardfork and 80% of the network upgrades, that definitionally means that Vitalik had the support of 80% of the network, otherwise they wouldn't have followed the upgrade.

Blockchains are about consent. If you don't like what's happening on a blockchain, make a change. A single person making a change in isolation isn't interesting, but a large group of people making a change together IS interesting, and can be successful even if that group is just a minority. You end up with two different networks, each capable of thriving on their own.

Miners depend on the users of a blockchain for revenue. If a blockchain has no users, there will be no fees, and no revenue. The reverse is not true. If the users determine that they are better off selecting a different set of miners to build and preserve consensus, they can fork the network in a way that changes who is able to mine effectively, but does not otherwise impact daily use of the blockchain.


My grandpa lived in a building with unnecessarily expensive local coal heating. They never plugged into a heat pipe from a nearby powerplant, because the neighbor, who operated the local boiler always vetoed the decision. Why? Because he was being payed for operating it.

This is pretty similar situation. Incentives of the miners are not aligned with those of the users.


Does something like delegated/nominated proof of stake solve this?

Delegated proof-of-stake is worse than Proof-of-Stake or Proof-of-Work from a decentralization perspective as the "delegators" can bribe their way to stay in power.

Some resources (they link to DPoS alternatives and discuss them):

- https://vitalik.ca/general/2016/12/29/pos_design.html

- https://vitalik.ca/general/2017/12/17/voting.html

- https://vitalik.ca/general/2018/03/28/plutocracy.html

- https://vitalik.ca/general/2019/04/03/collusion.html


The incentives of the miners are aligned with the users: The miners mine and then they get paid.

If the incumbent miners stop mining in protest of their future profits declining, then new miners will just come in to take the profits they are refusing to collect today. There is no incentive for them to conspire and every incentive for them to not conspire.


Everyone acts per their interest. Right and wrong is subjective.

Miners aren't stakeholders, they are hired to do one job and have no right to get any input. They're already coddled in ethereum. Everyone who actually is a stakeholder wants PoS. Ultimately eth buyers decide everything, as all money flows from them. Miners just mine what's profitable at the moment.

The only thing eth buyers (and sellers) are deciding is price. The connections between price and protocol are indirect and often complex, tenuous.

sorry but no one is hired. Mining is voluntary and based on incentives: you remove the incentives, miners stop mining.

it’s that simple.


> Everyone who actually is a stakeholder wants Proof of Stake

And everyone doing work wants Proof of Work


I’m tired of this argument that “this is not decentralized”. It is meaningfully decentralized in multiple ways:

* there is no legal entity representing the Ethereum blockchain because it is decentralized

* the correct chain is not dictated by a single person or group of people

What you are seeing is an implicit form of democracy or people acting in shared interests and in support of Ethereum’s original developer and “leader”. The moment vitalik loses it and the organization loses credibility, alternate plans will be made according to the common interests of the people who have a stake in the system. Perhaps there will be a fork, but in the end the greatest demand will be for the most universally accepted version and the other will whither into insignificance ala Ethereum classic.


51% hashpower != 51% of stakeholders, this is an important distinction that many comments about democracy are missing.

Hence GP talking about bodyguards at a concert-- who would typically be a minority of persons there.


Your analogy breaks down at "because of a grudge or whatever." The reason the miners are pissed is because ethereum is proposing to stop paying them. So what if the bouncers shut down the event because management told them they're not getting paid? Sounds pretty reasonable to me.

That's not true, they can still join a staking pool if they want to continue being "paid", so really it's just the way they're being paid that's changing.

Yes, the plan is to find a solution to make it work without the current bouncers

Not to find a solution, it was already found. The roadmap plan was always to switch to PoS, the miners and PoW were always temporary until it was developed / ready. Now the beacon chain (core of PoS) is live, with around $6 billion staked. Some of the miners (not all of them by far) are complaining they're no longer going to be needed, going so far as to make a show of "force". Others (like f2pool) have calmly been preparing with rest of Ethereum community, and are transitioning to staking themselves.

I believe your analogy is totally ill-structured and it misses the very main idea behind decentralization. There is no security guards, there is no concert-goers and there is no superstar singing at the stage. There is only MH/s and every single MH/s is equal to other one. That's the all idea about the system proposed and has been used.

Miners are wrong not because you believe different people should have different weighted power to change the system, they are wrong because the roadmap for PoS was well-established long long time ago giving them more than enough time to re-structure their revenue channels and invest accordingly. Therefore for them to say "we have been used. we invested a lot and now we are pushed aside" doesn't make any sense because the investment they had made until the roadmap for ETH2.0 was public has a ROI multiples times of what they invested already as of today.

For them to say this there are 2 options.

1) They were living in a cage and missed the plans for ETH2.0 and even after the roadmap is public they kept investing in mining equipment which will be useless soon. 2) They are just greedy and they just want to keep the same earnings although they have not got even a single argument for "why keeping the high fees is good for the ecosystem" apart from it means more money for them.


> more than enough time to re-structure their revenue channels and invest accordingly.

In other words, their business just goes away, but they can always start some other business?


In other words, they have been notified 2+ years ago that, their business -which has been very profitable so far- would go away because there is a better technology which can be used so that the network can still run with less environmental impact on earth. I wish every business was that lucky to be notified that early against the next technological breakthrough which deemed them obsolete.

mmh doesn’t make a lot of sense. Miners do actually provide the infrastructure for the network to function properly: no miners, no coins, no blocks, no transactions, no network.

I know it’s tempting to discard miners’ concerns, but it would be a great mistake. Miners need incentives, without incentives we’ll start allocating capital and resources somewhere else.

We are not greedy, not crazy, not confrontational: we are just rational.

If someone don’t like us, then could do without us.


As of 01 Dec 2020, there is already another Ethereum mainnet chain (Eth2 Phase 0) running in parallel with and dependent upon the Eth1 mainnet chain:

https://beaconcha.in/

https://beaconscan.com/

https://github.com/ethereum/eth2.0-specs/tree/dev/specs/phas...

Vitalik is proposing a role reversal to take place earlier than it was previously planned (not completely accurate in a technical sense re: previous plans, but effectively the same):

Eth1 mainnet will hand-off consensus responsibility to Eth2 mainnet (PoW -> PoS), while Eth1 nodes continue to "run the code" that executes smart contracts / processes transactions.

If the plan is put into motion, and as long as some miners / mining pools don't yank the plug on their mining nodes in the canonical Eth1 mainnet, then the canonical mainnet — per consensus among the Ethereum Foundation and aligned developers, Eth2 validator operators, orgs/companies/exchanges/etc — will transition suddenly from Eth1 (PoW) to Eth2 (PoS). And that will be the end of all mining on the canonical Ethereum mainnet.

Miners/pools who find it impractical or undesirable to reallocate resources from mining to staking may band together to continue running an alternate mainnet chain based on PoW (ETW?); market forces would then decide whether that chain is viable, as well deciding the fate of the evolved (PoS) Ethereum mainnet chain.


thanks for the info, I knew all of that. the problem here is not the expected switch to PoS, the problem is how do we go about reaching consensus about something in Ethereum. Is Vitalik calling the shots? I hope not. So if a small group of people is very determined and excited, doesn't mean shit to the ecosystem at large.

I am not saying this EIP, or PoS, are bad. It's the way you do it that matters.


Legal | privacy