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Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum.

I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of the good ones.

What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.

How about being able to raise money for a project, and whitelist investors, without people having to trust you to send them the securities after they send you the money, and them seeing exactly what is being done with dilution or whatever instead of having to trust?

Or having a fair pricing model as investors buy in using a bonding curve, eliminating priced rounds and other crap, pg said that’s the “future” - Ethereum makes it possible.

All this is only possible because enough gateways trade ETH that it can now be considered money. And it can be used as an input to tons of cool smart contract things. You couldn’t do this stuff 10 years ago, at best you’d have some sorta hookup to Stripe API and banks.

Explain the mechanism by which people who invest can exercise their rights as stakeholders, receive dividends etc? Who's to enforce they actually own anything? What's stopping this project from taking all the money and producing nothing (which is exactly what happened with pretty much every ICO out there)?

What’s stopping a YC startup from going bankrupt after having disclosed tons of risks in a PPM? At least here we know exactly how much was invested.

Why does everything have to be about voting and receiving dividends?

Amazon’s shareholders don’t do either one but value the shares greatly.

And dividends can be programmed into the smart contracts too. Want them in DAI, USDT, ETH? You can! One way would be for the company to put them into a new smart contract that refers to the other smart contract which stores who owns what share, at that particular time. You could also program tons of fancy rules like a UBI from the company or whatever. They would also be distributed fairly.

Explain the mechanism. How do I know this organization made this much money and that the amount I'm being paid is fair in regards to their profits? How can this code track all the money the company is making? It's not like they're being paid with their tokens.

And for minority of projects where indeed they're expected to be paid using their own token, how do I know the company owners don't run away with all the money they raised? Because this is exactly what happened with 99.99% of ICOs created on Ethereum. Now, of course scams happen in the traditional financial system too, but not to the same extent, because there's an enforcement mechanism in place. So, following your example, what stops a YC company from declaring bankruptcy and spending all the money on things founders want for themselves? Well, an investigation may be launched: founders are known, they can be found, prosecuted and sentenced. With tokens issued online, where you may not even have a company registered or have a company registered in some obscure jurisdiction, there is very little incentive NOT to steal the money. And, once again, that's exactly what happened during the ICO craze, which Ethereum is directly responsible for. A lot of people lost a lot of money funding scammers - and nobody blinks an eye!

I don't argue that everything has to exist within the traditional financial system. On the contrary. But in order to provide real value and allow investors to have some level of certainty that at least their money won't be outright stolen, the solution MUST include an enforcement or incentive mechanism strong enough to deter scammers.

valid points, however, do you think it's impossible to have such a 100% on-chain business ?

As far as I understand it, all that matters is the logic of the smart contract code, and possession of private keys. Humans are removed completely from the process. If you own the private key involved in a transaction, then that is the guarantee you’re looking for. All that’s left is to examine the smart contract code in order to figure out what sort of contract to which you’re now a cryptographically-guaranteed party.

No person enforces anything. Only the math does. And I think that’s entirely the point.

> Humans are removed completely from the process

Do you have an example of an organization that works this way, 100% automated? It's hard to think of a system that can be 100% foolproof, there is always someone somewhere that has to trigger something manually, and that 's the weak spot.

Nope, I don’t. And I’m not a particular proponent of this approach. This is just how I understand it.

I think the ultimate goal is to have smart contracts which don’t require any of the human intervention you’re mentioning. How that’ll be possible remains to be seen...

> That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.

I thought the point of this would be that the contract code, that defines organization would automatically pay you back in whatever. No need in regulators with laws, that random judge can overturn any day. And that is the whole point of it...

USDC is not a scam, and it’s on Ethereum. You are too biased, it’s off putting.

>That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents?

...the smart contract? Maker pays interest (via buy and burn). It's really not that different than a corporate board agreeing to pay dividends. We don't need a state regulator to pay ourselves, do we?

"a blockchain for general purpose computing" is precisely the problem. Nobody wanted or needed that. Bitcoin was created as digital money. A bunch of people mistakenly thought that the best "feature" of Bitcoin was its programmability, and doubled down on that by allowing arbitrary computations in transactions, which just opened up the Pandora's Box of attack vectors.

And you can't really say "Ethereum is one of the good ones" if it literally enabled the wholesale defrauding of billions of dollars from ill-informed speculators by providing the platform for those fraudulent ICOs.

>Nobody wanted or needed that.

I'm sure everybody just wanted a faster horse, but I certainly do have some good uses for distributed computing (with a larger bandwidth than Ethereum can provide, though). And any new tech can be seen as the "Pandora's Box of attack vectors" and a fraud platform, including the internet itself.

Not every experiment is a scam.

Afraid of a little competition? This is the paradox of the bitcoin maximalist: The 'free market' is good but don't try to compete with my 'one true asset'!

I heard about Bitcoin in 2010 a few days before MagicalTux announced Mt. Gox on the Bitcoin forums. Once graphic card mining became a thing I quickly started a small farm while in school.

When I first understood PoW I immediately knew PoW must die for cryptocurrency to become sustainable. It is the single largest flaw with contemporary cryptocurrency. Bitcoin has become stale and unwilling to progress, instead choosing to retreat in maximalist dogma. This prevents bitcoin from solving some of these obvious technical issues. The block size debates is far more than enough to turn me away.

For me the ethereum community has been a breath of fresh air and is far more progressive than those left in the bitcoin world. After seeing the ethereum community gracefully handle the 2016 DOA hack with a hard fork, I was sold. Ethereum's community understood technology serves us, not the other way around while acknowledging and actively working toward solving problems bitcoiners often simply ignore.

I believe in the human spirit of solving problems through technology. Ethereum is not a panacea, but the ethereum project tries to remember that progressive spirit.

Disclaimer: I hold positions in both, more in Ethereum.

1. Both are very complex. How did you compare?

2. "Constantly coming up with new terms and features and "new hot thing"" - this is a fact. "to try and pump the price" - this is a speculation. Even if it is not - I don't know why is it necessarily bad. That is one of the major goals of every company applying to YC, or doing any kind of innovation in business.

3. Technically, all the use cases for Bitcoin are the same as the use cases for Ethereum, AFAIK.

4. It has the same proof of work system with miners, so in the end Buterin has the same 0 direct control over it, as Nakamoto would over Bitcoin. True, a lot of influence.

5. "97.3% of all statistics are made up."

Obviously all cryptocurrencies are a scam.

Previously: https://news.ycombinator.com/item?id=2107770

https://news.ycombinator.com/item?id=21145147

Except Bitcoin. And the market justly reflects it via price.

Erm, no, check my links.

Remember: Markets can stay irrational longer than you can stay solvent.

Okay, now I think your comments endlessly calling ethereum a scam are starting to make sense. It seems like you're a bitcoin maximalist, no?

Ethereum has the first ever decentralized banking system based on on-chain smart contracts. I'm earning high interest on usd stablecoins for several months now. The interest rate was double digit until very recently, but even 5% is still very good for a completely anonymous system. DAI itself is a decentralized usd stablecoin, meaning it can't be confiscated by the issuer. It's overcollateralized by locked eth. Anyone can generate new dai after locking eth. Those two together make the previously impossible possible - an Iranian or Venezuelan citizen earning interest on a USD-denominated savings. This is all called DeFi. Once mortgages and other external assets are tokenized, it's going to allow fully decentralized mortgages.

https://trade.dydx.exchange/markets

https://app.compound.finance/

>Bitcoin solves a real problem: it allows people to escape and bypass existing financial system and continue doing business, save and not be subject to policies outside of their control. It is black market money which governments hate and will try to outlaw in some way.

Bitcoin completely failed, as majority of its hashpower is located in China. The Chinese government can tell miners to censor transactions tomorrow and to orphan blocks from non-compliant miners and it would happen. There's no defense against this. Changing PoW via a hard fork would result in a gpu-secured network that's even more vulnerable than an asic-based one, as it's easier to a large entity to rent or buy enough gpus.

PoS is the only defense against such centralization. Most hashpower is going to be an impossible to hide industrial facilities, while PoS only needs an internet connection, much harder to catch. More importantly, even if a determined attacker acquires a very big fraction of the tokens and attacks the network, a hard fork can just delete the hostile accounts. One a gpu based PoW network is attacked there's no solution, as it's not possible to make the attacker's mining hardware ineffective via a hard fork.

Bitcoin is traceable.

Bitcoin is slow.

There are better alternatives out there.

Let’s be clear about the problem with ETH. It has a 60% pre-mine, and the next 35% of the mining was done by just a small subset of the same people. Only 5% of the supply was ever “up for grabs”. A currency requires highly-decentralized float. ETH will always be speculative.

Other than that (fatal problem), its a great technical project.