rei
3972
(Cough)
I predict more energy will be expended
sharaleo
3973
I hope it’s a fucking disaster, so another nail gets driven into the cryptocoffin.
Tim_N
3974
Haha, the comic isn’t wrong!
Ethereum ‘Classic’ (proof of work of course) has seen an uptick in popularity since a firm date was given to the Ethereum merge. Moreover, some people are also planning Ethereum POW which is a fork of Ethereum just before the merge and will continue using the proof-of-work mechanism.
JoshL
3975
I know a bit about how cryptocurrency works, but I have no idea how this works. I mean, the entire point of cryptocurrency is to solve the doible-spend problem, so to then go and say, “well, we’re just going to make a copy of all the money. Now you have all the money you had before, and an identical copy of the money over here” is just boggling.
I mean, I realize it’s not complicated technically, you just duplicate the chain and start adding different blocks. But how it works economically is a mystery. How could anyone assign value to all this new money? And it’s happened before! (Ethereum classic, as you mentioned)
Whoever is willing to exchange it sets the value, I imagine. Money out of someone’s liabilities, as long as they want to, is nothing new, right?
Anyway, the switch means those with the most will profit the most through the various economies of scale. I’d say that goes against the demand made of quick high profit grift, and thus failing by succeeding (by people leaving), but who knows how long any of this will keep going.
Tim_N
3977
So when a fork of a blockchain is made, the ledger can get reset or the ledger can be copied over from a ‘snapshot’ of whenever the fork was made. The latter case usually means the forked crypto has much more supply in a more widely distributed number of people than the former (when a ledger starts from scratch, usually the creators are the only ones who start with tokens or else they sold them prior to the start of the blockchain in a ‘private sale’).
Price is supply vs. demand as we all know, so a forked blockchain who uses a snapshot of the ledger needs immediate demand otherwise the price very quickly or immediately stabilises around zero as people holding the original currency tries to sell the forked currency.
Ethereum classic has a complicated history as ETH early on completely reset their blockchain to undo people who stole tokens from them, when they made a new ETH they carried over the original record in ETH classic. That has been chugging along because of diehards and weirdos and whatnot, but getting renewed attention now that ETH is going to PoS.
Tim_N
3978
To be fair, this is how all normal currencies coupled with traditional finance work right now. In fact normal currencies are probably worse, as I believe larger account balances get a higher rate of return on average.
It just begs the question what is the point of any of this? The merge will remove any shred of decentralisation crypto ever had.
So it’s really doubling the cash stacks but whether the value changes depends on an arbitrary value assigned by the market on those stacks?
Sounds like double the dumpster fire except the new fire requires less energy.
Tim_N
3980
I am not sure what you mean, what is the arbitrary value?
Forking with a snapshot of the ledger is not like doubling the cash stacks, it’s like copy-pasting the cash stacks but then putting them in another room, assigning them to the same owners, but putting a small red dot in the corner of all the notes to distinguish them.
As soon as you do this, everyone will start taking their notes with the red dot on them and try to find someone to sell them to. Whether they are able to find anyone depends on how good the creators were in marketing the fork such that people are price speculating that it will go to the moon. 99.999999% of the time it doesn’t work and the price instantly goes to zero and the forked blockchain dies. For some reason, people don’t often like to buy useless objects from people who were gifted the object for free for no reason. This is why most forks (say, Litecoin forked from bitcoin) reset the ledger to be a clean slate.
I suspect ETH POW is just a scam to try and get rubes to buy in before ETH whales or the creators dump all their ETH POW on everyone’s heads.
Tim_N
3981
This is an accurate description of Proof of Stake.
Sorry if I was sounding flippant but what I meant by arbitrary value is really the entirely consumer driven value of cryptocurrencies. There is no absolute driver for the new stack to be worth the same, more or less than the original ie it is also possible for the new POS stack to be worth nothing if no one wants to buy POS eth.
Tim_N
3983
What you might be underappreciating is that PoS ETH is an official merge, the marketing engine and ‘use cases’ (NFT scams on OpenSea, token scams on uniswap, etc.) will in theory work as normal after the move to PoS, so I imagine there’ll still be similar levels of demand. The price will likely be volatile after the merge. A cryptocurrency that does nothing will be worth nothing if no one wants to buy that cryptocurrency, that’s universally true.
According to Google, 2.5 hours till the merge!
If anyone is considering it, think very carefully before buying ETH. Even if the merge is successful, there are plenty of good arguments that the price of ETH will go down in the short and medium term. For instance, there are alot of people who have been staking ETH in a lock system that will open up soon after the merge as far as I know (something called the shanghai update). Many of these people staked their ETH a year or more ago, and could be waiting to sell.
Right now, which can be changed again. Admittedly, in ways that will probably be more and more not nice, but there are paths. With cryptocurrencies, the only way is if people stop using them so the investment goes to zero, without anyone ceding to temptation of an opportunity.
Tim_N
3985
And ~78 terawatt hours of the world’s 23,900 terawatt hours of energy consumption per year suddenly disappears and nothing was lost.
I certainly appreciate learning a little more about how this would go so thank you.
As much as I do not believe in cryptocurrencies having value, taking power consumption out of their list of ills is a huge step in the right direction.
Thrag
3987
PoS is a very good thing for civilization. Not as good are society at large realizing the true nature of crypto as it exists and it subsequently completely dying, but it’s something.
Plus the hilarity of how it completes the arc of crypto being “distribution! everyone can mine! power to the people!” to “yeah, let’s just let whales control the whole thing and take the lion’s share of the profits”.
JoshL
3988
Do I need to subscribe to your newsletter? ETH is now down 15% in a week. (note: I have never owned any cryptocurrency).
Uncertainty breeds asset devaluation; it’s just bigger when there’s nothing behind it.
I don’t think you need a newsletter for that one.
Yeah, it’s not only when there’s nothing behind it, wait till Elon (or other personality) randomly tweets something about it and the crypto bros lose their collective minds (buying or selling).
jpinard
3991
Can bitcoin do what Ethereum did?
