I think the same analysis applies to Bitcoin in fact.
Funny that this upvoted article says much of what I said yesterday in a comment that was originally heavily downvoted, then went back:
The Ethereum solution to serve this demand, however, ironically has semi-centralized clusters. While it’s more decentralized than purely-centralized systems, it’s not really the level of decentralization that some were hoping for, and Buterin has admitted as such. These clusters of centralization serve as potential attack surfaces for governments to crack down on these methods of going around regulated and fully centralized and KYC-regulated firms.
One could almost say it’s a veneer of decentralization over a system that is actually quite centralized. There’s a step here towards decentralization, but it’s not actual decentralization in its current form.
I went further. Let me reproduce it here: No, blockchains are not the future, they are really the reason why one transaction can happen at a time in the whole world. Even Ethereum 2.0 will have shards which will do away with this anomaly. The only reason flash loans even work with no collateral is because you can be sure nothing else is running on the “world computer” while your transaction runs, so you can roll it back with no risk except gas fees.
Vitalik himself acknowledges this, the guy is quite honest and straightforward about its limitations:
Vitalik Buterin: Using Ethereum is expensive, and its blockchain is ‘almost full’ He also said blockchain's 'problem' is that every computer verifies every transaction
Actually blockchains are a first-generation technology that do global consensus for every block, which literally means all transactions in the world must go through one computer in the world (the miner) although it’s a different one each time. And the situation is actually worse, since you don’t know who would mine the next block in advance, every transaction must be sent to every potential miner! Imagine if BitTorrent had every computer store and seed every movie instead of using DHT.
The ability to send or loan arbitrarily large amounts for a fixed fee is a symptom of centralization. In a fully distributed network, transaction fees would have to be proportional to transaction size!
Almost every other protocol on the Internet does not have such bottlenecks in its design. No one asks how many emails or websites can be served per second. Blockchain is trying to secure every transaction using the entire network! That is why so much electricity is wasted just to do 7 transactions per second.
The next generation of crypto will actually be able to power payments using embarrasingly parallel architecture. Until then, we have blockchain.
Ethereum is nicknamed the “world computer” for a reason. Gas fees are super high for small transactions like paying for coffee or voting in a secure election. Just one app KryptoKitties can clog up the entire network.
As one example, we built Intercoin apps on top of Ethereum (https://intercoin.org/applications) but we are not going to wait around for Ethereum 2.0 - which is blockchain also. Kik Messenger and others have long gotten off. Ripple, MaidSAFE and Solana use different technologies.
You were downvoted because you are tooting your coin, your argument is weak, and your examples meaningless.
Your argument boils down to: not enough TPS, because bad technology. It's good enough for now and can always be changed later. Changing the distribution of the mempool to miners is trivial. But the game theory consequences (MEV for flash lending) are not. So no one wants to change what is not yet broken until the implications become clear.
> The ability to send or loan arbitrarily large amounts for a fixed fee is a symptom of centralization. In a fully distributed network, transaction fees would have to be proportional to transaction size
With UTXO, there is no correlation between amount and transaction size (cf "dust")
UTXO is just “unspent transaction outputs”. The reason Bitcoin and Ethereum can send transactions of any size for the same fee is because ALL transactions are secured by the entire network, regardless of their size. So they just charge the cost of what a consensus process would take (proof of work, nakamoto consensus in this case) for the entire network to agree on the linear order of that transaction in the sequence. It’s a brute force inefficient approach. Like transporting $1 in the same armored vehicle with a convoy as $1,000,000
You might be able to code something, but clearly have no idea what are talking about and what are desirable properties (which you call inefficient, which I call aligning incentives)
How is it good enough for now, when none of the tokens are actually usable for their intended purpose onchain - and no one uses decentralized crypto systems for everyday payments? Our society relies on centralized server farms run by huge states and corporations and we see the result. Suddenly people care about Big Tech because of Parler and WhatsApp but these are just two blips in a long line of consequences of living in a Feudal society.
WeChat for example is used every day in China and has replaced cash for millions of businesses, and now you have a centralized social credit system, controlled by the Party, and anyone can be blocked at any time, as can those who associate with them. And the digital dollar is coming soon to your neighborhood, which means one account at the central bank, and yes most people will sign up. Meanwhile you’re sitting around saying 10 transactions a second is good enough... this is how the centralized state and corporation wins. When cypherpunks do nothing.
Enjoy living in a world where Facebook and Amazon and your Federal government OWN your identity, data, transactions and let you live as a digital serf under strict supervision.
Can you elaborate? You do realis what everyday payments are, right? Food, clothing, transportation, and so on? Think WeChat in China. Where is this town where people are using Bitcoin on the daily for these things?
Funny that this upvoted article says much of what I said yesterday in a comment that was originally heavily downvoted, then went back:
The Ethereum solution to serve this demand, however, ironically has semi-centralized clusters. While it’s more decentralized than purely-centralized systems, it’s not really the level of decentralization that some were hoping for, and Buterin has admitted as such. These clusters of centralization serve as potential attack surfaces for governments to crack down on these methods of going around regulated and fully centralized and KYC-regulated firms.
One could almost say it’s a veneer of decentralization over a system that is actually quite centralized. There’s a step here towards decentralization, but it’s not actual decentralization in its current form.
I went further. Let me reproduce it here: No, blockchains are not the future, they are really the reason why one transaction can happen at a time in the whole world. Even Ethereum 2.0 will have shards which will do away with this anomaly. The only reason flash loans even work with no collateral is because you can be sure nothing else is running on the “world computer” while your transaction runs, so you can roll it back with no risk except gas fees. Vitalik himself acknowledges this, the guy is quite honest and straightforward about its limitations:
Vitalik Buterin: Using Ethereum is expensive, and its blockchain is ‘almost full’ He also said blockchain's 'problem' is that every computer verifies every transaction
Actually blockchains are a first-generation technology that do global consensus for every block, which literally means all transactions in the world must go through one computer in the world (the miner) although it’s a different one each time. And the situation is actually worse, since you don’t know who would mine the next block in advance, every transaction must be sent to every potential miner! Imagine if BitTorrent had every computer store and seed every movie instead of using DHT.
The ability to send or loan arbitrarily large amounts for a fixed fee is a symptom of centralization. In a fully distributed network, transaction fees would have to be proportional to transaction size!
Almost every other protocol on the Internet does not have such bottlenecks in its design. No one asks how many emails or websites can be served per second. Blockchain is trying to secure every transaction using the entire network! That is why so much electricity is wasted just to do 7 transactions per second. The next generation of crypto will actually be able to power payments using embarrasingly parallel architecture. Until then, we have blockchain. Ethereum is nicknamed the “world computer” for a reason. Gas fees are super high for small transactions like paying for coffee or voting in a secure election. Just one app KryptoKitties can clog up the entire network.
As one example, we built Intercoin apps on top of Ethereum (https://intercoin.org/applications) but we are not going to wait around for Ethereum 2.0 - which is blockchain also. Kik Messenger and others have long gotten off. Ripple, MaidSAFE and Solana use different technologies.