Ethereum creator Vitalik Buterin mentions LessWrong, discusses the various camps and ideologies in Cryptocurrency development

Ander

Vitalik says cryptocurrency developers should "reach out to LessWrong more", in order to not be ignorant of advanced computer science and game theory topics.

https://blog.ethereum.org/2014/12/31/silos/

I think Vitalik raises several major important points, namely:

* Bitcoin's $600 million wasted on electricity yearly in order to secure the network is a huge problem. Various Proof of Stake algorithms are attempting to improve upon this. The ideal solution would be one which combines the low cost of the Proof of Stake algorithm, with the high security or Proof of Work. I not enough of an expert to be able to say which solution is best, but both the Ripple consensus algorithm and the Bitshares Delegated Proof of State algorithm look promising. I am interested to see what algorithm Vitalik will choose for Ethereum.

* ASIC miners are a problem due to the resulting centralization. They have also lead to increased centralization in Bitcoin, as the network is now increasingly controlled by a few large mining pools.

* Blockchain technologies have a great potential to change the world, and solve governmental and organizational problems that society is facing. Beyond simply revolutionizing money, blockchain technologies could also be used in the future to support prediction markets, voting/consensus building, exchanges, etc.

Vitalik says cryptocurrency developers should "reach out to LessWrong more", in order to not be ignorant of advanced computer science and game theory topics.

https://blog.ethereum.org/2014/12/31/silos/

I read this and was disappointed. Addressing your summary:

Proof of stake is broken in the same fundamental way as DRM: you can make it arbitrarily difficult to break but in practice not difficult enough to be infeasible. Once broken it becomes a worse version of proof of work, at best. Ripple consensus does not work as advertised.

ASICs help Bitcoin for much the same reasons evand mentioned.

I am not a bitcoin maximalist despite claims to the contrary. I co-created Freicoin for pete's sake.

Totally agree with the last point.

We're all on the same side... Can't we all get along without name calling or petty politics?

I'm curious, what exactly is the problem with the Ripple consensus algorithm? Why doesn't it work?

0Ander11y

While basic Proof of Stake may be 'broken', that does not necessarily mean that every variant of it is similarly broken. Several variations on proof of stake are more secure than the original. But it is possible for Proof of Stake to be useful even if its NOT as secure as Proof of Work, because it is MUCH less expensive. This means that if you have a blockchain application that doesnt need to be absolutely 100% ultra secure, but it needs to make a profit/spend less money securing the network, then Proof of Stake (or an improved variation) is probably better for that application than Proof of Work. For the ultimate store of value (Gold 2.0), Bitcoin with Proof of Work and the high level of security it provides is probably best. This is why Bitcoin has a place, and will survive, imo. For application that need slightly less security, Proof of Stake might be better. For example, lets say you want to run a prediction market, which is something that LessWrong seems to love. Its useful that your prediction market is not subject to 3rd party risk of a centralized source, and is instead secured by the blockchain. But maybe you dont need quite as much security as bitcoin provides. Maybe you need to run your prediction market at low cost, so that fees are low. Maybe a Proof of Stake variant is enough security, and provides better value. From what I've read, both Ethereum and BitShares will in the future allow you to run such a prediction market, and both will not require massive mining costs to secure the network. Regarding ASICs, the problem is that the large mining pools that have developed as a result of the need to be maximally efficient in bitcoin mining have resulted in increased centralizaiton. Right now if you controlled or compromised the top two mining pools, you could attack the network. There is much more centralization in bitcoin mining now in the ASIC era than there was several years ago.