It is true that Ethereum has a more powerful scripting language. The real question, however, is if that feature has practical value.
I think the jury is still out on that question but I personally lean towards no. If and when there are profitable applications of this technology, ones that wouldn't have been possible without ethereum scripts then I will be glad to change my mind.
I agree that it is still an open question whether the EVM will have profitable applications. I lean towards yes.
It is (in my opinion) no question that the feature has theoretical value. I think the only question is whether that feature's value will outweigh the considerable costs of using a blockchain.
I think there are definitely cases where it will be profitable, but think blockchain tech in general is probably overhyped right now.
I would lean towards no but perhaps I will be surprised.
We have had about a year of dapp development gone by so far and there isn't a single dapp with any meaningful userbase.
I think if another year goes by and we are 2 years in the dapp development cycle and there is no successful dapp that will probably mean it's not a successful model.
I am also concerned about these dapps having insane valuations and raising huge sums of money just by releasing a vague whitepaper, without having a working product with users.
Normal startups would usually start with a seed round of hundreds of thousands USD but raising 50 millions or more is just obscene, that's a series B or C round for a fast growing startup with tens of millions real users and hundreds of employees usually.
I am interested how this whole situation plays out but remain skeptical for now.
I agree with you. I wonder if the best use case for ethereum scripts is actually with private block chains. For private chains the trust problem with external input to the scripts (which is needed for any serious dapp) would be minimized.
I've seen so many technologies hyped, fail to live up to expectations, and then disappear. Etheruem has some interesting ideas, I'm worried that they have grossly over-stated its potential and it will soon fall off the hype cliff.
I've been looking into this question. Szabo first proposed "smart contracts" in 1994, but Ethereum is basically the first practical smart contracts platform ever - the first one that people actually use a whole lot.
(You can squint at things and say "well that's a bit like a smart contract", but that's retrospectively applying a label - like calling Git a "blockchain". I'm speaking of things that were expressly labeled "smart contracts".)
Too bad it's not the first secure smart-contract platform; that honor probably goes to the folks who developed Joule, E, etc. in the mid-90s. Szabo and his contemporaries were steeped in capability theory, but Ethereum glossed over all of that in favor of hype and cash.
Sorry for a stupid question but I have to ask. Why everyone is so desperate to start a company and locate it physically in the US?
Is it just because of VC money? Wouldn't any safe place with good laws and easy immigration policy do? I don't take seriously Blockchain projects (and consider most of them blatant scam) and they are relatively small now. But longterm can this model solve the part about VC money?
I'd wager it's the pre-existing culture of Silicon Valley that attracts startups. Kind of like a tech Mecca, it's got a magnetic pull based on "if you want to succeed you need to be based here". With VCs etc operating out of there it does actually become a self-fulfilling prophecy.
As to the blockchain and ICO model, the problem is the current lack of regulation, leaving the burden of research to the buyer. I expect this will change relatively soon (places like New York, India and Singapore are already trying to introduce legislation regarding this) and then we might see more of an uptick, but you still need to get people out of the almost 40 year old mindset now that "Silicon Valley is where startups have to be to make it big".
>> There already exists a common currency through which we can trade. It's called ether
> Exactly. For every ICO that pops up, ask does this use case require a special token?
Well, creators of Ether have already got their share, didn't they? What should be the motivation of "dApp" developers in your opinion if they can't earn the way Ether developers did? Do you expect them to use Ethereum for the love of humanity? Because, you don't really need Ethereum to create decentralized applications. There were decentralized (p2p) forums way before the crypto movements. There is a decentralized (p2p) search engine that works just fine without Ethereum. If not ICO, why would I pay the Ethereum network to deploy my contract, develop an app, promote it, and then convince my users that they should pay the network to use my app, too (assuming that I hold 0.0000 of Ether and don't care about the rise of its price)?
> If not ICO, why would I pay the Ethereum network to deploy my contract, develop an app, promote it, and then convince my users that they should pay the network to use my app, too (assuming that I hold 0.0000 of Ether and don't care about the rise of its price)?
If you want to enforce the same properties that the Ethereum network can, but you don't want to use anything associated with the Ethereum network, then you need to write something similar. And it turns out this takes work.
So you could either:
(1) write your own separate distributed cryptocurrency system, which is not exactly a "crush some Red Bull and hack it in a weekend" project; or
(2) use Ethereum, which already exists.
As you don't have to do it yourself but you still benefit from it, some people like (2) instead of (1).
>> write your own separate distributed cryptocurrency system
You don't need "cryptocurrency system" for most of the cases, do you? E.g. you don't need to solve double spending problem if all you want is a decentralized forum / messaging app / video chat. I'm not a decentralization expert but it seems to me, DHT has worked so far. And its advantage over Ethereum is that users don't have to buy some currency and pay for every message. They subscribe to the content they like and support it by hosting it. It's easy as that.
You need Ethereum if you want an easy ICO, but if it's a bad thing now, then I don't know why would anybody use it.
> If you want to enforce the same properties that the Ethereum network can, but you don't want to use anything associated with the Ethereum network, then you need to write something similar. And it turns out this takes work.
I fail to see the reasoning behind why it takes work, or considerably more work to just write a new cryptocurrency from scratch. Basically you can just fork bitcoin or any existing cryptocurrency code, and do the changes you want to do.
In fact, as far as I understand, many organisations are for example taking ethereum code, and then just running private version of it, with their own token & mining.
The actual reason to run your ICO on ethereum network is that you get the easy money from the ethereum investors, who have gotten ridiculous gains from the ether price appreciation and are spending it accordingly. At some point the stupid money will run out.
Yeah, just $30 million for development plus 12 million of ETH which is in current price like what $4.5 billion?
I'm against of this kind of taxes. But if this is the way it works in crypto world, why should it be OK for some and not-OK for others?
Sure, but Ethereum is a tool. An ICO is the result of a process.
My thesis is that many companies, large and small, could benefit from an ICO...and that the majority of these know little about ICOs, Ethereum, or the relevant government regulations.
The newco would present the following offer to the prospective customer: --We will ready you for a legal ICO within xx weeks. To do this, we will help you define the unit-of-value for your token and then put all systems, paperwork, and processes in place for the ICO. In return, we will receive coins worth nn% of the ICO as a success fee.--
This is a novel variation of an investment-banker play. Over time, large parts of the process could be systematized in software. Much of the ICO scene is scary and wild. [0] Pathfinders might be valued in this wilderness.
The part about the private messages and huge media files is not clear. If I want to share some message with my friends only should I encrypt the message using their public keys and publish the result on blockchain? Would those be $number_of_friends messages or is there a way to publish it just once? How expensive that would be? Should I use IPFS for media files? Has anybody ever implemented these parts in practice?
How can I convince people to use my Facebook killer app instead of Facebook if they have to pay for every action (update profile, send message, post something, etc.), the price is not clear in advance (who knows how much "gas" every action would cost), and the process of publishing is not instant (IIRC Facebook has 2 billions of active users, can Ethereum handle that scale? It's supposed to be used by thousands of different projects, right?).
What's sidechain? Is it something I have to develop myself (i.e. something Ethereum does not provide out of the box)? If that's the case why do I need Ethereum at all?
Using that list, Cuba and North Korea immediately follow Bitcoin in energy consumption. Cuba or North Korea alone could never hope to gain control of the network: they could not supply enough power even if they redirected everything to malicious Bitcoin mining rigs. More realistically, even a country like Saudi Arabia (with a reported 272TWh) could not control the Bitcoin network in the long term--"wasting" 5.5% of your national energy consumption is not sustainable.
This "waste" is actually a kind of security all its own.
Comparing finance's shares of GDP to bitcoin hashing power is useless. The power used for hashing is at best a lower bound on how much a bitcoin based finance system would need to run.
(Eg even with bitcoins, you'd still have essentially the same stock market. You might be trading coloured coins on the blockchain, but people would still need to work to raise capital etc.)
The hashing power creates trust in settlement. Much of the financial industry is also about trusted settlement through other means. They are in fact quite comparable in that sense.
You are right that the hashing power basically produces trust in settlement.
I guess where we disagree is in how much of a proportion effort in finance is spent on producing that kind of trust vs other activities (like eg capital allocation, or hunting for arbitrage activities etc).
Do you think they had non-speculative use cases in mind when creating Ethereum? I don't think so. There are way better ways to create decentralized applications. Without the coins part.
I don't think that is true. You can absolutely reuse BTC for your so called "smart contracts".