Ethereum & Peershare

General
1

I went to a talk on Monday, hosted by London Coinscrum, at which there was a speaker from Ethereum

As I understand it, Ethereum seeks to be an operating platform – instead of having addresses for sending and receiving coins (like Bitcoin, Peercoin and other cryptos), its addresses can have codes attached. These codes can perform “contracts” that represent functions for assets and identities, such as derivatives, property, insurance, and shares

A practical example is that a crop farmer can link his insurance payment to a data feed at the weather authority; in the event of a drought, as measured by the data feed, the code triggers his insurance payment automatically

I wonder whether Ethereum is intended to perform, in a wider way, is what we want Peershare to do for stocks and shares. If so, is Ethereum competition for Peershare?

2

The Ethereum whitepaper only mentions equity based organizations that distribute dividends by proposing an alternative type of organization where each shareholder or member has exactly one share or vote, like a democracy on a blockchain. So, equity based organizations that distribute dividends are not a market they are trying to provide solutions for. While the Ethereum architecture can probably be extended to offer functionality that resembles Peershares in some ways, it would do so sub-optimally for the following reasons:

  1. Ethers would have to be purchased to represent shares, which cost money. Peershares are free to the issuing entity.
  2. Perhaps the most challenging problem Ethereum is facing is scalability. Trying to put so many disparate applications on a single blockchain suggests that competition for block space could be quite high, meaning high transaction fees. Where Peershare uses a dedicated blockchain for each equity, this won’t be a problem.
  3. Ethereum is a proof of work network, which means the network is very expensive. Peershare networks will be cheap to maintain, since they are pure proof of stake.

I would speculate that the relationship between Ethereum and Peershare (should they both prove to be successful) will be synergistic in nature. A person or business that is drawn in to the cryptoeconomy use either Peershare or Ethereum will find themselves with the skills, knowledge and inclination to use the other system. A cryptoeconomy that consists of commodities, flexible contracts and equities will attract a much larger user base than a cryptoeconomy with just commodities and equities.

So, I am very eager to see the Ethereum team succeed. They have assembled highly skilled people but their project is very ambitious. We will see what becomes of it, but it will add tremendous strength to the cryptoeconomy if they can succeed.

3

I am concerned that my previous post might lead people to invest in Ethereum. That was not my intent. While it is possible that Ethereum will make people money, it has been noted that the business model is such that the organizers will win big (with the initial funding) regardless of whether Ethereum is successful. Some have said that the leaders of Ethereum should have more at stake.

The model we are using in Peershare is quite different. The seed investor has 200 BTC and 60.000 PPC at stake, while at this point no one else has risk. Only when we establish a functional system with proven success will we invite others to risk their funds in exchange for potential gains. In our case, selling shares will not only provide additional funding, but is essential to creating a robust network in terms of decentralizing it.

4

As Jordan said, the what I called nested blockchain model has way more flexibility going forward and when based on Peercoin’s model, it will be cheaper to run than Ethereum. I was quiet dissapointed in Ethereum when I learned that they are using PoW for Ethers (expensive) and everything from same blockchain creating either a bloated blockchain or a very high transaction fee.

What I like to see is that Peercoin network provides better ways for Peershares model. E.g. api’s but also a model where the nested blockchain (or child blockchain) would be able to derive its strength directly from the mother. E.g. the ability to create PoS/PoW blocks with the same coins. This would reduce the issue with relatively weak child’s which need a lot of PoS/PoW work to strengthen on its own especially if you want to maintain a distributed and trusted blockchain.

Edit:
Child blockchains can be easily created by forking, so the model I describe is basically controlled forking. To provide the new fork with some edge, some enhancements could be made to tailor it to its purpose but maintaining the mother’sl PoS properties utilising the ability to PoS on two (or more) blockchains at once. This model would also solve the problem of creating a new blockchain and issuance and distribution of coins (depending on functionality required this might or might not be an advantage)

5

Bitcoin is now moving to allow more metadata to be embedded into the blockchain, for example for top-layer protocols such as MasterCoin, Colored Coins, etc. I wonder if this is something that Sunny is also considering going forward and/or if you see technical obstacles for that.

6

PeerCoin provides a clean way to store large value,

Etherium seems to be like DHTML+servlet allowing web 2.0/3.0m but with cost to execute and do stuff, execute contracts.

I think PeerCoin will be dedicated store of value with Peershare advantages.

the risks in the etherirum language may make it less attractive for large value store

7

I can’t speak on the technical side of Ethereum, but I will speak my opinion as best I can :slight_smile:

First and foremost. I say nay to Ethereum. I read through the white paper, I watched the videos, I pawed through their available forums. This is one of those things I personally have a, “sick to my stomach” feel about. I don’t like the sound of it. There seem to be flags waving that just say, “this is a bad idea”. Not limited to just the crowd funding and as of current - (apparently) no proper paper work. Near 100% risk to early funders, no real risk for the Dev’s. If it tanks right out of the gate they potentially retire millionaires immediately. I know any of these points could be argued, but I am not here for that. Just trying to take what I’ve read and form some logical thoughts about this. I hate HATE HATE hype trains. People get so excited and they don’t watch for any signs.

Other points… They keep speaking towards anonymity and the near untraceable. How does this help build on Crypto’s future? If we want to integrate local shops, small stores, hell… Lets shoot bigger, Target, Walmart, the big guys that move around lots of money. Obviously full transparency is part of Crypto, security has to be another part, but if we use a Cloak and Dagger system, who the hell would want to be a part of it? This has GOT to be completely customer friendly, it has to be secure, it has to create/complete transactions quickly. I’m not a programmer, I can’t even read the source code without questioning my sanity, so this is laid out like a potential customer/buyer might see this when being told about it. In the short term, maybe Ethereum is super fast/efficient, what about down the road? A single block chain. The “potential” to use shares/votes to ‘nudge’ the chain in specific directions. What about down the road? That chain may start as a tiny dot in space and time, but it will grow, and grow like a nasty, nasty cancer when it does. The power required to keep this going would require miners of insane proportions, I would guess. The block chain is going to have programs tacked into it, contracts, potentially websites of good, OR bad nature. They talk about CC transactions in 15-30 seconds. I can’t see it, nor can I see those big companies trusting a system like this that is just being ridden by potential criminals, black markets, “Silk Road 2.0”, Child Porn… The list is endless.

I know any of those final points could be countered in saying, “Yeah, Bitcoin has some of that already”. Do we REALLY want to support a system that has THAT much potential for criminal activity? I, for one, do not. And the future of main market, in my eyes, is not with Ethereum.

Please don’t tell me, “Then don’t invest”. I know that. I know there is risks with Crypto, but this one is huge, and shady.

And, unless I TOTALLY misunderstand some of this. Ethereum wants to “wrap” around the existing Crypto-universe, (()per say()). So… Decentralized centralized decentralization? That and the potential for exorbitant fees around any corner.

I’m more concerned about the future of Peercoin, and coins like it that look towards the future. And hopefully one that can include things like a Soda Machine, Redbox, my local grocery store. That is my hope for it. Otherwise it just remains a virtual stock market and that is nearly all it remains.

Questions and comments please!

8

I have to say every comment in this thread so far has been educational for me. So, thanks to everyone.

Ethereum is the leading proponent for Turing-complete scripting integrated into a distributed blockchain. A powerful concept. But Ethereum might get it wrong for unrelated reasons. For example, Ethereum may (and apparently will at this time) go with PoW only and no PoS. Well, I guess most of us here at Peercoin would disagree with that strategy!

So, Ethereum could fail for reasons unrelated to the core effort: Turing-complete integration.

The Potential! The Promise, and the Peril!

So far as Peercoin is concerned, I think along with many, we need to keep Peercoin lean and strong: a long-term store of value.

That said, I would love to hear what Sunny thinks of Turing-complete scripting integrated with a distributed blockchain.

And of course more of what everyone else thinks of this too! :wink:

9

Why don’t you ask him about it here…

http://www.peercointalk.org/index.php?topic=2456.0

10

Why don’t you ask him about it here…

http://www.peercointalk.org/index.php?topic=2456.0[/quote]

I did. Even though it is not immediate to Peercoin’s future, I still hope the question survives the cut.

11

I did plenty of research on Ethereum also, and I’m really not excited about it. To me, it’s a bunch of geeks who under stand each other’s lingo, but can never market it to the masses.

In addition, I frown upon another “turing complete language” that we all get to learn. Every time some one creates a new system, they want to have every one re-learn a new programming language in order to use it. Creating a new language on a whim isn’t a good idea. I don’t care how “easy” it is to code AFTER you learn the language and the structure. The fact you have to abandon what you know and re-learn something new is stupid.

Programmers in general like to pick 1 or 2 languages and stick with it. Rarely do they want to know 8 or 9 of them.

In addition, just creating a touring complete language is difficult enough. But no, they want to create a touring complete language AND build a network, AND get market acceptance, AND teach people how to use it, AND get investors, AND get people to trust it, AND do a number of other things right out of the box, all at once.

Ethereum is going to be like one of those fireworks you buy and save for July 4th, and when you finally light it, it blows a lot of smoke, starts making a sound, and then quickly fizzles out as a dud.

If I’m wrong, I’ll admit it. But at this stage of the game, it’s not looking good at all.

12

[quote=“ppcman, post:11, topic:1931”]Ethereum is going to be like one of those fireworks you buy and save for July 4th, and when you finally light it, it blows a lot of smoke, starts making a sound, and then quickly fizzles out as a dud.

If I’m wrong, I’ll admit it. But at this stage of the game, it’s not looking good at all.[/quote]

I couldn’t have said it better myself. I actually chuckled when I read this, hits right near my heart hehe.

13

You got it wrong. They just want to develop the protocol, all the applications like Marketplaces, Exchanges, Shares, will be programmed by other people. So will be all the marketing. Plus, there won’t be a single blockchain. Each application will have it’s own.

14

Got it wrong?

Got it right - They just want to develop the protocol? That is the network design and the touring complete language. I already stated my reasons for developing another new touring complete programming language that people learned.

Peercoin / Peershare Difference: We’re using C++, which plenty of people already know. We’re building on top of Bitcoin’s skeleton, which is already proven to be stable. They’re starting from scratch.

Got it right - Programmed by other people? The same people that now have to learn this new touring complete language? The same people that have to trust the design of this new network that hasn’t even successfully ran, with real world trading yet?

Peercoin / Peershare Difference: People already trust Peercoin. Look at our Marketcap and the length of time we’ve run already. It’s taken a long time to get to where we are now. They still have a couple of years to even come close to us. Bitcoin wasn’t built in a year, and Ethereum won’t be either. (Or if it is, it won’t run right)

Got it right - So will be all the marketing? Really? They’re inventing a new protocol, language, etc, and they’re going to let every one else market their creation? There aren’t enough long term seasoned & experienced users using it yet. It’s still a new idea.

Peercoin / Peershare Difference: We already have a community built from long term users who have been around since Peercoin’s creation in 2012

I don’t think we got it wrong. I think we got most of it right, and our concerns are still valid.

I admire Ethereum trying to do what they are trying to do. But they won’t be in a significant part of my investment portfolio any time soon. They have a LOT of ground to cover, and progress to be made.

15

I find the concept of smart contracts to be exceptionally powerful and alluring.
Real world events effecting Real world money, and Real world money effecting Real world events - without the deeply flawed system we now have of delayed and often purchased or influenced or prejudiced ‘justice’ enforced by ‘trusted’ third parties such as judges, juries, prosecutors and cops, all pushed on by sometimes extremely highly paid and well connected legal warriors, etc., etc. I have seen how the sausage is made, and there must be a better way!

I don’t know if it is even possible, but I wish Ethereum Godspeed.

And if they can’t do it - Sunny might have to! :wink:

P.S. after he has made us all rich first, of course!!! ;D :slight_smile:

16

Hold your horses! I’m still a firm believer in Sunny. I just don’t think that Peershares and Ethereum are rivals of any sort. Peershares operate on a more stable protocol and development already progressed quite far. That being said, I value Vitalik and his vision for Ethereum a lot, but it won’t be an easy task to pull off. Up till now it is still in “vaporware” stage, so to say. In my understanding, Ethereum aims to become what HTML is to TCP/IP – a protocol that allows for all kinds of colorful applications, from prediction markets to betting bots, you name it. This goes far beyond the scope of Peershares. So it’s like comparing apples and pears really. I personally wish them the best, and I think both projects can complement each other.

17

I wish every one the best too Sebsebzen. I think Vitalik is a good programmer. If I ran an IT department, he’d be on staff.

At the age of 20, he’s accomplished a lot. But there is also a business component to things that may be getting lost in the Ethereum solution. I know he’s not working alone business wise, but still…

They had a huge fundraiser planned for Feb 1st, and then recanted it. That’s problematic for me. Doing something like that as one of your first introductions looks poorly thought out.

Perhaps I feel a little touchy about the subject. Vitalik wrote a blog post about Dagger basically poking holes in Proof of Stake, and then recanted some of what he wrote afterwards. Now he’s talked about doing a PoS/PoW hybrid, then I don’t know what the current status is…

If I really had to guess, I think Sunny King is double Vitalik’s age, which might explain his patience and methodical thinking, which comes in handy when you’re dealing with coding financial systems.

NewMoneyEra said it right, when he said that Ethereum’s concept sounds “powerful and alluring”. I agree. I downloaded some of the software, played with the test alpha stuff. Read the forums, followed the blogs, and the deeper involved I got, no longer was it powerful and alluring, and I took 3 steps back. On the surface it sounds great. When you have your hands deep into the solution you can see how much work has to be done before it goes anywhere.

It will be interesting. But I’ve made my early predictions already known. :slight_smile:

18

if BTC is the tcp/ip, msc/xcp would be html,
ethereum would be javascript over IPX protocol.

19

ppcman, I get your point. The Dagger/Slasher issue is also something I posted as a question to Sunny for the community interview :slight_smile: