Obviously the big issue with web3 are the gas costs
First off the gas costs are no problem on chains that can achieve scalability (sidechains can offset transaction load and costs, layer 2 scaling solutions can offset costs, etc). Even without the scalability upgrades and without voting to decrease transaction rewards, if Cardano was to have the market cap of Ethereum and higher activity in its block, its transaction fees would be slightly above or below $1.69 and its smart contract fee would be around $8.46.
These fees are still low compared to Ethereum on a busy day though right now the gas fees are about $6.50 due to low activity.
A dirty little secret they don't tell you about Ethereum is that the blockchain in its accounting model is a global variable in validating every transaction. If Ethereum is having multiple transaction requests all at the same time (say like a token sale or NFT mint) then it'll only choose one and kick the rest out while taking their transaction and gas fees. I've lost $300 before just trying and retrying to transact a smart contract signed on Ethereum because the activity was so high, my transaction and smart contract would get kicked out of the line. I think if you watch this site during high blockchain activity (which is showing Bitcoin and Ethereum transactions in real time):
you will see some of the "kids" getting kicked off the bus after they were already let on. I think that is showing those failed transactions.
All coins are dogshit in scalability right now imo. Ethereum has made moves in this area with a lot of side projects focusing on scalability but you got to move those tokens to that project, there's nothing much on their layer at the moment. Also, them moving from Proof of Work to Proof of Stake in ETH 2.0 while the network is running will almost certainly lower security during crucial time periods of "The Merge".
I see what you're saying about decentralization when it comes to blockchains. But how about the projects being implemented on those chains? ... I see so many projects implementing way more on-chain than seems necessary, and pursuing decentralization without any apparent rational motive.
The whole point of Web3 is that users own a part of the platform their using and therefore get a voice in how it's used. Anything you use and believe is worth using should have your voice involved, no matter if it's small or large. I believe the mass of people that use a product should have a better say in how they want the product to be.
Wouldn't Google, Facebook, Twitter, etc be much better if all the people who used it could easily have a part ownership and voice in how its run? Google Class-C stock is $2245 at the time of writing this. We wouldn't be having problems with our private data being traded for profit without our consent! I cannot have a fractionalized ownership of the stock (say own 1/100th for $22.45) and have a vote in the company stock meetings. The easiest way to start acquiring Google stock is to be living in the US and going through a crap ton of paperwork, brokerage fees, etc. Stock meetings aren't online, I believe you have to go in person or mail in your vote and it is a complete hassle that isn't worth it unless you own a lot of Google stock and hence have a lot more say in how the company is run.
Contrary to popular belief Ethereum and Bitcoin are not as decentralized when you compare Nakamoto Coefficient (also known as minimum attack vectors, meaning # of validator/mining pools that need to team up to take control of over 50% of blockchain validation say).
Here is some great research from @trailofbits looking at how decentralized blockchains really are.
Data was taken from last year but you know who is missing? Cardano. At some points Cardano has even had a Nakamoto Coefficient of 30! You can look at Cardano's Nakamoto Coefficient over time here:
For example, you could implement a dutch auction for an NFT on-chain... but is there really an issue with centralization for the auction process (people trust their ebay auctions without an issue)? IMO you would only need consensus with the final bid and ownership.
No, it's not necessarily an issue. Some of the decentralization is a flavor of the week and stems from a complete distrust in authority and corporations from the past couple decades. But there are some things that would certainly run better and be better if the mass of people had more of a say and a stake in it. Centralization tends to run faster but it's also easier to corrupt/break so that's usually the tradeoff.
but I am curious about your thoughts on NFTs? What do you think is the best platform for developing complex NFTs? Right now it seems like ethereum has the most developed standard with ERC721, but the gas costs seem prohibitive.
Do you think any particular blockchain has a technical advantage when it comes to non-fungibles?
Ok you need to read this twit post:
9/18 Cardano eUTXO model is perfect for NFTs and dApps
Compared to ETH, ADA transaction model is a no-brainer for scalability:
Multiple assets in one transaction
Low and steady transaction fees
No fees are spent if the transaction fails
“A picture is worth a thousand words”
Cardano is #3 in trading volume of NFTs atm. They are cheap, made on-chain (so no gas fee to send, treated as Ada token), and because of the EUTXO model there are many types of NFTs that can be made on Cardano that I don't think would be possible on Ethereum (or if they are it isn't worth it).
If you know your probability/statistics, the thing about the Ethereum Accounting model is that it is a set inside of the Cardano EUTXO model. That means Cardano can make a smart contract that mimics like transactions done on the Ethereum blockchain, Ethereum on the other hand cannot mimic Cardano transactions.
The difference between Cardano's EUTXO and Ethereum Account model explained by Lars Brunjes (The Cardano Smart Contract Instructor)
I'm a big fan of Cardano and Charles (he's a genuine thought leader who is passionate for all the right reasons), but I've seen some technical NFT fud that did look legitimate.
If you have any technical FUD on Cardano NFTs I would certainly like to see it, I haven't seen anything that holds its weight in reality.
Here is a picture of types of NFTs and all (if not most) have been made on Cardano in some way or another. I don't remember the tweet this was posted from.
People are using NFTs as objects in their Cardano game. I saw a guy a few weeks ago that made an NFT that couldn't hold another of the same type of NFT unless he transacted the NFT he already had to a certain address. There's some strange and amazing things going on in that space, we don't even know where it'll end up 5-10 years from now.
Also, are you a developer? You seem to have a fair amount of technical knowledge. Do you do blockchain stuff professionally? And no worries at all if you don't want to answer that.
I've been studying blockchain like crazy in the last 2 years but I am not a blockchain developer. I really really want to be though and help build in whatever way I can. I have a couple mountains I'm climbing right now but I'm making moves.
Thank you so much for your detailed response. I'm going to go through all of these links and learn as much as I can. Can't even tell you how much I appreciate this.
I'm glad to be of help if I can! :) It was quite a weight learning all of this at first but I really enjoy it now that I have a bit more of understanding the tech. Also please send me that technical FUD you found when you get a chance, I'd like to read it and learn anything new that may be in there :)
In terms of the ada FUD, there was a reddit thread about 7-8 months ago that I can't seem to locate. I do recall that it was related to the launch of NFT's on the platform and something people were dubbing the "concurrency issue". Based on your level of knowledge, I'm guessing this is something you're already familiar with...
Yes, that was a challenge Fall last year. Concurrency is basically being able to make multiple transactions at the same time. On Ethereum accounting model, you don't have to solve for this because the whole blockchain ledger is involved in every transaction though that also still means that during high activity some transactions happening at the exact same time will get booted off and have their transactions fail while still having to pay the transaction fee. Unfortunately, this FUD has stuck around much longer than it should have and many solutions have been released.
Cardano is also releasing pipelining in its Vasil hardfork and I believe that should solve (or greatly help) the consensus solution for all new projects that develop on it hereafter.
Input Output Global - Introducing pipelining: Cardano's consensus layer scaling solution
Pipelining is one of the key scaling improvements to be deployed in 2022. Here’s how it works and why it
"Currently, a block goes through six steps as it moves across the chain:"
Block header transmission
Block header validation
Block body request and transmission
Block body validation and local chain extension
Block header transmission to downstream nodes
Block body transmission to downstream nodes
"A block’s journey is a very serialized one. All steps happen in the same sequence every time, at every node. Considering the volume of nodes and the ever-growing number of blocks, block transmission takes a considerable amount of time."
"Diffusion pipelining overlays some of those steps on top of each other so they happen concurrently. This saves time and increases throughput."
Do you happen to remember the name of the project that was developing those complex NFTs in their Cardano games? I'd be interested in examining that further.
I don't know the name, I just happened to meet the guy briefly sorry about that one.
I also have another question for you... Do you think Cardano is a good chain for releasing stablecoins (in particular, a simple fiat pegged stable)? Does it have any particular advantages or drawbacks that you can think of, in that regard? I guess I'm wondering if there's any inherent advantages to ada defi stable pools over other defi protocols.
The main thing with stablecoins is the design. Many stablecoin designs as of late incorporate Ponzi scheme economics because they are designed to grow really fast by offering large rewards to holders. However, they depend on growing at the same break neck pace in order to still give out the same APY rewards to its holders. One day this doesn't work and everything falls apart. Build fast to launch and fix later doesn't work well when you're dealing with peoples money. Build slow and steady with a stablecoin designed to actually be stable imo is much better and can add value to the economy as it grows.
The biggest advantage I can think of is using Haskell functional programming which prevent many common bugs and hacks that happen in a Ethereum-like ecosystem (the Haskell code won't compile in many of these cases). In Haskell, the code can be mathematically proven to do the job it was intended to do and is much better for auditing and figuring out where bugs can take place.
Another advantage is the dApp certification Cardano will be having for all its dApps & DeFi on their new dApp store. While anyone can submit projects to Cardano, those that go through a more rigorous process of having their projects audited and certified get featured higher on the Cardano dApp store. Ethereum has nothing like this, they focus more on building and getting it released as fast as possible and safety comes second.
IOG’s new Lace light wallet will include a dApp store with dApp certification.
Right now, all DeFi is made up of overcollateralized loans and people are making money by either getting in early on a DeFi project and riding the wave up or gambling. Now by gambiling, I mean that they put collateral up for one kind of DeFi currency (say Ethereum, USDT, USDC, something less volatile) and they take out a DeFi loan for another type of currency (could be an established project like Chainlink for example, could be memecoins, etc) hoping the crypto they were loaned goes up relative to their collateral. This is not good, it doesn't expand economic output in the world and is essentially online gambling for the moment. With Decentralized IDs you can begin having a credit history and having your identity backed up on the blockchain but encrypted so only you have the keys to see it and you can share the keys with your choosing. With a credit history and other identifying information, you can start to have undercollateralized loans work on the blockchain. Smart contracts can be made in a way that when you give the keys that show your identifying information on the blockchain, that the smart contract doesn't send the information back to the lender which leaves no discrimination or collecting of information. You'll want to make sure it's done all the certification though.
An estimated 80% of people in Africa along with their assets are unbanked which means much of their assets and history is undocumented as well.
and there are many more similar third world countries in Asia and South America that are similar. When making a loan in an African country, the government is almost always the biggest entity to lend from. However, past politicians have loaned so much money from the IMF/World Bank and when they got out of office they pocketed the money and moved to another country like the US leaving the citizens of that country to pay off the loan. Because of this, in some African countries a regular citizen must put up 300% collateral just to get a loan. This prevents any kind of business from growing in Africa. With DIDs, you can have competitive loans from anywhere around the world that compete with the largest banks in the world in the richest countries like the USA. Banks require middlemen to run. Once the code is written, decentralized crypto does not require people for day to day operations (but will require voters to govern and make changes to the protocol). There is no CEO at the top that can pocket all the money, profits from fees and interest get shared proportionally to the amount you are invested in it. Banks can't compete with this, people will flock to crypto and banks will be scrambling to stay relevant like Blockbuster when Netflix brought online streaming.
A fourth advantage for DeFi on Cardano (at least as an investor) is that they are focusing on building RealFi applications in the real world that will help develop third world countries by their own citizens. Real Finance (RealFi) is the integration of traditional finance with decentralized finance. This has the potential to further develop third world nations economic input at a faster rate.
A lot of this still remains to be seen whether it can be done but if it works, you can expect to start seeing African nations and third world countries develop like China did starting in the 70s but at a much faster pace.
While Cardano is looking to bank the unbanked, World Mobile looking to connect the unconnected to the internet. World Mobile is heavily partnered with Cardano and will be using the Cardano blockchain.
First off the gas costs are no problem on chains that can achieve scalability (sidechains can offset transaction load and costs, layer 2 scaling solutions can offset costs, etc). Even without the scalability upgrades and without voting to decrease transaction rewards, if Cardano was to have the market cap of Ethereum and higher activity in its block, its transaction fees would be slightly above or below $1.69 and its smart contract fee would be around $8.46.
These fees are still low compared to Ethereum on a busy day though right now the gas fees are about $6.50 due to low activity.
https://crypto.com/defi/dashboard/gas-fees
A dirty little secret they don't tell you about Ethereum is that the blockchain in its accounting model is a global variable in validating every transaction. If Ethereum is having multiple transaction requests all at the same time (say like a token sale or NFT mint) then it'll only choose one and kick the rest out while taking their transaction and gas fees. I've lost $300 before just trying and retrying to transact a smart contract signed on Ethereum because the activity was so high, my transaction and smart contract would get kicked out of the line. I think if you watch this site during high blockchain activity (which is showing Bitcoin and Ethereum transactions in real time):
https://www.txstreet.com/
you will see some of the "kids" getting kicked off the bus after they were already let on. I think that is showing those failed transactions.
All coins are dogshit in scalability right now imo. Ethereum has made moves in this area with a lot of side projects focusing on scalability but you got to move those tokens to that project, there's nothing much on their layer at the moment. Also, them moving from Proof of Work to Proof of Stake in ETH 2.0 while the network is running will almost certainly lower security during crucial time periods of "The Merge".
The whole point of Web3 is that users own a part of the platform their using and therefore get a voice in how it's used. Anything you use and believe is worth using should have your voice involved, no matter if it's small or large. I believe the mass of people that use a product should have a better say in how they want the product to be.
Wouldn't Google, Facebook, Twitter, etc be much better if all the people who used it could easily have a part ownership and voice in how its run? Google Class-C stock is $2245 at the time of writing this. We wouldn't be having problems with our private data being traded for profit without our consent! I cannot have a fractionalized ownership of the stock (say own 1/100th for $22.45) and have a vote in the company stock meetings. The easiest way to start acquiring Google stock is to be living in the US and going through a crap ton of paperwork, brokerage fees, etc. Stock meetings aren't online, I believe you have to go in person or mail in your vote and it is a complete hassle that isn't worth it unless you own a lot of Google stock and hence have a lot more say in how the company is run.
Contrary to popular belief Ethereum and Bitcoin are not as decentralized when you compare Nakamoto Coefficient (also known as minimum attack vectors, meaning # of validator/mining pools that need to team up to take control of over 50% of blockchain validation say).
Here is some great research from @trailofbits looking at how decentralized blockchains really are.
https://blog.trailofbits.com/2022/06/21/are-blockchains-decentralized/
Data was taken from last year but you know who is missing? Cardano. At some points Cardano has even had a Nakamoto Coefficient of 30! You can look at Cardano's Nakamoto Coefficient over time here:
https://datastudio.google.com/u/0/reporting/3136c55b-635e-4f46-8e4b-b8ab54f2d460/page/p_9vyfu6gorc
No, it's not necessarily an issue. Some of the decentralization is a flavor of the week and stems from a complete distrust in authority and corporations from the past couple decades. But there are some things that would certainly run better and be better if the mass of people had more of a say and a stake in it. Centralization tends to run faster but it's also easier to corrupt/break so that's usually the tradeoff.
https://nitter.net/i/status/1538780677298167809
9/18 Cardano eUTXO model is perfect for NFTs and dApps
Compared to ETH, ADA transaction model is a no-brainer for scalability: Multiple assets in one transaction Low and steady transaction fees No fees are spent if the transaction fails
“A picture is worth a thousand words”
Cardano is #3 in trading volume of NFTs atm. They are cheap, made on-chain (so no gas fee to send, treated as Ada token), and because of the EUTXO model there are many types of NFTs that can be made on Cardano that I don't think would be possible on Ethereum (or if they are it isn't worth it).
If you know your probability/statistics, the thing about the Ethereum Accounting model is that it is a set inside of the Cardano EUTXO model. That means Cardano can make a smart contract that mimics like transactions done on the Ethereum blockchain, Ethereum on the other hand cannot mimic Cardano transactions.
The difference between Cardano's EUTXO and Ethereum Account model explained by Lars Brunjes (The Cardano Smart Contract Instructor)
https://www.youtube.com/watch?v=Eq4gS2mXhKk
If you have any technical FUD on Cardano NFTs I would certainly like to see it, I haven't seen anything that holds its weight in reality.
Here is a picture of types of NFTs and all (if not most) have been made on Cardano in some way or another. I don't remember the tweet this was posted from.
https://files.catbox.moe/9pjjdh.png
People are using NFTs as objects in their Cardano game. I saw a guy a few weeks ago that made an NFT that couldn't hold another of the same type of NFT unless he transacted the NFT he already had to a certain address. There's some strange and amazing things going on in that space, we don't even know where it'll end up 5-10 years from now.
I've been studying blockchain like crazy in the last 2 years but I am not a blockchain developer. I really really want to be though and help build in whatever way I can. I have a couple mountains I'm climbing right now but I'm making moves.
I'm glad to be of help if I can! :) It was quite a weight learning all of this at first but I really enjoy it now that I have a bit more of understanding the tech. Also please send me that technical FUD you found when you get a chance, I'd like to read it and learn anything new that may be in there :)
Yes, that was a challenge Fall last year. Concurrency is basically being able to make multiple transactions at the same time. On Ethereum accounting model, you don't have to solve for this because the whole blockchain ledger is involved in every transaction though that also still means that during high activity some transactions happening at the exact same time will get booted off and have their transactions fail while still having to pay the transaction fee. Unfortunately, this FUD has stuck around much longer than it should have and many solutions have been released.
EXAMPLES OF CARDANO CONCURRENCY SOLUTIONS
Wingriders DEX - Concurrency
https://medium.com/@wingriderscom/concurrency-7b19e77783da
SundaeSwap Labs Presents: The Scooper Model
https://sundaeswap-finance.medium.com/sundaeswap-labs-presents-the-scooper-model-678d6054318d
Minswap - Introducing Laminar — An eUTxO scaling protocol for accounting-style smart contract
https://minswap-labs.medium.com/introducing-laminar-an-eutxo-scaling-protocol-for-accounting-style-smart-contract-d1ac8847dde8
Maladex solves concurrency scales beyond memory limits and designs the best possible Cardano DEX
https://blog.maladex.com/maladex-solves-concurrency-scales-beyond-memory-limits-and-designs-the-best-possible-cardano-dex-391d7e519e67
Cardax Cardano concurrency solution EXPLAINED! (Cardano DEX) | Hashoshi
https://www.youtube.com/watch?v=91l6io0Q1fM
Cardano is also releasing pipelining in its Vasil hardfork and I believe that should solve (or greatly help) the consensus solution for all new projects that develop on it hereafter.
Input Output Global - Introducing pipelining: Cardano's consensus layer scaling solution Pipelining is one of the key scaling improvements to be deployed in 2022. Here’s how it works and why it
https://iohk.io/en/blog/posts/2022/02/01/introducing-pipelining-cardanos-consensus-layer-scaling-solution/
"Currently, a block goes through six steps as it moves across the chain:"
"A block’s journey is a very serialized one. All steps happen in the same sequence every time, at every node. Considering the volume of nodes and the ever-growing number of blocks, block transmission takes a considerable amount of time."
"Diffusion pipelining overlays some of those steps on top of each other so they happen concurrently. This saves time and increases throughput."
I don't know the name, I just happened to meet the guy briefly sorry about that one.
The main thing with stablecoins is the design. Many stablecoin designs as of late incorporate Ponzi scheme economics because they are designed to grow really fast by offering large rewards to holders. However, they depend on growing at the same break neck pace in order to still give out the same APY rewards to its holders. One day this doesn't work and everything falls apart. Build fast to launch and fix later doesn't work well when you're dealing with peoples money. Build slow and steady with a stablecoin designed to actually be stable imo is much better and can add value to the economy as it grows.
The biggest advantage I can think of is using Haskell functional programming which prevent many common bugs and hacks that happen in a Ethereum-like ecosystem (the Haskell code won't compile in many of these cases). In Haskell, the code can be mathematically proven to do the job it was intended to do and is much better for auditing and figuring out where bugs can take place.
Another advantage is the dApp certification Cardano will be having for all its dApps & DeFi on their new dApp store. While anyone can submit projects to Cardano, those that go through a more rigorous process of having their projects audited and certified get featured higher on the Cardano dApp store. Ethereum has nothing like this, they focus more on building and getting it released as fast as possible and safety comes second.
IOG’s new Lace light wallet will include a dApp store with dApp certification.
https://nitter.net/IOHK_Charles/status/1535851975031545856
A third advantage for DeFi is Cardano's development of Decentralized IDs (DID) like Atala PRISM.
https://atalaprism.io/
Right now, all DeFi is made up of overcollateralized loans and people are making money by either getting in early on a DeFi project and riding the wave up or gambling. Now by gambiling, I mean that they put collateral up for one kind of DeFi currency (say Ethereum, USDT, USDC, something less volatile) and they take out a DeFi loan for another type of currency (could be an established project like Chainlink for example, could be memecoins, etc) hoping the crypto they were loaned goes up relative to their collateral. This is not good, it doesn't expand economic output in the world and is essentially online gambling for the moment. With Decentralized IDs you can begin having a credit history and having your identity backed up on the blockchain but encrypted so only you have the keys to see it and you can share the keys with your choosing. With a credit history and other identifying information, you can start to have undercollateralized loans work on the blockchain. Smart contracts can be made in a way that when you give the keys that show your identifying information on the blockchain, that the smart contract doesn't send the information back to the lender which leaves no discrimination or collecting of information. You'll want to make sure it's done all the certification though.
An estimated 80% of people in Africa along with their assets are unbanked which means much of their assets and history is undocumented as well.
https://youtu.be/ATRb9rE1sXM
and there are many more similar third world countries in Asia and South America that are similar. When making a loan in an African country, the government is almost always the biggest entity to lend from. However, past politicians have loaned so much money from the IMF/World Bank and when they got out of office they pocketed the money and moved to another country like the US leaving the citizens of that country to pay off the loan. Because of this, in some African countries a regular citizen must put up 300% collateral just to get a loan. This prevents any kind of business from growing in Africa. With DIDs, you can have competitive loans from anywhere around the world that compete with the largest banks in the world in the richest countries like the USA. Banks require middlemen to run. Once the code is written, decentralized crypto does not require people for day to day operations (but will require voters to govern and make changes to the protocol). There is no CEO at the top that can pocket all the money, profits from fees and interest get shared proportionally to the amount you are invested in it. Banks can't compete with this, people will flock to crypto and banks will be scrambling to stay relevant like Blockbuster when Netflix brought online streaming.
A fourth advantage for DeFi on Cardano (at least as an investor) is that they are focusing on building RealFi applications in the real world that will help develop third world countries by their own citizens. Real Finance (RealFi) is the integration of traditional finance with decentralized finance. This has the potential to further develop third world nations economic input at a faster rate.
Welcome to the Age of RealFi
https://iohk.io/en/blog/posts/2021/11/25/welcome-to-the-age-of-realfi/
By integrating digital identity with Cardano, we can create real value and opportunity for people across the globe
There's a Cardano project developing in Africa called Waya Collective and I'd say they are a more RealFi kind of project.
Waya Collective, Cardano ISPO for Manufacturing in Africa | Learn Cardano Podcast
https://www.youtube.com/watch?v=J4V9VgF-MuU
RealFi on Cardano w/ Waya Collective | Empowa
https://www.youtube.com/watch?v=r5GJM6pow1Y
A lot of this still remains to be seen whether it can be done but if it works, you can expect to start seeing African nations and third world countries develop like China did starting in the 70s but at a much faster pace.
While Cardano is looking to bank the unbanked, World Mobile looking to connect the unconnected to the internet. World Mobile is heavily partnered with Cardano and will be using the Cardano blockchain.
World Mobile Whiteboard Explainer
https://www.youtube.com/watch?v=CUPNKSxOcKI
Lots of good info from World Mobile in this AMA including some discussion of the move into North America.
https://twitter.com/WorldMobileTeam/status/1539880960564633600
https://twitter.com/i/spaces/1LyxBoaleYYKN