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ETHER THREAD: ETH2.0 = PANAMA CANAL/ GLOBAL COMPUTER/PROGRAMMABLE $$$

Discussion in 'The Kruse Longevity Center' started by Jack Kruse, Jan 13, 2021.

  1. Jack Kruse

    Jack Kruse Administrator

    ^^^^^^Hence why Ethereum developers have delayed Ethereum’s transition to proof-of-stake for years (their initial plan to switch to proof-of-stake was back in 2016 and we’re about to enter 2022), acknowledging that it’s a much more complex system than proof-of-work.
     
    John Schumacher likes this.
  2. Jack Kruse

    Jack Kruse Administrator

  3. Jack Kruse

    Jack Kruse Administrator

  4. Jack Kruse

    Jack Kruse Administrator

  5. Jack Kruse

    Jack Kruse Administrator

    The main take-home of the 3 ARTICLES: is that by not including unforgeable costliness as part of their designs, proof-of-stake systems are inherently more circular in nature and thus rely more on some degree of constant trust, have less ability to recover from chain splits without manual intervention, and have limited ability to secure the historical blockchain = NOT SECURE
     
    John Schumacher likes this.
  6. Jack Kruse

    Jack Kruse Administrator

    A lot of people offhandedly propose proof-of-stake as being superior or better technology than proof-of-work, and praise higher-throughput systems, without realizing these technical issues at all. Many of the things they think are bugs to be eliminated from the system, like the fact that a proof-of-work system has a real-world resource cost, are actually features that make it as secure as possible = BECAUSE RICH GUYS LOVE THE CONFIRMATIONAL BIAS THEY HAVE FOR CENTRALIZED CONTROL = CANTILLON EFFECT THEY LEVERAGE.
     
    John Schumacher likes this.
  7. Jack Kruse

    Jack Kruse Administrator

    Stablecoin custodians represent another attack vector and centralization problem against smart contract platforms that have DeFi as a key part of their ecosystem, whether they are proof-of-work or proof-of-stake. This problem affects protocols like Ethereum and Solana, but not really Bitcoin. This is why I believe Bitcoin will all wind up on Bitcoin within 5-7 years.
     
    John Schumacher likes this.
  8. Jack Kruse

    Jack Kruse Administrator

    Stablecoins are tokens on a blockchain that represent units of fiat currency, and most commonly, the U.S. dollar. This is why the US Federal Reserve is waging war with DeFi.

    Why?
     
    John Schumacher likes this.
  9. Jack Kruse

    Jack Kruse Administrator

    Once stablecoins are issued by a protocol, people can then use whichever blockchain they are issued on to send and receive stablecoin payments between themselves with no centralized third party = The Fed wants to be that centralized third party.
     
    John Schumacher likes this.
  10. Jack Kruse

    Jack Kruse Administrator

    Why should you be careful parking your money in stablecoins for yield? Stablecoins are very centralized. The custodian holds the actual money; the collateral that backs all of those tokens. The custodians have the power to “blacklist” some of their tokens, which freezes them and basically makes them worthless. Tether has blacklisted over 500 addresses and counting. This means a rich guy in silicon valley could rug pull your 13% yield.
     
    John Schumacher likes this.
  11. Jack Kruse

    Jack Kruse Administrator

    There is now over $140 billion in stablecoin value on smart contract networks. This gives them tremendous power over the banks = why Gensler and Yellen want them heavily regulated.
     
    John Schumacher likes this.
  12. Jack Kruse

    Jack Kruse Administrator

    Who centralizes ETH? The Ethereum Foundation & Consensys, which contributes to the development and runs the Infura node infrastructure. They also own metamask which is the main ETH wallet.

    The big dog in the centralization of ETH though is the stablecoin owners. This is why Silicon Valley and Wall Street love ETH and for no other reason. It is also why the SEC will always target ETH.

    They have basically enough power at this point to dictate which Ethereum blockchain is valid or not, in the event of a hard fork. ETHER has a lot of hard forks in its history. With $115 billion in assets between them, the two largest stablecoins have a lot of influence over Ethereum and other smart contract blockchains. This makes the the ideal attack vector for hackers. It is also why the yield on stable coins is not as stable as most think.
     
    John Schumacher likes this.
  13. Jack Kruse

    Jack Kruse Administrator

    The hard fork attack vector is huge. Why?
    When a hard fork happens, stablecoin custodians cannot recognize both sets (double-spend issue) of tokens as redeemable for their money, since there are now twice as many total tokens (two full sets, one for each fork of the blockchain).

    They have to pick which blockchain is the valid one in their eyes, for which they accept redemptions of their tokens for money. And whichever one they don’t recognize as valid, has its DeFi and other stablecoin value eradicated.

    Today right now most of the $100 billion in AUM locked up in DeFi protocols, the core lifeblood of Ethereum, is reliant on these centralized stablecoins and the dudes who own them, as well as the stablecoins that are used by centralized offshore exchanges or that are being used for payments.
     
    John Schumacher likes this.
  14. Jack Kruse

    Jack Kruse Administrator

    IF your money is in a DeFi ETH deal what is your problem?
    Ethereum users can’ fall back on their node network defense as Bitcoin users can. If ETH developers & stablecoin whales or large entities like The Ethereum Foundation & Consensys want to change any of the rules of the underlying protocol they can. Your opinion and your money is subject to their choice.
     
    John Schumacher likes this.
  15. Jack Kruse

    Jack Kruse Administrator

    Wall St and Silicon Valley do not care about decentralization because they have been operating in a system of broken fiat money that has fueled and equity asset bubble for 20 years.
    You must know your Wall Street history to know in all bull markets irrespective of cause, they usually have no regulatory crackdowns or drama, technical details of the asset class don’t really matter to their performance. So they are ignored.

    Wall Street actually kind of loves DeFi today during money printing in the tactical sense, because in aggregate they all understand the idea of leveraging, liquidity management, exchanging, and arbitraging inefficiencies, and don’t really care about decentralization or technical details as much. They are pigs feeding at the yield trough. They know the Fed has to print so they all want the yield DeFi gives because the only way to stop it is REGULATION

    This is why Gensler is persona non grata now.
     
    JanSz and John Schumacher like this.
  16. Jack Kruse

    Jack Kruse Administrator

    For all sound money advocates, DECENTRALIZATION IS THERE KEY ISSUE. Nature and BTC are the only two protocols that are 100% decentralized. Those who care about immutability (TIME) and money supply assurances over a decade-long investment horizon, and those who care about securities laws, they notice what is and is not decentralized when they are considering putting their life savings in an ETH yield deal or stable coin.
     
    JanSz, John Schumacher and ND Hauf like this.
  17. Jack Kruse

    Jack Kruse Administrator

    Governments are experts at cutting off the heads of centrally controlled networks like Napster. I believe Gensler is sharpening his guillotine blade for Ether.
    Pure P2P decentralized networks like Gnutella and Tor seem to be holding their own = why BTC will win the long game.
     
  18. Jack Kruse

    Jack Kruse Administrator

  19. Jack Kruse

    Jack Kruse Administrator

    Announced today: FDIC Chairman McWilliams"is EXPLORING whether stablecoins should be covered by deposit insurance" But bank regulators REQUIRE stablecoins to be insured, per President's Working Group. Bank regulators already have the power to enforce this as policy. So is insurance actually available? Catch-22???
     
    John Schumacher likes this.
  20. Jack Kruse

    Jack Kruse Administrator

    The following are ETH main lobbying firms in DC and all operate on Proof of Stake.
    @a16z
    @coinbase
    @paradigm
    @consensys


    They don't need Bitcoin to die to keep making a shit ton of ill-gotten shitcoin gainz, but they're certainly going to encourage government action contra Bitcoin and in favor of protocols, they control. Don't let them lie about Proof of Work.
     
    DebraGM, caroline and John Schumacher like this.

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