Is not the new token issuance speed a little too fast?
The answer is relative. If you are miner, you are happy, if you are token holder, you are not…
Just read about Ethereum 2.0 and what I like is that Ethereum leaders, developers and community carefully design inflation and its effect (https://github.com/ethereum/eth2.0-specs/pull/971). Aeternity team response so far is that “we care about technology, we don’t care about price”.
If the incentive to stake is too low, the network will not get the minimum amount of validators needed to keep many shards going. If the incentive is too high, the network is overpaying for security and inflating at a rate that is detrimental to the economics of the network as a whole.
The second part of above quote describes exactly what happened with Aeternity. The result of such inflation was easy to predict but why it was designed to make such a disaster is a question without answer. It looks like millions of dollars (at the cost of token-holders) were wasted securing the network that doesn’t need so much power now so overpaying for security.
That build no confidence in Aeternity when so basic things are overlooked. How the future of Aeternity could look like if everybody worries what disaster decisions could be made in a future? No business will take such big risk. And the result is obvious, Aeternity blockchain is not seriously considered by business, blockchain developers and investors. It was too risky to invest in and it is still too risky to invest in (in terms of money, development, business operation, etc.).
I want to point that in contrast to Bitcoin, AE tokens were already distributed in ICO and there was no reason to distribute them via hyper-inflationary mining process. Bitcoin’s initial distribution was necessary and it didn’t matter how big mining reward was. There were no previous token-holders that might be hurt by it and mining could be done on a regular PC using CPU only. What Aeternity did was a total disaster.
The other thing that worries me is that Yani Malahov told that any blockchain that is not based on PoW “will die sooner or later” (https://www.youtube.com/watch?v=eDj3O8N7Dh8). How anybody can expect that Aeternity will be a major player and top performer if PoS is criticized by its leader? If Aeternity leaders won’t be open minded and visionary they will always be few steps behind the innovations.
And the last thing. There were 276 million tokens created via ICO, now we have 335 million tokes. Think about how share-holders in real business would react in such situation. The will vote to fire all the directors and replace them with others that are more competent. They will not allow the current management to act like that any longer. And not now, but as soon as they would now what damage is going to be made.
The result of such politics and ignorance could be just one. The Aeternity will never be a mainstream blockchain as it doesn’t deserve it. Business always calculate the risk and the numbers of failure decisions are simply too high.
very good question，the team should
answer it carefully！
While I agree the inflation is really bad, and it doesn’t help that they did the inflation curve super high in the first months now over 20% of inflation was already performed in just 1 year. 2nd year is in theory going to be 10%. This is not new and this was discussed with the team since it was set.
This guy is wasting ammo on silly things though, he is skipping the fact that aeternity promised PoS (as in rewards, not voting) and so far rewards are null and voting is not yet released. Mining on mobile was promised too and it will not happen (which has not been reflected on main website even after at least 1 year of knowing this), that the team seems to take arbitrary unilateral decisions, or the fact that aeternity has not a exposed method to know all the network data from the nodes (you can’t figure out the reward for a block just mined, you know the beneficiary but not how much he got paid, you can’t request that) even when a node has this information somehow, it won’t show you.
Technically aeternity is impressive and fast, a bit flawed and not as transparent as I would like it to be. But claiming only the inflation is what should prevent it from going mainstream? now that is quite a jump.
Also, this has been discussed and brought up on several ocassions.
I see a good discussion here coming up on the horizon. I will try to comment on some of the points mentioned above.
First I want to highlight that aeternity is:
- open source
I think it is important to always acknowledge the fact that everyone at any time can use and join the network without any permission. You can become a node operator and verify everything (as it look like soon even with a mobile phone) or become a miner by spinning up a machine with a simple GPU. You can create an account without any permission and you can fork the software if you want to start your own project, based on aeternity core.
Inflation rate -> This was a long discussion with many pros- and cons. Many different proof-of-work currencies (Ethereum, Monero, Bitcoin) have been analyzed and at the end, the main argument and final compromise were: a high inflation rate at the beginning attracts miners and makes the network more secure. Combined with Cryptowinter and many other happenings it is hard to put an analysis on this now.
Proof-of-stake -> There are many opinions. I personally follow the proof-of-stake projects on a continues base. Emin Gün Sirer, who introduced Bitcoin-NG with his team, is also an advisor to us. That said, I know people next to me that are interested in PoS, Staking and all the innovation coming from that area. Nevertheless, if you would ask me today, I would still stick with PoW. I like that it has a proven history, that you don’t need a stake to become a validator and that I still feel that it is way harder to “bribe” validators or attack the network as soon as it reaches a significant hashing power. I recently read this article and there are many more out there that support my current point of view. Just go to any technology-oriented Bitcoin or Ethereum conference if you like to deep dive into this discussion.
Mining on Mobile Phones -> yeah, I guess that will not happen. At the very beginning, Cuckoo Circle was very promising doing so, but it was quickly proven wrong. Many different ways have been explored, but it is just not feasible. Maybe if phones become more powerful one day, but even if, Bitcoin-NG is quite a blocker and a mining phone could slow down the network. It is something that has been left behind for now and close to no research shows promising results here.
Governance -> There are two things now, one will be launched this month and can already been seen here https://governance.aeternity.com/ it is a Blockchain aepp for weighted delegated signaling. This means that every token has one vote and you can delegate (stake) your tokens to an address that then becomes your delegate (this address will vote with your tokens on top of their own). If you, for example, trust my visions and strategy, you could delegate your vote to me (eminogrande.chain, yay! the naming system is online). This way we hope that even if participation is low at the beginning, that over time, we will have the majority of tokens pointed to active community members to signal a direction for the whole network. There is anice discussion on Twitter that I saw this morning.
Second, to that, there is hard-fork signaling for miners now. Before upgrades happen, miners can set a flag (same as in Bitcoin) to signal their support for an upgrade.
- Block reward -> @Kryztoval you can do some CLI magic in Erlang and it will give you that number. The reason why there is not an API endpoint for everything is security related. More endpoints, more attack vectors. A node is not primarily made to serve data, it must be stable and communicate with other nodes and find consensus. For more specific data, tools like @jsnewby Middleware provide transparency. You can for sure requests this as a feature and it will be available soon.
Last but not least. I understand your criticism and i also don’t know if all the decisions made in the past and planned for the future are the right once. If you have a strong opinion about something, voice it, but also provide a possible solution. Make suggestions on how to improve, join the public calls every Friday, come to a meetup, make an AEX proposal - there are dozens of ways to interact with the developing community.
I also encourage you to use the governance aepp as soon as it is out. The aeternity community is small, so every signaling still has impact and we can still move fast - that is one of aeternity’s biggest advantages.
very good feadback，thanks
Well stated Emin, POW and an attractive BRI are essential for securing a network in the early days
1 - How can it be so hard? Unless decisions where made on a whim, there should be a specific and clear way to say why this decision was taken, that has been my point all allong, unilateral decision making with no clear investigations on an opensource project.
There is a balance between the intention of people to do an attack on a network and it’s value. You wouldn’t spend 20% of your money protecting 1 apple, would you? however spending 20% of your money protecting your house and all its habitants is a no brainer. Why make a high inflation to ask for people to come protect a network that had such low value (hence making it even lower)? this puzzles me.
2 - There are several proof of stake blockchains, most of them forks of the really innovative ones, there are also some others that have mixed (as in more than one) PoW algorythms and some that are hybrid PoW/PoS blockchains. This proves it is technically possible. There are also some issues like the case of the validator mafia in another chain that proves there are difficulties to any and all blockchain technologies. But if you want to say that something tested like bitcoin PoW is without unknown issues I’m sure that’s not true at all. It comes back to what was written in the aeternity white paper, and how it is still reflected in many areas of the documentation and website which is not what the deployed and current network looks like.
3 - Partially same point as before, this should be stated in the FAQ and updated in the whitepaper, this was still one of the main and first reasons I jumped on this project, because I liked the idea of being able to secure a network from my phone so that every single user of the network could make the network more secure. This could have been done in a plethora of ways - you could have a stripped down blockchain (either by removing extra data not needed for hashing or by archiving old blocks and starting the transactions from a set point in time) that allowed phones with limited cpu and storage to be able to keep and validated transactions, or by providing a PoS service that could run as a service on a phone. Those are just 2 ways that come to mind right now.
4 - This is like asking the rich whether they should give resources to the poor, spoiler alert, the majority will mostly say no. Asking the miners if they would want a PoS solution will get a no from everyone. Specially because this coin makes it so easy for people to the crypto equivalent of hit-and-run which is mine-and-sell. There is no incentive to keep the coin and creating a surplus of supply will indubitably drop the price, so you are motivated to sell the coin before it loses it’s current value.
5 - Erlang is not common or accesible as far as I have seen. Having the data in the CLI in Erlang is not enough to say the data is available, I think you guys have a weird view of what a middleware should and shouldn’t do. If we go back to the original bitcoin core wallet first of all it is clear everything that affects the balance of an account is written out and traceable - this means it has a transaction record, second of all we learn that it has indexing capabilities that are turned off by default to save node resources. Middlewares for bitcoin are made to offload this indexes to another device and to implement better interfaces (better API endpoints) and to limit surface attacks. The original idea behind this as stated by the core team was to add the indexing capabilities as a plugin to the node that can be turned on or off. Later the middle ware was created, the middleware is not a plugin nor addon. The Aeternity node has 2 zones of attacks, each with their peculiar areas of attack and vectors. There are public and private zones. Why is this information not exposed on an internal api endpoint? My point persist: This information is known by the node but it is not easily accesible, it has no traceability and there is no way for an external person to know this information readily from the base node. This is an auditable task and must be answered by the main node, not the middleware.
Last points - I tried to join the calls but it so happens to be in the early mornings for me (around 5 or 6 am) so far I have only been to two of them and I can’t pay much attention being so sleepy. My hands are itching to get the governance app so I can signal my small amount of AE to vote on something. I have read the AEX papers and commented on those, the lack of Erlang resources online have prevented me from getting on learning it.
If that is what stopping you, here you go: https://learnyousomeerlang.com/ - let me know when you are done and I can provide you more.
What really attracts absenteeism is the token price
I’m just going to reply to the initial inflation topic and not the follow-up discussion, because I think they deserve their own threads and there’s no use in trying to discuss all issues at once. I also do not agree that only PoW will survive. PoS still has a big problem with bribing/censorship but I’m definitely bullish on PoS.
Having an ICO for a proof of work chain—or much of anything really—was not the best choice, in my opinion, but I was not around when that decision was made.
Yes, Bitcoin was initially developed without any prior public funding by a bunch of self-motivated individuals but that process is not sustainable in the long run, as seen today. The dynamics in 2009/2010 were just much different. See for example grin, where the developers basically had to beg for funding while all the big VCs just invested in mining infrastructure to extract as much revenue as possible.
Now, relatively high issuance is required for proof of work chains, seeing as the operational expenses for miners are constant and high, but like I stated before, I, too, think that the issuance was way too high. It was paying for security, which was not needed—I was overruled in this regard and so the issuance, as proposed by others, was implemented. And even if we assume that the initial issuance was correct, the curve fall off is too sharp when most evidence points towards PoW not being sustainable without significant block rewards; especially if we assume that we’d need more security in the future.
So where do we go from here? If we want to stay with PoW, then the issuance will most likely have to stay fairly high. Switching to PoS would mean that issuance can be reduced significantly. A hybrid PoW/PoS scheme would possibly mean still having a fairly high issuance but staking would then also allow others to secure the network and not be as strongly affected by the security fee.
Last, the fact that the decision was not communicated properly is bad and we’re actively changing this.
Hahaha. I knew it. Now there will be a debate that inflation curve is falling too sharp. Why it doesn’t suprise me. Aeternity is like a cancer.
@ssh, please create the proposal to inflate future rewards and that BRI will take 100% of it. All of it for the sake of future sustainability of course.
It is like reading: The initial issuance is wrong so let’s screw it further. The ultimate beneficent will be BRI and Aeternity Fundation anyway.
I did that, love it. Really nice “open source” learning material.
This is an interesting approach worth researching I think.
some miners are also token holders. Only those mine to sell for profit are happy.
It is and I will do it for sure! Thanks hanssv.