Alt Explainer

Trying to provide high quality educational content on crypto

$ETH is money

[Alt Explainer @AltExplainer]

@zack_bitcoin PoW's biggest flaw is arguably that economies of scale could lead to a very centralised mining pool with only 1 entity as no one else would have the start up capital to compete.

In this case, you would want many people running full nodes to verify the mining pool is behaving

[Alt Explainer @AltExplainer]

@zack_bitcoin So I mean it depends on your model of a cryptocurrency then.

For many, the nodes are the core and they are delegating a role to the miners/stakers but still need to verify they behave.

If you are assuming they will behave then you don't need many full nodes.

[Alt Explainer @AltExplainer]

@zack_bitcoin If I can convince the whole bitcoin community to double the supply of BTC, it can happen. It is the community that decides to mint BTC and what to use it for.

It will basically be impossible to convince them to move away from what Satoshi suggested but is possible in theory.

[Alt Explainer @AltExplainer]

@zack_bitcoin After the halving's finish, I can run a BTC miner connected to the network and it won't produce new BTC. Mining isn't producing BTC.

Miners are providing a service to the BTC community and are being paid for it. They aren't actually producing the BTC, the bitcoin community is.

[Alt Explainer @AltExplainer]

@zack_bitcoin If I run a miner not connected to the network, it doesn't produce a BTC, mining isn't producing BTC.

BTC is minted out of thin air and given as a reward to miners for securing the network. Miners aren't actually producing the BTC.

[Alt Explainer @AltExplainer]

@zack_bitcoin bro, this is just mental gymnastics. Proof of Work is also paid for with inflation

[Alt Explainer @AltExplainer]

@zack_bitcoin Node runners decide the rules of the network so ideally you have a diversity of people running them so one group can't make the rules on behalf of everyone else.

[Alt Explainer @AltExplainer]

@zack_bitcoin Is the point that L1's don't need many people running nodes so we can make nodes more powerful?

If this is the case then you end up with a group of people, of a similar wealthy background all running nodes and no one else.

[Alt Explainer @AltExplainer]

@zack_bitcoin tbh it doesn't look like this is describing Ethereum L2's.

Rollups don't have transactions re-processed on L1 nodes. L1 nodes only process the zk proof and a sample of the transaction data (with danksharding)

[Alt Explainer @AltExplainer]

@Justin_Bons Sol, Sui, Apt, have nodes that can only be run by wealthy users.

If all node runners are of similar backgrounds, the chain is not for everyone as the nodes are the ones that ultimately decide the rules for everyone else.

Scaling by increasing the node hardware isn't scaling.

[Alt Explainer @AltExplainer]

@RobertSagurton We only need 1 valuable L1 token. The other chains can then use that token for their security.

The other chains can be as decentralised as they like as L2's. L2's don't have to be more centralised than L1's -they just tend to be as they have less need for the security

[Alt Explainer @AltExplainer]

@VovkaTheGreat @RobertSagurton Some people also forgot that we aren't building for decentralisation but for security and censorship resistance.

Decentralisation is just a tool to get these.

If you can get them without decentralisation - like through L2's. Then it doesn't matter.

[Alt Explainer @AltExplainer]

@rajatsoni BTC doesn't have a proven security plan after it's distribution ends.

Don't save in a currency with future security concerns.

[Alt Explainer @AltExplainer]

@notgrubles @pythianism How is a highly volatile chart for USD transaction fees good? You do not want highly volatile block rewards as it leads to highly volatile security. You have proved his point.

[Alt Explainer @AltExplainer]

@0xJoIris @musalbas @grok Yeah your point is why solo stakers are important. Even if regulations force Lido to become malicious, the solo stakers will fork and slash them.

Proof of governance is not as resilient.

[Alt Explainer @AltExplainer]

@IAmNickDodson If everyone has massive UTXO's holding many tokens within a UTXO, wouldn't that lead to massive transactions all the time?

[Alt Explainer @AltExplainer]

@jon_charb Depends on the definition of L2.

It will be a BTC and ETH L2 with security derived from ETH.