Quote: (04-24-2018 03:50 AM)Giacomo Casanova Wrote:
Gengis Khan, I read many interesting posts from you about ETH, but please allow me to make a small analysis about one of the weak points in the whole idea of dapps on the Eth platform. What do you think of this article?
https://medium.com/@giltotherescue/vecha...fcfca4bde2
I have been analyzing the "dapp business" for a while but still I cannot understand how ethereum is going to deal with the monetization issue (not mentioning the issue of fluctuating price that also bitcoin has). Any opinion?
It's a valid criticism.
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Imagine a decentralized eBay. A bidder has to pay a gas fee to the blockchain every time they place a new bid. How many people would be willing to do that once? But wait, now they’re outbid. Want to place another bid? Pay another gas fee. As research has shown, the pain of a loss is harder to stomach than the joy of a gain. The desire to bid again is less and less each time.
However it's also being addressed by scaling solutions such as Plasma. The idea will be that eventually dApps do everything off-chain (i.e. you don't pay fees for every interaction) and only commit to the blockchain periodically.
So imagine cryptokitties, where everything had a gas fee. Now imagine it using a Loom Plasma, you log in, breed your cats, sell them and at the end of the week, the app commits everything to the blockchain as a snapshot.
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Every time you want to store information on the blockchain, even if it’s not something you would normally pay to keep track of, you have to pay a fee in cryptocurrency.
This won't be the case anymore once dApps implement Plasma. No doubt there will be some growing pains, as developers have to think through when exactly to store information on the blockchain. And also who pays for it.
My guess (and this is really just a guess) is that eventually you won't even know you're interacting with the blockchain. It'll all be in the background. Again, as an analogy, to the internet, you don't set your own IP every time you check the internet or manually have to say: "why yes, I'd like to confirm the entering of this form and send this information through the TCP/IP protocol."
That doesn't mean that if you're not a bit technically giftes, you can't make out like a bandit. As with the internet, in the early days if you understood how to program even the shittiest websites, you could make a lot of money. Nowadays, most people just install WordPress for their website.
Similarly, if you're part of the small group of people who have some understanding of how all this works, you could make much money off e.g. PoS, mining, and other information assymetries. Keep in mind Ethereum only has 30 million unique addresses. I personally have created 5-6, so let's be generous and say every person has 2 addresses. That's only 15 million people right now who are on the Ethereum blockchain.
By the time we have mass adoption, people might not even realize the dApps they're using are built on top of Ethereum. And considering the lack of technical abilities of the average person, that's what you'll need anyway.
Coinbase is imo a good example of UX - you log in and you can buy/sell cryptocurrencies. No talk about private keys etc. Ethereum already has the ENS (similar to DNS, which sets this website to rooshvforum.network instead of a string of numbers). Once that becomes a lot more easier to use, you could see Coinbase and other companies roll out ETH addresses such as:
GiacomoCasanova.coinbase.eth
Like the early day AOL email addresses.
The fact that Ethereum is already on this idea, and has so many coins working on its platform makes me very bullish.
Would you use an email address that works for 95% of websites (dApps)?
And how much effort would you make if a company today demanded you make a new email address on their platform? (E.g. dApp saying you need a Cardano address).
As for his other criticism:
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You use a dApp for the first time. You click a button, the app says you need something called MetaMask. You follow the steps:
Keep in mind, this applies to every major technology, initially it's a hassle.
Can you imagine sending an email in 1995 vs. sending a paper letter? Sending email was much more inconvenient (I assume, since I wasn't old enough yet). You'd have to buy a computer, get an internet provider, wait for the internet guy to come around, create an email address, ask your friend over the phone what his email address was, etc.
Yet today, email and the internet have been ubiquitous.
This actually reminds me, applications like the Brave browser may be critical. It comes with Metamask preinstalled. And it will pay users to browse the internet (through ads). That could end up creating faster user adoption.
What we really have today is the skeleton version of blockchain technology, where everyone can see the bare foundation. It's still early days.
As for fluctuation in prices, this is where
stablecoins such as DAI could come in. DAI is pegged to the USD (after determining the USD was less volatile than the IMF's SDR). This is also why I'm so excited about DGX, where 1DGX is equal to 1 gram of gold.
We
may also see a day where something like BTC or ETH becomes the defacto global reserve currency instead of the USD. I'm learning economics as fast as I can right now, I'm not an expert on it by any means, but it does appear fiat currencies are losing trust as Central banks can print them nilly-willy.
And then you also have the question of what'll happen with protocol-level cryptocurrencies. They may end up getting relegated to mostly being used to pay stakers and swap tokens. I.e. this idea of using ETH to pay for your coffee may not take off due to its volatility. Then again, if ETH or BTC become the global reserve, paying 0.2 gwei for your coffee might be the same as paying $2 for your coffee and its volatility relative to the USD may not matter anymore.
We've got exciting times ahead, that's for sure.
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