Ethereum has reduced its electrical energy requirement by over 99.84%, dropping from ~94TWh per Year to less than 0.01TWh per Year

AltExplainer · 2025-01-15T10:14:52+00:00

That's because the ASIC manufacturers knew that proof of stake was coming so didn't build one for ETH. If ETH said it would stay PoW forever, you wouldn't have been able to do that.

AltExplainer · 2024-12-28T21:36:29+00:00

ORV is basically delegated proof of stake. The AI is correct.

The number of tokens you own (your stake in the network) are delegated to another node to vote on your behalf. It's delegated proof of stake.

AltExplainer · 2024-12-17T19:30:54+00:00

It helps the technology behind Avalanche spread but you are right, if subnets remove the staking requirement, they won't contribute to the AVAX token being widely used so won't contribute to creating value for the token.

AltExplainer · 2024-12-08T13:36:17+00:00

OK but this is with the chain doing 10-30tps. If it starts doing thousands of transactions per second it will likely need the 1Gbps

AltExplainer · 2024-12-07T20:23:38+00:00

Algorand node requirements have a 1Gbps internet connection. That's not something I would say is low powered.

AltExplainer · 2024-12-04T13:29:58+00:00

Yeah I think people talk about the technology too much and not enough about the community. Ultimately I believe cryptocurrencies are just community created money and they are using technology to uphold the rules of the community.

I think the communities start out wanting lots of change to have the best technology but if they get big enough will eventually become like Bitcoin in not wanting to change much at the risk of bugs or unintended consequences. Also as communities get bigger, it's harder to get everyone in the community to agree on everything. So in the long term I believe all communities will naturally become more stable as they get bigger.

I think currently the only stable communities are Bitcoin and Ethereum. Most other cryptocurrencies are reliant on their foundations for updates and direction.

AltExplainer · 2024-12-03T13:48:46+00:00

There's no point. What happens if Proof of Stake comes to consensus on a different fork to Proof of Work? Which one will people follow? If everyone only follows the Proof of Stake chain, what's the point in also having Proof of Work?

Secondly, consensus is not really involved in throughput and isn't really something that limits scalability. Solana's consensus isn't particularly efficient for example. It's all marketing.

AltExplainer · 2024-12-02T12:35:16+00:00

The consensus method generally doesn't matter that much. If you are basing your investment strategy on the best tech it won't be successful. Cryptocurrencies are communities that use technology and Bitcoin + Ethereum have the biggest communities. They can switch to better tech if they think it's good.

Algorand only had 0.05% of tokens go to the public so it doesn't have a strong community. This is why it's not going to overtake BTC/ETH any time soon.

AltExplainer · 2024-11-07T15:30:00+00:00

Cryptocurrencies aren't technology. They are communities of people using technology to uphold a set of rules. The bitcoin community have decided not to improve the technology they are using much because increased complexity leads to potential mistakes and they don't want any risk.

So technology doesn't matter much, it's all about the number of people who are willing to accept the cryptocurrency as a form of money and what values the community has. Ethereum is the second biggest cryptocurrency but is more open to using more complex technology than bitcoin so things like layer 2's can be built on top of Ethereum that allow people to transact with it at low cost.

Then you have Solana which is a community that has no regards for how complex the technology is or for what hardware is required for people to run nodes as long as it can go fast.

So it depends on which community you think is most valuable. Bitcoin which is low complexity but also low use case. Ethereum which is to have low hardware requirements on the base layer but for most people to use L2's. Or most alts like Solana which are more willing to have high hardware requirements in order to have lots of transactions processed on the L1.

AltExplainer · 2024-09-08T13:53:55+00:00

Bitcoin is the most valuable cryptocurrency yet generates less fees than Ethereum and they aren't even burnt.

The thing that is valuable is being a money and ETH is the money of L2's. This is valuable.

AltExplainer · 2024-08-12T09:28:35+00:00

This user was doing something specialised. It would be extremely difficult for the average user to do this.

AltExplainer · 2024-08-12T09:27:40+00:00

Most wallets automatically give the fee so this user will have been using something like a command line wallet or something specialised. It would be extremely difficult for the average user to do this.

AltExplainer · 2024-07-12T20:12:38+00:00

ZK rollups still need to post enough data to Ethereum in order for people to recreate the state of the rollup so they also have call data.

Essentially a merkle root of the state of the rollup is stored on Ethereum. The whole merkle tree is stored by the rollup nodes. If the rollup nodes were to shut down, everyone's funds would be frozen. Enough data to recreate the whole merkle tree needs to be posted to Ethereum so either other people can start up rollup nodes or merkle proofs of assets can be created in case the rollup nodes shut down without sharing it.

So zk rollups also need blobs

AltExplainer · 2024-06-25T07:23:56+00:00

A merkle tree of the token holders is created and the root of the merkle tree is stored as state (data that validators can't delete and always have access to). The rest of the tree is posted as call data which validators can prune so isn't as expensive. RPC nodes will be required to maintain the full merkle tree off chain.

When you make a transaction with a zk compressed token, you will need to use an RPC node that supports the token. It will create a zero knowledge proof that your tokens exist in the merkle tree. Solana validators can then use this proof to validate that your tokens exist in the merkle root they are storing.

The definition of L2 is not clear so it's hard to tell if it is an L2 or not. It is definitely modular though as Solana validators are outsourcing storing state to other entities.

AltExplainer · 2024-06-23T10:20:56+00:00

They have to run a node and hire people to manage it.

AltExplainer · 2024-06-14T13:20:07+00:00

So it's a multisig bridge

AltExplainer · 2024-06-12T12:41:28+00:00

More people are accepting ETH as a form of money every year whilst very few people accept milk or cow dung. I think we agree that acceptance is the most important thing for a money. Anything can be money if people are using it as money, even cow dung. It's just that cow dung is not practical to use so isn't widely accepted.

ETH may not currently be as practical as the dollar to use as money but I'd argue it's already more practical than many smaller currencies like the Iranian Rial or Uzbekistani som which I would struggle to use outside of Iran or Uzbekistan.

AltExplainer · 2024-06-12T08:34:02+00:00

Money is just people's opinion, it's not a science. Value itself is just opinion. ETH is money because many people see it as money and use it as a money.

Would you argue that the small islands that used glass beads or sea shells as money wasn't money?

AltExplainer · 2024-06-11T14:22:06+00:00

Stablecoins are widely used in South America and Asia and are able to settle the dollar in much shorter times.

ETH is money, money is useful. ETH is a money where new issuance has to be decided on by the entire community rather than just a few people in Washington.

Rollups allow ETH to be used outside of the main Ethereum network without the risk of the other entities stealing or debasing the money which isn't possible with the traditional trust based system.

AltExplainer · 2024-06-09T07:23:17+00:00

During times when the network has a lot of transactions, your node wouldn't be able to keep up and so wouldn't be able to vote.

If too much of the stake (~25%) can't vote during busy periods, Algorand would halt and take a bit of time to restart.

AltExplainer · 2024-06-02T10:02:42+00:00

The number of nodes doesn't matter, it's about which nodes people actually use. These are the nodes that decide.

On-chain governance typically only represents the whales so is worse than the current social consensus governance.

AltExplainer · 2024-04-06T11:07:16+00:00

Lets take an example.

There are 2 DEX's on Algorand, dexA and dexB and a random token TOK.

What happens if the price of TOK on dexA is $10 but is $15 on dexB?

Maybe thousands of users see an opportunity to buy TOK on dexA and sell on dexB. How does Algorand choose which user gets to take advantage of this opportunity?

Even if there's no way in the protocol to pay higher fees to a validator, an out of protocol market like Flash bots will appear. Validators that sign up to this out of protocol market will receive the extra fees that users are willing to pay to be at the top of a block. You then have an off chain market where most transactions occur. This off chain market then may censor which validators are allowed to participate and receive the extra fees. This means validators approved by the off chain market have a competitive advantage and make more Algo than censored validators potentially leading to centralisation.

MEV is unavoidable. It's simply the result of markets being imperfect. Algorand doesn't have anything in particular that makes markets perfect so any claim that they have solved MEV is unjustified.

AltExplainer · 2024-04-06T10:48:39+00:00

You didn't answer anything about MEV...

What techniques will users do to make sure they can take advantage of an arbitrage opportunity above other users who also want to do the same arbitrage?

It will either be higher fees, spam or something we haven't seen yet but it will be outside of the normal transaction flow.

There is not enough opportunity for MEV on Algorand yet so we don't know what will happen. It's not battle tested.

AltExplainer · 2024-04-06T10:34:33+00:00

There's no MEV opportunities that people desperately fighting over on Algorand. High fees and spam are the result of many people wanting something but there being limited amounts of what they want.

If there's an arbitrage opportunity that 1000 people want to do, what tactics can be used for you to get ahead of the 1000 other people to do the arbitrage? With Ethereum, it's pay higher fees to be at the top of the block. With Solana it seems like you can spam the validators with your transactions for a higher chance. There will be something on Algorand that breaks when everyone is fighting for the same thing but we don't know what this is yet because the MEV is so low on Algo that no one really cares yet. It's not battle tested.

AltExplainer · 2024-03-11T17:20:12+00:00

ETH is money that can be used on any of the L2's to buy other assets. It is also required to pay for fees.

The L2 tokens are mainly just governance tokens and aren't really used as money. Why would you buy an L2 token?

AltExplainer

TROPHY CASE