Which is better, Ethereum or Ergo?

Community Chat
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Right now isn’t a bad situation. Plenty of projects have high enough market capitalization to “do things.” Unless you think it will become worse? Buttcoin has steadily lost dominance. In bear markets it gains dominance, in bull markets it losses dominance…

What does Buttcoin do that Cardano and Ergo cannot?

Well BTC is the most secure ledger in history. It has the highest hashrate of any blockchain. The primary value of BTC is to resist attacks from outside forces, while allowing anyone who can afford transaction fees to store information on the ledger–safe from attack. Because money is the most valuable information to store, BTC has value.

Part of the security model is ASIC mining, which means people around the world have specialized equiptment just for mining BTC, and therefore have no incentive to use that equiptment to attack the network. So the more money an entity puts into attacking the BTC network, the less monetary incentive they have to conduct an attack.

However, being the most secure does not mean other blockchains are not secure

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I definitely think it will become worse. Keep some cash or other liquid assets on hand, would be my advice. And start mining some ERG!

Security is a complex topic. Bitcoin claims to dominate security based on hashrate - but I bet I can undermine your confidence in that proposition, via several arguments. The first would be the concentration of the resources needed to maintain that supposed security, especially in a time of war. From the standpoint of providing a secure, long-term store of value, I think probably Cardano is at the head of the pack. But rather than take that tangent, let’s stay focused on money rather than security.

I’m sure you are familiar with Gresham’s law that bad money drives out the good. This is often noted by bitcoiners as the reason number goes up: the US dollar, while legal as currency, will dominate trade because it is bad money. The good money, bitcoin will be hoarded and traded among a group of cognoscenti. A better gold than gold.

But note that the explicit argument here is that bitcoin will mostly leave the market and will not be traded. This is why some folks like to say that Ethereum, with its variable supply and Turing complete trading engine, must be the future of money: because it might be even worse than the dollar. Those people are trying to find greater fools, but the bitcoiners are lesser fools. I kid, I kid.

The thing that is so compelling about the Ergo manifesto is that it focuses on the utility of money while avoiding the temptation to throw away the principles that make it a good store of value. Money is just a tool, ergo it should be used.

Not hoarded. Not Hodled till I die.
But used to buy and sell the things that we need and cherish in life.

ETA: Michael Saylor is like Scrooge McDuck. There, I said it.

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Did you vote on the recent emission proposal? Just wondering if as a miner it was straightforward to vote…

Yeah certainly Ergo’s mining algorithm has the advantage that anyone with a gaming computer can reasonably contribute to the network with their investment to reward not having a steep buy in (spending $$$ on an ASIC, because nothing else is competitive). Also, if a massive war broke out, Bitcoin mines might get targeted for destruction or takeover.

Does Gresham’ law factor into modern monetary theories? Like, inflate your currency to pump value into sectors of the economy and incentive spending? You can’t inflate bitcoin, so there is more incentive to hold and no ability to redistribute the value. Versus USD being centrally controlled without backing, but the centralized control is what allows the currency to dominate. My additional clarifying question: In this case does good money = sound money?

The bitcoin maxies truly make me uncomfortable. The more I learn about their arguments, the more I see their reasoning. The more I see their reasoning, the more uncomfortable I become. Buttcoin maximalism is the belief that the economic revolution has gone far enough. The counter argument is El Salvador. There is no proof that El Salvador has the BTC it claims to be backing its new bonds with. If BTC had more robust smart contracts, bonds could be issued on chain and prove the backing inherently.

I like the ethos of the Ergo Manifesto for this reason. The money and tools should be built for everyone…-not as a new tool for governments to use their subjects in more abstract ways. From what I’ve read, many places that “accept” BTC as payment are using wallets that cannot connect directly on-chain. So people aren’t even trading real BTC, just the idea of BTC.

The thing that is so compelling about the Ergo manifesto is that it focuses on the utility of money while avoiding the temptation to throw away the principles that make it a good store of value. Money is just a tool, ergo it should be used.

Not hoarded. Not Hodled till I die.
But used to buy and sell the things that we need and cherish in life.

^Perhaps the ultimate “bad” money is SigmaUSD.

I really don’t get Michael Saylor. If BTC is the holy coin–if no further innovation is needed–why is he selling it still? He’s already accumulated enough to last his lifetime. The revolution is over and he has reached monetary nirvana. Saylor is a high priest in the Buttcoin religion and I’m a peasant wondering how to apply his teachings to my everyday life…

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I voted yes, which was easy, because so did my pool.

Like all economics, Gresham’s Law is just a rule of thumb. Even the iron law of supply and demand has some rather notable exceptions. Economics is just a continuation of politics by other means.

MMT is the just latest group of alchemists insisting that money is magic and they know how to master transmutation. I think Keynes got it mostly right, if you just want to wave hands around. But we never pay down the debt in the good times, so the trains run off the tracks.

One interesting consequence of cryptocurrencies is that money could become properly measurable, unlike gold or dollars. If we ran an economy using a cryptocurrency, instead of just a bunch of promises, we might actually get to understand better what is really going on and treat it scientifically. I think this is the main purpose of the CBDC, but care must be taken to avoid invading people’s privacy.

You cannot inflate bitcoin, ada, or erg, yes. This is a big problem because of Gresham’s observation. Another way to look at it is that deflation is the great killer of economies. Money is the lubricant. Inflation is like the engine is burning oil. Deflation is like there isn’t enough oil. Which is worse?

The importance of the algorithmic stable coins is not that they are pegged to a sovereign currency or some commodity. The importance is that their supply is variable to accommodate economic conditions.

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Going from math, physics, chemistry to economics left me scratching my head sometimes. Studying Keynes, Hayek, Marx, Pol Pot, etc seemed like a strange way to view economics. These guys all lived relatively recently, did humans really just now figure out the “best” economic system(s)? Evidently not, I believe it was Keynes who said that by 2020 the production capacity per person would be so high that most people would work less than 20 hours a week and spend the rest of their time enjoying individual interests such as inventing new technologies.
^ This is something I like about cryptocurrencies. It’s a tool we as humans can apply as you wish. Perhaps CBDC technology will be used to spy on citizens, but those citizens will have the tools to fight back (if they choose too, just like owning guns).

Dude II’m nor sure I buy into the idea that deflation kills economies, therefore inflation is needed. What’s an example of deflation killing an economy? There are limitless examples of inflation gong out of control… I don’t think people want to spend their money instead of saving it because of inflation.

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“The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.”

Keynes was a genius. For all the concern that economics cannot be addressed scientifically or mathematically, he nevertheless tried during times of tumult. Economic systems, like all technology, have improved unsteadily across known history. They will continue to improve, if we don’t blow ourselves up first. If Keynes thought that the distribution of wealth would remain fair, and was merely making predictions about productivity, then you can fairly castigate him for being naïve and optimistic about human nature; but he was right about the productivity. It is truly remarkable what we as a species have wrought. The elite truly live like god-kings among us.

Deflation surely does kill economies, because the savvy begin to worship money instead of assets. Our productivity is so high because our consumption is so high. Our consumption is so high because most people spend beyond their means. Partially we do this because we are stupid, and unable to resist the Bernaysian programing. But we also do this because we anticipate that assets are more valuable than money. Not just appreciating assets like a small homestead, but depreciating assets that deliver better value than just holding cash… like an above-ground pool for the yard apes.

And most people, if presented with the idea that their money will constantly buy more over time, will spend less now and save instead. Less consumption means less productivity. Less productivity means less employment. Less employment means less wages, making money even more scarce and valuable. The Scrooge McDuck’s sit on their giant piles of money and call it the “apex asset”.

You want examples? Every third world country during the Cold War, where dollars were scarce. Zero development. Hoarding of limited resources by warlords. Exploitive and extractive economies that enslaved their people to make drugs, precious materials, or subsistence agriculture. A mess that should not be glorified.

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Now that it’s evident that the individual workload won’t increase, just production and consumption, should we strive for development?

I’m in a 3rd world country right now. In school I was taught to call countries like this “developing countries.” It’s not accurate though, because most of the populace actively resist development. They don’t want paved roads. They already know how to make dirt ones. They don’t want modern homes. Bricks, cement and bamboo work just fine for anything up to a 3 story hotels (and the last thing they want is a hotel bigger than 3 stories). Many don’t want democracy, because dictators tell you the rules. People here would rather hold the local currency or buy an additional goat over having appreciating assets like USD or stocks… And it’s not because they’re starving or don’t have extra money to put aside. They would rather have another goat to look at instead of stocks on a computer screen.

I know the USA is a different situation. We don’t all have a small amount of farmland to produce our own food and dairy products. However, I question if development is the proper goal. Is a better goal to maintain our current standard of living while decreasing how many hours we work? Americans work way too much, and for what? Smart phones, scam student loans and pools. Until I came here, I felt bad about myself because I like to take a nap in the middle of the day. Here I’ve walked into a restaurant or other business in the afternoon and had to wake up an employee from napping on the job.

Pol Pot had some well placed intentions. Maybe we can start experimenting with our own modern socialism, using the traceability of crypto to keep bureaucracies accountable. Of course, owning your own crypto also provides a natural safety net.

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South East Asia was definitely second world or developing world, depending on which superpower they favored.

I’m mostly thinking about post-colonial Africa and unaligned S. America. People like to talk about the inflation in Zimbabwe… have you considered what the monetary situation in the Republic of Rhodesia looked like?

Pol Pot is a good example of what goes wrong when people take themselves too seriously, and get others to join them.

Brazil attempted to create a currency that tracked population, but I don’t think that is enough to counter the deflationary aspect of a fixed money supply.

I think think that the dollar system jumped the rails when Billy Boy Rubin, Gingrich the Newt, and Bubba Clinton all decided we didn’t need primitive rules like Glass-Steagall.

Anyway, we are back to discussing agorism, instead of the differences between Ethereum and Ergo. Lets see if we can stretch back there. Ethereum has a variable supply (and unfair initial distribution). I am arguing here that a variable supply is good, but only when it comes to stable coins. I think that the fixed maximum supply (and fair distribution) of ERG is acceptable as the framework upon which to build a fair economic system. In fact, even moreso than Cardano, because so much ERG has yet to be emitted. Way more than Bitcoin, especially if the Nakamoto wallets move.

If I wanted to build a CBDC with some degree of stability and gradual inflation, I would definitely insist that the underlying infrastructure be public, decentralized, and difficult to game outside of parameters that are set by law (congress) and enforced by fiat. It would need to be secure and private, easy to use for payments online, easy to transfer peer to peer, and not subject to some fascist corporate implementation so that we depend on some pigs being too big to fail. Public, open source, infrastructure. It should also be tied to the USPS, identity, citizenship, voting, and all suitable government benefits. The Fed has a monumental job on their hands. I think they will let the ECB act as the western guinea pig, before they jump in. That is smart because Europeans are sure to carefully blunder into the worst case scenarios. I know they will insist on having competition in the CBDC industry, but I really hope they don’t let Jamie Dimon write the rules. Mr. Morgan’s ghost is salivating.

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If you are a religious man, you should consider what is meant by “the mark of the beast”, without which “no one shall be able to buy or sell”.

We don’t have to sleepwalk into John’s fever dream. We can be deliberate, and try to avoid the worst outcomes as we embrace the consequences of cryptography and a global network.

ETA: Did you ever get the feeling that you are being followed? THE ORB - S.A.L.T - YouTube

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@Grayman

Hey man, we’ve discussed a lot of ideas that could benefit the broader Ergo community. I want to codify our ideas on the Ergo Blog.

I think we discussed too broad a range of topics to make one cohesive, encompassing blog post (as you mentioned with us getting off topic). How could I break down our discussion into multiple specific blog posts? I’m used to the technical writing format of lab reports, this is my first time free-handing it :slight_smile:

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Well you should definitely check out Cafe Bedouin’s site for inspiration about writing in a free form.

I’d probably choose to focus on the Ethereum vs Ergo stuff, rather than macro and agorism… Tokenomics, mining comparison, eutxo vs Solidity, PoS implementation in an already skewed and plutocratic ecosystem…

Bitcoin was the inspiration, Ethereum is the target.

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@Grayman What do you think about this?

Ergo Through the Lens of a Bitcoin Maximalist

In this blog post I look at Ergo through the lens of Only the Strong Survive, an opinion piece by bitcoin maximalists Allen Farrington & Big Al. I paraphrase sections of their paper to uncover how Ergo looks based on some of the rationales behind bitcoin maximalism.

Bitcoin maximalists believe the benefits of Layer 1 (L1) blockchain technology are fully realized by Bitcoin. These L1 luddites want further cryptocurrency innovation to focus on building on top of Bitcoin through through Layer 2 (L2) solutions such as Lightning Network.

From the paper:

There are a handful of interrelated characteristics that constitute the real innovation of Bitcoin and that delicately balance to give it unprecedented functionality. These are:

i) The proof-of-work algorithm

ii) The difficulty adjustment

iii) The native unit of (only) monetary value

iv) The lack of a founder or acknowledged leader

v) The economic incentive created for distrusting individual actors to achieve distributed consensus, unforgeably and immutably. This all allows Bitcoin to realize endogenous value as an asset grounded in its security, and endogenous provision of security as incentivized by this asset.

Compared to Ergo:

i) Ergo is a democratic blockchain with an ASIC-resistant proof-of-work algorithm, Autolykos, that maintains the ethos of 1 CPU = 1 vote. Hashpower = voting power. The miners own our network

ii) Autolykos has difficulty adjustment.

iii) Ergo has the native coin ERG.

iv) Bitcoin has the anonymous founder Satoshi Nakamoto. Satoshi is the largest holder of BTC, with 1.1 million of the 21 million maximum supply of Bitcoin. Mr. Nakamoto made suggestions for the future of the protocol in the months following public release. Satoshi left behind ideas for Bitcoin’s future, some of these ideas were not implemented by later developers. For example, Satoshi believed that block size limit should increase to improve scaling. This improvement was never realized due to the poor leadership of a third party and as a result Bitcoin transactions cost several dollars instead of several cents. After Satoshi’s disappearance the for-profit company Blockstream hired Bitcoin core developers and used their influence to prevent an increase in block size past 1 MB. The limited in block size is the reason L2 solutions are needed to scale transaction volume. The most popular L2 scaling solution for Bitcoin is the Lightning Network. The first transaction on the Lightning Network occurred in 2017 on Litecoin by an employee of Blockstream…

Ergo’s founder and core developer is cryptocurrency innovator Alex Chepurnoy, known by his handle Kushti. Kushti is a leader in the Ergo ecosystem through his suggestions for improvements to the protocol. His leadership (and the leadership of other Ergo developers) is overwhelming wanted by the community. Recently Kushti proposed EIP27, an alteration to the ERG emission schedule. Ergo miners approved this proposal with over 90% of the hashpower voting yes on EIP27. If Satoshi had maintained a similar level of involvement Bitcoin may have won the block size war.

Bitcoin maximalists purport that Bitcoin doesn’t have a leader. El Salvador recently adopted BTC as legal tender and is using the Chivo wallet for transactions. The Chivo wallet uses the Lightning Network and El Salvadorians cannot transact directly on the Bitcoin blockchain. The 1 MB block size limit of Bitcoin limits the freedom of users by incentivizing centralized L2 solutions such as Lightning Network. The code of a cryptocurrency is the constitution that limits the power that can be exerted on people using a given blockchain. On Ergo the constitution provides a comparatively more robust suite of L1 solutions that benefit from decentralization.

v) Ergo has this same value proposition.

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Excellent start, well focussed.

But needs more…

Transition paragraph about how the Bitcoin maxi trashes Ethereum, and why Ergo cannot be similarly criticized…

Then a section on how Ergo has smart contracts, and also beats Ethereum on it’s strengths too.

Keep going!

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@Armeanio
Does the Ergo blog take community submissions? I want to continue to write this blog post, but I don’t want to start my own blog…

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My friend, the internet is like old wagon wheel trails… it will all be forgotten.

Feel free to continue composing here.

The permanent internet history will start with web 3.0.

Have you looked at arweave?

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I’m not worried about writing down ideas for permanent storage (I shouldn’t have used the word codify earlier).

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Quality community content is always welcome

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I’ve recently understood that neither of them is the best. I more like Litecoin and DASH forks anyway. The one I’m looking into rn is WEI.

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Isn’t Litecoin just a fork of Bitcoin?

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That’s a remarkable statement for a first post.

Can you say why you prefer WEI?

Have you considered Dogecoin? That is a fork of Litecoin and I hear the richest man in the world owns a bunch of it…

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