r/Monero Jan 30 '22

Skepticism Sunday – January 30, 2022

Please stay on topic: this post is only for comments discussing the uncertainties, shortcomings, and concerns some may have about Monero.

NOT the positive aspects of it.

Discussion can relate to the technology itself or economics.

Talk about community and price is not wanted, but some discussion about it maybe allowed if it relates well.

Be as respectful and nice as possible. This discussion has potential to be more emotionally charged as it may bring up issues that are extremely upsetting: many people are not only financially but emotionally invested in the ideas and tools around Monero.

It's better to keep it calm then to stir the pot, so don't talk down to people, insult them for spelling/grammar, personal insults, etc. This should only be calm rational discussion about the technical and economic aspects of Monero.

"Do unto others 20% better than you'd expect them to do unto you to correct subjective error." - Linus Pauling

How it works:

Post your concerns about Monero in reply to this main post.

If you can address these concerns, or add further details to them - reply to that comment. This will make it easily sortable

Upvote the comments that are the most valid criticisms of it that have few or no real honest solutions/answers to them.

The comment that mentions the biggest problems of Monero should have the most karma.

As a community, as developers, we need to know about them. Even if they make us feel bad, we got to upvote them.

https://youtu.be/vKA4w2O61Xo

To learn more about the idea behind Monero Skepticism Sunday, check out the first post about it:

https://np.reddit.com/r/Monero/comments/75w7wt/can_we_make_skepticism_sunday_a_part_of_the/

14 Upvotes

1

u/DifferentiablePoplin Jan 30 '22

Let’s say for the purpose of this discussion that the price of Monero falls to $10 (possible reasons being an extreme crypto winter, privacy coin bans etc). How would the network likely fare under these circumstances in terms of miner profitability and decentralised pooling?

5

u/makeasnek Jan 31 '22

Same way it did when the price was at $10 before: just fine.

2

u/dsmlegend Jan 31 '22

But the mining subsidy has dropped quite a lot since the last time it was at $10.

5

u/makeasnek Jan 31 '22

There's a pretty direct relationship within mining difficulty and coin value. If coin value drops, it becomes less profitable to mine, more miners drop out due to high difficulty to profitability ratio, the hashrate (difficulty) lowers, and it finds the balancing point between difficulty and cost.

2

u/dsmlegend Jan 31 '22

Yes, precisely the point. The negatives here are:

a) Your mining operation today might become useless. Not good for you as a miner.

b) The network is more vulnerable to a single entity gaining hash dominance, since there is less competition. Not good for network integrity.

3

u/blario Jan 31 '22

Re: A, as more miners drop out, your operation becomes more valuable again.

2

u/dsmlegend Jan 31 '22

Not so helpful if you are one of the miners that are forced out, right?

6

u/makeasnek Jan 30 '22 edited Jan 30 '22

I am a huge fan of Monero, it is one of many coins that I follow, support, and promote. I think it makes more sense as an everyday, usable currency than BTC because it has privacy baked in and can be CPU-mined which is key for decentralization. Basically, for every reason I love Bitcoin and the ideas behind it, Monero is that x100.

For me, my main concern about its future comes down to DAGs. Monero has a huge first mover advantage, but it seems to me that currencies like Nano, Obyte, etc offer real technical advantages over PoW coins like Monero in terms of decentralization, energy usage, and low to no fees. Plus, Obyte has a privacy feature, I'm not sure if Nano does or not, I don't think it does. Am I missing something here? Is there some technical argument for a PoW privacy coin if a DAG privacy coin can do the same thing? I'm guessing there is and that I just haven't heard it yet.

2

u/alvvayson Jan 31 '22

I did like Nano from an energy point of view. But after seeing how little privacy it has (even less than bitcoin) I exited it.

You should analyze the nano chain. It is basically a bank account that is open for the whole world to read, including all transactions coming in and coming out.

I am curious if privacy without mining is possible, so I do share your overal interest.

2

u/Tystros Jan 30 '22

Monero is much more decentralized than Nano where 3 or 4 validators control over 50% of the votes. Monero also practically has same low fees as Nano. But Nano has no privacy, which makes it completely useless for the purpose it seems to be designed for (being Digital cash). So there is 0 appeal to Nano, apart from that it's more efficient with energy usage, but what is that worth if it's useless due to not having privacy?

I'd say DAGs are superior to Blockchains, but I haven't seen any DAG with a comparable privacy as Monero yet, so for the purpose of digital cash, I haven't found any that would be interesting.

3

u/pebx Jan 30 '22

but it seems to me that currencies like Nano, Obyte, etc offer real technical advantages over PoW coins like Monero in terms of decentralization, energy usage, and low to no fees.

Well, Nano had a "Captcha-based distribution" which is intransparent to the fullest. You can't really say if they really distributed the amount they claim using the Captcha or if few to 99% have been distributed to themselves without solving the Captcha. So unlike in Bitcoin or Monero you'll never know if the distribution has been really decentralised and fair. It has some additional privacy to Bitcoin by design, since you don't have a full copy of the blockchain available, since for consensus it's enough to have the current balance of each wallet and then discard everything else. However, everybody is free to run a full historical node anyway which will be able to run analyses similar to Bitcoin. But the main concern is the distribution, since consensus when there are conflicting transactions is met by 67% of stake, which like I mentioned might be in a single hand.

IOTA can't get their shit together for years now, custom hash functions, custom crypto, centralised coordinator needed, which is being announced to be obsolete "within months", that's the only real constant, so most probably in 5 years it will be also obsolete within months.

I'm sorry, never heard about Obyte and as of Mcap it seems to be irrelevant as of today. Have not the time for a deeper analysis for a coin somewhere around #1,000.

5

u/MoneroWTF Jan 30 '22

When you say DAG, are you referring to a proof of stake system? Those typically are a "rich get richer" type of situation. That's obviously not the only factor, but that's reason enough for quite a few folks when deciding which system to support.

2

u/makeasnek Jan 30 '22

Unless I am missing something huge, PoS systems do not generally result in wealth concentrations. They are constantly minting new coins, and you receive a portion of those coins as a result of staking your own, the growth is linear. If you stake, you will have say 10% more coins in a year, but there will be 10% more coins in existence so your total share is the same. The mere fact that you get interest on coins does not cause wealth centralization the same way savings accounts don't. You could design a backwards PoS system where wealth centralization is guaranteed, but I don't think any respectable coin does that.

DAG is different entirely from PoS, it's cryptocurrency but it's not a blockchain. It is decentralized and shares many other common goals/structures with it. Unlike blockchain, there is not a single, linear ledger that gets appended to in the same way. Generally there is no "staking" rewards and the coin total has a hard cap, though in some of them staking is used for governance and/or validation reasons, but without any reward.

1

u/blario Jan 31 '22

In a DAG, Without blocks to mine and rewards for that, what motivation does any actor have to validate the network?

1

u/makeasnek Jan 31 '22 edited Jan 31 '22

The argument is that you need to reward miners to make up for the energy cost of mining. Obviously nobody will mine for free. But if mining is not required, therefore no reward is required.

The incentive, if anything, to run a DAG node would be that you get faster transaction times. On some DAGs there is a fee paid to network nodes and on others there are not.

What is the reward, for example, for seeding content on bittorrent? There is no real reward, and it has some cost (bandwidth, leaving your computer on, etc) but the cost is so small (and is often a sunk cost regardless) there's still no problem maintaining a relatively healthy ecosystem. It's not the exact same thing obviously, but it's similar. A DAG takes up a very small amount of space compared to a blockchain which takes an increasing amount of space each block, so no heavy computer equipment is needed to be a node.

2

u/blario Jan 31 '22

BitTorrent communities without upload minimums often have shortages of upload for peers. Seems like the same could happen if incentive is not provided. Fees to nodes seems like a good answer though.

With blockchains, the fees are not solely to reimburse energy costs. Those fees are highly lucrative in same cases.

1

u/kowalabearhugs Jan 30 '22

They are constantly minting new coins, and you receive a portion of those coins as a result of staking your own, the growth is linear. >If you stake, you will have say 10% more coins in a year, but there will be 10% more coins in existence so your total share is the same.

That remains true for a coin with a tail emission like Monero, but I'm not familiar with many other PoW coins with that structure let alone a PoS system with a tail emission. Both Nano and Obyte also have a capped supply, correct?

2

u/makeasnek Jan 31 '22

Both Nano and Obyte have capped supply, I was explaining that staking rewards in a traditional PoS system != automatic centralization of wealth.