I wish there was a source/expert I trusted on crypto, but at best they're usually "naive" and so many are just "i like what I have my money in or am paid to like". Solana is one of the theoretical...
I wish there was a source/expert I trusted on crypto, but at best they're usually "naive" and so many are just "i like what I have my money in or am paid to like".
Solana is one of the theoretical techs coming out of crypto that could seriously change things, mostly due to it's potential throughput allowing it to work for serious enterprise level traffic (like visa).
On the other hand, it's also choked repeatedly and is heavily centralized, and there's legit concerns it's all just marketing bullshit and it can't actually meet the metrics needed.
Visa taking a stab at this is really quite interesting, especially now. Maybe they're just dipping their toes in the financial wild west for their own scam, but after the market crash/correction, it's hard to see that as the most likely cause. Still large companies have done dumb shit before.
I wish there was someone I trusted to go through the tech and the actual real life use case visa is planning. The article isn't awful but it's clearly just marketing nonsense. If there's anything to this tech at all this will probably be the big show.
So big question here: The entire point of crypto (currency) is that there is no centralized instance. Why are people celebrating a big payment provider (i.e. a one of literally the most...
So big question here: The entire point of crypto (currency) is that there is no centralized instance. Why are people celebrating a big payment provider (i.e. a one of literally the most centralized instances) stepping in here to provide a supposedly decentralized payment system? I understand that this is has the potential to be a big boost in credibility for crypto which it currently, sorely lacks, but isn't one of "the big companies" taking control of decentralized system exactly what's not supposed to happen?
I am aware of the various technical limitations in crypto which has resulted in a pseudo-decentralized system which is actually controlled by the few actors who have the biggest wallets, but most of the worlds online payments go through either Visa or Mastercard, and if they make a system like this, they will certainly not build it in an open fashion which makes it possible to cut them out. How is this something worth celebrating?
We are not going to get away from trust, because trust has too much value, and a world in which you don't trust anybody is an absurd hypothetical anyway. Insofar as a trust-free distributed consensus mechanism like a 'blockchain' has value, it is not as something that can be used to realise a pseudo-libertarian ideal of hiding digital dollars under your digital mattress; rather, it is as a common substratum and a mechanism and something which can be used to institute policies that effectively economise trust in interesting and specifically targeted ways. This mirrors what jaron lanier has said about the topic, as well as anoma's heterogeneous security models.
I agree with you, but then why bank on crypto as a big institution? Chasing a new customer base? The trust Visa and Mastercard has comes from them being registered, regulated business with a clear...
I agree with you, but then why bank on crypto as a big institution? Chasing a new customer base? The trust Visa and Mastercard has comes from them being registered, regulated business with a clear chain of responsibility. This is not going to change. By implementing any sort of crypto they are not going to gain any more trust.
My theory is that Visa is trying to see if their opex is lower on Solana vs than on their in-house infra. The under-the-hood transfer an settlement could still be totally hidden from the user. And...
My theory is that Visa is trying to see if their opex is lower on Solana vs than on their in-house infra. The under-the-hood transfer an settlement could still be totally hidden from the user. And to plays devil's advocate, if the opex is lower, visa could maintain their same fees ($0.12 per transfer etc.) while scalping a higher margin.
Moonchild has a great answer but in general "the point of crypto" doesn't exactly matter nearly as much as "the actual use case of crypto...if any". Obviously "knowing" that you have $100 because...
Moonchild has a great answer but in general "the point of crypto" doesn't exactly matter nearly as much as "the actual use case of crypto...if any".
Obviously "knowing" that you have $100 because 45,000 people across the globe did math that agrees you have $100 has it's uses. Still there are way too many safety/quality of life features that institutions provide which the average user is NEVER going to live without. While there are some crypto's looking into this at a lower level (I think radix was the last one I heard about) generally banking institutions exist because of these realities.
People need loans, interest, liquidity, and a place that they can call and say "hey uhh i fucked up can you undo that".
From the POV of a massive company like Visa, crypto (and really more blockchain), might be attractive as a way to verify transactions for extremely cheap. Thus being able to undercut the competition and still take a huge profit.
From the POV of people in crypto, well it's the use case outside of "volatile digital gold" they've all been waiting for. The fact that coins are still a market is probably something that is undesirable, but maybe has intrinsic value.
Either way, centralization and regulation are coming if there's any future beyond "for some reason i don't want to use normal money" uses. There are those who don't care if this happens so long as they get rich quick off it (likely not to of course), those who want this to happen but also want crypto to stay "pure" (basically in denial about how all of this works), and those who want to stick to the "tenets" of crypto and don't care if it blows up or not so long as it stays decentralized (purists).
Edit-
And on rereading my original comment, the "centralization" of solana is something a little different.
A supposed advantage of crypto is that if you hit a critical mass of validators, it should be extremely hard for the network to ever go down. You have people all over the world handling transactions, so even if an entire country goes out, there's still thousands of nodes processing transactions as if nothing ever happened.
Solana is infamous for having a lot of their nodes be controlled by them...and this has multiple times led to outages and rollbacks when things failed, which is not a great look and obviously not something Visa would tolerate.
When discussing Solana's centralization, it's essential to note that it's not merely the quantity of validator nodes that's pivotal. What's also significant is the distribution of stake weight...
When discussing Solana's centralization, it's essential to note that it's not merely the quantity of validator nodes that's pivotal. What's also significant is the distribution of stake weight among these nodes, and their geographic distribution.
Ideally, there should be a majority of individually operated nodes, each with a stake weight anywhere between 15k to 1.5M SOL (somewhat arbitrary, I view 1.5M SOL as a sufficient stake upper-limit for a validator). It is the stake weight of a node that determines how often a validator will be given a leader slot for producing a block. Too low of a stake weight, and you'll never get a leader slot. For instance, even if the Solana Foundation operated a million validators each staking just 1000 SOL, none would carry enough weight to secure leader slots or produce blocks.
Historically, Solana has experienced liveness issues arising from transaction processing problems, such as intense competition for a particular state or challenges with leader propagation. Notably, due to the substantial degree of decentralization, rectifying these outages with protocol upgrades took considerable time. This was primarily because it necessitated a certain percentage of the distributed stake weight to update their software. Had Solana been more centralized, the outages would have been far quicker to resolve :)
It's for this reason that the validator community has adopted a rolling approach to software upgrades, basing decisions on the percentage of stake running the newest version. This strategy helps mitigate potential impacts from unexpected bugs.
On the geographic front, I believe the Solana network has a satisfactory number of validators. The priority for these validators should now shift to relocating to regions with sparser stake concentrations. Notably, there exists an incentive structure for this: stake-pools gauge if your validator runs in a city or data center with other validators, and will decrease (or increase) the stake they delegate to you based on the stake concentration.
However, I'd argue that there is a certain an element of centralization: We see a significant lack of diversification among Solana validator software. This is where solutions like Firedancer, as Visa highlighted in the article, can play a pivotal role. A validator client built from the ground-up on spec alone, to diversify how a more significant portion of stake is processing transactions. There is also the Jito Solana client, though I believe its mostly an up-to-date fork of the Solana Labs client, with some additional code to help reduce spam on the network (by providing a way for the network to have efficient MEV, so instead of spamming for state, searchers can use Jito bundles.)
Disclaimer: I manage a medium stake-weight validator on the network, completely independent of the Solana Foundation Delegation Program (I've received no stake from Solana Foundation.) I'm open to further discussions!
I wish there was a source/expert I trusted on crypto, but at best they're usually "naive" and so many are just "i like what I have my money in or am paid to like".
Solana is one of the theoretical techs coming out of crypto that could seriously change things, mostly due to it's potential throughput allowing it to work for serious enterprise level traffic (like visa).
On the other hand, it's also choked repeatedly and is heavily centralized, and there's legit concerns it's all just marketing bullshit and it can't actually meet the metrics needed.
Visa taking a stab at this is really quite interesting, especially now. Maybe they're just dipping their toes in the financial wild west for their own scam, but after the market crash/correction, it's hard to see that as the most likely cause. Still large companies have done dumb shit before.
I wish there was someone I trusted to go through the tech and the actual real life use case visa is planning. The article isn't awful but it's clearly just marketing nonsense. If there's anything to this tech at all this will probably be the big show.
So big question here: The entire point of crypto (currency) is that there is no centralized instance. Why are people celebrating a big payment provider (i.e. a one of literally the most centralized instances) stepping in here to provide a supposedly decentralized payment system? I understand that this is has the potential to be a big boost in credibility for crypto which it currently, sorely lacks, but isn't one of "the big companies" taking control of decentralized system exactly what's not supposed to happen?
I am aware of the various technical limitations in crypto which has resulted in a pseudo-decentralized system which is actually controlled by the few actors who have the biggest wallets, but most of the worlds online payments go through either Visa or Mastercard, and if they make a system like this, they will certainly not build it in an open fashion which makes it possible to cut them out. How is this something worth celebrating?
Refer to my recent comment addressing this issue.
I agree with you, but then why bank on crypto as a big institution? Chasing a new customer base? The trust Visa and Mastercard has comes from them being registered, regulated business with a clear chain of responsibility. This is not going to change. By implementing any sort of crypto they are not going to gain any more trust.
My theory is that Visa is trying to see if their opex is lower on Solana vs than on their in-house infra. The under-the-hood transfer an settlement could still be totally hidden from the user. And to plays devil's advocate, if the opex is lower, visa could maintain their same fees ($0.12 per transfer etc.) while scalping a higher margin.
Moonchild has a great answer but in general "the point of crypto" doesn't exactly matter nearly as much as "the actual use case of crypto...if any".
Obviously "knowing" that you have $100 because 45,000 people across the globe did math that agrees you have $100 has it's uses. Still there are way too many safety/quality of life features that institutions provide which the average user is NEVER going to live without. While there are some crypto's looking into this at a lower level (I think radix was the last one I heard about) generally banking institutions exist because of these realities.
People need loans, interest, liquidity, and a place that they can call and say "hey uhh i fucked up can you undo that".
From the POV of a massive company like Visa, crypto (and really more blockchain), might be attractive as a way to verify transactions for extremely cheap. Thus being able to undercut the competition and still take a huge profit.
From the POV of people in crypto, well it's the use case outside of "volatile digital gold" they've all been waiting for. The fact that coins are still a market is probably something that is undesirable, but maybe has intrinsic value.
Either way, centralization and regulation are coming if there's any future beyond "for some reason i don't want to use normal money" uses. There are those who don't care if this happens so long as they get rich quick off it (likely not to of course), those who want this to happen but also want crypto to stay "pure" (basically in denial about how all of this works), and those who want to stick to the "tenets" of crypto and don't care if it blows up or not so long as it stays decentralized (purists).
Edit-
And on rereading my original comment, the "centralization" of solana is something a little different.
A supposed advantage of crypto is that if you hit a critical mass of validators, it should be extremely hard for the network to ever go down. You have people all over the world handling transactions, so even if an entire country goes out, there's still thousands of nodes processing transactions as if nothing ever happened.
Solana is infamous for having a lot of their nodes be controlled by them...and this has multiple times led to outages and rollbacks when things failed, which is not a great look and obviously not something Visa would tolerate.
When discussing Solana's centralization, it's essential to note that it's not merely the quantity of validator nodes that's pivotal. What's also significant is the distribution of stake weight among these nodes, and their geographic distribution.
Ideally, there should be a majority of individually operated nodes, each with a stake weight anywhere between 15k to 1.5M SOL (somewhat arbitrary, I view 1.5M SOL as a sufficient stake upper-limit for a validator). It is the stake weight of a node that determines how often a validator will be given a leader slot for producing a block. Too low of a stake weight, and you'll never get a leader slot. For instance, even if the Solana Foundation operated a million validators each staking just 1000 SOL, none would carry enough weight to secure leader slots or produce blocks.
Historically, Solana has experienced liveness issues arising from transaction processing problems, such as intense competition for a particular state or challenges with leader propagation. Notably, due to the substantial degree of decentralization, rectifying these outages with protocol upgrades took considerable time. This was primarily because it necessitated a certain percentage of the distributed stake weight to update their software. Had Solana been more centralized, the outages would have been far quicker to resolve :)
It's for this reason that the validator community has adopted a rolling approach to software upgrades, basing decisions on the percentage of stake running the newest version. This strategy helps mitigate potential impacts from unexpected bugs.
On the geographic front, I believe the Solana network has a satisfactory number of validators. The priority for these validators should now shift to relocating to regions with sparser stake concentrations. Notably, there exists an incentive structure for this: stake-pools gauge if your validator runs in a city or data center with other validators, and will decrease (or increase) the stake they delegate to you based on the stake concentration.
However, I'd argue that there is a certain an element of centralization: We see a significant lack of diversification among Solana validator software. This is where solutions like Firedancer, as Visa highlighted in the article, can play a pivotal role. A validator client built from the ground-up on spec alone, to diversify how a more significant portion of stake is processing transactions. There is also the Jito Solana client, though I believe its mostly an up-to-date fork of the Solana Labs client, with some additional code to help reduce spam on the network (by providing a way for the network to have efficient MEV, so instead of spamming for state, searchers can use Jito bundles.)
Disclaimer: I manage a medium stake-weight validator on the network, completely independent of the Solana Foundation Delegation Program (I've received no stake from Solana Foundation.) I'm open to further discussions!