Why I will not be investing in Ethereum

Reaper

Thanks Malthusian, you managed to get a fuller grasp of it than me. Even if I am safe sticking to simple buying and selling Ethereum with cash I will still avoid it. It brings the whole thing into disrepute and confirms my view this is not the future of money.

I gather some developers are trying to come up with solutions but with little support. Too much vested interest in the money it earns I fear.

masonic

Reaper said:

Thanks Malthusian, you managed to get a fuller grasp of it than me. Even if I am safe sticking to simple buying and selling Ethereum with cash I will still avoid it. It brings the whole thing into disrepute and confirms my view this is not the future of money.

There are a number of other reasons it could not be considered "the future of money":

• Most people would object to their transaction history being made public, even if their identity wasn't associated with the account information
  
• Most people would object to paying an explicit transaction fee every time they paid for something or transferred money between accounts
  
• Most people would be unwilling to wait even a few minutes for a transaction in a shop or online to be confirmed
• Most people would object to the price of goods and services fluctuating from one minute to the next

If blockchain technology itself becomes the future of money, then it will be a private ledger that is controlled by a government or central bank.

Reaper

Not long ago hackers (suspected to be the North Korean Lazarus group) stole $100m in crypto from Horizon Bridge. Amusingly as they transferred out the funds they suffered losses from multiple MEV attacks. We are only talking tens of thousands compared to the millions they stole, but it made me chuckle.

https://twitter.com/Eigenphi/status/1540356148468908032

unitedwestand

This has been addressed by Ethereum here:

https://ethereum.org/en/developers/docs/mev/

& by it's founder here..

https://youtu.be/lfO5deaBWCY

https://decrypt.co/113777/get-ready-for-the-scourge-inside-vitalik-buterins-updated-ethereum-plans

ETH has been around for 8 years, it's also been continuously developed during that period. These things are beimg addressed and will likely be ironed out in future releases. Afterall it's software at the end of the day.

Malthusian

unitedwestand said:

This has been addressed by Ethereum here:

Let's skip ahead to the part relevant to the thread, which is its attempt to explain why MEV can be a good thing:

Many DeFi projects rely on economically rational actors to ensure the usefulness and stability of their protocols. For instance, DEX arbitrage ensures that users get the best, most correct prices for their tokens and lending protocols rely on speedy liquidations when borrowers fall below collateralization ratios to ensure lenders get paid back.

Except the entire point is that front-running transactions is not a good thing for users and they are not getting the "correct" price for their tokens. 
Unless the logic here is "Code is law. The code that the Ethereum network runs on inherently allows sandwich attacks to take place. Therefore the higher price paid by users to the front-runners is the correct price. Few understand."

Without rational searchers seeking and fixing economic inefficiencies and taking advantage of protocols' economic incentives, DeFi protocols and dapps in general may not be as robust as they are today.

This appears to be saying that front-runners are doing everyone a favour by showing that front-running is possible. "I did you a favour by robbing your shop because I showed that you need to get better security."
If that's not what it's saying it's just vague handwaving. (Which protocols and dapps are more robust thanks to front-running?)

ETH has been around for 8 years, it's also been continuously developed during that period. These things are beimg addressed and will likely be ironed out in future releases. Afterall it's software at the end of the day.

If this has been an issue for 8 years it doesn't give confidence that it will ever be fixed. 

If my software has a bug that causes it to randomly crash, I have an incentive to fix it so that more people buy it. If my software exists to move money around and has a flaw that allows people who understand the vulnerabilities in the software intimately (like, er, me) to extract that money from users, I don't have nearly the same incentive to fix it.