The Other Side of Ethereum: What Attacks Does Ethereum Often Face?
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Original title: "Reddit Hot Article: What attacks does Ethereum often face? "
Written by: Liberosist
Translation: ETH Chinese Station
Special thanks to the folks at r/ethfinance for collecting questions.
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Q: Can't Ethereum expand?
This is clearly a misconception, as there are currently multiple rollups live, some of which have been running for a year! Examples include Loopring, zkSync, DeversiFi, Hermez, Aztec, dYdX, and Immutable X, to name a few. Most of these projects can reach thousands of TPS with extremely low gas fees, and some of them can also provide subsidies (or reduce gas fees for user experience).
What is currently missing are general purpose programmable rollups. Optimism has been active on mainnet since January, but is currently limited to Synthetix. The next major project released by Optimism is Uniswap V3, which will open public smart contract deployment in July or later. BTW, this year Optimism did a poor job of communicating, so criticism is justified. Whether it's an engineering project or not, communication and public relations are always important.
But Optimism is only one solution. Other solutions such as zkSync 2.0, Arbitrum and StarkNet will be launched this year, while the likes of OMGX and Cartesi will also join the fray. In fact, it now appears that Arbitrum will be in use before Optimism. Not to mention sidechains or commitchains like Polygon, xDai or other EVM chains like BSC or Avalanche. Ultimately, all of these will become part of the expanded Ethereum ecosystem.
Related article: Opinion: Rollups are 4th gen blockchains : CryptoCurrency (reddit.com)
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Q: Will excessive Gas fees kill Ethereum?
This strange view is widely circulated in the cryptocurrency circle, but it is completely unfounded. Can excessive demand for a product lead to its failure? Graphics cards are already ridiculously expensive, so are AMD and Nvidia going to die anytime soon?
The answer is of course no. The reality is that, as mentioned above, the demand for EVM block space is very large, and the supply of Gas is limited. At present, the high Gas fee shows that there is a very large demand for Ethereum L1 block space, and people are willing to pay a high premium for it.
As time goes by, the gas supply will gradually increase, and the gas fee will also decrease-from a realistic long-term perspective, the block space supply will never be able to meet the global demand for EVM block space. Hybrid solutions such as rollups, zkPorter/Validium, sidechains/alternative chains, and centralized solutions will emerge in the future. The entire Ethereum ecosystem will operate in tandem, making different trade-offs in terms of decentralization and transaction fees.
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While Vitalik is still an important part of the Ethereum ecosystem, Ethereum development has become sufficiently decentralized over time. Unique to Ethereum is the use of multiple clients, research and developers working together to create an understandable specification. Multiple client developers working independently then apply the specification. This is different from all other blockchain projects where a single client is developed by a core team. Of course, some people now support a single client—concentrate all resources on one client, so that the quality of this client can be higher than other 4 or 5 independent clients, but developing multiple clients is obviously the most decentralized method. For example, Ethereum currently employs 4 consensus layer clients, with one more in development, and all of these client developer teams are independent of the Ethereum Foundation except for being funded. For any consensus upgrade, the 5 development teams must agree, and then the 135,000+ validators must also be updated. This is the opposite of a centralized network. Not to mention Ethereum's powerful "Layer 0", which is the Ethereum community, where all developers and validators participate. EIP-1559, for example, was largely driven by community will.
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Q: Ethereum has adopted a pre-mining mechanism, and Vitalik is controlling Ethereum? (from u/aaqy and u/ec265)
I'm not a fan of ICOs, although Ethereum did have ICOs. I also don't like ninja mining, like Bitcoin. We have seen some fair ways of launching DeFi projects, including airdrops to users, which is of course the best way to distribute tokens.
However, it is important that we understand the context of the Ethereum ICO at the time. This is the fairest way to raise money in 2014. After the creation of Ethereum, the Ethereum Foundation held about 12 million ETH. Yet over the years, a lot of ETH has been given away, and a lot of it has been used to raise funds, as was the case with Ethereum at the time. Currently the Ethereum Foundation and early developers hold a maximum of 2% of the supply. ETH owned by Vitalik accounts for 0.3% of the total.
Would I like to see a fairer distribution of ETH tokens? The answer is yes. But today, Ethereum token distribution is the fairest compared to all other projects.
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Q: Mining is damaging the environment?
It's not just about electricity either, we know there's a severe shortage of semiconductors around the world right now. Many of TSMC's limited wafer supplies are currently used to manufacture mining cards, such as ASICs and GPUs, which can be redistributed to serve fields such as engineering, science, and of course, gaming.
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Q: Ethereum has been rolled back before, will this happen again?
People like to use the DAO fork as an example of Ethereum rolling back. But people also selectively ignore many of these details:
First, a DAO fork is not a rollback. This was a special case where the attacker had to wait 28 days to withdraw money, so the community implemented changes to the smart contract.
There is a strong consensus among developers, users, miners, and the community - so it's hard to argue that the rollback was a centralized decision.
Those who refused to roll back simply chose Ethereum Classic. It's a win-win for all.
Against this assumption, the rejection of EIP-999 is the most powerful counter-evidence. There was an opportunity to roll back 500,000 ETH for an entity managed by one of Ethereum's co-founders, but the community strongly opposed the decision. Ethereum rollback will not happen again.
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While it is true that Infura is a dominant service provider, and the Ethereum ecosystem definitely needs to diversify, this is clearly a misconception. In November 2020, Infura suffered a massive outage, but Ethereum has been running fine. Of course, this incident caused disruptions to some frontends, exchanges, and wallets, but as long as you run your own nodes or use a different service provider, you can solve the problem. Since this outage, many frontends and wallets have started running their own nodes and using alternatives like Alchemy. While there is still a lot of work to be done in this area, it would be a mistake to think that Ethereum relies on Infura.
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Q: The state of Ethereum is growing too fast?
This is certainly the correct view compared to Bitcoin. If you want a blockchain that goes back in archival mode and verifies every transaction from the genesis block, then Bitcoin is indeed a better choice. So how much is it worth? If you want to use the Bitcoin network, then you already trust the miners. On Ethereum, you can run a full node (not an archive node) on a Raspberry Pi 4 with a 1TB SSD to send and verify transactions. This is relatively easy hardware to buy for most users and consumers. Some might argue that even running an archive node is easy with a client like TurboGeth.
At the same time, it should also be noted that Ethereum will make more trade-offs in this regard, and gradually realize updates such as weak subjectivity, statelessness, and state expiration mechanisms. Purists will find this unfair, but it won't matter, considering other benefits, there will be a group of users who are happy to sync data from the genesis block.
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This view is factual, but there are security factors behind it. I would like to add that after EIP-1559 and the merger takes place, the ETH supply will likely reach about 120 million and continue to deflate or remain stable after that.
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This view is partly correct. While many exaggerate this, Ethereum’s block reward did undergo two cuts, and both were due to community consensus rather than code. EIP-1559 and mergers will revolutionize Ethereum monetary policy. But if these two do not bring further changes to Ethereum in the next few years, the criticism still stands. Bitcoin remains the standard when it comes to the predictability and reliability of its token supply — despite the security risks it faces in the future.
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There are many misconceptions about Ethereum 2.0, although to a large extent Ethereum researchers and developers are responsible for the ambiguity in the messaging. First off, none of us would be calling it "Ethereum 2.0" right now. In short, this refers to a series of upgrades. The beacon chain was launched in December 2020, which is the first upgrade, and relevant personnel are actively promoting the merger, which is planned to be carried out by the end of 2021. Next I'm going to talk about sharding. Another misconception is that gas fees will be lower after these upgrades - but this will never happen in Layer 1. The role of sharding is to speed up rollups. The combination of stateless and stateful expiration would have a greater impact on Layer1, plus sharded execution if needed (this is still moot).
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Q: Ethereum has no intrinsic value, is it created out of nothing?
Ethereum is a global decentralized SaaS platform that generates revenue through transaction fees. Those transaction fees are now pretty substantial — more than $1 billion a month. Compared to the largest companies in the world, Ethereum ranks second in terms of revenue. I don't think it's sustainable at the moment, but I mean it's possible and with some vision for the future.
Not only is Ethereum one of the most productive assets in the world, it also has the most advanced value capture mechanism.
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Q: ETH pledge is too difficult?
This opinion is very much in line with the fact that 32 ETH is a lot of money. However, I think people have a serious misunderstanding about the definition of staking. In many delegated blockchains, when you "stake", you actually delegate verification to someone else. Newer consensus models such as Algorand randomize this process, but you are still delegating to others rather than doing the verification yourself. You actually make a profit without doing anything.
For those who just want to pledge and don’t care about technical details, the beacon chain is just the base layer, on which a variety of pledge services have been derived, and these solutions vary in the degree of decentralization. These services allow you to stake small amounts of ETH for rewards. Click here to view the list of staking services: Ethereum 2.0 Beacon Chain (Phase 0) Block Chain Explorer - Ethereum 2.0 Staking Services Overview - beaconcha.in - 2021
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Does Ethereum keep changing plans? That's definitely true, but it's pretty much in line with practical needs. The cryptocurrency industry is innovating at a rapid pace, and it doesn’t make sense to stick with old technology when you’re making groundbreaking advances. Even if you haven’t researched the industry for a year or so, there are still reasons to ditch PoW/PoS hybrid consensus. It makes sense for Ethereum to adopt a rollup-centric roadmap, because it can greatly improve the scalability of Ethereum, and its arrival is faster than we think. Various upgrades are indeed underway, the beacon chain goes live in December 2020, EIP-1559 will be implemented in two months, and we are less than 6 months away from the merger.
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Q: Will the proof-of-stake mechanism gather assets and lead to centralization? (via u/epic_trader and u/Mathje, u/sn00fy)
While at first blush this argument seems plausible, there are many nuances involved:
Proof-of-work that has been running for over 6 years has brought a lot of benefits to Ethereum, during which time we have seen effective token distribution. Now, Ethereum is second only to Bitcoin when it comes to the degree of decentralization of token distribution.
One of the biggest factors that is often overlooked is the very low token issuance under Proof of Stake. After the merger occurred, the distribution was approximately 0.5%. The community is proposing a validator cap, which would then be capped at around 0.8%.
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Q: If Ethereum is adopted by major companies, they will only run private chains? (via u/sn00fy)
Not only companies, but also private chains for consumers will be launched in the future. This is already happening on Binance Smart Chain, but I think in the future, big companies like governments, banks, and corporations will run private chains.
As mentioned at the beginning, in the long run, the gas consumed by Layer 1 of Ethereum is very limited. But it doesn't matter, the Layer1 space will always remain 100% saturated, while other solutions built on top of Ethereum will increase their network effects and Lindy Effect.
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Q: Ethereum uses old technology, will the newly born blockchain use newer technology? (via u/Mathje)
While there is a lot of misinformation in the crypto space, causing a lot of panic, confusion, and uncertainty, this is the one that gives me the most headaches. Ethereum has always been at the forefront of innovation and will continue to be so. While there are indeed innovative projects in this space, none of them are trying to solve the big problem: the blockchain impossible triangle problem. Assume a situation where every other smart contract chain uses some form of delegated consensus mechanism, many with a hard cap on the number of validating nodes. For example, Cosmos: 300 (currently at 150); Polkadot: 1000; Binance Smart Chain and EOS: 21. Ultimately, for the blockchain, the larger the number of verification nodes, the worse the scalability.
The Beacon Chain uses revolutionary new technologies, such as weak subjectivity and signature aggregation, to support up to 1 million validating nodes for massive decentralization. There are already 135,000 verification nodes, and thousands of verification nodes join every week. Not to mention that beacon chain validators do not need to be online 24/7 like other chains.
The first case: In terms of ETH transfer, the throughput of these Layer1 chains can exceed that of Ethereum (about 55 TPS), and the overall throughput will also exceed that of Ethereum (about 20 TPS). However, Ethereum is using breakthrough new technologies, such as data availability sampling, to achieve more than 100,000 TPS by enabling rollup and data sharding technology without affecting decentralization. Even if decentralization is completely abandoned, Layer1 will not achieve such a high TPS. If mixed solutions such as zkPorter and Validium are added, Ethereum can achieve higher TPS.
Second scenario: the most innovative blockchains are actually rollups. StarkNet has made great achievements. The reason why rollups solutions such as StarkNet are based on Ethereum is that Ethereum has the best consensus mechanism in the industry.
In short, the Ethereum ecosystem has the most cutting-edge technology in the industry.
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Q: Ethereum has no real usage scenarios, but is it just a game for gamblers, or a trading platform for some equally useless tokens? (via u/sn00fy)
That said, the speculative nature of much of the activity on Ethereum appears to be worrisome. Of course, this was true of all early technologies. We've also seen big companies really adopting Ethereum, such as Visa, and the European Investment Bank is also issuing bonds on Ethereum. We still need to do a lot of work to expand these real use cases.
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Indeed, some early rollups had centralized sequencers. But this is not a security risk, as fraud proofs or validity proofs would provide the same security as the Ethereum mainnet. Activity and censorship risks also exist, and the centralized sequencer is definitely not a trustless system. Fortunately, most rollups have plans to decentralize the sequencer in their roadmap, so this won't be a long-term problem.
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Yes, but no. Inside a rollup everything is composable, but the composability between layer1 and rollup and between rollup and rollup is really broken. Luckily, there are a number of projects working hard to solve this problem and achieve relatively smooth Layer 2 interoperability, but this work is still a work in progress, and as it stands, composability is more of an engineering problem than a theory obstacles.
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Q: Ethereum is like a four-dimensional monster, with two blockchains and two assets, ETH1 and ETH2?
This is a misconception, there is only one ETH token. Although there are now two chains running in parallel, the beacon chain can be seen as an incentive test network to ensure that the new consensus mechanism can run smoothly. These two chains will merge into one Ethereum in the near future.
Original post author's reply to some comments:
I think half of the comments below ignore the blockchain impossible triangle problem. No project other than Ethereum has solved this problem, nor tried to solve it. Except for Bitcoin and Ethereum, all projects have made varying degrees of compromises in terms of decentralization and security, and most projects still cannot provide the scalability of Ethereum rollup. After sharding is put into use, rollup can Achieve greater scalability. If you apply a non-delegated consensus mechanism with 135,000 validating nodes (let alone 1 million) while maintaining a manageable state, let the blockchain run on a consumer laptop or 4th generation Raspberry Running on a Raspberry Pi 4, it must be a dream. As mentioned earlier, most blockchains have at most a few hundred validators who are delegated to centralize staking. Someone mentioned Solana, and according to the project's system requirements page (Validator Requirements | Solana Docs), to run a Solana node, you need to spend $1200 per month to rent a cloud instance, and the state size will increase by a few TB every month. It's just a different type of product, not comparable to Ethereum. But there is nothing wrong with Solana's design ideas. As I mentioned above, solutions based on Ethereum or parallel to Ethereum will have their own advantages and disadvantages, and there is a trade-off between decentralization and transaction costs.
