"With the shift to mobile, we now live firmly in a world of clients and servers – with the former completely unable to act as the latter – and those questions seem more important to me than ever. Meanwhile, ethereum actually refers to servers as “clients,” so there’s not even a word for an actual untrusted client/server interface that will have to exist somewhere, and no acknowledgement that if successful there will ultimately be billions (!) more clients than servers."
Finally someone articulates the problem with crypto. People don't want to run their own servers, and they sure as shit don't want to run their own banks. So in theory you have a decentralised trustless web or financial system, but in practice, everyone is trusting someone to run a node for them. Which is exactly how the web and finance work now.
If people want banks, they can have them. At this point exchanges have become the banks of the cryptocurrency space. Lots of people just leave their coins in the exchanges, they even have savings accounts.
The ability to withdraw the money and use it directly with no third party involved is still important. Especially since governments are already implementing digital currencies that will be fully under their control.
How is withdrawing your crypto keys from an exchange functionally different from hiding jewellery around the house? At least the value of the jewellery is far less volatile, plus you can wear and enjoy it, which makes you less likely to lose it.
Yes yes you can memorise some encryption key, but that poses its own problems - what happens to your money if you die or become non-compos mentis?
Ultimately any sane person ends up trusting someone, whether a bank, an exchange, a lawyer or safe deposit box. Crypto removes the need for trust with a pretty extraordinary and elegant idea, but nobody actually wants it.
I'm not gonna claim it's different. It's not. Holding funds in a paper wallet means you have a piece of paper that's worth thousands, millions. It's a fact that there are inherent risks to holding that paper.
At some point this becomes about principles. Even if you have banks, even if banks manage to provide a good service without screwing up the economy in the process, you always have the choice to simply opt out of it. You can withdraw all of your money if you want and still maintain the ability to transact with anyone in the world. Now banking is no longer something that's imposed on everyone, it's an individual choice. It's a lot like the right to bear arms.
Your question about what happens to the money if you die is extremely relevant. My father asked me that exact question about cryptocurrencies. I came to the conclusion that if we own crypto then we must somehow make these arrangements ourselves because we can't depend on some government or bank to do it and certainly not some exchange that doesn't even answer emails. It should be possible for family to inherit a physical paperkey but I have to admit I know of no concrete examples of such a thing happening.
This is not a problem with crypto, because there are solutions to this, it's a problem with how people use it. The real danger is that people get too comfortable with this way of doing things and we never switch to more secure solutions.
As the person said, it is not a problem with crypto because there are indeed solutions to the problem. The tool you are referring to are the set of crypto currencies, of which there are many, which do not compensate data handling.
The point I'm trying (and failing) to make is that if a solution to a problem is reliably mis-used by its users, then it's not actually a solution in practical terms. The problems in this space are ultimately social, not technical. Success is measured by usage, not passing tests.
I’m not saying Metamask is a good tool, it’s not that easy switching to a good tool today anyway, we will see what happens in the next years but I expect that this will be an active area of research and improvement.
The same thing can be said of the web in general. The linked article even makes this point! If in the early web users all wanted to run their own servers the centralization of web 2.0 would not have happened. Is there any reason to think that history won't repeat itself and users will choose to use web3 technologies the "right" way?
Without Chrome and their push to force https I doubt that the web would have become so encrypted. But then CDN services did start centralizing https as well (because users don’t want to deal with certificates). Metamask and popular wallets, as well as layer 1 projects, have to decide to invest in these areas.
First of all, nobody participating in a blockchain protocol is running their own bank, no more than you are running the country when you vote for president.
Secondly, you are correct that in Web 2 people do not desire to run their own servers or analogously in crypto today they do not want to run nodes. But many people do want to mine - its a massive industry, but the issue stands, the nodes connecting people to the network and serving the data end up centralized; The Infura Problem is a great example of this. Infura was started by Ethereum founders to run Ethereum nodes that the standard wallets (the biggest of which, Metamask, made by the same organization) connect to by default.
The issue is that the Ethereum network is deeply reliant on both consensus and data-distribution, but it only compensates infrastructure for consensus - the miners - and in the future, stakers. Bitcoin is not as deeply affected by this because of its low data throughput, but its worth noting that non-mining nodes, which are essential to non-miners having a say in the network, are volunteering. These nodes are also responsible for distributing transaction data when miners use a modified Bitcoin Core Client designed to try and gain advantages by selectively sharing.
The miners on each network and those who run businesses around it don't want the networks to crumble, so they end up doing the work of nodes, but at the bare minimum. In Ethereum this means centralized node hosting services - that's a reality of the state of the network at this point. The solution is to start compensating both aspects of the network, because both are important. This not only re-decentralizes the nodes' motives and control, but it also means that distributing data more efficiently offers more rewards, so node operators are rewarded for scaling the network. The key concept here is that if the network does not compensate for its vital functions directly and proportionally to performance, then those functions will simply remain on life support.
The average user (the same user that doesn't want to be bothered with running a server at home) doesn't care about this, I don't think. Most people would prefer to rely on a trusted authority or expert for this sort of thing.
When talking about democratization, the average user is probably the only user that matters.
Yes but the fact that the user will do what's convenient does not mean it is better. The thing about Bitcoin (as an example) is that 99% of people using can't parse the source code, but they all know that if there was an issue in it the alarm would have been sounded by now by someone who could.
This is more a problem with Ethereum rather than with "standard" crypto.
For mobiles you have "SPV wallets" that does communicate with many other nodes while verifying block headers and that the transactions you're interested in are included in the blocks.
So an SPV wallet doesn't contain the whole blockchain, but to cheat it (and make you see invalid transactions), you need to generate a fake block, which is just as expensive as creating a real and valid block.
And all that's needed is for you to find a single node you can communicate with
Finally someone articulates the problem with crypto. People don't want to run their own servers, and they sure as shit don't want to run their own banks. So in theory you have a decentralised trustless web or financial system, but in practice, everyone is trusting someone to run a node for them. Which is exactly how the web and finance work now.