Here I have answers to questions Vitalik asked to cryptocurrency community. It may not be that bullseye answers but gives idea on where we should be headed to.
1.Bitmain and affiliated pools now have ~53% of all bitcoin hashpower. Isn't this a really big problem?
This is actually big problem because it can actually compromise the consensus mechanism that bitcoin has been built on. 51% attack can be possible with those mining pools having their consensus to do so. Four scenarios can be possible for those over centralized mining pools to come out and do something nasty.
First, the price of bitcoin plunged to below certain level and mining pool’s rewards fallen far below their mining cost.
Second, mining of bitcoin has almost done, the degree of difficulty accelerated and cost of mining explosively increased so that mining reward does not compensate their mining effort such as electricity bill and cost of mining ligs
Third, those mining pools decided that their mining cost such as electricity bill and mining rigs cost has been fully recovered. They decide to leave bitcoin mining.
Fourth, due to oil price increase the electricity bill also increases and the reward can not cover the mining expenses.
Even in those four cases they can not pull the plug suddenly on certain day because they have to sell their bitcoin first to open market. Before they begin to sell their bitcoin they will try their best to manipulate the market for them to maximize their gains. Rosy perspective on bitcoin will be published by most mainstream cryptocurrency related medias and surge of bitcoin price will come back for the occasion.
The situation will be over with those mining pools selling off all bitcoins they have.
2.Why aren't there any useful large-scale applications yet?
Large organizations and governments are reluctant to recognize the blockchain technology as legitimate technology because they will lose the power to control what they have been controlling.
The blockchain technology ignited power struggle between technology and corrupted incapable bureaucrats. The more blockchain can do the more those bureaucrats resist.
When the automobile was first invented British government made law on red flag walking in front of automobile when the automobile enters the city center. The law was the result of couch makers lobby. Where are those coach maker’s now?
3.Why are there not yet good solutions to account security? When will the problem of account hacks and thefts be solved?
Account security has been problem of not only cryptocurrencies but also those who use online services like Google, Facebook and many others.
Account level security is something everybody is working on but won’t be achieved that easily. Some says that biometric will solve the problem however 3D printed fake fingerprint or picture of person can even break down the biometric authentication.
This will take some time to make it perfect and until then multi factor authentication might work temporarily.
4.How can decentralized apps work well even with 5-10 second blockchain latency?
Consider decentralized apps as the online service based on dial modem 30~40 years ago and those services survived from dial up modem. Now we can stream a movie with 4K or 8K resolution online.
For example, decentralized apps based on blockchain does not have good file management system nor storage management. It only stores and retrieves bunch of data from decentralized ledger that we can not hardly call a database. Blockchain’s data management and file management sucks in that perspective. In order to solve this problem we need decentralized storage technology like IPFS and others together with the speed boosting mechanism of blocks on chain like network packet compression or something. Blockchain needs serious system upgrade and it is high time to do that.
5.PoW is burning billions of dollars per year, even more than all scams and thefts combined," "Isn't this a big tragedy?
PoW is as gloomy as the prisoner of war is. When bitcoin was first developed the goal of bitcoin’s scalability might have been to support the California residents who are open, tech snavy and progressive. However Bitcoin now became the hottest stuff of the world and way beyond its original scalability goal, I guess. PoW became the prisoner of bitcoin’s own growth however more reasonable and feasible consensus algorithm will come to us.
The question is that is Bitcoin or Ethereum core flexible enough to accommodate new consensus mechanism which can solve all its current PoW problem?
6.What are the centralization risks in proof of stake?
PoS is already criticized as the plutocracy however there’s always answer to any problem. Why don’t those cryptocurrency foundations research on the corporate governance of big corporations and their corporate structure those companies have been worked on over 2 centuries. Writing codes on specific problem is as easy as like snapping your fingers however preventing possible risks of the system that billions of people is using is not that simple.
How about having certain portion of coins of PoS reserved for mitigating conflicts of interests among stakeholders? Voting only with their stake will surely make the coin the plutocracy. Many IT companies try to minimize large stock owners brutality by issuing non voting stock and stuff. This governance issue must be studied long before you code your solution.
7.Given how EOS governance has turned into an epic fail, doesn't this mean that all on-chain governance including DAOs is fundamentally flawed? How can any DAO deal with bribe attacks, plutocrats and other risks?
Governance issue of something is not that easy to solve with a click or two. Think about the governance of United Nation. Everyone involved with UN had once high hope on UN’s role in international community however What kind of hell hole UN became recently.
Hire governance exerts long before you actually try to code on-chain governance. No simple arithmetic algorithm can entirely prevent all possible governance issue of the coin. If somebody is really expecting that then the person should not work on governance issue.
Men are created evil and the assumption of bitcoin users are likewise. How come simple arithmetic DAO contract logic prevent all possible attacks? Are you fucking born Yesterday?
There’s no such silver bullet or magic pill ever existed nor will be.
Think about Intrusion Detection System (IDS) of computer network. They now use AI to mitigate possible network vulnerability or the sign of attack. Why don’t blockchain use that technology?