4 ms·
On Settlement Finality
- lisper 10y ago> First of all, a very important philosophical point to make is that there is no system in the world that offers truly 100% settlement finality in the literal sense of the term. If share ownership is recorded on a paper registry, then it is always possible for the registry to burn down, or for a hooligan to run into the registry, draw a “c” in front of every “1” to make it look like a “9”, and run out. This is a disingenuous straw-man argument. Of course paper records can never offer settlement finality, but a centralized cryptographic system certainly can (or, at least, it can offer settlement finality with confidence equal to that of the underlying cryptographic system).
- mhluongo 10y agoI think the bigger point is that settlement, at some level, is a social fiction. Anything in the physical world can be altered or voided through the use of force. We're talking about ledgers across potentially unstable economies and governments.
- rm_-rf_slash 10y agoChristian evangelicals in this country believe the Bible is 100% true and the exact word of God. The same Bible was pruned hundreds of years ago from stories the Catholic Church didn't like.
- lisper 10y ago> settlement, at some level, is a social fiction No. This has been true historically, but with the advent of modern cryptography (and specifically with the invention of secure digital signatures) it is no longer true (or at least it need no longer be true). And the folks at Etherium surely know this, which is why the paper ledger argument is not merely a straw man but also disingenuous.
- mhluongo 10y agoLook, I'm a big crypto fan myself. I appreciate what you're saying, but it doesn't match the real world. Put land grants on the blockchain. Crypto all you want, but the guys with guns can seize the land next regime change. What you're saying is only true, AFAIK, for bearer bond type instruments.
- lisper 10y ago> the guys with guns can seize the land next regime change. Sure, violence trumps everything. But if civilization is sufficiently intact that the concept of "settlement of a financial transaction" is a meaningful concept, the crypto + a trusted third party can provide it. (Actually, the third party doesn't even have to be trusted, just agreed upon by all parties.) > bearer bond type instruments No, people with guns can steal those too. Violence trumps everything.
- mhluongo 10y agoI know bearer bonds can be stolen. What I meant is that the idea of "ownership" is more complicated than you're admitting. We can choose to ignore what the crypto says about who owns an underlying asset. The asset can be seized, destroyed, etc. I mention bearer bonds in this context because if the value is native to the crypto- as is the case with digital currencies- settlement is more meaningful.
- lisper 10y agoI'm not talking about ownership, I'm talking about settlement finality. While these two concepts are closely related, they are not the same. Crytography cannot guarantee ownership. Ultimately force is the only thing that can do that. But crypto can guarantee settlement finality with a confidence equal to one's ability to keep a secret key secure.