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My 'cryptoequity' project was on the Hacker News front page a couple years ago (https://news.ycombinator.com/item?id=7992667 https://news.ycombinator.com/item?i

by Jd 10y ago

My 'cryptoequity' project was on the Hacker News front page a couple years ago (https://news.ycombinator.com/item?id=7992667 https://news.ycombinator.com/item?id=7992667), in which many commentators noted that many high value applications were probably illegal. As enthusiastic as I remain about the overall premise of equity replacements issued on cryptographically secure ledgers (including Etheruem, which I started with by running the educational channel Ethercasts), I don't see anything in this presentation that indicates that the massive challenges regarding nation-state regulation have been solved. Even were one to go on the premise that one can effectively run this in a sandbox away from standard nation-state regulation, one has the more general problem of enforceability of contracts, etc. If I hire you via a crypto-contract but then you don't deliver the associated goods, what recourse do I have? This and related effects caused ~2 years of delays in my own implementation. I'll note I remain optimistic and positive about all related efforts in this field.

clavalle 10y ago
> one has the more general problem of enforceability of contracts, etc. If I hire you via a crypto-contract but then you don't deliver the associated goods, what recourse do I have? I thought the point of crypto-contracts was to make enforcement as automatic as possible...if that is not fully true, are there any neutral verifications services that can hold things in escrow?
- pavel_lishin 10y ago
  A crypto-contract can't evaluate the work you've delivered. If we enter into some arbitrary crypto-contract for me to build you a chair in exchange for 20 currencies, and I bring you a stump I hacked out of the woods, there's no underlying system that can tell me to fuck off and that I'm not getting paid.
  - smokeyj 10y ago
    > there's no underlying system that can tell me to fuck off and that I'm not getting paid No reason an arbitration clause couldn't be included in the contract.
    - monkmartinez 10y ago
      Who or what backs up the arbitrator? This is why we have guns, police, prisons, and militaries and lawyers....
      - pavel_lishin 10y ago
        If the arbitrator hits the "approve payout" (or "deny payout") API endpoint (or however this works), the e-currency gets cyber-delivered (or not) into my VR-wallet or whatever. I mentioned in another comment the headache that reputation systems required would bring.
      - smokeyj 10y ago
        > Who or what backs up the arbitrator? Ethereum contracts are turing complete. The payout function can be contingent on either the buyer or arbitrators releasing the funds. The arbitrators can be determined before hand or rely on an external contract that offers arbitration services. The possibilities are truly endless.
        monkmartinez 10y ago
        > The payout function can be contingent on either the buyer or arbitrators releasing the funds. How long is the discovery period? What about "returns"? What if the arbitrator is working with the seller and scams me? When does "I have a big gun and I am not afraid to use it" come into the function? > The arbitrators can be determined before hand or rely on an external contract that offers arbitration services. And how much will those services cost? Who vets the arbitrator? What is my recourse if arbitration fails? > The possibilities are truly endless. Yes, I agree. This is just built for a place that does not yet exist.
        deleted 10y ago
        [deleted]
        che_shirecat 10y ago
        why do people in the ethereum community throw around the phrase "turing complete" with such abandon? can't you just say that you can create smart contracts with contingent on conditions? I don't see what this has to do with a turing machine besides the fact that you can script if-else in a contract?
  - monkmartinez 10y ago
    > there's no underlying system that can tell me to fuck off and that I'm not getting paid. You are right. This is why these things will not go anywhere. Ultimately they need some kind of "back up"... For example, the system we currently have flows like so: Nation state Military > Federal Police > Local Police > Physical Intimidation via face to face meeting. At every step, stop when lawyers and/or politicians get involved.
    - pavel_lishin 10y ago
      Well, you could have trusted third-party arbiters who would evaluate whether or not to release the funds on delivery of the good or service. But that brings on a whole new level of reputation-economy things you have to think about.
      - monkmartinez 10y ago
        And how deep should that go? Pretty soon you will need arbitration for the arbiters. Has no one addressed the basic need of a justice system with these crypto currencies?
        pavel_lishin 10y ago
        Like I said, > that brings on a whole new level of reputation-economy things you have to think about.
        throwaway29292 10y ago
        How about some image processing/object recognition by standardized AI interfaces?
        gukov 10y ago
        I'm thinking something like unit tests but for real life objects, eg. the chair has to have four legs, specific length, etc. Then have mechanical turks "run" the tests.
        10y ago
  - TD-Linux 10y ago
    You can actually evaluate work you've delivered, but only for a very small subset of "work" - basically, things that can be represented and evaluated entirely with software. Here's an example: https://bitcoincore.org/en/2016/02/26/zero-knowledge-contingent-payments-announcement/ https://bitcoincore.org/en/2016/02/26/zero-knowledge-conting... Of course, this is entirely insufficient to do something like "put your corporation on the blockchain".
    - fudged71 10y ago
      you can also pay someone for the task of validating work that has been delivered
  - haywirez 10y ago
    Isn't this fully addressed by decentralized arbitrators and reputation systems, with a solid economic incentive setup? After all, we are just remaking human civilization on top of more efficient, modern platforms...the same old mechanisms will apply, they'll just (hopefully) work faster & better.
    - igk 10y ago
      Thing is, that's not how it's pitched, and the trade-off needs to be worth it. I personally would rather we found a way to do verifiable e voting (no idea how though, some cryptographic way to sign the logic used to express the program so you can verify it's the thing everyone agreed on?) and remade our cooperation systems into a working version of libertarian communism/syndicalistic anarchism. IIRC rojave is trying something like that right now?
      - urbushey 10y ago
        Rojava? Do you have a source? Interested in hearing more.
  - mark_l_watson 10y ago
    Good point. It might help if 'contracts' and payment amounts were small. In the Antifragile (book) sense: the fairness of any individual contract is fragile, rife with risk. However, in aggregation the system is antifragile (better than robust) as long as occasional bad deals are acceptable.
wyager 10y ago
> If I hire you via a crypto-contract but then you don't deliver the associated goods, what recourse do I have? Isn't this sort of a "solved" question, in the sense that we know there's only so much a computer can do? The practical answers are, of course, reputation systems and incentivization systems like escrow. Both of those are areas of active research.
elastic_church 10y ago
You just do exactly what ethereum did. Pay off a securities regulator in the smallest state of Switzerland to say it isn't a security while simultaneously getting an opinion letter in the US saying the same thing. Sovereign sanctioning and alot of capital SEC hasn't challenged it yet though but I mean, you can be rich and bring your project to the world.

by Jd 10y ago

clavalle 10y ago

> one has the more general problem of enforceability of contracts, etc. If I hire you via a crypto-contract but then you don't deliver the associated goods, what recourse do I have? I thought the point of crypto-contracts was to make enforcement as automatic as possible...if that is not fully true, are there any neutral verifications services that can hold things in escrow?

pavel_lishin 10y ago
A crypto-contract can't evaluate the work you've delivered. If we enter into some arbitrary crypto-contract for me to build you a chair in exchange for 20 currencies, and I bring you a stump I hacked out of the woods, there's no underlying system that can tell me to fuck off and that I'm not getting paid.
- smokeyj 10y ago
  > there's no underlying system that can tell me to fuck off and that I'm not getting paid No reason an arbitration clause couldn't be included in the contract.
  - monkmartinez 10y ago
    Who or what backs up the arbitrator? This is why we have guns, police, prisons, and militaries and lawyers....
    - pavel_lishin 10y ago
      If the arbitrator hits the "approve payout" (or "deny payout") API endpoint (or however this works), the e-currency gets cyber-delivered (or not) into my VR-wallet or whatever. I mentioned in another comment the headache that reputation systems required would bring.
    - smokeyj 10y ago
      > Who or what backs up the arbitrator? Ethereum contracts are turing complete. The payout function can be contingent on either the buyer or arbitrators releasing the funds. The arbitrators can be determined before hand or rely on an external contract that offers arbitration services. The possibilities are truly endless.
      - monkmartinez 10y ago
        > The payout function can be contingent on either the buyer or arbitrators releasing the funds. How long is the discovery period? What about "returns"? What if the arbitrator is working with the seller and scams me? When does "I have a big gun and I am not afraid to use it" come into the function? > The arbitrators can be determined before hand or rely on an external contract that offers arbitration services. And how much will those services cost? Who vets the arbitrator? What is my recourse if arbitration fails? > The possibilities are truly endless. Yes, I agree. This is just built for a place that does not yet exist.
      - deleted 10y ago
        [deleted]
      - che_shirecat 10y ago
        why do people in the ethereum community throw around the phrase "turing complete" with such abandon? can't you just say that you can create smart contracts with contingent on conditions? I don't see what this has to do with a turing machine besides the fact that you can script if-else in a contract?
- monkmartinez 10y ago
  > there's no underlying system that can tell me to fuck off and that I'm not getting paid. You are right. This is why these things will not go anywhere. Ultimately they need some kind of "back up"... For example, the system we currently have flows like so: Nation state Military > Federal Police > Local Police > Physical Intimidation via face to face meeting. At every step, stop when lawyers and/or politicians get involved.
  - pavel_lishin 10y ago
    Well, you could have trusted third-party arbiters who would evaluate whether or not to release the funds on delivery of the good or service. But that brings on a whole new level of reputation-economy things you have to think about.
    - monkmartinez 10y ago
      And how deep should that go? Pretty soon you will need arbitration for the arbiters. Has no one addressed the basic need of a justice system with these crypto currencies?
      - pavel_lishin 10y ago
        Like I said, > that brings on a whole new level of reputation-economy things you have to think about.
      - throwaway29292 10y ago
        How about some image processing/object recognition by standardized AI interfaces?
        gukov 10y ago
        I'm thinking something like unit tests but for real life objects, eg. the chair has to have four legs, specific length, etc. Then have mechanical turks "run" the tests.
        10y ago
- TD-Linux 10y ago
  You can actually evaluate work you've delivered, but only for a very small subset of "work" - basically, things that can be represented and evaluated entirely with software. Here's an example: https://bitcoincore.org/en/2016/02/26/zero-knowledge-contingent-payments-announcement/ https://bitcoincore.org/en/2016/02/26/zero-knowledge-conting... Of course, this is entirely insufficient to do something like "put your corporation on the blockchain".
  - fudged71 10y ago
    you can also pay someone for the task of validating work that has been delivered
- haywirez 10y ago
  Isn't this fully addressed by decentralized arbitrators and reputation systems, with a solid economic incentive setup? After all, we are just remaking human civilization on top of more efficient, modern platforms...the same old mechanisms will apply, they'll just (hopefully) work faster & better.
  - igk 10y ago
    Thing is, that's not how it's pitched, and the trade-off needs to be worth it. I personally would rather we found a way to do verifiable e voting (no idea how though, some cryptographic way to sign the logic used to express the program so you can verify it's the thing everyone agreed on?) and remade our cooperation systems into a working version of libertarian communism/syndicalistic anarchism. IIRC rojave is trying something like that right now?
    - urbushey 10y ago
      Rojava? Do you have a source? Interested in hearing more.
- mark_l_watson 10y ago
  Good point. It might help if 'contracts' and payment amounts were small. In the Antifragile (book) sense: the fairness of any individual contract is fragile, rife with risk. However, in aggregation the system is antifragile (better than robust) as long as occasional bad deals are acceptable.

wyager 10y ago

> If I hire you via a crypto-contract but then you don't deliver the associated goods, what recourse do I have? Isn't this sort of a "solved" question, in the sense that we know there's only so much a computer can do? The practical answers are, of course, reputation systems and incentivization systems like escrow. Both of those are areas of active research.

elastic_church 10y ago

You just do exactly what ethereum did. Pay off a securities regulator in the smallest state of Switzerland to say it isn't a security while simultaneously getting an opinion letter in the US saying the same thing. Sovereign sanctioning and alot of capital SEC hasn't challenged it yet though but I mean, you can be rich and bring your project to the world.