4 ms·

Who is being trusted to accurately report whether the borrower has paid? I have never understood how the "oracle" problem gets worked out in practice.

by mundo 9y ago

RexetBlell 9y ago
The amazing this about this particular application is that an oracle is not required at all. So it's completely automatic and trustless. The contract (think of it as a class in Java) has a single function which looks something like this: function acquire_name() { if (msg.value > $200) {self.registrar.transfer_ownership(self.domain_name, msg.sender);}} registrar is a pointer to an instance of the domain registrar that keeps track of all names. Here's an actual implementation of the registrar: https://github.com/ethereum/ens/blob/master/contracts/HashRegistrarSimplified.sol#L475 https://github.com/ethereum/ens/blob/master/contracts/HashRe...
- candiodari 9y ago
  And how would this help ? The economical problems people face in this day and age are not, at all, that contracts aren't enforced. Quite the contrary. The opposite is true: the problems people face is that the only contracts available to them, from rents to cell service, have onerous and unfair terms, favoring whichever side of the contract requires investment, and this unfairness goes up to a ridiculous extent. The last thing we need is more thorough enforcement of them. Hell, I do believe even the owners themselves would demand the ability to "do business". For instance, to let someone hang on to a name and remain in business while they search for a way to repay their debts.
  - RexetBlell 9y ago
    I am not sure what you're asking when you say "how would this help?". Do you not see any usefulness at all in people being able to sell domain names to each other trustlessly without needing to involve a third party?
    - candiodari 9y ago
      I do see the usefulness of that approach, but I also see an amount of risk. A disaster waiting to happen. Let's say, for instance childpornhere.eth goes live, someone pays and receives mail with pictures of a kidnapped child. Havethisguykilled.eth. Sponsorkillingblacks.eth. tipISISnottoattackyourkids.eth. And so on and so forth. The bitcoin "hostage" situations that we see now. Famously the encryption viruses, but the same is happening with cloud credentials (e.g. gmail or hotmail accounts used for businesses. Passwords get changed, last mail is "if you want them back pay $1k to <bitcoin address>") Second, securities fraud. If anything was learned from bitcoin in finance, it's that we cannot live without exchange laws, which bitcoin exchanges did not have. Tradehill, Mt. Gox, Bitcoin central, Bitstake, BitSpark, all and many have gone bankrupt, stealing large investments in the process through outright fraud (TradeHill, incidentally the guy who committed that fraud has a new bitcoin exchange), or through incompetence and getting hacked (which of course could always be just straight up fraud, I mean does anyone buy the Mt. Gox story, for instance ?) Second, addendum: outright general securities fraud. E.g. sudden changes in liquidity that I'm sure in most cases are mere accidents (well, 2 years ago in most cases, today, I'm not so sure), but cause short-term very quick value changes that even in the accidental cases most people find themselves victims to. More generally, the sale and trade of bitcoin derivatives and the practice of the issuers of said products to invest heavily for short term price changes. Or, causing an artificial and massive drop in liquidity through ddossing an exchange (hell, I've worked for actual financial exchanges and seen people pull this one off, but in bitcoin it's commonplace and unpunished) Thirdly, tax evasion. People use bitcoin, and eth, to avoid paying 0.2% or so commission to banks. We are to trust that these same (very rich) people have no issues paying 30% or so in tax. Riiiiiiiiiiiiiiiiiiiiiiiight. Do you really want to allow that ? This is (mostly) what is enabled here.
      - skewart 9y ago
        In many (most) parts of the world the legal system for enforcing contracts isn't all that reliable and trustworthy. An Etheruem-based contract is a big improvement over a traditional contract enforceable only by a slow, corrupt court. Pretty much all technology increases the surface area for fraud. However, the benefits usually outweigh that increase. Blockchains are no different. But the benefit is likely to accrue more to people in less developed countries.
- mundo 9y ago
  I don't really follow. Is this transaction in eth or dollars? If the former, how does the algorithm know what the exchange rate is? If the latter, how does it know a USD transaction has even taken place? It sounds like you're talking about a hypothetical future in which eth is just as useful as USD, meaning that the risk in holding eth and converting it to USD is negligible, and that the contract writer doesn't have to worry about the exchange rate changing much. If so, then it seems like you're sort of solving the easy part and skipping over the hard part.

Who is being trusted to accurately report whether the borrower has paid? I have never understood how the "oracle" problem gets worked out in practice.

by mundo 9y ago

Who is being trusted to accurately report whether the borrower has paid? I have never understood how the "oracle" problem gets worked out in practice.

RexetBlell 9y ago

The amazing this about this particular application is that an oracle is not required at all. So it's completely automatic and trustless. The contract (think of it as a class in Java) has a single function which looks something like this: function acquire_name() { if (msg.value > $200) {self.registrar.transfer_ownership(self.domain_name, msg.sender);}} registrar is a pointer to an instance of the domain registrar that keeps track of all names. Here's an actual implementation of the registrar: https://github.com/ethereum/ens/blob/master/contracts/HashRegistrarSimplified.sol#L475 https://github.com/ethereum/ens/blob/master/contracts/HashRe...

candiodari 9y ago
And how would this help ? The economical problems people face in this day and age are not, at all, that contracts aren't enforced. Quite the contrary. The opposite is true: the problems people face is that the only contracts available to them, from rents to cell service, have onerous and unfair terms, favoring whichever side of the contract requires investment, and this unfairness goes up to a ridiculous extent. The last thing we need is more thorough enforcement of them. Hell, I do believe even the owners themselves would demand the ability to "do business". For instance, to let someone hang on to a name and remain in business while they search for a way to repay their debts.
- RexetBlell 9y ago
  I am not sure what you're asking when you say "how would this help?". Do you not see any usefulness at all in people being able to sell domain names to each other trustlessly without needing to involve a third party?
  - candiodari 9y ago
    I do see the usefulness of that approach, but I also see an amount of risk. A disaster waiting to happen. Let's say, for instance childpornhere.eth goes live, someone pays and receives mail with pictures of a kidnapped child. Havethisguykilled.eth. Sponsorkillingblacks.eth. tipISISnottoattackyourkids.eth. And so on and so forth. The bitcoin "hostage" situations that we see now. Famously the encryption viruses, but the same is happening with cloud credentials (e.g. gmail or hotmail accounts used for businesses. Passwords get changed, last mail is "if you want them back pay $1k to <bitcoin address>") Second, securities fraud. If anything was learned from bitcoin in finance, it's that we cannot live without exchange laws, which bitcoin exchanges did not have. Tradehill, Mt. Gox, Bitcoin central, Bitstake, BitSpark, all and many have gone bankrupt, stealing large investments in the process through outright fraud (TradeHill, incidentally the guy who committed that fraud has a new bitcoin exchange), or through incompetence and getting hacked (which of course could always be just straight up fraud, I mean does anyone buy the Mt. Gox story, for instance ?) Second, addendum: outright general securities fraud. E.g. sudden changes in liquidity that I'm sure in most cases are mere accidents (well, 2 years ago in most cases, today, I'm not so sure), but cause short-term very quick value changes that even in the accidental cases most people find themselves victims to. More generally, the sale and trade of bitcoin derivatives and the practice of the issuers of said products to invest heavily for short term price changes. Or, causing an artificial and massive drop in liquidity through ddossing an exchange (hell, I've worked for actual financial exchanges and seen people pull this one off, but in bitcoin it's commonplace and unpunished) Thirdly, tax evasion. People use bitcoin, and eth, to avoid paying 0.2% or so commission to banks. We are to trust that these same (very rich) people have no issues paying 30% or so in tax. Riiiiiiiiiiiiiiiiiiiiiiiight. Do you really want to allow that ? This is (mostly) what is enabled here.
    - skewart 9y ago
      In many (most) parts of the world the legal system for enforcing contracts isn't all that reliable and trustworthy. An Etheruem-based contract is a big improvement over a traditional contract enforceable only by a slow, corrupt court. Pretty much all technology increases the surface area for fraud. However, the benefits usually outweigh that increase. Blockchains are no different. But the benefit is likely to accrue more to people in less developed countries.
mundo 9y ago
I don't really follow. Is this transaction in eth or dollars? If the former, how does the algorithm know what the exchange rate is? If the latter, how does it know a USD transaction has even taken place? It sounds like you're talking about a hypothetical future in which eth is just as useful as USD, meaning that the risk in holding eth and converting it to USD is negligible, and that the contract writer doesn't have to worry about the exchange rate changing much. If so, then it seems like you're sort of solving the easy part and skipping over the hard part.