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OK, I'll bite. How does your contract move gold from you to me? If it doesn't (which it obviously doesn't), how is it removing the utility of escrow? In fact,

OK, I'll bite. How does your contract move gold from you to me? If it doesn't (which it obviously doesn't), how is it removing the utility of escrow? In fact, what is it achieving in this case that does something different to a traditional payment system? And in what conceivable way has this anything to do with the utility of Amazon or eBay? That's not to say that smart contracts cannot have any utility, they can. I could imagine, for example, that they could replace a lot of the functions of notaries. Or, in fact, any case where the primary problem is a common understanding of the state changes of a digital asset. But I can't see how they have any utility in any of the examples you cite beyond a mundane payment system.

arbol 9y ago
Excellent! They do not move the physical gold - they move the ownership of a digital token tied to gold, at a far lesser fee than current digital escrow. This is the same as ETF gold currently. Not many people receive actual, physical gold. In the case that you needed to receive the physical gold, the cost of trusting a delivery person remains fairly constant (until we have autonomous delivery robots). However, the proof of ownership can no longer be tampered with, as it exists on a global ledger. This reduces the overall transaction fee. The transaction is a transfer of value. Amazon and eBay are also facilitators of value transactions. The same economic rules apply albeit on a much smaller scale. Extrapolate this and any transaction of a digital asset can benefit from reduced mediator fees. The scale of this is quite large. I think this is well summarised here: https://www.ibm.com/blogs/insights-on-business/retail/transactions-trust-value-blockchain-technology/ https://www.ibm.com/blogs/insights-on-business/retail/transa... Text between asterisks is added by me. "Consensus: Thanks to the value that smart contracts and shared ledgers offer blockchain users, consensus can be more easily agreed upon and confidently understood. Using blockchain, users can make decisions based on factual data – helping to eliminate disputes, confusion and time (reduced mediator fees). Consensus is built at each step of the supply chain not just at the beginning, when the order is placed and the end, when the order is received. This process enables all parties to resolve issues as they occur and have visibility to take alternative actions if necessary. From a supply chain perspective, this adds tremendous value to merchants, logistic companies, vendors and all others working together to deliver timely, efficient inventory deliveries, re-orders and more. This is particularly important when you factor in that data – and data alone – is what leads supply chain leaders in their immediate and future decisions. Without concrete data to refer to and analyze, decisions cannot be as precisely made between both internal and external partners alike." TLDR: reduced mediator fees reduce barriers to entry in any market where value transactions occur.
- lucozade 9y ago
  > They do not move the physical gold If you're not moving the gold, who needs escrow? You're just describing a cash settled spot market. > the cost of trusting a delivery person remains fairly constant Indeed, as you're having no effect on either escrow or post-settlement delivery. But that's my point, smart contracts don't make a blind bit of difference. > Amazon and eBay are also facilitators of value transactions The value is in the goods turning up. Smart contracts don't help at all outside digital assets. Or more specifically, the payment process is trivial compared to the logistics process. The value is almost all in the latter. That's not generally true for digital assets. But today, the main challenges with those are to do with rights and marketing/discovery. Again, that's the value, today, of Amazon in that space. Disrupting transactions is irrelevant. Now, I'm not saying the tricky bits can't be disintermediated. That's already started. But TBH if and when that does occur, why go to all that trouble and leave the transaction system as a fee taker? Disintermediate that too.
  - arbol 9y ago
    Supply chain mistakes are costly and can result in unsaleable stock. There are existing standards (see GS1) but they are full of errors due to disparate systems and varying interpretations of XML messages. Smart contracts have the potential to reduce the cost of goods delivery through shared supply chain management systems, placing less risk on a potential 'new to market' market place or 'direct to consumer' seller. These are both direct challenges to Amazon and eBay. Expensive digital assets will always require a mediation fee. You could write your own contract to transfer the assets for free but you would probably want to pay to guarantee that it worked. Of course, if the digital transaction is of a suitably small value, a direct transfer of assets may be preferred via a self-authored contract. The loser in this case is VISA or whichever payment provider scalps off the top of music/movie/book/... sales currently. I wasn't trying to specifically cite transactions as being the main target of smart contracts (although they are the most obvious). The example was to show how existing processes of a transactional nature can be recreated with less complexity and therefore utilise less resources. There is an endless list of examples where this holds to some extent.

arbol 9y ago

Excellent! They do not move the physical gold - they move the ownership of a digital token tied to gold, at a far lesser fee than current digital escrow. This is the same as ETF gold currently. Not many people receive actual, physical gold. In the case that you needed to receive the physical gold, the cost of trusting a delivery person remains fairly constant (until we have autonomous delivery robots). However, the proof of ownership can no longer be tampered with, as it exists on a global ledger. This reduces the overall transaction fee. The transaction is a transfer of value. Amazon and eBay are also facilitators of value transactions. The same economic rules apply albeit on a much smaller scale. Extrapolate this and any transaction of a digital asset can benefit from reduced mediator fees. The scale of this is quite large. I think this is well summarised here: https://www.ibm.com/blogs/insights-on-business/retail/transactions-trust-value-blockchain-technology/ https://www.ibm.com/blogs/insights-on-business/retail/transa... Text between asterisks is added by me. "Consensus: Thanks to the value that smart contracts and shared ledgers offer blockchain users, consensus can be more easily agreed upon and confidently understood. Using blockchain, users can make decisions based on factual data – helping to eliminate disputes, confusion and time (reduced mediator fees). Consensus is built at each step of the supply chain not just at the beginning, when the order is placed and the end, when the order is received. This process enables all parties to resolve issues as they occur and have visibility to take alternative actions if necessary. From a supply chain perspective, this adds tremendous value to merchants, logistic companies, vendors and all others working together to deliver timely, efficient inventory deliveries, re-orders and more. This is particularly important when you factor in that data – and data alone – is what leads supply chain leaders in their immediate and future decisions. Without concrete data to refer to and analyze, decisions cannot be as precisely made between both internal and external partners alike." TLDR: reduced mediator fees reduce barriers to entry in any market where value transactions occur.

lucozade 9y ago
> They do not move the physical gold If you're not moving the gold, who needs escrow? You're just describing a cash settled spot market. > the cost of trusting a delivery person remains fairly constant Indeed, as you're having no effect on either escrow or post-settlement delivery. But that's my point, smart contracts don't make a blind bit of difference. > Amazon and eBay are also facilitators of value transactions The value is in the goods turning up. Smart contracts don't help at all outside digital assets. Or more specifically, the payment process is trivial compared to the logistics process. The value is almost all in the latter. That's not generally true for digital assets. But today, the main challenges with those are to do with rights and marketing/discovery. Again, that's the value, today, of Amazon in that space. Disrupting transactions is irrelevant. Now, I'm not saying the tricky bits can't be disintermediated. That's already started. But TBH if and when that does occur, why go to all that trouble and leave the transaction system as a fee taker? Disintermediate that too.
- arbol 9y ago
  Supply chain mistakes are costly and can result in unsaleable stock. There are existing standards (see GS1) but they are full of errors due to disparate systems and varying interpretations of XML messages. Smart contracts have the potential to reduce the cost of goods delivery through shared supply chain management systems, placing less risk on a potential 'new to market' market place or 'direct to consumer' seller. These are both direct challenges to Amazon and eBay. Expensive digital assets will always require a mediation fee. You could write your own contract to transfer the assets for free but you would probably want to pay to guarantee that it worked. Of course, if the digital transaction is of a suitably small value, a direct transfer of assets may be preferred via a self-authored contract. The loser in this case is VISA or whichever payment provider scalps off the top of music/movie/book/... sales currently. I wasn't trying to specifically cite transactions as being the main target of smart contracts (although they are the most obvious). The example was to show how existing processes of a transactional nature can be recreated with less complexity and therefore utilise less resources. There is an endless list of examples where this holds to some extent.