4 ms·

> Also, non-fungible asset tokens. Better known as "deeds." (Right now they're mostly used for virtual collectibles, but fundamentally they're the same "possess

by theamk 8y ago

> Also, non-fungible asset tokens. Better known as "deeds." (Right now they're mostly used for virtual collectibles, but fundamentally they're the same "possession of X is ownership of the thing X represents" objects that fit the government's model for e.g. real-estate law. They're just digital instead of paper.) I don't believe one would want physical assets, especially real estate, to be managed on the blockchain -- I certainly won't. Hackers steal private keys, courts can transfer ownership or invalidate the sale. So one need government backdoor to asset database. And if you have a backdoor, you might as well use centralized system -- it is cheaper, faster and more reliable. (And if you want to ensure there are no hidden, retroactive changes, you may want to use systems like certificate transparency [0] which provide log proofs without all the mining overhead) [0] http://www.certificate-transparency.org/log-proofs-work http://www.certificate-transparency.org/log-proofs-work

derefr 8y ago
> Hackers steal private keys Yes, just as they can steal bearer bonds or cash (or deeds, back when deeds were bearer instruments) from the safe in your house. That's why you don't (usually) keep physical deeds in personal safes, but rather give them over to a custodian, e.g. a bank, who will secure access to them much more effectively than you can. A "Custodian"-role smart-contract, likely maintained by a company like a bank, is a part of the proposed model for both security tokens and NFTs. > courts can transfer ownership or invalidate the sale A "Regulator" contract [likely maintained by an actual government agency like the SEC, or a subcontractor thereof] that can both force and prevent transfers, is also part of the model of security tokens. > And if you have a backdoor, you might as well use centralized system -- it is cheaper, faster and more reliable. No. The point of having the blockchain here is that everything—including the actions of the regulator itself—is auditable. In a centralized system, you can't detect regulatory capture. If the logic the regulator used to determine the validity of a transfer is built into an (immutable, versioned) smart contract, however, then it's very simple to detect when that logic has any special cases. The point of creating these financial instruments as Ethereum-substrate token contracts, isn't just to prove what transactions happened; if that were all you wanted, you could indeed just use log proofs. Ethereum is used here because you don't just want to prove what each agent did, you want to be able to audit exactly the logic they used to do it. You want a verifiable why, not just a verifiable what. A plain-old "blockchain" (or a distributed log-proof store) is like a video of a poker game where you can see everyone's hands and decks. Add smart-contracts, and you've instead got a video of a poker game where the players are 1960s robots and the video has captured all the movements of their computational relays and valves.
- nradov 8y ago
  This adds nothing useful to the existing systems we already have for tracking ownership of actual assets.
- theamk 8y ago
  Let's talk about house buying because this information is publicly available and somewhat well known. Here is a sample house contract: https://www.forsalebyowner.com/pdf/agrmttosell.pdf https://www.forsalebyowner.com/pdf/agrmttosell.pdf Notice that many of these clauses are not representable on blockchain at all (for example clauses 9, which allows buyer to adjust price down if the house has any defects), and some could only be represented if entire industries are 100% on block (7, 8, 10, 14, 15, 16, probably many others). Since this is unlikely to happen, at least initially, they are not representable either. As a result, the smart contract cannot be more complex than "start with this amount, adjust price either way if both parties agree, accept if both parties and regulator agree, regulator can override anything" The smart contract won't make seller publicly explain why she want to decrease the amount by $12,345. There will be no explanation why both parties or regulator decided to cancel contract either. All of these decision happen off-blockchain, in the courtrooms, lawyer's offices, or just in private conversations. Also, since there is a "Custodian" maintaining your smart contract, and "Regulator" approving the deals, you won't be able to avoid regulatory capture either. If you try to go against government's interests, then your private keys would get "accidentally" revoked, your smart contract would get "accidentally" invalidated and so on. And of course, there are lots of other reasons. What if of one of the parties committed fraud, but this was not discovered until after contract completed? What if Ethereum community decides to fork again? And so on.

by theamk 8y ago

derefr 8y ago

> Hackers steal private keys Yes, just as they can steal bearer bonds or cash (or deeds, back when deeds were bearer instruments) from the safe in your house. That's why you don't (usually) keep physical deeds in personal safes, but rather give them over to a custodian, e.g. a bank, who will secure access to them much more effectively than you can. A "Custodian"-role smart-contract, likely maintained by a company like a bank, is a part of the proposed model for both security tokens and NFTs. > courts can transfer ownership or invalidate the sale A "Regulator" contract [likely maintained by an actual government agency like the SEC, or a subcontractor thereof] that can both force and prevent transfers, is also part of the model of security tokens. > And if you have a backdoor, you might as well use centralized system -- it is cheaper, faster and more reliable. No. The point of having the blockchain here is that everything—including the actions of the regulator itself—is auditable. In a centralized system, you can't detect regulatory capture. If the logic the regulator used to determine the validity of a transfer is built into an (immutable, versioned) smart contract, however, then it's very simple to detect when that logic has any special cases. The point of creating these financial instruments as Ethereum-substrate token contracts, isn't just to prove what transactions happened; if that were all you wanted, you could indeed just use log proofs. Ethereum is used here because you don't just want to prove what each agent did, you want to be able to audit exactly the logic they used to do it. You want a verifiable why, not just a verifiable what. A plain-old "blockchain" (or a distributed log-proof store) is like a video of a poker game where you can see everyone's hands and decks. Add smart-contracts, and you've instead got a video of a poker game where the players are 1960s robots and the video has captured all the movements of their computational relays and valves.

nradov 8y ago
This adds nothing useful to the existing systems we already have for tracking ownership of actual assets.
theamk 8y ago
Let's talk about house buying because this information is publicly available and somewhat well known. Here is a sample house contract: https://www.forsalebyowner.com/pdf/agrmttosell.pdf https://www.forsalebyowner.com/pdf/agrmttosell.pdf Notice that many of these clauses are not representable on blockchain at all (for example clauses 9, which allows buyer to adjust price down if the house has any defects), and some could only be represented if entire industries are 100% on block (7, 8, 10, 14, 15, 16, probably many others). Since this is unlikely to happen, at least initially, they are not representable either. As a result, the smart contract cannot be more complex than "start with this amount, adjust price either way if both parties agree, accept if both parties and regulator agree, regulator can override anything" The smart contract won't make seller publicly explain why she want to decrease the amount by $12,345. There will be no explanation why both parties or regulator decided to cancel contract either. All of these decision happen off-blockchain, in the courtrooms, lawyer's offices, or just in private conversations. Also, since there is a "Custodian" maintaining your smart contract, and "Regulator" approving the deals, you won't be able to avoid regulatory capture either. If you try to go against government's interests, then your private keys would get "accidentally" revoked, your smart contract would get "accidentally" invalidated and so on. And of course, there are lots of other reasons. What if of one of the parties committed fraud, but this was not discovered until after contract completed? What if Ethereum community decides to fork again? And so on.