4 ms·

This doesn't make any sense. Can only preordained organizations print the notes? Then we’re back to centralized cash. Can anyone print the notes? Then they can

This doesn't make any sense. Can only preordained organizations print the notes? Then we’re back to centralized cash. Can anyone print the notes? Then they can also print duplicates. Do we verify electronically when we transact to prevent that? Then we're back to electronic transactions. What am I missing? How is this not fatally flawed?

ccamrobertson 7y ago
Today, Kong's printing is centralized to the Kong project (similar to a premine) because we cannot guarantee that someone else will use a secure element which conforms to section 2 of the paper (which would preclude the creation of duplicates). If anyone else wants to print Kong, and we can verify they source a secure element conforming to section 2 of the paper, then we'll share "printing rights" with them. The Kong recurring lockdrop, section 4.2, is outside of our control and open to anyone. We start to explore how someone could participate in printing Kong freely, without our influence, in section 5.1 but there are massive unsolved challenges to tackle here. There is a significant distinction between verifying a note electronically and conducting an electronic transaction. The former can be done in an offline fashion; the latter cannot and, in the case of credit card networks, Ethereum and, Bitcoin, incurs a fee.
- jakelazaroff 7y ago
  Is this not strictly worse than cash, then? It’s still a centralized physical currency, but instead of a government with checks and balances that is ostensibly accountable to its citizens, Kong is controlled by an opaque organization accountable to nobody. After reading the paper, I’m still not exactly sure how the lockdrop works. Could you elaborate on it? As for verifying transactions offline, I’m skeptical of how useful that is. If you can lock down printing, the supply of fake or duplicate Kong should be low anyway. If you decentralize printing (or a lot of counterfeit/duplicate Kong gets introduced into the market some other way) then offline verification seems insufficient. What’s to stop me from printing and spending two copies of a note if I know the other parties won’t veriify the transaction online until much later?
  - ccamrobertson 7y ago
    We can only print Kong; we cannot remove it from circulation. We're limited in the total amount of Kong we can print. We likely will need to have another document detailing how the lock drop works. The short version is that you lock up Ethereum in a smart contract for between 30 and 365 days; when you prove that fact to a given Kong lock drop contract instance you receive Kong token (at the end of the period). > If you decentralize printing (or a lot of counterfeit/duplicate Kong gets introduced into the market some other way) then offline verification seems insufficient. What’s to stop me from printing and spending two copies of a note if I know the other parties won’t certify the transaction online until much later? Here's how I see offline verification working: (1) I sync up directly with an Ethereum node and cache all the Kong note smart contracts (ideally my own would be the most trustworthy). Most importantly this contains the public key for each Kong note known at the time and the token associated with that note (2) I accept any notes that I can electronically verify from that cache. That's done by challenging the note to sign a message and verifying the response. (3) I don't accept any notes not in my cache. The downside is that I can't accept very new notes, but we suspect that if we continue to produce Kong that we'll do so in large batches infrequently.
    - jakelazaroff 7y ago
      > We can only print Kong; we cannot remove it from circulation. This isn't strictly true; you can buy notes from people. > We likely will need to have another document detailing how the lock drop works. The short version is that you lock up Ethereum in a smart contract for between 30 and 365 days; when you prove that fact to a given Kong lock drop contract instance you receive Kong token (at the end of the period). It sounds like the basic idea is that you "preorder" Kong with Ethereum, and then you visit a physical location (the "contract instance") to receive your cash ("Kong token"). If my understanding is correct, then this isn't outside of your control at all — you (or the "contract instance") can simply refuse to issue the cash. Re: verification, here's my issue: > Most importantly this contains the public key for each Kong note known at the time and the token associated with that note What if someone counterfeits Kong not by wholesale faking currency, but by duplicating valid notes in circulation? The public key would be the same, so they would both pass offline verification.
- deleted 7y ago
  [deleted]
pjc50 7y ago
It's a zero coupon bearer bond, that's all. With some very elaborate anti forgery. Nothing wrong with an organization printing bonds, it's just that these aren't a debt but represent locked up economically inactive etherum.
- jakelazaroff 7y ago
  This might sway me if they didn't repeatedly refer to it as "cash" on their website.
  - gnode 7y ago
    There's a distinction that Kong is not payable on demand, until after expiry, but I'm not sure it's a useful distinction. Unlike a conventional bond, there isn't a question of default by the issuer; the Etherium is locked up in a smart contract, rather than relying on the issuer honouring the bond at maturation. Rarely do users of cash care about the property of it being payable on demand by the issuer (conventionally a central bank), only the property that it be practical for physical commerce.
    - arcticbull 7y ago
      Here the risk is that the note becomes physically damaged in some trivial way and the value is lost forever. Maybe it's bent too far over in one direction, maybe something heavy falls on it, etc, etc.
      - gnode 7y ago
        That physical cash can become damaged is nothing new. Maybe this implementation could be easily damaged in some way, I don't think this threatens the concept of silicon cash generally.
        arcticbull 7y ago
        Physical cash is both very resilient and if damaged can be replaced. This is neither.

ccamrobertson 7y ago

Today, Kong's printing is centralized to the Kong project (similar to a premine) because we cannot guarantee that someone else will use a secure element which conforms to section 2 of the paper (which would preclude the creation of duplicates). If anyone else wants to print Kong, and we can verify they source a secure element conforming to section 2 of the paper, then we'll share "printing rights" with them. The Kong recurring lockdrop, section 4.2, is outside of our control and open to anyone. We start to explore how someone could participate in printing Kong freely, without our influence, in section 5.1 but there are massive unsolved challenges to tackle here. There is a significant distinction between verifying a note electronically and conducting an electronic transaction. The former can be done in an offline fashion; the latter cannot and, in the case of credit card networks, Ethereum and, Bitcoin, incurs a fee.

jakelazaroff 7y ago
Is this not strictly worse than cash, then? It’s still a centralized physical currency, but instead of a government with checks and balances that is ostensibly accountable to its citizens, Kong is controlled by an opaque organization accountable to nobody. After reading the paper, I’m still not exactly sure how the lockdrop works. Could you elaborate on it? As for verifying transactions offline, I’m skeptical of how useful that is. If you can lock down printing, the supply of fake or duplicate Kong should be low anyway. If you decentralize printing (or a lot of counterfeit/duplicate Kong gets introduced into the market some other way) then offline verification seems insufficient. What’s to stop me from printing and spending two copies of a note if I know the other parties won’t veriify the transaction online until much later?
- ccamrobertson 7y ago
  We can only print Kong; we cannot remove it from circulation. We're limited in the total amount of Kong we can print. We likely will need to have another document detailing how the lock drop works. The short version is that you lock up Ethereum in a smart contract for between 30 and 365 days; when you prove that fact to a given Kong lock drop contract instance you receive Kong token (at the end of the period). > If you decentralize printing (or a lot of counterfeit/duplicate Kong gets introduced into the market some other way) then offline verification seems insufficient. What’s to stop me from printing and spending two copies of a note if I know the other parties won’t certify the transaction online until much later? Here's how I see offline verification working: (1) I sync up directly with an Ethereum node and cache all the Kong note smart contracts (ideally my own would be the most trustworthy). Most importantly this contains the public key for each Kong note known at the time and the token associated with that note (2) I accept any notes that I can electronically verify from that cache. That's done by challenging the note to sign a message and verifying the response. (3) I don't accept any notes not in my cache. The downside is that I can't accept very new notes, but we suspect that if we continue to produce Kong that we'll do so in large batches infrequently.
  - jakelazaroff 7y ago
    > We can only print Kong; we cannot remove it from circulation. This isn't strictly true; you can buy notes from people. > We likely will need to have another document detailing how the lock drop works. The short version is that you lock up Ethereum in a smart contract for between 30 and 365 days; when you prove that fact to a given Kong lock drop contract instance you receive Kong token (at the end of the period). It sounds like the basic idea is that you "preorder" Kong with Ethereum, and then you visit a physical location (the "contract instance") to receive your cash ("Kong token"). If my understanding is correct, then this isn't outside of your control at all — you (or the "contract instance") can simply refuse to issue the cash. Re: verification, here's my issue: > Most importantly this contains the public key for each Kong note known at the time and the token associated with that note What if someone counterfeits Kong not by wholesale faking currency, but by duplicating valid notes in circulation? The public key would be the same, so they would both pass offline verification.
deleted 7y ago
[deleted]

pjc50 7y ago

It's a zero coupon bearer bond, that's all. With some very elaborate anti forgery. Nothing wrong with an organization printing bonds, it's just that these aren't a debt but represent locked up economically inactive etherum.

jakelazaroff 7y ago
This might sway me if they didn't repeatedly refer to it as "cash" on their website.
- gnode 7y ago
  There's a distinction that Kong is not payable on demand, until after expiry, but I'm not sure it's a useful distinction. Unlike a conventional bond, there isn't a question of default by the issuer; the Etherium is locked up in a smart contract, rather than relying on the issuer honouring the bond at maturation. Rarely do users of cash care about the property of it being payable on demand by the issuer (conventionally a central bank), only the property that it be practical for physical commerce.
  - arcticbull 7y ago
    Here the risk is that the note becomes physically damaged in some trivial way and the value is lost forever. Maybe it's bent too far over in one direction, maybe something heavy falls on it, etc, etc.
    - gnode 7y ago
      That physical cash can become damaged is nothing new. Maybe this implementation could be easily damaged in some way, I don't think this threatens the concept of silicon cash generally.
      - arcticbull 7y ago
        Physical cash is both very resilient and if damaged can be replaced. This is neither.