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Thanks for asking us to expand! We can always write a novel, but not everyone wants to read about oracles and unsolved problems in distributed compute. You are

Thanks for asking us to expand! We can always write a novel, but not everyone wants to read about oracles and unsolved problems in distributed compute. You are correct, for this smart contract to work you need defined rules around how the money is released should either party falsely claim success or failure, so you need to rely on automation or some third party to validate fulfillment of the contract. So you're back to an oracle problem, how do I know I can trust the validator? The nice advancement here is that anyone can be that third party! Your smart contract can explicitly identify a third party for multisig, or you can rely on a validator pool of mechanical turks instead of a licensed escrow agent, and accordingly the cost of escrow can decrease. The nice part is that this is customizable, and built into the very rails that move money. It's a much lower barrier to entry than trying to build something like that for ACH, and that's what excites us about cryptocurrency.

btown 5y ago
It's refreshing to hear well-thought-out responses to the "isn't it just escrow" question, which I admit I've asked in a skeptical way re: cryptocurrencies in the past! Decoupling oracle-ness from a need to be a legally trusted holder of money is indeed something that broadens/democratizes the pool of viable oracles. On that note, if an outstanding question is "how do we increase the supply (and thus decrease the price) of oracles beyond those who happen to know how to interact with smart contracts," I wonder if something like your Hedgehog tech, paired with standardized smart contract plugins, could make it possible for far more domain experts without crypto experience to enter and advertise themselves in the oracle market. Makes your system a one-stop easy-onboard volatility-reducing shop for the escrow problem you identified, for all participants in that marketplace!
- cadillion 5y ago
  Wow, you hit the nail on the head! To point to our long term vision, cryptocurrency has the nice property of being data, but the double-edged feature of being money. In order to tell people how to get data from point A to point B you suddenly have to be a fiduciary financial adviser! We want to take that duty seriously and help people interact with the cryptocurrency ecosystem as a trusted adviser. If we can help you customize and interact with smart contracts and plug them into existing regulatory frameworks, then we can unlock a lot of value for everyone.
- mchusma 5y ago
  I still struggle with smart contracts. I am glad they exist, but right now I think they will be some super rare thing, used in cases that previously required eacrow. I was in the e-signature world, and nobody tended to ever care about authentication. Nobody really wanted to pay for it, almost ever. They smart contracts have 2 of the largest features of escrow: handing control of your money to a third party and not being able to use the money now/bad payment "terms". It mitigates some counterparty risk, as it's harder for the oracle themselves to steal the money. It's also probably expensive, as oracles have to meditate disputes and take on risk. So interesting, but unsure what it would be used for.
runbathtime 5y ago
Do you have money transmitter licenses in all the states? Do you plan on getting them?
- cadillion 5y ago
  We do not currently have money transmitter licenses as we do not move any money for you (yet), we merely pass your trade requests to your exchange. To your point, though, we are pursuing these licenses in every jurisdiction where required so we can start offering this service. We're also registering as an investment adviser so we can offer financial advice. This takes time and a lot of capital, but we believe the end result will be worth it.
  - runbathtime 5y ago
    I'm trying to understand, by passing the trade request you are like a hosted wallet that you control? Instead of the user broadcasting a transaction, the hosted wallet does that? I don't understand how that isn't money transmission, unless the hosted wallets are actually multisg, because as I undertand it multisig isn't considered custodial.
    - cadillion 5y ago
      So currently we don't host any wallets. Clients open custodial accounts with pre-existing exchanges and then leave an API key for us to retrieve transaction and balance data. When they request a trade, we simply let the exchange know that the client has requested a trade, and we don't move any money on the client's behalf. We are currently seeking money transmitter licenses so that we can offer a hosted wallet of our own, where we hold the exchange accounts on the client's behalf, and act as their counterparty for every trade so they don't have to maintain accounts at multiple venues. This version of the application is not yet available.
      - runbathtime 5y ago
        Thanks for the clarification. The api is used to send instructions to the money transmitter. I am imagining the product is more UX and aggregation of data for the end user. Congrats on your launch.
lucasverra 5y ago
There is also decentralized protocols for judging events like https://kleros.io/ https://kleros.io/ (not affiliated)
- gip 5y ago
  While I love the idea of JaaS (Justice As A Service) I suspect that in most cases the cost will make it unworkable. In the situation OP faced, figuring out whether the contract has been correctly executed and whether the payment should have been made would have required specialized knowledge as well as time to look into the details of the case.
ALittleLight 5y ago
It seems to me like there is already something better than "smart contracts" now with the current legal and financial system. The current system can handle all sorts of nuance, edge cases, and disagreement that smart contracts can't. What's the Oracle for "Did you really go bankrupt?" or "Does the interaction between Alabama and California law necessitate payment in these specific conditions?" Ethereum is one of the more credible cryptocurrencies and yet, it is slow, throughput is woefully inadequate for scale, expensive to transact, and smart contracts don't really work. When I say "Don't really work" I mean that you can't use them for the things you'd want to use them for - i.e. you can't write an Ethereum smart contract for "If I deliver X hours of contracting work, meeting these specifications, then you will pay me Y amount by Z date automatically." If I'm wrong and you can do stuff like that, please point me to the solidity. I'm glad you included the line welcoming comments from those who feel this market shouldn't exist, otherwise I wouldn't have written this comment. I hate to be negative regarding a launch - but this feels like adding a product to the Ponzi Scheme Industry. Maybe it's like writing software to help manage slot machines, except your slot machines aren't regulated and you tell people they're investing rather than gambling.
- colbycornish 5y ago
  Thanks for the thoughtful response, and you're absolutely right, the current legal system is designed to handle all these. Right now, Oracles are also way more complex to build, and they can't handle the nuances of meeting X specification in a way that's simple and easy to do. To be clear, that doesn't mean that a simple solution will never be created. Obviously we think it will, but that doesn't mean we're right. But to address a slightly different part of your framing, our situation actually got more complicated when attempting to go the legal route. We suddenly had additional lawyer, collections, and time costs associated with the process...and we still never managed to collect. That's certainly an area where the current legal system fails (for a lot of people!). Cryptocurrencies might not be the perfect alternative, but they are an alternative that, in our opinion, is exciting to explore.
  - ALittleLight 5y ago
    Hope it works out!

btown 5y ago

It's refreshing to hear well-thought-out responses to the "isn't it just escrow" question, which I admit I've asked in a skeptical way re: cryptocurrencies in the past! Decoupling oracle-ness from a need to be a legally trusted holder of money is indeed something that broadens/democratizes the pool of viable oracles. On that note, if an outstanding question is "how do we increase the supply (and thus decrease the price) of oracles beyond those who happen to know how to interact with smart contracts," I wonder if something like your Hedgehog tech, paired with standardized smart contract plugins, could make it possible for far more domain experts without crypto experience to enter and advertise themselves in the oracle market. Makes your system a one-stop easy-onboard volatility-reducing shop for the escrow problem you identified, for all participants in that marketplace!

cadillion 5y ago
Wow, you hit the nail on the head! To point to our long term vision, cryptocurrency has the nice property of being data, but the double-edged feature of being money. In order to tell people how to get data from point A to point B you suddenly have to be a fiduciary financial adviser! We want to take that duty seriously and help people interact with the cryptocurrency ecosystem as a trusted adviser. If we can help you customize and interact with smart contracts and plug them into existing regulatory frameworks, then we can unlock a lot of value for everyone.
mchusma 5y ago
I still struggle with smart contracts. I am glad they exist, but right now I think they will be some super rare thing, used in cases that previously required eacrow. I was in the e-signature world, and nobody tended to ever care about authentication. Nobody really wanted to pay for it, almost ever. They smart contracts have 2 of the largest features of escrow: handing control of your money to a third party and not being able to use the money now/bad payment "terms". It mitigates some counterparty risk, as it's harder for the oracle themselves to steal the money. It's also probably expensive, as oracles have to meditate disputes and take on risk. So interesting, but unsure what it would be used for.

runbathtime 5y ago

Do you have money transmitter licenses in all the states? Do you plan on getting them?

cadillion 5y ago
We do not currently have money transmitter licenses as we do not move any money for you (yet), we merely pass your trade requests to your exchange. To your point, though, we are pursuing these licenses in every jurisdiction where required so we can start offering this service. We're also registering as an investment adviser so we can offer financial advice. This takes time and a lot of capital, but we believe the end result will be worth it.
- runbathtime 5y ago
  I'm trying to understand, by passing the trade request you are like a hosted wallet that you control? Instead of the user broadcasting a transaction, the hosted wallet does that? I don't understand how that isn't money transmission, unless the hosted wallets are actually multisg, because as I undertand it multisig isn't considered custodial.
  - cadillion 5y ago
    So currently we don't host any wallets. Clients open custodial accounts with pre-existing exchanges and then leave an API key for us to retrieve transaction and balance data. When they request a trade, we simply let the exchange know that the client has requested a trade, and we don't move any money on the client's behalf. We are currently seeking money transmitter licenses so that we can offer a hosted wallet of our own, where we hold the exchange accounts on the client's behalf, and act as their counterparty for every trade so they don't have to maintain accounts at multiple venues. This version of the application is not yet available.
    - runbathtime 5y ago
      Thanks for the clarification. The api is used to send instructions to the money transmitter. I am imagining the product is more UX and aggregation of data for the end user. Congrats on your launch.

lucasverra 5y ago

There is also decentralized protocols for judging events like https://kleros.io/ https://kleros.io/ (not affiliated)

gip 5y ago
While I love the idea of JaaS (Justice As A Service) I suspect that in most cases the cost will make it unworkable. In the situation OP faced, figuring out whether the contract has been correctly executed and whether the payment should have been made would have required specialized knowledge as well as time to look into the details of the case.

ALittleLight 5y ago

It seems to me like there is already something better than "smart contracts" now with the current legal and financial system. The current system can handle all sorts of nuance, edge cases, and disagreement that smart contracts can't. What's the Oracle for "Did you really go bankrupt?" or "Does the interaction between Alabama and California law necessitate payment in these specific conditions?" Ethereum is one of the more credible cryptocurrencies and yet, it is slow, throughput is woefully inadequate for scale, expensive to transact, and smart contracts don't really work. When I say "Don't really work" I mean that you can't use them for the things you'd want to use them for - i.e. you can't write an Ethereum smart contract for "If I deliver X hours of contracting work, meeting these specifications, then you will pay me Y amount by Z date automatically." If I'm wrong and you can do stuff like that, please point me to the solidity. I'm glad you included the line welcoming comments from those who feel this market shouldn't exist, otherwise I wouldn't have written this comment. I hate to be negative regarding a launch - but this feels like adding a product to the Ponzi Scheme Industry. Maybe it's like writing software to help manage slot machines, except your slot machines aren't regulated and you tell people they're investing rather than gambling.

colbycornish 5y ago
Thanks for the thoughtful response, and you're absolutely right, the current legal system is designed to handle all these. Right now, Oracles are also way more complex to build, and they can't handle the nuances of meeting X specification in a way that's simple and easy to do. To be clear, that doesn't mean that a simple solution will never be created. Obviously we think it will, but that doesn't mean we're right. But to address a slightly different part of your framing, our situation actually got more complicated when attempting to go the legal route. We suddenly had additional lawyer, collections, and time costs associated with the process...and we still never managed to collect. That's certainly an area where the current legal system fails (for a lot of people!). Cryptocurrencies might not be the perfect alternative, but they are an alternative that, in our opinion, is exciting to explore.
- ALittleLight 5y ago
  Hope it works out!