3 ms·

Can you elaborate? I doubt your claim because "how much profit" a business makes is tied to the legal/financial system(s) the business operates in. To me it loo

by timkam 5y ago

Can you elaborate? I doubt your claim because "how much profit" a business makes is tied to the legal/financial system(s) the business operates in. To me it looks like we have the "object level vs. meta level" fallacy that is so typical for crypto enthusiasts: in the end, what governs our society is not crypto tech (object level), but meta level institutions. And even if these institutions were to agree that, for example, a smart contract is a legal contract, they could still reverse this decisions and hence move the agreement back to the meta level.

redpiller 5y ago
Here is an article about our use case: https://jonathangrosdubois.medium.com/how-leasehold-achieves-decentralization-8e311c6e55f https://jonathangrosdubois.medium.com/how-leasehold-achieves...
- RandomLensman 5y ago
  Maybe I get this wrong, but doesn't this rely very classically on aligned interests and various parts keeping the other parts in check? No blockchain or tokens required... I did not see anything how profit is verified. Could always use expenses to funnel money out, opex and capex are mixed creatively etc.
  - redpiller 5y ago
    It costs real money to buy back tokens from the market and to burn them on the blockchain because they are provably scarce. Because new tokens cannot be created, burning them on the blockchain permanently reduces the remaining circulating supply of tokens so the value of remaining tokens goes up (supply versus demand). Someone could potentially funnel money out from the stream of profits but anyone could independently check expected earnings (looking at the assets in the portfolio) against the on-chain buyback amount. At least, it significantly limits how much money can be funnelled out. On the other hand, with a regular company, the directors can make up any numbers on the books and funnel out all of the profits and could keep this going for years undetected. That is far worse. Altogether, it's not 100% trustless but it's orders of magnitude more transparent than a share-based system. As a small business with directors located in different parts of the world (some of which only met over video chat), this model was essential for us to get over the trust hurdle. Now that we can see tokens being bought and burned, it is building trust within the community. Many community members have already sold some tokens back and seen them burned. Some small investors already made a profit over their initial investment and still have half of their tokens left. That said, it's not going to be ideal until we we multiple real estate companies (run by different people) hooked into the LSH blockchain. The more companies there are, the less trust there is.
    - RandomLensman 5y ago
      Fair enough. For me this is a much better "pitch" than the "absolute certainty" above. The way I understand it, you help align incentives better and improve financial oversight while your tool of choice is some blockchain structure (others might work, too). And it seems to me that is mainly directed at smaller businesses with limited auditing requirements and in distributed settings.
    - Traster 5y ago
      > but anyone could independently check expected earnings How? In order to know the earnings of the company I basically need to audit everything. I need to know all the lease agreements, I need to know all the costs etc. How do I know that the company has made less money this year because we just got unlucky with low occupancy or expensive repair bills, or if one of the people running the company is funneling money via some subcontractor?
- timkam 5y ago
  Thank you. I took a quick look, and the article at least mentions something along the lines of my "object level vs. meta level" concerns :-)

by timkam 5y ago

redpiller 5y ago

Here is an article about our use case: https://jonathangrosdubois.medium.com/how-leasehold-achieves-decentralization-8e311c6e55f https://jonathangrosdubois.medium.com/how-leasehold-achieves...

RandomLensman 5y ago
Maybe I get this wrong, but doesn't this rely very classically on aligned interests and various parts keeping the other parts in check? No blockchain or tokens required... I did not see anything how profit is verified. Could always use expenses to funnel money out, opex and capex are mixed creatively etc.
- redpiller 5y ago
  It costs real money to buy back tokens from the market and to burn them on the blockchain because they are provably scarce. Because new tokens cannot be created, burning them on the blockchain permanently reduces the remaining circulating supply of tokens so the value of remaining tokens goes up (supply versus demand). Someone could potentially funnel money out from the stream of profits but anyone could independently check expected earnings (looking at the assets in the portfolio) against the on-chain buyback amount. At least, it significantly limits how much money can be funnelled out. On the other hand, with a regular company, the directors can make up any numbers on the books and funnel out all of the profits and could keep this going for years undetected. That is far worse. Altogether, it's not 100% trustless but it's orders of magnitude more transparent than a share-based system. As a small business with directors located in different parts of the world (some of which only met over video chat), this model was essential for us to get over the trust hurdle. Now that we can see tokens being bought and burned, it is building trust within the community. Many community members have already sold some tokens back and seen them burned. Some small investors already made a profit over their initial investment and still have half of their tokens left. That said, it's not going to be ideal until we we multiple real estate companies (run by different people) hooked into the LSH blockchain. The more companies there are, the less trust there is.
  - RandomLensman 5y ago
    Fair enough. For me this is a much better "pitch" than the "absolute certainty" above. The way I understand it, you help align incentives better and improve financial oversight while your tool of choice is some blockchain structure (others might work, too). And it seems to me that is mainly directed at smaller businesses with limited auditing requirements and in distributed settings.
  - Traster 5y ago
    > but anyone could independently check expected earnings How? In order to know the earnings of the company I basically need to audit everything. I need to know all the lease agreements, I need to know all the costs etc. How do I know that the company has made less money this year because we just got unlucky with low occupancy or expensive repair bills, or if one of the people running the company is funneling money via some subcontractor?
timkam 5y ago
Thank you. I took a quick look, and the article at least mentions something along the lines of my "object level vs. meta level" concerns :-)