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>>A stable coin where you trust whoever is providing the backing for that asset is no different from a crypto currency in that way, the trust model still requir

>>A stable coin where you trust whoever is providing the backing for that asset is no different from a crypto currency in that way, the trust model still requires that you trust someone to honor the coin or value it in some way. I don't follow. With a cryptocurrency you don't have to trust any one. The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption. >>The interesting part about it that you can move coins between people who don't trust one another without a 3rd party is entirely due to the remotely verifiable nature of the thing, like any other coin. Yes true. And that applies to any digital property on the blockchain. The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins. Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen.

throwawaylinux 5y ago
> I don't follow. With a cryptocurrency you don't have to trust any one. The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption. Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust. And if it's not a stable coin then you have to trust that you will be able to sell it or exchange it. If your government bans banks or merchants trading in crypto then you might have a problem. But I specifically didn't want to talk about crypto currency because as I keep repeating, that is the one place where block chains can make sense (even though you still have the edge problem). > Yes true. And that applies to any digital property on the blockchain. No, no it doesn't. Not sure what you're having trouble understanding, but it specifically only applies to property that you can verify remotely without trust. I.e., coins. > The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins. It's not solved. You still have the trust problem. If you have to trust the entity backing your stable coins then you don't need distributed trust. > Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen. No they all have the same problem.
- CryptoPunk 5y ago
  >>Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust. You're misunderstanding me. By cryptocurrency, I am referring to a natively digital asset, with nothing from the real world, e.g. US dollars, backing it. ETH would be an example of a cryptocurrency. I am distinguishing cryptocurrencies from stablecoins, which do have something from the real world backing them. That's why I wrote: "The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption." With stablecoins, you need to trust a third party - the issuer of the stablecoin - to provide USD in the event that the stablecoin is redeemed. With a cryptocurrency, there is no third party you need to trust to honor any pledges. Yes, governments can ban a cryptocurrency, but that is NOT a case of a trusted third party violating its commitment to you, as in the case of a stablecoin issuer in default, so it's an entirely different category of dependence on trust in a third party.

throwawaylinux 5y ago

> I don't follow. With a cryptocurrency you don't have to trust any one. The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption. Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust. And if it's not a stable coin then you have to trust that you will be able to sell it or exchange it. If your government bans banks or merchants trading in crypto then you might have a problem. But I specifically didn't want to talk about crypto currency because as I keep repeating, that is the one place where block chains can make sense (even though you still have the edge problem). > Yes true. And that applies to any digital property on the blockchain. No, no it doesn't. Not sure what you're having trouble understanding, but it specifically only applies to property that you can verify remotely without trust. I.e., coins. > The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins. It's not solved. You still have the trust problem. If you have to trust the entity backing your stable coins then you don't need distributed trust. > Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen. No they all have the same problem.

CryptoPunk 5y ago
>>Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust. You're misunderstanding me. By cryptocurrency, I am referring to a natively digital asset, with nothing from the real world, e.g. US dollars, backing it. ETH would be an example of a cryptocurrency. I am distinguishing cryptocurrencies from stablecoins, which do have something from the real world backing them. That's why I wrote: "The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption." With stablecoins, you need to trust a third party - the issuer of the stablecoin - to provide USD in the event that the stablecoin is redeemed. With a cryptocurrency, there is no third party you need to trust to honor any pledges. Yes, governments can ban a cryptocurrency, but that is NOT a case of a trusted third party violating its commitment to you, as in the case of a stablecoin issuer in default, so it's an entirely different category of dependence on trust in a third party.