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> Because blockchains eliminate counter-party risk for a large number of transactions, provide unparalleled transparency, and give anyone with an internet conne

> Because blockchains eliminate counter-party risk for a large number of transactions, provide unparalleled transparency, and give anyone with an internet connection access to global financial markets, enfranchising billions of people who are otherwise locked out due to unsatisfactory local conditions. Blockchain tech will make developed economies more efficient, and will accelerate development world-wide Saying this doesn’t make it self evident. What exact counter party risk is eliminated by blockchain technology? I know there’s alot of hype around the public ledger, but what transparency does it provide beyond that? It’s not like I audit the entire trail of any arbitrary transactions, which is usually where things like that come into play. What about fraud? Also, how’s blockchain better than existing and ongoing open banking projects? They’re enfranchising people today. Look at all the good micro loans have done in developing nations for instance

legutierr 3y ago
> What exact counter party risk is eliminated by blockchain technology? Some specific examples currently available: • Atomic swaps, where traded assets are immediately moved between accounts upon execution of the trade, eliminate the possibility that settlement will not complete. • Real-time commerce, where merchants accept payments in a format that can immediately be turned around and spent, without waiting for reimbursement from third-party networks. • Loans backed by on-chain collateral, such that default triggers immediate transfer of collateral, eliminates the risk that collateral may not be obtainable upon default, or that the value of collateral may fall too far before the loan is liquidated. > It’s not like I audit the entire trail of any arbitrary transactions, which is usually where things like that come into play. Open databases can be digested and analyzed by open-source tools, and by trusted independent third-parties. Closed databases cannot be analyzed by anyone except for the database owner and government authorities. Some government authorities are trustworthy, others are under-resourced, incompetent or corrupt. Even if you personally won't read the full history, you benefit from other people being able to do so. > Also, how’s blockchain better than existing and ongoing open banking projects? They’re enfranchising people today. Problems can have multiple good solutions! Still, open API access is different from open access to underlying data and algorithms. Open APIs and blockchains can co-exist and benefit from each other. > What about fraud? Fraud is a complex topic. The traditional financial system has seen lots of fraud over the years (think about what we witnessed in 2008). Credit card fraud is also a rampant problem that is only managed by large financial firms heavily surveilling payment networks. There are fraud vectors that blockchain networks are more susceptible to—just like there are other fraud vectors that blockchain networks are less susceptible to than traditional financial systems. In my view, the greatest fraud risk in crypto comes from the issuance of tokens that are questionable in some way—a risk that I think can be eliminated if strong controls are implemented regarding the issuance of tokens on-chain.
- gerdesj 3y ago
  "where merchants accept payments in a format that can immediately be turned around and spent" Cash already does that and so does my chip n pin card. There's an advertisement showing in the UK that lampoons crypto. A bloke buys some onions from a stall (ie direct sale from field to consumer) and he is asked which crypto he will use to pay with. The putative buyer says he has a fiver (cash). Blockchain transactions require time to work. The ledger has to be updated correctly by agreement with the rest of the network to work and that takes time. I can do a tap to pay and my phone beeps within a very few seconds to note a transaction.
  - legutierr 3y ago
    > Cash already does that and so does my chip n pin card. Does the merchant who accepts your chip n pin payment receive the funds in their account immediately after they accept your payment? In the US, merchants have to pay fees and/or interest to get same-day access to that money—because such access effectively functions as an advance on receivables. In most countries, same-day settlement is completely unavailable. Cash isn't much better. Can a store owner pay for inventory with cash? Maybe some inventory, but most things need to be paid for electronically. Can a retailer process payroll using cash? Turning cash into electronic money is a hassle and a security nightmare. Armored cars exist for a reason, and they aren't free. Crypto payments can be spent immediately upon receipt. No settlement delay, no need for armored cars. > There's an advertisement showing in the UK that lampoons crypto. A bloke buys some onions from a stall (ie direct sale from field to consumer) and he is asked which crypto he will use to pay with. The putative buyer says he has a fiver (cash). Funny. What is the advertisement selling? > Blockchain transactions require time to work. The ledger has to be updated correctly by agreement with the rest of the network to work and that takes time. I can do a tap to pay and my phone beeps within a very few seconds to note a transaction. This comment reminds me of the Kodak executives who thought there would never be a market for the digital camera the company had invented, because its resolution was so much lower than that of film. Your information is out-of-date. Bitcoin is slow. Next-gen crypto is fast. Personally, I'm partial to the lightning network, which finalizes payments in seconds.

legutierr 3y ago

> What exact counter party risk is eliminated by blockchain technology? Some specific examples currently available: • Atomic swaps, where traded assets are immediately moved between accounts upon execution of the trade, eliminate the possibility that settlement will not complete. • Real-time commerce, where merchants accept payments in a format that can immediately be turned around and spent, without waiting for reimbursement from third-party networks. • Loans backed by on-chain collateral, such that default triggers immediate transfer of collateral, eliminates the risk that collateral may not be obtainable upon default, or that the value of collateral may fall too far before the loan is liquidated. > It’s not like I audit the entire trail of any arbitrary transactions, which is usually where things like that come into play. Open databases can be digested and analyzed by open-source tools, and by trusted independent third-parties. Closed databases cannot be analyzed by anyone except for the database owner and government authorities. Some government authorities are trustworthy, others are under-resourced, incompetent or corrupt. Even if you personally won't read the full history, you benefit from other people being able to do so. > Also, how’s blockchain better than existing and ongoing open banking projects? They’re enfranchising people today. Problems can have multiple good solutions! Still, open API access is different from open access to underlying data and algorithms. Open APIs and blockchains can co-exist and benefit from each other. > What about fraud? Fraud is a complex topic. The traditional financial system has seen lots of fraud over the years (think about what we witnessed in 2008). Credit card fraud is also a rampant problem that is only managed by large financial firms heavily surveilling payment networks. There are fraud vectors that blockchain networks are more susceptible to—just like there are other fraud vectors that blockchain networks are less susceptible to than traditional financial systems. In my view, the greatest fraud risk in crypto comes from the issuance of tokens that are questionable in some way—a risk that I think can be eliminated if strong controls are implemented regarding the issuance of tokens on-chain.

gerdesj 3y ago
"where merchants accept payments in a format that can immediately be turned around and spent" Cash already does that and so does my chip n pin card. There's an advertisement showing in the UK that lampoons crypto. A bloke buys some onions from a stall (ie direct sale from field to consumer) and he is asked which crypto he will use to pay with. The putative buyer says he has a fiver (cash). Blockchain transactions require time to work. The ledger has to be updated correctly by agreement with the rest of the network to work and that takes time. I can do a tap to pay and my phone beeps within a very few seconds to note a transaction.
- legutierr 3y ago
  > Cash already does that and so does my chip n pin card. Does the merchant who accepts your chip n pin payment receive the funds in their account immediately after they accept your payment? In the US, merchants have to pay fees and/or interest to get same-day access to that money—because such access effectively functions as an advance on receivables. In most countries, same-day settlement is completely unavailable. Cash isn't much better. Can a store owner pay for inventory with cash? Maybe some inventory, but most things need to be paid for electronically. Can a retailer process payroll using cash? Turning cash into electronic money is a hassle and a security nightmare. Armored cars exist for a reason, and they aren't free. Crypto payments can be spent immediately upon receipt. No settlement delay, no need for armored cars. > There's an advertisement showing in the UK that lampoons crypto. A bloke buys some onions from a stall (ie direct sale from field to consumer) and he is asked which crypto he will use to pay with. The putative buyer says he has a fiver (cash). Funny. What is the advertisement selling? > Blockchain transactions require time to work. The ledger has to be updated correctly by agreement with the rest of the network to work and that takes time. I can do a tap to pay and my phone beeps within a very few seconds to note a transaction. This comment reminds me of the Kodak executives who thought there would never be a market for the digital camera the company had invented, because its resolution was so much lower than that of film. Your information is out-of-date. Bitcoin is slow. Next-gen crypto is fast. Personally, I'm partial to the lightning network, which finalizes payments in seconds.