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Yes, but this doesn't account for the fact that a cryptocurrency can be recorded across multiple blockchains (e.g. sharding). So a cryptocurrency (as opposed to

Yes, but this doesn't account for the fact that a cryptocurrency can be recorded across multiple blockchains (e.g. sharding). So a cryptocurrency (as opposed to a blockchain) can have all three properties of decentralization, scalability, and security. Also, the problem can be solved even more simply and elegantly than sharding by having a multi-cryptocurrency ecosystem which supports fast, decentralized, and low friction conversions exposed via the same (interoperable) transaction APIs. If the on-chain volume is sufficient on all chains, it's possible to automatically determine relative prices of tokens... In the same way that tourists from different countries can spend their native country's currency locally (conversion is not always necessary if the relative prices and volumes are somewhat stable). If the on-chain transaction volumes of different cryptocurrencies are similar (or above a certain threshold that corresponds to the size of the businesses accepting the cryptocurrency as payment), then a business can effectively accept payment in any cryptocurrency which they know/trust the existence of since the API would be the same across all chains. So you could use the same passphrase to log into all the different chains (including ones you never heard of) and you would already have an account there. You don't need to trust the chains themselves with your passphrase, you only need to trust your wallet app since the passphrase should never be sent over the wire. Wouldn't it be great if you could just walk up to a local business and offer to pay them in some new cryptocurrency they've never heard of which supports the same API? They could verify whether or not it meets their volume/stability and exposure requirements automatically in a couple of minutes. We're so close to achieving this ideal. The tech already exists in various forms. We just need regulatory/taxation clarity and a bit of willpower.

latchkey 2y ago
> So you could use the same passphrase to log into all the different chains (including ones you never heard of) and you would already have an account there. The UX on this has improved significantly in just the last year or so. We have wallets, like Rabby, which interact seamlessly across multiple (many!) chains and can even switch within the same dapp on a per transaction basis. It just works.
yao420 2y ago
> Wouldn't it be great if you could just walk up to a local business and offer to pay them in some new cryptocurrency they've never heard of. Not being snarky but why would this be great for anyone? What would be the point?
- latchkey 2y ago
  1. Business gets a sale they might not have received otherwise. 2. Business receives funds in their preferred currency. 3. Customer gets what they want. Not much different than me going to Vietnam with USD and then trying to buy a Nước mía (sugar cane juice) from a local vendor that can't legally accept USD. My only alternative is to rely on a third party to convert my USD to VND. Which begs the question, why isn't this digital and why do we need the middlemen taking their cut of the transaction? Expand that out into larger purchases, which then imply you're a criminal unless you provide full KYC.
  - lmm 2y ago
    > Expand that out into larger purchases, which then imply you're a criminal unless you provide full KYC. Well yeah, that's the whole point isn't it? Like, the business doesn't want to be getting paid out of ransomware ransoms, they want money in a clean currency, and so at some point someone has to exchange clean money for ransom tokens, and if you offer to do that without verification then you're essentially part of the ransomware industry and people will treat you accordingly.
    - latchkey 2y ago
      You lost me at "clean currency". No such thing.
      - snapcaster 2y ago
        Come on man, you know exactly what he meant don't be like this
        2y ago
MadnessASAP 2y ago
How does someone verify the authenticity of a unknown coin based solely on API requests to an endpoint that the 2nd party provides? Also, if we hold the Trilemma to be true then presumably some point in the network will have weaker security to improve the other 2. Thereby compromising the entire network. You don't beat CAP/Trilemma by gluing 2 databases together.
- cryptica 2y ago
  If you don't know the coin but you can see that its blockchain is connected to a blockchain that you know and trust, you can look at DEX chain-to-chain trade volume between your blockchain and the unfamiliar blockchain to determine its value and the amount of volume trustlessly (the volume would be measured in your own trusted coin coming from its own blockchain in a cryptographically verifiable way). If you can see that $1 million worth of your own coin is being exchanged for that other unknown coin each day and people are paying $50K worth of your own coin every day to cover cross-chain transaction fees, surely you can take a risk and accept that unknown coin as payment for a $100 product. The risk of the coin being a scam goes down with the amount of verifiable trade volume.
mattwilsonn888 2y ago
The problem is not solved by having excellent support for interoperability between chains. The security of any bridge interaction between chains is no better than the weaker chain. And the security of two chains does not add up, in fact, the more resources are split up between multiple chains, the less secure they all become. So this doesn't solve for the security side of the trilemma.
- cryptica 2y ago
  If the chains are distinct and tokens are merely easily interchangeable, they are isolated security-wise. Of course, accepting payment in a token you've never heard of presents a risk, but this risk isn't significant if that new token's blockchain is connected to a blockchain which you trust via a DEX or bridge. It's possible to build simple client-side cryptographic tools to verify trades or bridging across different blockchains... If you can cryptographically verify that a new token is traded chain-to-chain against a token you trust with a certain amount of volume, then you know you can trust that new coin to some extent. Also, as a business owner, you can charge an additional fee when accepting unknown or low volume coins, or coins that are backed by blockchains which have a small number of nodes. Imagine how many more people would be able to afford to buy your products if you would accept just about any token as payment. It could be a way to gain a competitive edge and boost your profit margins by accepting riskier coins from unfamiliar communities. It's not quite the same as if everyone could print their own money on pieces of paper; we know that wouldn't work because nobody would have an incentive to do any work to produce anything... But the opposite extreme (which is our current reality) also doesn't work; there are all these people with no money and no opportunities who could be doing business with each other, but they can't because they have no money and are not allowed to create their own money to get their parallel 'unbanked people' economy going.
MrSS 2y ago
Honestly, no it would not be great to be able to pay with any cryptocoin. It basically makes it even more opague. This will only create a meta game for people on a meta level managing coins and arbitrage.

latchkey 2y ago

> So you could use the same passphrase to log into all the different chains (including ones you never heard of) and you would already have an account there. The UX on this has improved significantly in just the last year or so. We have wallets, like Rabby, which interact seamlessly across multiple (many!) chains and can even switch within the same dapp on a per transaction basis. It just works.

yao420 2y ago

> Wouldn't it be great if you could just walk up to a local business and offer to pay them in some new cryptocurrency they've never heard of. Not being snarky but why would this be great for anyone? What would be the point?

latchkey 2y ago
1. Business gets a sale they might not have received otherwise. 2. Business receives funds in their preferred currency. 3. Customer gets what they want. Not much different than me going to Vietnam with USD and then trying to buy a Nước mía (sugar cane juice) from a local vendor that can't legally accept USD. My only alternative is to rely on a third party to convert my USD to VND. Which begs the question, why isn't this digital and why do we need the middlemen taking their cut of the transaction? Expand that out into larger purchases, which then imply you're a criminal unless you provide full KYC.
- lmm 2y ago
  > Expand that out into larger purchases, which then imply you're a criminal unless you provide full KYC. Well yeah, that's the whole point isn't it? Like, the business doesn't want to be getting paid out of ransomware ransoms, they want money in a clean currency, and so at some point someone has to exchange clean money for ransom tokens, and if you offer to do that without verification then you're essentially part of the ransomware industry and people will treat you accordingly.
  - latchkey 2y ago
    You lost me at "clean currency". No such thing.
    - snapcaster 2y ago
      Come on man, you know exactly what he meant don't be like this
      - 2y ago

MadnessASAP 2y ago

How does someone verify the authenticity of a unknown coin based solely on API requests to an endpoint that the 2nd party provides? Also, if we hold the Trilemma to be true then presumably some point in the network will have weaker security to improve the other 2. Thereby compromising the entire network. You don't beat CAP/Trilemma by gluing 2 databases together.

cryptica 2y ago
If you don't know the coin but you can see that its blockchain is connected to a blockchain that you know and trust, you can look at DEX chain-to-chain trade volume between your blockchain and the unfamiliar blockchain to determine its value and the amount of volume trustlessly (the volume would be measured in your own trusted coin coming from its own blockchain in a cryptographically verifiable way). If you can see that $1 million worth of your own coin is being exchanged for that other unknown coin each day and people are paying $50K worth of your own coin every day to cover cross-chain transaction fees, surely you can take a risk and accept that unknown coin as payment for a $100 product. The risk of the coin being a scam goes down with the amount of verifiable trade volume.

mattwilsonn888 2y ago

The problem is not solved by having excellent support for interoperability between chains. The security of any bridge interaction between chains is no better than the weaker chain. And the security of two chains does not add up, in fact, the more resources are split up between multiple chains, the less secure they all become. So this doesn't solve for the security side of the trilemma.

cryptica 2y ago
If the chains are distinct and tokens are merely easily interchangeable, they are isolated security-wise. Of course, accepting payment in a token you've never heard of presents a risk, but this risk isn't significant if that new token's blockchain is connected to a blockchain which you trust via a DEX or bridge. It's possible to build simple client-side cryptographic tools to verify trades or bridging across different blockchains... If you can cryptographically verify that a new token is traded chain-to-chain against a token you trust with a certain amount of volume, then you know you can trust that new coin to some extent. Also, as a business owner, you can charge an additional fee when accepting unknown or low volume coins, or coins that are backed by blockchains which have a small number of nodes. Imagine how many more people would be able to afford to buy your products if you would accept just about any token as payment. It could be a way to gain a competitive edge and boost your profit margins by accepting riskier coins from unfamiliar communities. It's not quite the same as if everyone could print their own money on pieces of paper; we know that wouldn't work because nobody would have an incentive to do any work to produce anything... But the opposite extreme (which is our current reality) also doesn't work; there are all these people with no money and no opportunities who could be doing business with each other, but they can't because they have no money and are not allowed to create their own money to get their parallel 'unbanked people' economy going.

MrSS 2y ago

Honestly, no it would not be great to be able to pay with any cryptocoin. It basically makes it even more opague. This will only create a meta game for people on a meta level managing coins and arbitrage.