4 ms·

>The Bitcoin protocol represents a way of digitally transferring a scarce resource without the need for a central authority. Sure, but what you need is a way t

by zeteo 14y ago

>The Bitcoin protocol represents a way of digitally transferring a scarce resource without the need for a central authority. Sure, but what you need is a way to exchange things without recourse to central authority. You can transfer bitcoins to the local bar, there's no way to ensure they transfer you back a drink. This is precisely why exchanges like Mt. Gox have become prominent - how else can you make sure the buyer transfers dollars to your bank account? So all you have are donations without recourse to central authority - which sounds a lot less revolutionary.

weavejester 14y ago
When dealing with physical objects, sure, you have the same problem as regular currency. You need to rely on the weight of the law and the reputation of the seller to give you the material item you requested. However, (a) that's not a deal-breaker, otherwise fiat currency wouldn't work, and (b) you can programmatically enforce rules on the transfer of intangible assets. For instance, Namecoin adapts the Bitcoin protocol for the purchase of domain names, which are a limited but intangible commodity. If I buy a domain name with namecoins, the network itself enforces the sale. Even when dealing with something that requires a central authority, like regular currency, Bitcoins have worth. For instance, if I want to transfer money between service A and service B, Bitcoins can act as a common intermediate protocol. Although the two endpoints are still required, we can replace a lot of the inbetween mechanism, and reduce the dependencies between the two services.
- zeteo 14y ago
  Of course it's not a deal breaker. All I'm saying is that Bitcoin doesn't enforce exchange. There's nothing in the Bitcoin protocol that forces Namecoin to give you a domain name.
  - weavejester 14y ago
    Actually there is. You can entwine a pair of transactions such that if the bitcoins are claimed by the seller, the corresponding namecoins can be claimed by the buyer.

by zeteo 14y ago

weavejester 14y ago

When dealing with physical objects, sure, you have the same problem as regular currency. You need to rely on the weight of the law and the reputation of the seller to give you the material item you requested. However, (a) that's not a deal-breaker, otherwise fiat currency wouldn't work, and (b) you can programmatically enforce rules on the transfer of intangible assets. For instance, Namecoin adapts the Bitcoin protocol for the purchase of domain names, which are a limited but intangible commodity. If I buy a domain name with namecoins, the network itself enforces the sale. Even when dealing with something that requires a central authority, like regular currency, Bitcoins have worth. For instance, if I want to transfer money between service A and service B, Bitcoins can act as a common intermediate protocol. Although the two endpoints are still required, we can replace a lot of the inbetween mechanism, and reduce the dependencies between the two services.

zeteo 14y ago
Of course it's not a deal breaker. All I'm saying is that Bitcoin doesn't enforce exchange. There's nothing in the Bitcoin protocol that forces Namecoin to give you a domain name.
- weavejester 14y ago
  Actually there is. You can entwine a pair of transactions such that if the bitcoins are claimed by the seller, the corresponding namecoins can be claimed by the buyer.