3 ms·

Many classes of assets are inherently centralized. IBM shares are essentially centrally controlled by IBM. Gold (or other physical commodity) backed shares ca

by rdl 13y ago

Many classes of assets are inherently centralized. IBM shares are essentially centrally controlled by IBM. Gold (or other physical commodity) backed shares can be centrally issued by each holder of gold; essentially, each bar or vault would have its own issue. This is just negotiable warehouse receipts. The only classes where decentralized issues make sense are "virtual" currencies like bitcoin, or equities/debts of virtual corporations. There probably isn't a market for more than one virtual currency in the long run, except maybe for sidechains (or exchangeable alternatives) due to purely technical things, or compliance, like zerocash vs. bitcoin.

wyager 13y ago
>IBM shares are essentially centrally controlled by IBM. Why does that mean we have to trade IBM shares with a centralized system? There are huge advantages to having decentralized trading systems.
- Retric 13y ago
  Shares are not cash, IBM has to know who to send dividends to. That does not mean you can't have middlemen just a known address or bank account + number of shares.
  - rdl 13y ago
    For "real" shares, yeah. (also, voting, and other rights at dissolution). I think it is possible to have a virtual corporation which has some kind of self-enforcing dividend also payable in bitcoins. The practical benefit of this for any company with a legal presence is minor, but allowing something to exist entirely online with no particular jurisdictional ties would be nice. I still don't think the benefits of this make up for the costs of the blockchain for most uses.
  - wyager 13y ago
    >Shares are not cash, IBM has to know who to send dividends to. So they can send the dividends to the addresses that own shares. In fact, that should be even cheaper than using a bank or any other middleman-requiring system. Another advantage of decentralization.
onnoonno 13y ago
> Gold (or other physical commodity) backed shares can be centrally issued by each holder of gold I am a bit confused. My impression so far was that something like this would be commonly seen as a decentralized scenario?
- rdl 13y ago
  Each gold holding (maybe bar, maybe vault) is itself centralized. I would consider a promise from pg or sama to pay 1oz of gold upon presentation to be pretty low on counterparty risk; I'd consider the same from a random person online who claimed to have gold and be willing to redeem it upon presentation of one of his tokens as a much higher counterparty risk. The market would price these separate issues, and then you could build a basket of gold issues into something meta (maybe with a blockchain, or maybe with smart contracts, to reduce the meta counterparty risky).

by rdl 13y ago

wyager 13y ago

>IBM shares are essentially centrally controlled by IBM. Why does that mean we have to trade IBM shares with a centralized system? There are huge advantages to having decentralized trading systems.

Retric 13y ago
Shares are not cash, IBM has to know who to send dividends to. That does not mean you can't have middlemen just a known address or bank account + number of shares.
- rdl 13y ago
  For "real" shares, yeah. (also, voting, and other rights at dissolution). I think it is possible to have a virtual corporation which has some kind of self-enforcing dividend also payable in bitcoins. The practical benefit of this for any company with a legal presence is minor, but allowing something to exist entirely online with no particular jurisdictional ties would be nice. I still don't think the benefits of this make up for the costs of the blockchain for most uses.
- wyager 13y ago
  >Shares are not cash, IBM has to know who to send dividends to. So they can send the dividends to the addresses that own shares. In fact, that should be even cheaper than using a bank or any other middleman-requiring system. Another advantage of decentralization.

onnoonno 13y ago

> Gold (or other physical commodity) backed shares can be centrally issued by each holder of gold I am a bit confused. My impression so far was that something like this would be commonly seen as a decentralized scenario?

rdl 13y ago
Each gold holding (maybe bar, maybe vault) is itself centralized. I would consider a promise from pg or sama to pay 1oz of gold upon presentation to be pretty low on counterparty risk; I'd consider the same from a random person online who claimed to have gold and be willing to redeem it upon presentation of one of his tokens as a much higher counterparty risk. The market would price these separate issues, and then you could build a basket of gold issues into something meta (maybe with a blockchain, or maybe with smart contracts, to reduce the meta counterparty risky).