5 ms·

Gateways actually don't have to be trusted by the network. Think of them as similar to stores issuing credit: the gateway just says "the user has a credit for 1

by gdb 12y ago

Gateways actually don't have to be trusted by the network. Think of them as similar to stores issuing credit: the gateway just says "the user has a credit for 100 USD, redeemable at my store". That credit is tradable, but only to other users who trust credit from that gateway. This means there needs to emerge a good system for users to decide which gateways to trust, but a malicious gateway can only directly harm the users who have decided to trust it. The beauty of this model is anyone can become a gateway at any time. See for example the gist linked at the end of the Stellar blog post: https://gist.github.com/thejollyrogers/b114b5a98fa11a5a4ad0 https://gist.github.com/thejollyrogers/b114b5a98fa11a5a4ad0 — becoming a gateway is just two API calls.

eordano 12y ago
I smell compatibility hell. "Hey, take my credit from X gateway" "Sorry, I don't trust X"
- gdb 12y ago
  Yep! That's where the stellar comes in. It's something that everyone the network can accept and requires no trust. So as long as someone is willing to convert your gateway's credit to stellar (and worst case, your gateway should be willing to do so), you're fine.
  - kanzure 12y ago
    > (and worst case, your gateway should be willing to do so) Isn't the worst case that the gateway goes belly up?
    - gdb 12y ago
      Well, the real worst case is probably that the Earth gets hit by a coronal mass ejection and takes down all electronics: http://bit.ly/1qO25PH http://bit.ly/1qO25PH :). But more seriously, a gateway you trust going under is indeed a risk. That's part of why you can specify not just "I trust this gateway" but also "I trust this gateway for up to 100 CAD" — you can explicitly specify your exposure.
  - eridius 12y ago
    That's assuming your gateway has stellar on hand to provide as conversion. Stripe is starting with 2% of the stellar, but (AFAIK) nobody else is starting with any significant chunk. If a gateway issues credit in exchange for real-world exchanges, I don't see why there's any expectation that they'll have stellar on-hand to use for the conversion, although perhaps they can use their real-world money to buy stellar from some other gateway. I'm also wondering, since the amount of Stellar is capped (100 billion, right? Can this ever change?), and since 50% of Stellar is being distributed to people who sign up, it seems like a sizable portion of this Stellar will almost certainly immediately become unusable as people sign up, get their Stellar, and never come back. Edit: Just found the bit where it says Stellar will be created at a rate of 1% annually. The fixed 100 billion cap I cited was based on earlier comments about Ripple's cap.
    - themusicgod1 12y ago
      > That's assuming your gateway has stellar on hand to provide as conversion. That's not the only way that gateways can talk to eachother. Given this is ripple we're talking about, anyone who has a mutual trust connection between gateways can facilitate a transaction, as can any market-making trader. Looking at MIRI's gateway and my own showed dozens of such connections. Ripple has 100,000 users, any of which can be part of the connection between any two given gateways. Stellar is planning on growing that large and larger, so it should be expected that this will happen there, too.
mrb 12y ago
"The network does not need to trust gateways, but users need to trust them" -> a subtle difference, but it does not change my point: trusting a gateway's honesty is required. So let's say I choose to not trust any gateway and their currencies, and instead decide to transact in the native stellar currency directly. This is a strange choice: why have support for alternate currencies if the Stellar protocol in itself can do nothing to help gateways gain trust? You might as well have, say, Amazon not even bother becoming a gateway issuing their own USD_Amazon, but instead Amazon would just accept the stellar currency directly. In this case I am still required to trust the native stellar currency. I am required to trust that Stellar --the nonprofit organization-- will correctly follow their mandate (https://www.stellar.org/about/mandate/ https://www.stellar.org/about/mandate/): distributing x% to X, y% to Y, etc, properly thwarting fraud attempts from people with many fake Facebook accounts, properly thwarting fraud attempts during voting (https://www.stellar.org/about/mandate/#Stellar_creation https://www.stellar.org/about/mandate/#Stellar_creation), properly thwarting fraud attempts from people building fake nonprofits to attempts to gain a share of the 25% of stellars reserved for nonprofits, etc. And Stellar trusts Facebook, so I am even required to trust that there is no malicious employee at Facebook that will exploit APIs to attempt to gain stellars. You plan to distribute stellars through SMS? Heck I now need to trust telecom carrier employees, etc. Even if you are honest and make no operational mistake, fighting all these fraud attempts will be a large uphill battle, and there is way too much trust required, way too many possibilities for mistakes to happen. Contrast this with Bitcoin: all Bitcoin requires is trust in three cryptographic algorithms which fit in a few thousand lines of code (ECDSA w/secp256k1, SHA-256, and RIPEMD-160). I appreciate the attempt of building a different payment technology, but Stellar should not mislead people into believing they are similar to Bitcoin ("Stellar is decentralized [...] owes a lot to Bitcoin"). Stellar threw away the most fundamental element of Bitcoin: complete decentralization (including decentralization of the issuance of units of currency.)
- gdb 12y ago
  Stellar is built to be a bridge from the physical one to the digital one. There certainly are tradeoffs there, particularly that the kinds of trust relationships needed for your life today have direct analogues. But, as I mentioned in https://stripe.com/blog/bitcoin-the-stripe-perspective https://stripe.com/blog/bitcoin-the-stripe-perspective, it's not obvious that the Bitcoin technology on its own will end up being enough to avoid having to reintroduce trust in some form. (There is a chance that we'll figure out how to do trust in a distributed fashion, which would be awesome for both Bitcoin and Stellar.) So I'm with you — there are real tradeoffs here, and I'd encourage everyone interested in this stuff to mull them over (and I'm also happy to discuss: gdb@stripe.com). But one thing I really respect about the Stellar organization is the very deliberate approach they've taken to these choices, and how they've found a happy middle that feels like a translation of the existing physical world into the new digital one. If it works, I think it'll make Bitcoin and other digital currencies even more successful.
eridius 12y ago
> The beauty of this model is anyone can become a gateway at any time. If this takes off, then you could use this to build the killer "spot me $5" app. A few weeks ago when some friends were describing the spreadsheet they used to track who owes what to who, I proposed a micro-virtual currency limited to just the circle of friends that all trust each other, whereby exchanging the virtual currency you can transfer debts, and trivially find out who owes money and who is owed just by looking at the current account ledger. Seems like Stellar enables that on a massive scale, without everyone needing to trust each other, because the coins are all tagged with the issuer. Stellar uses real-world currencies to denote the held values. Does it limit these currencies to actual known entities, or could I become an issuer and start issuing credits in a fake currency? If I can do that, then it seems like there's an opportunity here to use Stellar to track things other than monetary exchanges. As a hypothetical example, if I had several kids, they could all trust each other to issue units of a fake currency called "Chore". If I ask one of them to do something, they could instead pay 1 Chore to their sibling to have them do it instead. This can of course be redeemed later if I ask the sibling to do something. Since it's a fake currency, it has no real value and can't be traded outside of the small group of kids (as nobody would accept it). This sort of thing can't be done with e.g. USD because the proxy money could be traded to someone else who doesn't realize that I won't actually accept it back for money.
- eridius 12y ago
  Thinking about this a bit more, there is one flaw with using it to track debts among a circle of friends, which is that any of those friends could then turn around and trade the USD-stellar I issued them to someone else, who doesn't realize that they shouldn't actually trust me for it. Using a fake currency as a proxy for USD would work here, but of course fake currencies have their own problem which is everyone has to invent a unique fake currency to avoid confusion. Another solution would be to allow gateways to declare that their coins are only redeemable by a limited set of accounts. That way I can be a gateway and issue USD-stellar that everyone knows is worthless if it leaves the circle of friends. I could do this ad-hoc just by refusing to redeem any issued coins by someone outside the group, but as mentioned above that leaves open the possibility of people not realizing that these particular coins are worthless (outside the group). Of course, this also has the problem where someone may now look at their balance and see that they have $500 USD, but not realize that $50 of it is actually debt issued by me, because the software they're using doesn't distinguish restricted coins from others. Perhaps the fake currency approach really is the best. This has the benefit of letting an extended group of friends trade around debt issued by people they're not actually direct friends with, but they trust transitively through a shared friend. If I decide to accept debt issued by Alice, and Alice refuses to pay up when I go to her, I can then talk to our shared friend (but hopefully Alice would agree that the debt I bought from Joan is still valid and pay up). The downside is, of course, that everyone has to be using the same centralized shared currency. And that won't scale past a small group of friends (if it did, it wouldn't be a fake currency anymore). Although if you have several smaller circles of friends each with their own currency, and there's overlap, they could decide to trust the other currency and treat it as equivalent to theirs. I guess this is a continuation of Stellar's philosophy that the trust is granted by the person accepting the coin, rather than being dictated in any fashion by the issuer. Of course, all this is predicated on the fake debt-currency not spreading far. As you try to scale to larger groups of friends, it ultimately ends up being simpler just to switch to USD. I guess the real challenge here is figuring out how to let Stellar wallet clients display contained balances in a way that doesn't confuse coins issued by generally-trusted gateways vs coins issued by small gateways that most users probably won't trust. If I can somehow either categorize myself as a gateway, or each gateway I trust, those categories could be used to display balances appropriately. This way I can categorize Alice, Joan, Bob, Fred, and Jane as debt-issuing friends, and they can issue USD, and I won't accidentally think I have $500 USD when I really have $450 USD and $50 friend-debt. This doesn't really solve the problem of trading debt to people who don't realize it's worthless, but I don't know if that's a legitimate worry.

by gdb 12y ago

eordano 12y ago

I smell compatibility hell. "Hey, take my credit from X gateway" "Sorry, I don't trust X"

gdb 12y ago
Yep! That's where the stellar comes in. It's something that everyone the network can accept and requires no trust. So as long as someone is willing to convert your gateway's credit to stellar (and worst case, your gateway should be willing to do so), you're fine.
- kanzure 12y ago
  > (and worst case, your gateway should be willing to do so) Isn't the worst case that the gateway goes belly up?
  - gdb 12y ago
    Well, the real worst case is probably that the Earth gets hit by a coronal mass ejection and takes down all electronics: http://bit.ly/1qO25PH http://bit.ly/1qO25PH :). But more seriously, a gateway you trust going under is indeed a risk. That's part of why you can specify not just "I trust this gateway" but also "I trust this gateway for up to 100 CAD" — you can explicitly specify your exposure.
- eridius 12y ago
  That's assuming your gateway has stellar on hand to provide as conversion. Stripe is starting with 2% of the stellar, but (AFAIK) nobody else is starting with any significant chunk. If a gateway issues credit in exchange for real-world exchanges, I don't see why there's any expectation that they'll have stellar on-hand to use for the conversion, although perhaps they can use their real-world money to buy stellar from some other gateway. I'm also wondering, since the amount of Stellar is capped (100 billion, right? Can this ever change?), and since 50% of Stellar is being distributed to people who sign up, it seems like a sizable portion of this Stellar will almost certainly immediately become unusable as people sign up, get their Stellar, and never come back. Edit: Just found the bit where it says Stellar will be created at a rate of 1% annually. The fixed 100 billion cap I cited was based on earlier comments about Ripple's cap.
  - themusicgod1 12y ago
    > That's assuming your gateway has stellar on hand to provide as conversion. That's not the only way that gateways can talk to eachother. Given this is ripple we're talking about, anyone who has a mutual trust connection between gateways can facilitate a transaction, as can any market-making trader. Looking at MIRI's gateway and my own showed dozens of such connections. Ripple has 100,000 users, any of which can be part of the connection between any two given gateways. Stellar is planning on growing that large and larger, so it should be expected that this will happen there, too.

mrb 12y ago

"The network does not need to trust gateways, but users need to trust them" -> a subtle difference, but it does not change my point: trusting a gateway's honesty is required. So let's say I choose to not trust any gateway and their currencies, and instead decide to transact in the native stellar currency directly. This is a strange choice: why have support for alternate currencies if the Stellar protocol in itself can do nothing to help gateways gain trust? You might as well have, say, Amazon not even bother becoming a gateway issuing their own USD_Amazon, but instead Amazon would just accept the stellar currency directly. In this case I am still required to trust the native stellar currency. I am required to trust that Stellar --the nonprofit organization-- will correctly follow their mandate (https://www.stellar.org/about/mandate/ https://www.stellar.org/about/mandate/): distributing x% to X, y% to Y, etc, properly thwarting fraud attempts from people with many fake Facebook accounts, properly thwarting fraud attempts during voting (https://www.stellar.org/about/mandate/#Stellar_creation https://www.stellar.org/about/mandate/#Stellar_creation), properly thwarting fraud attempts from people building fake nonprofits to attempts to gain a share of the 25% of stellars reserved for nonprofits, etc. And Stellar trusts Facebook, so I am even required to trust that there is no malicious employee at Facebook that will exploit APIs to attempt to gain stellars. You plan to distribute stellars through SMS? Heck I now need to trust telecom carrier employees, etc. Even if you are honest and make no operational mistake, fighting all these fraud attempts will be a large uphill battle, and there is way too much trust required, way too many possibilities for mistakes to happen. Contrast this with Bitcoin: all Bitcoin requires is trust in three cryptographic algorithms which fit in a few thousand lines of code (ECDSA w/secp256k1, SHA-256, and RIPEMD-160). I appreciate the attempt of building a different payment technology, but Stellar should not mislead people into believing they are similar to Bitcoin ("Stellar is decentralized [...] owes a lot to Bitcoin"). Stellar threw away the most fundamental element of Bitcoin: complete decentralization (including decentralization of the issuance of units of currency.)

gdb 12y ago
Stellar is built to be a bridge from the physical one to the digital one. There certainly are tradeoffs there, particularly that the kinds of trust relationships needed for your life today have direct analogues. But, as I mentioned in https://stripe.com/blog/bitcoin-the-stripe-perspective https://stripe.com/blog/bitcoin-the-stripe-perspective, it's not obvious that the Bitcoin technology on its own will end up being enough to avoid having to reintroduce trust in some form. (There is a chance that we'll figure out how to do trust in a distributed fashion, which would be awesome for both Bitcoin and Stellar.) So I'm with you — there are real tradeoffs here, and I'd encourage everyone interested in this stuff to mull them over (and I'm also happy to discuss: gdb@stripe.com). But one thing I really respect about the Stellar organization is the very deliberate approach they've taken to these choices, and how they've found a happy middle that feels like a translation of the existing physical world into the new digital one. If it works, I think it'll make Bitcoin and other digital currencies even more successful.

eridius 12y ago

> The beauty of this model is anyone can become a gateway at any time. If this takes off, then you could use this to build the killer "spot me $5" app. A few weeks ago when some friends were describing the spreadsheet they used to track who owes what to who, I proposed a micro-virtual currency limited to just the circle of friends that all trust each other, whereby exchanging the virtual currency you can transfer debts, and trivially find out who owes money and who is owed just by looking at the current account ledger. Seems like Stellar enables that on a massive scale, without everyone needing to trust each other, because the coins are all tagged with the issuer. Stellar uses real-world currencies to denote the held values. Does it limit these currencies to actual known entities, or could I become an issuer and start issuing credits in a fake currency? If I can do that, then it seems like there's an opportunity here to use Stellar to track things other than monetary exchanges. As a hypothetical example, if I had several kids, they could all trust each other to issue units of a fake currency called "Chore". If I ask one of them to do something, they could instead pay 1 Chore to their sibling to have them do it instead. This can of course be redeemed later if I ask the sibling to do something. Since it's a fake currency, it has no real value and can't be traded outside of the small group of kids (as nobody would accept it). This sort of thing can't be done with e.g. USD because the proxy money could be traded to someone else who doesn't realize that I won't actually accept it back for money.

eridius 12y ago
Thinking about this a bit more, there is one flaw with using it to track debts among a circle of friends, which is that any of those friends could then turn around and trade the USD-stellar I issued them to someone else, who doesn't realize that they shouldn't actually trust me for it. Using a fake currency as a proxy for USD would work here, but of course fake currencies have their own problem which is everyone has to invent a unique fake currency to avoid confusion. Another solution would be to allow gateways to declare that their coins are only redeemable by a limited set of accounts. That way I can be a gateway and issue USD-stellar that everyone knows is worthless if it leaves the circle of friends. I could do this ad-hoc just by refusing to redeem any issued coins by someone outside the group, but as mentioned above that leaves open the possibility of people not realizing that these particular coins are worthless (outside the group). Of course, this also has the problem where someone may now look at their balance and see that they have $500 USD, but not realize that $50 of it is actually debt issued by me, because the software they're using doesn't distinguish restricted coins from others. Perhaps the fake currency approach really is the best. This has the benefit of letting an extended group of friends trade around debt issued by people they're not actually direct friends with, but they trust transitively through a shared friend. If I decide to accept debt issued by Alice, and Alice refuses to pay up when I go to her, I can then talk to our shared friend (but hopefully Alice would agree that the debt I bought from Joan is still valid and pay up). The downside is, of course, that everyone has to be using the same centralized shared currency. And that won't scale past a small group of friends (if it did, it wouldn't be a fake currency anymore). Although if you have several smaller circles of friends each with their own currency, and there's overlap, they could decide to trust the other currency and treat it as equivalent to theirs. I guess this is a continuation of Stellar's philosophy that the trust is granted by the person accepting the coin, rather than being dictated in any fashion by the issuer. Of course, all this is predicated on the fake debt-currency not spreading far. As you try to scale to larger groups of friends, it ultimately ends up being simpler just to switch to USD. I guess the real challenge here is figuring out how to let Stellar wallet clients display contained balances in a way that doesn't confuse coins issued by generally-trusted gateways vs coins issued by small gateways that most users probably won't trust. If I can somehow either categorize myself as a gateway, or each gateway I trust, those categories could be used to display balances appropriately. This way I can categorize Alice, Joan, Bob, Fred, and Jane as debt-issuing friends, and they can issue USD, and I won't accidentally think I have $500 USD when I really have $450 USD and $50 friend-debt. This doesn't really solve the problem of trading debt to people who don't realize it's worthless, but I don't know if that's a legitimate worry.