5 ms·

> Stellar transactions do not work in the absence of a trust path; Bitcoin does This isn't quite accurate: a lot of Stellar's mechanisms are set up to allow tr

by gdb 12y ago

> Stellar transactions do not work in the absence of a trust path; Bitcoin does This isn't quite accurate: a lot of Stellar's mechanisms are set up to allow transactions to flow despite the lack of a trust path. For example, this is the main function of the stellar currency. As well, the distributed exchange doesn't require trust between the parties — just a mutual desire for the exchange to occur.

JoshTriplett 12y ago
> This isn't quite accurate: a lot of Stellar's mechanisms are set up to allow transactions to flow despite the lack of a trust path. For example, this is the main function of the stellar currency. I'm not talking just about the currency exchange process itself; I'm also talking about the "ledger" mechanism and maintenance of it. Stellar seems much more reliant on trusted third parties. This story gave a lot of detail about trusting specific third-parties, but treated Stellar as a magic inherently trusted mechanism for IOU exchange above reproach. Thus, it gives me no confidence or inclination to trust Stellar itself.
- eridius 12y ago
  Holding credit on the stellar network requires trust. You need to trust the issuer of the credit to be willing to redeem real-world value for the credit. Given the requirement for trust already built in to Stellar, the consensus protocol seems like a natural extension of that. Just as you need to trust the issuer of credit, you also need to trust your stellar provider to have chosen peers that will not collude. In a sense, this is actually kind of like Tor. When you establish a circuit through the Tor network, you're trusting that all the relays on the circuit are not colluding together. If they are colluding then you've lost all your privacy. Ultimately, if Stellar takes off, I think it makes sense for real-world institutions like banks to start running stellard. If I hold an account at a bank, I'll use their stellard, and exchange credit issued by them. I've already trusted the bank to hold all my money, so I'm not really taking on any new risk by also trusting them to run stellard.
  - JoshTriplett 12y ago
    > Holding credit on the stellar network requires trust. You need to trust the issuer of the credit to be willing to redeem real-world value for the credit. That's my primary concern. Given the choice between trusting a particular issuer or just trusting that some entity exists who will exchange a currency I hold, I'd much rather do the latter.
    - eridius 12y ago
      Well, you do the latter anyway. In order to spend USD issued by the issuer Foo, you actually don't really have to trust Foo at all yourself (though obviously you have to trust them enough to hold their credit), instead either the other party in the transaction has to trust Foo, or there has to be a third party that trusts Foo and is willing to exchange Foo!USD for some other currency that the other party accepts. You only really have to trust Foo to be good for the credit yourself if you want to cash out. And even then, if someone else trusts Foo and is willing to exchange Foo!USD for some other currency that you trust better, you can do that too. It's a lot easier if you really do trust the issuer, because then you don't have to worry about finding someone else who does who will exchange Foo!USD for another currency. Also, it's worth pointing out that even with Bitcoin you end up having to trust specific entities to be good actors. Notably, any time you use an exchange you have to actually trust the exchange to give you the value you paid for. For example, if I use Coinbase to exchange BTC and USD, Coinbase ends up holding a balance on my behalf. I have to trust that if I request to withdraw my balance from Coinbase, that they'll actually deposit the USD in my bank account, and will actually send the BTC to another wallet of my choosing. In fact, the whole MtGox debacle is a great example of how this completely and utterly failed. Didn't a lot of people lose a lot of money, in the balances that MtGox held for them? People trusted MtGox and their trust was violated. --- Basically, the need to trust individual entities is not new with Stellar. Bitcoin has the exact same issue. Stellar has the benefit of being more likely to be adopted by existing centralized financial institutions, which are far less likely to abscond with your money, than the various gateways/exchanges that deal in Bitcoin.
  - klipt 12y ago
    > If I hold an account at a bank, I'll use their stellard, and exchange credit issued by them. I've already trusted the bank to hold all my money, so I'm not really taking on any new risk by also trusting them to run stellard. I'd trust USTreasury!USD over WellsFargo!USD any day. Since the US government is the actual issuer of the currency in the first place, and the institution which guarantees it as legal tender for all debts.

by gdb 12y ago

JoshTriplett 12y ago

> This isn't quite accurate: a lot of Stellar's mechanisms are set up to allow transactions to flow despite the lack of a trust path. For example, this is the main function of the stellar currency. I'm not talking just about the currency exchange process itself; I'm also talking about the "ledger" mechanism and maintenance of it. Stellar seems much more reliant on trusted third parties. This story gave a lot of detail about trusting specific third-parties, but treated Stellar as a magic inherently trusted mechanism for IOU exchange above reproach. Thus, it gives me no confidence or inclination to trust Stellar itself.

eridius 12y ago
Holding credit on the stellar network requires trust. You need to trust the issuer of the credit to be willing to redeem real-world value for the credit. Given the requirement for trust already built in to Stellar, the consensus protocol seems like a natural extension of that. Just as you need to trust the issuer of credit, you also need to trust your stellar provider to have chosen peers that will not collude. In a sense, this is actually kind of like Tor. When you establish a circuit through the Tor network, you're trusting that all the relays on the circuit are not colluding together. If they are colluding then you've lost all your privacy. Ultimately, if Stellar takes off, I think it makes sense for real-world institutions like banks to start running stellard. If I hold an account at a bank, I'll use their stellard, and exchange credit issued by them. I've already trusted the bank to hold all my money, so I'm not really taking on any new risk by also trusting them to run stellard.
- JoshTriplett 12y ago
  > Holding credit on the stellar network requires trust. You need to trust the issuer of the credit to be willing to redeem real-world value for the credit. That's my primary concern. Given the choice between trusting a particular issuer or just trusting that some entity exists who will exchange a currency I hold, I'd much rather do the latter.
  - eridius 12y ago
    Well, you do the latter anyway. In order to spend USD issued by the issuer Foo, you actually don't really have to trust Foo at all yourself (though obviously you have to trust them enough to hold their credit), instead either the other party in the transaction has to trust Foo, or there has to be a third party that trusts Foo and is willing to exchange Foo!USD for some other currency that the other party accepts. You only really have to trust Foo to be good for the credit yourself if you want to cash out. And even then, if someone else trusts Foo and is willing to exchange Foo!USD for some other currency that you trust better, you can do that too. It's a lot easier if you really do trust the issuer, because then you don't have to worry about finding someone else who does who will exchange Foo!USD for another currency. Also, it's worth pointing out that even with Bitcoin you end up having to trust specific entities to be good actors. Notably, any time you use an exchange you have to actually trust the exchange to give you the value you paid for. For example, if I use Coinbase to exchange BTC and USD, Coinbase ends up holding a balance on my behalf. I have to trust that if I request to withdraw my balance from Coinbase, that they'll actually deposit the USD in my bank account, and will actually send the BTC to another wallet of my choosing. In fact, the whole MtGox debacle is a great example of how this completely and utterly failed. Didn't a lot of people lose a lot of money, in the balances that MtGox held for them? People trusted MtGox and their trust was violated. --- Basically, the need to trust individual entities is not new with Stellar. Bitcoin has the exact same issue. Stellar has the benefit of being more likely to be adopted by existing centralized financial institutions, which are far less likely to abscond with your money, than the various gateways/exchanges that deal in Bitcoin.
- klipt 12y ago
  > If I hold an account at a bank, I'll use their stellard, and exchange credit issued by them. I've already trusted the bank to hold all my money, so I'm not really taking on any new risk by also trusting them to run stellard. I'd trust USTreasury!USD over WellsFargo!USD any day. Since the US government is the actual issuer of the currency in the first place, and the institution which guarantees it as legal tender for all debts.