[Cryptography] A little history, was What is total world transaction volume?

Patrick Chkoreff patrick at rayservers.net
Thu Feb 9 14:43:31 EST 2017


John Levine wrote on 02/09/2017 10:54 AM:

>> In other words, people will start spending liability currencies issued
>> by web wallet providers (e.g. Coinbase).  Those currencies will be
>> redeemable for actual bitcoin on the blockchain, with varying degrees of
>> probability.  The risk will be the technological, financial, or
>> fiduciary failure of the issuer.
> 
> This leads to an obvious question -- if you have to trust Coinbase or
> whoever issues your wallet, what's the point of tying it to bitcoin,
> other than bitcoin's ineffable coolness?

Bitcoin is just one example of a deliverable asset.  It has certain
effable properties which some might find desirable in a diversified
portfolio of liquid assets.

Another possible asset might be "Amazon credits".  Amazon could issue
credits that could be spent on their site, and also traded freely among
the owners of credits.  It would be thhuper-nice if they could do it
without ending up in prison.

Then Walmart could issue credits.  Then Amazon and Walmart could provide
a cross-platform currency trading feature based on something like this:

https://en.bitcoin.it/wiki/Atomic_cross-chain_trading

Alternatively, Amazon could hold an inventory of Walmart credits and
sell them as yet another product.  They might lose a sale on a camp
stove, but they'd earn the spread on the currency sale.


> If I'm going to use a stored value card, I'll use one issued by a real
> bank whose books are audited and against whom I have recourse if my
> money disappears.

Yes, it is desirable to use payment providers who are audited, possibly
bonded, and subject to legal recourse.  I would like to see more of
that.  Depending on what you mean by "audit".  In my industry of hedge
fund accounting, audits seem to be good only for detecting that a horse
has left the barn three months ago.  But I suppose that audits, properly
constructed, might have some serious value.


-- Patrick

P.S. I have strayed a bit from the topic of accelerating bitcoin
settlement and more into the topic of free-range money.  I did that
because I found it relevant, but I'll back off now and drop the thread.



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