[Why don't we get to vote in U.S. elections?]

This morning a user made a (largely off topic) post in the Clams thread. Clams is proof-of-stake and recently implemented a way for stakers to vote on petitions. Some people have complained, and one of the complaints was expressed in the post this morning:

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This brings me to the second point and return to the issue of stakeholder democracy.  As stated previously, the idea generally seems grand to those deemed stakeholders or pigs found to be more equal than others.  This leads the lesser equals with little alternative but to be at the mercy of equals?  I should congratulate Clamour for not being like this in the way Marxism and various off shoots are, several people have stated this is about being unequal and securing that fact.  The fact is you have disenfranchised a large portion of the user base with this system.  I can neither vote nor add a petition for several reasons.  The first is I have no Clams and therefor any vote I cast will count for zero under the staking allocation of votes.  The second is that I am unable to run the Clam client of on my PC due to the poor DSL and wallet software drastically slowing down my rig.  I downloaded it but it never synced and is too far behind now to try again without leaving it running for sev
 eral days.  Don't even try to say download the torrent.

This system is very similar to the the early American restriction of voters to male property owners.  The U.S. and Anglosphere have the remarkable ability to reform themselves which is probably why we have avoided internal revolutions.  The unfairness of male property owners having an outsized voice in society has long been known.  In fact, we in the U.S. deliberately expressed the ability of any person 18 years or older, with very few exceptions, to cast their vote by amending the Constitution by explicitly stating it.  There are countless people whose voices are silenced even though they use Clam regularly but don't stake any.  It gets even better.  Clams is substantially more dependent on the disenfranchised then by the currently blessed stakeholders.
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I've heard before that in the early U.S. voting was restricted to male property owners, and assume it's largely true. (History is usually more complicated in the details.) Obviously in the past 200 years  the U.S. has extended voting rights beyond property owners (and beyond males and even dropped to the age of 18). The arguments for allowing "non-stakeholders" to vote are expressed above.

I'm posting this in the Politics section (where I don't usually look) because it reminds me of something I hear sometimes from my fellow Europeans: Why don't we get to vote in U.S. elections? The argument goes that the U.S. has an outsized influence in the world and certainly affects Europeans. The argument against it is obvious: only U.S. citizens should be able to vote in U.S. elections. But isn't this based on the same idea as restricting voting to property owners/stakeholders? If it's different, can someone explain why? I have mixed feelings. I would to some degree like to vote in U.S. elections. But it terrifies me to think of United Stations voting in Spanish elections.

Recently I started thinking about how parties could form a kind of derivative contract by pooling some cryptocurrency at a multisig address. I posted about it earlier this month here:

https://bitcointalk.org/index.php?topic=1078338.msg11515522

Since then I've done a few examples by hand to demonstrate the idea. I did them using clams instead of bitcoin since clams has a "clamSpeech" part of a transaction. This let me write out the details of the contract in a way that is readable and must be cryptographically signed by the parties. The same thing could be done with OP_RETURN in bitcoin, it just wouldn't be as nicely visible on explorer websites.

I also worked out the relevant algebra and wrote it up, with the examples, as a short paper:

http://willmathforcrypto.com/multisigderivs.pdf

If you want to get a quick idea for how it works, here is one the examples with links to a clam explorer showing the transaction details.

Alice and Bob had some clams on June 23, 2015. Clams were trading at $1.60 at the time. They pooled some of their clams together into a 2-of-2 multisig address. Alice put in about $1.59 worth and Bob put in about $1.30 worth. The signed agreement is that the next day Alice gets $1.59 worth of clams out of the pool and Bob gets the rest. The "value" is based on the price at 10AM on June 24, 2015.

Here's the transaction making the contract and funding the multisig address:

http://clamsight.com/tx/f84f28e813118b78d7d03c535042bc94fa1f32de3d8a599854d45866f481783e

The price of clams at 10AM on June 24 turned out to be $1.73, so Alice got approximately $1.59 worth of clams out of the pool and Bob got the rest which were worth $1.53. Essentially Alice sold her volatility risk to Bob and as a result Bob realized a gain of over 17% when the price went up 8%.

Here's the transaction settling the contract.

http://clamsight.com/tx/b0a0312c7724c1b130300b9c5ae9db23148ed6194985d4b4879dca17fb889a0a

The actual transactions have a little extra clams in them to take care of mining fees and a "security deposit," as explained in the paper.

There's also an example showing how Alice shorted the price of clams.

I suspect this idea is already out there, and is possibly already in use. If so, I'll be happy if someone points it out. In general, feedback on the idea is welcome.

[Simple Example]

When problems pop up with centralized exchanges, as they repeatedly do, people start posting about the need for decentralized exchanges. An obvious question is how to interface with fiat, but this question misses the point that there are two distinct uses for exchanges. (1) To exchange one currency for another vs. (2) To hedge against volatility or speculate on prices. For purpose (2) there does not need to be an actual interface with fiat. A "decentralized exchange" designed to only support (2) can be built on top of Bitcoin using colored coins or Counterparty or Omni/Mastercoin. Similarly one could do this with assets in NxT or BitShares. I think in most of these cases there's a dependence on the ability to redeem the "digital asset" (e.g., the colored coin) for the asset it represents. BitShares uses a different mechanism, and seems to be a bit closer to what I'm about to describe. However, what I will describe doesn't need an altcoin or alternative network.

I've been thinking about a different way to simply use bitcoin with multisig to "exchange" in the sense of (2). Something like it must have been discussed before, so someone who's been around longer can hopefully point me to earlier threads. Here's a simple high level example.

Simple Example

Suppose Alice and Bob both have 1 bitcoin. Alice wants to try to make sure to keep at least $220 worth of bitcoin and is worried the price will fall. Bob thinks the price is about to rise and wants to profit from this. Alice and Bob could make a transaction T with their 2 bitcoins as inputs and with 2 outputs. The first output would be an OP_RETURN with a message (the "contract") and the second output would be a 2-of-2 multisig with both their addresses. The contract would say: "After 1 week, Alice gets paid X bitcoins and Bob gets paid 2-X bitcoins where X*P = 220 and P is the price of a bitcoin in USD." (To be more precise, if P < 110, then X must be 2.) While I've written this "contract" in English, it would be abbreviated to give the essential information in an OP_RETURN. Then after 1 week, Alice and Bob can look up the price P, build the transaction spending T's multisig output and both sign it. If the price is $200, then Alice gets 1.1 bitcoin and Bob gets 0.9 bitcoins. If the price is $250, then Alice gets 0.88 bitcoins and Bob gets 1.12 bitcoins.

Here is where there's a potential problem: they may not agree on P. Alice may say the price is $200 and Bob may say the price is $250. As long as they can't agree, the 2 bitcoins are locked up and neither benefits. It seems from a game theory perspective, they are incentivized to come to an agreement. Furthermore, since this is all on the blockchain, people can inspect the transaction and see that there has not been an agreement. Alice could publicly publish a partially signed transaction spending it assuming P = $200 and Bob could do the same with another partially signed transaction spending it assuming P = $250. Everyone could see these cryptographic commitments, look at the price on the day in question, and use it to determine whether or not to trust Alice or Bob (or neither) in the future. Suppose the price is $200 but Alice gives in, signing Bob's version (agreeing the price is $250). People can see that Bob said the price was higher than it really was (to his benefit) and distrust him in the future.

Another problem is that Alice or Bob might die or lose the private key, in which case both lose their money.

Example with Escrow

To some degree the problems could be mitigated by having a "decentralized exchange" as an escrow. This would simply be a bitcoin address I'll call Dentex. Instead of Alice and Bob sending their 2 bitcoins to a 2-of-2 multisig, they would send it to a 2-of-3 with addresses for Alice, Bob and Dentex, along with some "escrow fee" to Dentex. Just as before, Alice and Bob can agree on the price after the contract expires and sign the appropriate spend. If, however, they cannot agree, then Dentex can look up the price and sign a transaction spending the appropriate amounts to Alice and Bob. At that point, it's only up to Alice or Bob to sign and complete the contract. Dentex's reputation would be formed over time by people noting that Dentex correctly signed multisig txouts with a correct price at the correct times. Dentex could not simply run off with the money. There is still a problem (Sybil): Dentex might actually be Alice (or Bob). In this case Dentex could agree with Alice that the price is $200 even if the price is "really" $250. However, this would destroy Dentex's reputation immediately, so at least the attack could not continue. Also, in case Dentex were incapacitated (killed, shut down, imprisoned, gag ordered), all the "customers" revert to the 2-of-2 case in which they must agree on the price in order to free their money.

Dentex could be completely pseudonymous, with no one needing to know who or where they are. (This might be necessary if the "decentralized exchange" wants to avoid KYC/AML compliance.) Or Dentex could be completely open about who they are as a way of trying to get customers to trust them more.

Of course, this could be made more sophisticated in various ways, but hopefully I've gotten the idea across. Is anyone already doing this? Are there problems or attacks I'm not seeing? Thoughts?

Hi Everyone. I decided to try to earn some crypto by offering to answer math questions over email during my spare time (mainly on weekends). I don't know if there's any demand for this, but I guess this is how to find out.

The main topics I studied while in grad school were abstract math (abstract algebra, set theory, logic, and so on).

I put more info at willmathforcrypto.com.