Reggie Middleton builds Zero Trust Digital Currency Contracts on Blockchain

[molecular]

...or at least says so on his boombust blog:

The Future of Money is Here: BoomBust Zero Trust Digital Currency Contracts

I have created derivatives for Bitcoin that work exclusively on the Bitcoin network. They are capable of literally replacing the role of the large money center and investment banks. YES! This is a big thing. I will hopefully have a limited use beta example of the first product for the viewers of the show to experiment with. These products have been designed as zero trust contracts (meaning it was designed to eliminate the human judgment factor, thereby nearly completely automating the entire transaction). Currently, trust issues that the conventional OTC banking system products incur severely hamper free flowing capital markets. Greed begets inefficiencies. Digital zero trust contracts (as opposed to physical legal contracts) “theoretically” eliminate litigation and court involvement and expensive dispute resolution through means of the legal system. My BoomBust contracts allows anonymous parties to swap exposure in and out of Bitcoin from many widely traded currencies. (USD, EUR, YEN, CNY, etc.).

he then goes on to explain that in more detail (haven't read yet). I've read the post, not much substance so far.

What the hell is he up to?
Could this really be something big?
Who's helping him?

Or is he only fishing for subscribers?

[molecular]

I saw that. Watching this with great interest.

Did you read it? Can you sum it up? How is it supposed to work?

I don't even now what exactly a swap is.

[yogi]

My guess would be that it's a client application for a centralized exchange. But, the way he describes it, it's hard to know for sure.

[molecular]

My guess would be that it's a client application for a centralized exchange. But, the way he describes it, it's hard to know for sure.

Well, he says "zero trust". That's what got me interested. He's talking about "boombust" (his firm?) contracts in the text. This sounds like there's still some centralization and/or third party risk.

Just read the text, doesn't really explain (to me) how this is supposed to work technically. How are the parties brought together, how is the contract established / settled / whatever?

[dg2010]

This is essentially a gambling platform because at no point does any currency exchange take place.

I open a wager (contract) that essentially boils down to "USD will go UP", at the end of the contract the USD price will be taken from somewhere and then the contract settled. If I bet correctly I get more BTC than I staked. If I bet wrong, I get less. I would assume the zero trust comes from the fact it's automated and that both parties would be putting some stake up which is then automatically settled. However there needs to be a currency price feed source for the system to be able to settle.

Of course in the financial world it's not called gambling, it's contract derivatives.

[Voodah]

We'll  have to keep an eye open for this one.

[tvbcof]

What the hell is he up to?
Could this really be something big?
Who's helping him?

This is good to see.  Middleton has ranked highly on my list of the pool of people who do the rounds on the fringe interview circuit (e.g., Keiser's show.)  He has always struck me as being quite observant and not an orthodox thinker.

Whatever Reggie has got cooking could be big I think.  Some of the things which could be built on a solid distributed crypto-currency foundation with an eye toward reducing counter-party risk* are pretty mind blowing.  I'll be watching this as well, and hoping that Bitcoin remains a platform which is reliable for this purpose.  That is, the globally distributed blockchain and transaction network is not spammed with 1x10^9 morning coffee expenditures and, relatedly, appropriated by entities who have the ability to operate an ever increasingly expensive and technical set of infrastructure.

* More important to people who went through Jon Corzine's MF Global debacle/scam.  That reminds me to check.  Nope, the guy is not in jail yet.  Surprise, surprise.

[600watt]

sounds big. bitcoin will not only challenge credit cards and wu. decentralized trust is an earthquake and not a small one.

[molecular]

This is essentially a gambling platform because at no point does any currency exchange take place.

You think you might've just explained what derivatives are.

[molecular]

sounds big. bitcoin will not only challenge credit cards and wu. decentralized trust is an earthquake and not a small one.

I wish Middleton would explain technically how he wants to pull this off with "zero trust". Then I'll get excited.

I could imagine something with smart contracts that are automatically settled based on external data like EUR/USD rate or whatever. But I don't think the Bitcoin Network is ready for that feature at this point.

[bluemeanie1]

 no whitepaper.

 no theory.

 no history of publication.

 trying to attract attention.

who would buy these products?

 -bm

...or at least says so on his boombust blog:

The Future of Money is Here: BoomBust Zero Trust Digital Currency Contracts

I have created derivatives for Bitcoin that work exclusively on the Bitcoin network. They are capable of literally replacing the role of the large money center and investment banks. YES! This is a big thing. I will hopefully have a limited use beta example of the first product for the viewers of the show to experiment with. These products have been designed as zero trust contracts (meaning it was designed to eliminate the human judgment factor, thereby nearly completely automating the entire transaction). Currently, trust issues that the conventional OTC banking system products incur severely hamper free flowing capital markets. Greed begets inefficiencies. Digital zero trust contracts (as opposed to physical legal contracts) “theoretically” eliminate litigation and court involvement and expensive dispute resolution through means of the legal system. My BoomBust contracts allows anonymous parties to swap exposure in and out of Bitcoin from many widely traded currencies. (USD, EUR, YEN, CNY, etc.).

he then goes on to explain that in more detail (haven't read yet). I've read the post, not much substance so far.

What the hell is he up to?
Could this really be something big?
Who's helping him?

Or is he only fishing for subscribers?

[molecular]

no whitepaper.

 no theory.

 no history of publication.

 trying to attract attention.

who would buy these products?

Noone's buying anything. He's letting us know about his development (albeit not with enough detail to be able to even judge what it's all about).

[bluemeanie1]

no whitepaper.

 no theory.

 no history of publication.

 trying to attract attention.

who would buy these products?

Noone's buying anything. He's letting us know about his development (albeit not with enough detail to be able to even judge what it's all about).

if he isn't supplying any detail, how is this anything but spam?

[molecular]

yeah, we need more info.

he might just be trolling...

In that case: what an idiot. But we'll see.

[600watt]

historians that study the dotcom bubble "new economy" of the beginning of the millenium might come to the conclusion that the euphoria back then was unsustained because a technology like the bitcoin protocol was not available.

now we are talking about "new economy" for real. 

[dg2010]

Good point. The .COM bubble is a great example of how new emerging technology is picked up and blown out of all proportion. Bitcoin will be no different.

[marcus_of_augustus]

historians that study the dotcom bubble "new economy" of the beginning of the millenium might come to the conclusion that the euphoria back then was unsustained because a technology like the bitcoin protocol was not available.

now we are talking about "new economy" for real. 

bitcoin .... because this time it really is different .... lol

[justusranvier]

This is essentially a gambling platform because at no point does any currency exchange take place.

You think you might've just explained what derivatives are.

That's pretty much Wall Street in a nutshell - gambling with other people's money.

The worst part is the people involved think they are financial geniuses - masters of the universe - instead of welfare queens.

They lobbied for changes to tax laws to create the 401k, then when this caused trillions of dollars to flow into, and bid up the price of, equities they interpreted this as evidence that stock traders were financial gods.

It was just the demographic realities of the baby boom coming into their peak earning years though, as well as the tax code shovelling a bunch of money into the markets that otherwise would have been used for something else.

Then on the occasions when your bets don't work out, a primary dealer can just borrow unlimited dollars into existence from the federal reserve, or get laws changed to work in your favour at everybody else's expense. Or just get bailed out by taxpayers.

It's all a huge scam, which makes the inflated egos of traders particularly comical.

[molecular]

The worst part is the people involved think they are financial geniuses - masters of the universe - instead of welfare queens.

They lobbied for changes to tax laws to create the 401k, then when this caused trillions of dollars to flow into, and bid up the price of, equities they interpreted this as evidence that stock traders were financial gods.

I noticed something... made an experiment (started about 4 weeks or so ago): Usually my goal when trading was to increase the the amount of BTC I hold. I was doing so-so.

The experiment was to split off a small amount of funds, swap them for USD and try to increase my USD balance.

Guess what: I feel like a fucking genius trader now because I'm finally succeeding in increasing my balance substantially. Obviously this is very easy to pull off with an asset that is constantly increasing in value. Even bad mistakes are easily forgiven over time. Even using a coin flip to decide wether to buy or sell will certainly net you an increasing USD balance over time. Or let a bunch of monkeys make the decisions, it'll work.

You'd have to compare to holding in a constantly rising market or coin-flipping to judge your own success.

[justusranvier]

Guess what: I feel like a fucking genius trader now because I'm finally succeeding in increasing my balance substantially. Obviously this is very easy to pull off with an asset that is constantly increasing in value. Even bad mistakes are easily forgiven over time. Even using a coin flip to decide wether to buy or sell will certainly net you an increasing USD balance over time. Or let a bunch of monkeys make the decisions, it'll work.

You'd have to compare to holding in a constantly rising market or coin-flipping to judge your own success.

Yeah, our brains are particularly bad at recognizing confirmation and selection biases.

Combine that with success being addictive (dopamine rush) and now you understand why so much money changes hands in Las Vegas.