[XMR] Monero - A secure, private, untraceable cryptocurrency

[aminorex]

In situations where people need to hold XMR for a significant period of time (e.g. a merchant waiting for his escrowed XMR to be released, or someone using XMR to go between government currencies when traveling), they will want to be able to hedge against losses measured in EUR or USD or CNY. If we want to support an external project, perhaps we should consider one that allows them to do this easily and fluidly.

So you suggest we make sure to have an easy hedging solution by the time FreeBazaar is finished (a finish-to-finish dependancy, as it is called in projec management)? Am I reading it right? If yes, I consider this requires diverting financing and energy to the search of such tool. Do you have any lead?

Privacy is only required for payments into and out of the market.  Escrowed funds don't need to be kept in XMR.  Using shapeshift, buyers' funds could be put into multisig'd BTC until transaction completion, then changed back into XMR for anon output to sellers.

Go KoziTwo go!  Your XMR send/receive gateway can simply be bolted on to OB and there you go...

Or into multisig'd nubits, reimplemented as colored coins, thus abolishing exchange risk for the vendor.  Any complaints with that, jehst?

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[smooth]

In situations where people need to hold XMR for a significant period of time (e.g. a merchant waiting for his escrowed XMR to be released, or someone using XMR to go between government currencies when traveling), they will want to be able to hedge against losses measured in EUR or USD or CNY. If we want to support an external project, perhaps we should consider one that allows them to do this easily and fluidly.

So you suggest we make sure to have an easy hedging solution by the time FreeBazaar is finished (a finish-to-finish dependancy, as it is called in projec management)? Am I reading it right? If yes, I consider this requires diverting financing and energy to the search of such tool. Do you have any lead?

Privacy is only required for payments into and out of the market.  Escrowed funds don't need to be kept in XMR.  Using shapeshift, buyers' funds could be put into multisig'd BTC until transaction completion, then changed back into XMR for anon output to sellers.

Go KoziTwo go!  Your XMR send/receive gateway can simply be bolted on to OB and there you go...

Or into multisig'd nubits, reimplemented as colored coins, thus abolishing exchange risk for the vendor.  Any complaints with that, jehst?

What about the exchange risk to the buyer, if the transaction fails and they get their coins back. Maybe I actually want my 100 XMR back, not whatever crazy amount of XMR those nubits happen to be worth (possibly 0) when I get the refund.

[iCEBREAKER]

Privacy is only required for payments into and out of the market.  Escrowed funds don't need to be kept in XMR.  Using shapeshift, buyers' funds could be put into multisig'd BTC until transaction completion, then changed back into XMR for anon output to sellers.

Go KoziTwo go!  Your XMR send/receive gateway can simply be bolted on to OB and there you go...

Or into multisig'd nubits, reimplemented as colored coins, thus abolishing exchange risk for the vendor.  Any complaints with that, jehst?

What about the exchange risk to the buyer, if the transaction fails and they get their coins back. Maybe I actually want my 100 XMR back, not whatever crazy amount of XMR those nubits happen to be worth (possibly 0) when I get the refund.

Until XMR has multisig, I think we'll have to accept some trade-off in the form of risk (although I'd love to be proven wrong about this).

The exact form of that trade-off can be multiple choice and determined per-transaction by its participants.  EG, buyer and seller could agree to keep half the funds in BTC and the other half in colored NuBits, or any combination of multisig'd coins.

BTW, is there a NuBits for gold?

[smooth]

Until XMR has multisig, I think we'll have to accept some trade-off in the form of risk (although I'd love to be proven wrong about this).

Atrides plan is to support third party escrows with trust ratings in place of multisig. That serves exactly the same purpose as multisig except that the escrow could theoretically run away with the funds, but in practice this should be a low risk. Even with multisig, the escrow could be in league with the counterparty and arbitrarily decide against you, stealing your funds.

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

[jehst]

In situations where people need to hold XMR for a significant period of time (e.g. a merchant waiting for his escrowed XMR to be released, or someone using XMR to go between government currencies when traveling), they will want to be able to hedge against losses measured in EUR or USD or CNY. If we want to support an external project, perhaps we should consider one that allows them to do this easily and fluidly.

So you suggest we make sure to have an easy hedging solution by the time FreeBazaar is finished (a finish-to-finish dependancy, as it is called in projec management)? Am I reading it right? If yes, I consider this requires diverting financing and energy to the search of such tool. Do you have any lead?

Privacy is only required for payments into and out of the market.  Escrowed funds don't need to be kept in XMR.  Using shapeshift, buyers' funds could be put into multisig'd BTC until transaction completion, then changed back into XMR for anon output to sellers.

Go KoziTwo go!  Your XMR send/receive gateway can simply be bolted on to OB and there you go...

Or into multisig'd nubits, reimplemented as colored coins, thus abolishing exchange risk for the vendor.  Any complaints with that, jehst?

Literally just thought of multisig'd nubits being perfect for a centralized onion site.

Reimplemented as colored coins? Wow, we're really getting deep into the rabbit hole here. I'd have no complaints about that. I have to sit down and digest that one.

[jehst]

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

The exchange rate risk is the reason why escrowing free-floating crypto in any marketplace has never been popular.

It's a separate issue from multi-sig, but it's an issue that calls the worth of OB into question in the first place.

[smooth]

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

The exchange rate risk is the reason why escrowing free-floating crypto in any marketplace has never been popular.

It's a separate issue from multi-sig, but it's an issue that calls the worth of OB into question in the first place.

ArticMine explained on the other thread that hedging with derivatives is the solution. That can be offered via the marketplace for that matter, possibly bundled with an escrow service, or elsewhere.

[jehst]

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

The exchange rate risk is the reason why escrowing free-floating crypto in any marketplace has never been popular.

It's a separate issue from multi-sig, but it's an issue that calls the worth of OB into question in the first place.

binaryFate explained on the other thread that hedging with derivatives is the solution. That can be offered via the marketplace for that matter, possibly bundled with an escrow service.

OK, so OB/FB escrow services hedge as part of their service. That sounds reasonable.

Edit: I'd rate it as:

Buyer 8, Seller 8

Better than FE.

[aminorex]

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

The exchange rate risk is the reason why escrowing free-floating crypto in any marketplace has never been popular.

It's a separate issue from multi-sig, but it's an issue that calls the worth of OB into question in the first place.

ArticMine explained on the other thread that hedging with derivatives is the solution. That can be offered via the marketplace for that matter, possibly bundled with an escrow service, or elsewhere.

it is A solution.  it is a solution that involves counter-party risk.  a solution which pushes that risk into the cracks in the floorboards by balancing incentives and cloud-ify-ing it is fintech in crypto-style.  if you go with a legacy fintech solution, you end up with legacy fintech infrastructure (think CFTC, SEC, et filia).  whereas, a fully decentralized solution does some serious gaussian copulation with that risk stuff.  unfortunately it also takes a lot longer (and more specialized talents) to pull it off.  futures on 696 or whatever it is dot com are a lot easier to pull off on a deadline.

[smooth]

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

The exchange rate risk is the reason why escrowing free-floating crypto in any marketplace has never been popular.

It's a separate issue from multi-sig, but it's an issue that calls the worth of OB into question in the first place.

binaryFate explained on the other thread that hedging with derivatives is the solution. That can be offered via the marketplace for that matter, possibly bundled with an escrow service.

OK, so OB/FB escrow services hedge as part of their service. That sounds reasonable.

That, and if users really want Finalize Early, they can have it.

There is no reason a decentralized market can't support prepayment. The OpenBazaar guys might have convinced themselves (perhaps incorrectly) that the world wants multisig escrow, but if it turns out they are wrong and people want to prepay and accept the risks, then: a) FreeBazaar can go its own way (I don't get the feeling that Atrides is looking to buy into the OpenBazaar dogma at every step); and b) OpenBazaar can pivot if the market rejects their approach, or the project fails but that is irrelevant to a fork (wouldn't be the first time a forked project succeeded where the original failed).

[smooth]

The issue of exchange rate risk is entirely separate. It applies equally whether or not multisig is supported.

The exchange rate risk is the reason why escrowing free-floating crypto in any marketplace has never been popular.

It's a separate issue from multi-sig, but it's an issue that calls the worth of OB into question in the first place.

ArticMine explained on the other thread that hedging with derivatives is the solution. That can be offered via the marketplace for that matter, possibly bundled with an escrow service, or elsewhere.

it is A solution.  it is a solution that involves counter-party risk.  a solution which pushes that risk into the cracks in the floorboards by balancing incentives and cloud-ify-ing it is fintech in crypto-style.  if you go with a legacy fintech solution, you end up with legacy fintech infrastructure (think CFTC, SEC, et filia).  whereas, a fully decentralized solution does some serious gaussian copulation with that risk stuff.  unfortunately it also takes a lot longer (and more specialized talents) to pull it off.  futures on 696 or whatever it is dot com are a lot easier to pull off on a deadline.

An anonymous decentralized market routes around the CFTC. If a reputable escrow offers you protection for some amount of market risk in exchange for a higher fee, some would find that attractive.

Decentralized trustless derivatives might someday be possible. Ethereum claims they are, and that's effectively what nubits, etc. are doing. I'm skeptical many of these systems work until they don't. We shall see.

[jehst]

That, and if users really want Finalize Early, they can have it.

There is no reason a decentralized market can't support prepayment. The OpenBazaar guys might have convinced themselves (perhaps incorrectly) that the world wants multisig escrow, but if it turns out they are wrong and people want to prepay and accept the risks, then: a) FreeBazaar can go its own way (I don't get the feeling that Atrides is looking to buy into the OpenBazaar dogma at every step); and b) OpenBazaar can pivot if the market rejects their approach, or the project fails but that is irrelevant to a fork

Oh, I'm fully in support of laying down all the options and letting the market decide what they want to do. I'm just trying to predict what's likely. As I've written essays about, I believe the market will continue to reject multisig'd free-floating crypto in favor of FE as it has.

The question is how other untried alternatives will stack up against FE.

Will most buyers and sellers still settle on FE when trusted escowers are available who offer USD-stabilized escrow? Doubt it. This could happen on an XMR FreeBazaar, so that's hopeful.

Will most buyers and sellers still settle on FE when multisig'd nubits is an option? Doubt it.

Personally, I think centralized markets will continue to dominate rather than OB/FB because people simply prefer them. Centralized = simple. Everyone else is doing it, etc. But I believe an alternative transaction style will overtake FE on those centralized markets.

(wouldn't be the first time a forked project succeeded where the original failed).

Be careful. Those laurels could give you a rash.  

[smooth]

(wouldn't be the first time a forked project succeeded where the original failed).

Be careful. Those laurels could give you a rash.  

If you thought I meant Monero, I certainly didn't; Monero hasn't succeeded at much of anything yet.

I was speaking of open source projects generally, and there are many, many examples. For example, search for egcs here: http://en.wikipedia.org/wiki/GNU_Compiler_Collection

[jehst]

(wouldn't be the first time a forked project succeeded where the original failed).

Be careful. Those laurels could give you a rash.  

If you thought I meant Monero, I certainly didn't; Monero hasn't succeeded at much of anything yet.

I was speaking of open source projects generally, and there are many, many examples. For example, search for egcs here: http://en.wikipedia.org/wiki/GNU_Compiler_Collection

I'm kidding. I know you didn't mean Monero.

[iCEBREAKER]

Literally just thought of multisig'd nubits being perfect for a centralized onion site.

Reimplemented as colored coins? Wow, we're really getting deep into the rabbit hole here. I'd have no complaints about that. I have to sit down and digest that one.

Yes, colored Nubits (or whatever implementation/permutation of Unicornium) are deep in the rabbit hole and require massive internal OB modifications.

OTOH, simply bolting KoziTwo's XMR gateway on to the entrance and exit of OB (and accepting the exchange risk of escrowed BTC in order to accrue the advantages of multisig) complies with the KISS imperative.

I prefer BTC/XMR fluctuation exposure than anything involving derivatives.  Although commendably useful in principle and practice at scale, derivatives are tricky to get right and carry their own dangers even if done perfectly, especially in a tiny market like BTC/XMR.

Exchange rate exposure also provides an incentive to finalize early, or at least hurry up and not lag, to both parties.

[jehst]

Decentralized trustless derivatives might someday be possible. Ethereum claims they are, and that's effectively what nubits, etc. are doing. I'm skeptical many of these systems work until they don't. We shall see.

Have you looked into nubits and bitUSD much? I don't have the technical background to properly evaluate them, but my gut-feeling is that there's a Fukushima-like meltdown risk where everyone just decides that nubits or bitUSD suck and then they're instantly worthless. But if you are holding it for the period of an escrow, that risk doesn't seem that bad. Personally, bitUSD's stabilizing mechanism seems more elegant.

[smooth]

Decentralized trustless derivatives might someday be possible. Ethereum claims they are, and that's effectively what nubits, etc. are doing. I'm skeptical many of these systems work until they don't. We shall see.

Have you looked into nubits and bitUSD much? I don't have the technical background to properly evaluate them, but my gut-feeling is that there's a Fukushima-like meltdown risk where everyone just decides that nubits or bitUSD suck and then they're instantly worthless. But if you are holding it for the period of an escrow, that risk doesn't seem that bad. Personally, bitUSD's stabilizing mechanism seems more elegant.

Yes, that's exactly what I said.

All coins have similar properties really, but building derivatives with positive feedback on top makes it playing with matches while doused with an accelerant rather than merely playing with matches.

[Este Nuno]

Back when we were looking in to different reputation systems for Bitmark Adam Miller introduced us to Trustdavis which was pretty interesting: http://web.cs.ucdavis.edu/~defigued/index_files/trustdavis.pdf

Not sure if there's anywhere that's actually implemented such a system yet but it would be interesting to see. Maybe it's a bit more complicated than the more straightforward options though and I'm not sure how receptive people would be.

[smooth]

Back when we were looking in to different reputation systems for Bitmark Adam Miller introduced us to Trustdavis which was pretty interesting: http://web.cs.ucdavis.edu/~defigued/index_files/trustdavis.pdf

Not sure if there's anywhere that's actually implemented such a system yet but it would be interesting to see. Maybe it's a bit more complicated than the more straightforward options though and I'm not sure how receptive people would be.

That was very interesting. Thank you for sharing it.

I too wonder how receptive people are to these systems. I'm a bit perplexed at how terrible the systems that get widest use (e.g. ebay) appear to be, and yet they are successful and have longevity.

[stslimited]

how about, some Missives?