In page 3 I was very puzzled about how the multisig configuration would work and I imagined something similar to what I found later in section 10. Maybe it's a good suggestion to add a reference to section 10 for the explanation
Good idea. We'll put it on our whitepaper todo.
In the combination of multisig, how many keys are required to unlock the value sent? All the keys of the swarm plus Alice or Bob? Or is this an M-of-N configuration to prevent missing nodes?
In principle all keys are required. We are still looking into the possibility of using threshold encryption methods, like M-of-N, but it may be possible to do without.
Are all the required keys in one swarm/group sent to another swarm/group as backup before being sent to the users?
Either swarms will need to be duplicated to make sure there is fail-over for nodes that drop out, or we must recreate keys from the data that a certain amount of nodes of the swarm holds.
I understand one user creates an address to send and the other user constructs the private key to access the funds on that address
Which keys (public/private from who Alice/Bob) are signing on each part of the transaction? The steps in the graph confused me a little bit although I like the actual graph, kudos for it.
The current graphic for a transaction only shows the process in one direction. In reality both Alice and Bob are sending value to two wallets that are controlled by the swarm. These are swapped out, and handed to the opposite user as soon as the swarm has verified both their transactions.
In page 5:
There is a mention to an image that is missing in that page. I imagine this refers to the image that appears at the top of page 4, is this correct?
You are right.
Something to be corrected.
Who creates the hybrid asset and why should I care about a specific asset or trust the issuer compared to another one?
In the end, we want any user to be able to issue a hybrid asset. This creates diversity and many options for groups and users. For example, someone may create a hybrid asset comprised of all the alt-coins with animal names, and call it 'Animal Farm'.
This user may employ bots to increase the liquidity of that hybrid asset, draw in market participants, and make it a very attractive hybrid to use when one wants to quickly convert value between Dogecoin, Piggycoin, Kittycoin and Flappycoin (R.I.P.?).
Is there any reputation system?
We are still deciding on whether or how to build a reputation system. The problem with reputation systems is that a Sybil attack can quickly render them useless. Perusing block-chain track records to build a kind of reputation representation may also work, but we have not decided on this.
Who and how we set the exchange price of the hybrid asset among chains?
This is the part that I can't completely click in my head: if, for example, I create asset X in Counterparty for the value of 1 BTC and the same asset in NXT for the value of 1 BTC and tomorrow the price of NXT duplicates, then the value of my hybrid asset X in NXT is twice more valuable than my asset X in Counterparty. How do I sell/buy these assets to other people interested in buying the appreciated NXT?
Hybrid assets have a one-on-one relationship between value systems. When value in a hybrid asset is not synchronized it makes for an arbitrage opportunity. Multiple hybrid assets may have similar relationships between currencies, and thus other hybrids will be used to gain value from their arbitrage, pulling the value of the hybrid asset back into sync. (If a hybrid is a unique asset combination or has very little liquidity, the imbalance could remain. In that case, traders may choose to monetize on it using arbitrage via a federated gateway, or even centralized exchanges. In this case, however, traders are taking a risk, hoping to gain reward from their arbitrage.)
Legal disclosure
I'm not responsible for any mental harm caused to any human or animal produced while reading any of my possibly stupid questions.
That's a fine lot of good questions, if you ask me.
