Sunday, 2 December 2012

#P2P Smart Contracting - Law & Finance #Crypto BANKING


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"Services and Costs

Vincent

I've been thinking for many years about how to design a P2P network to replace the whole Internet and all financial services and a…
to open-transactions

From:
I've been thinking for many years about how to design a P2P network to replace the whole Internet and all financial services and all governments.  OT only aspires to the financial services portion, and as such lacks many concepts I have designed in my mind.  However, my thoughts about micro payments for services applies to OT.  I explained some of my thoughts about micropayments in the comments section of a recent entry on Ian Grigg's blog:

https://financialcryptography.com/mt/archives/001393.html

OT servers need to make money to provide the incentive for people to operate and run them.  Server operators should have the choice of which services they offer, and what they charge, or else set an AI in charge of variable rates.  So the server ought to have a protocol to inquire what services it offers and what is the current price for each of those services.  Each server should be able to use any arbitrary currency in setting and charging its prices.

Charging for time stamping should just be another service handled by this same protocol.

- Vincent

Johann Gevers
Vincent, your vision is very much aligned with our vision at Monetas. OT is actually fundamentally a *smart contracting* platform.…
to Fellow Traveler
Vincent, your vision is very much aligned with our vision at Monetas. OT is actually fundamentally a smart contracting platform. Thus the fundamental concept in the design of OT (as well as the more advanced platform we are building at Monetas that extends OT) is actually that of a smart contract, not a financial transaction. Financial transactions are a special case of legal transactions (legal transactions may or may not have a financial component, but all financial transactions are necessarily legal transactions).
Thus OT (and even more so in the case of the functionality we are building into Monetas) enables the full range of legal transactions, from simple contracts to the most sophisticated types of financial and legal contracts, including legal entities and voting.

Where Fellow Traveler has built a software platform for decentralized financial and legal transactions, I have developed legal concepts that enable a maximally decentralized legal system sophisticated enough to operate communities, organizations, and entire countries—yet simple enough that a child can understand them. Monetas represents the coming together of these financial and legal concepts and tools in a very powerful platform that we believe will revolutionize how we live and do business.

It sounds like you have similar ideas and goals—perhaps we should talk? You can reach me at DELETED



Johann




-------- Original Message --------
Subject:        services and costs
Date:   Wed, 28 Nov 2012 17:20:05 -0800 (PST)
From:   Vincent <DELETED>

I've been thinking for many years about how to design a P2P network to
replace the whole Internet and all financial services and all
governments.  OT only aspires to the financial services portion, and as
such lacks many concepts I have designed in my mind.  However, my
thoughts about micro payments for services applies to OT.  I explained
some of my thoughts about micropayments in the comments section of a
recent entry on Ian Grigg's blog:


OT servers need to make money to provide the incentive for people to
operate and run them.  Server operators should have the choice of which
services they offer, and what they charge, or else set an AI in charge
of variable rates.  So the server ought to have a protocol to inquire
what services it offers and what is the current price for each of those
services.  Each server should be able to use any arbitrary currency in
setting and charging its prices.

Charging for time stamping should just be another service handled by
this same protocol.

- Vincent

Vincent
My concept does not use a legal system, nor arbitration unless individual peers themselves choose to use an arbiter to help resolv…
to open-transactions

From:
My concept does not use a legal system, nor arbitration unless individual peers themselves choose to use an arbiter to help resolve a dispute.  My system is based on a network of assurances between peers.  Between any two nodes, a route of assurances can be found, and a least cost route for filing a claim.

- Vincent


--- On Wed, 11/28/12, Johann Gevers <DELETED> wrote:

From: Johann Gevers <DELETED>
Subject: Fwd: services and costs
To: "Fellow Traveler" <open-transactions@rayservers.com>
Date: Wednesday, November 28, 2012, 8:44 PM

Vincent, your vision is very much aligned with our vision at Monetas. OT is actually fundamentally a smart contracting platform. Thus the fundamental concept in the design of OT (as well as the more advanced platform we are building at Monetas that extends OT) is actually that of a smart contract, not a financial transaction. Financial transactions are a special case of legal transactions (legal transactions may or may not have a financial component, but all financial transactions are necessarily legal transactions).
Thus OT (and even more so in the case of the functionality we are building into Monetas) enables the full range of legal transactions, from simple contracts to the most sophisticated types of financial and legal contracts, including legal entities and voting.

Where Fellow Traveler has built a software platform for decentralized financial and legal transactions, I have developed legal concepts that enable a maximally decentralized legal system sophisticated enough to operate communities, organizations, and entire countries—yet simple enough that a child can understand them. Monetas represents the coming together of these financial and legal concepts and tools in a very powerful platform that we believe will revolutionize how we live and do business.

It sounds like you have similar ideas and goals—perhaps we should talk? You can reach me at johann@monetas.net.



Johann




-------- Original Message --------
Subject:        services and costs
Date:   Wed, 28 Nov 2012 17:20:05 -0800 (PST)
From:   Vincent <DELETED>

I've been thinking for many years about how to design a P2P network to
replace the whole Internet and all financial services and all
governments.  OT only aspires to the financial services portion, and as
such lacks many concepts I have designed in my mind.  However, my
thoughts about micro payments for services applies to OT.  I explained
some of my thoughts about micropayments in the comments section of a
recent entry on Ian Grigg's blog:


OT servers need to make money to provide the incentive for people to
operate and run them.  Server operators should have the choice of which
services they offer, and what they charge, or else set an AI in charge
of variable rates.  So the server ought to have a protocol to inquire
what services it offers and what is the current price for each of those
services.  Each server should be able to use any arbitrary currency in
setting and charging its prices.

Charging for time stamping should just be another service handled by
this same protocol.

- Vincent

Mark Friedenbach
Vincent, what you describe sounds a lot like Ripple generalized beyond financial transactions. You and Johann might be interested …
to open-transactions
Vincent, what you describe sounds a lot like Ripple generalized beyond financial transactions.

You and Johann might be interested in something we are working on in the Freicoin community: a proof-of-stake based protocol for distributed government I've named “republicoin.” The simplest expiation of the idea is that by adding a certain form of proof-of-stake voting, stakeholders, miners, and clients will be able to come to distributed agreement on greater or lesser restrictive rulesets governing the Bitcoin protocol. One application would be management of what we're calling “budgets”--mandated payments from the perpetual demurrage-offset subsidy (in Freicoin's case) or a percentage of transaction fees (if you were to do this in Bitcoin).

This is currently being discussed in the “should all the demurrage go to the miners?” thread on the Freicoin forums at freicoin.org, but I plan on splitting it off into its own project in the coming weeks/months. We'll be doing a one-off chain first to test the concept, and if that goes well integrate it into Freicoin and the OT/proof-of-work hybrid I'm cooking up.

Cheers,
Mark


On Wed, Nov 28, 2012 at 8:45 PM, Vincent <DELETED> wrote:
My concept does not use a legal system, nor arbitration unless individual peers themselves choose to use an arbiter to help resolve a dispute.  My system is based on a network of assurances between peers.  Between any two nodes, a route of assurances can be found, and a least cost route for filing a claim.

- Vincent


--- On Wed, 11/28/12, Johann Gevers <johann@gevers.net> wrote:

From: Johann Gevers <jDELETED>
Subject: Fwd: services and costs
To: "Fellow Traveler" <open-transactions@rayservers.com>
Date: Wednesday, November 28, 2012, 8:44 PM


Vincent, your vision is very much aligned with our vision at Monetas. OT is actually fundamentally a smart contracting platform. Thus the fundamental concept in the design of OT (as well as the more advanced platform we are building at Monetas that extends OT) is actually that of a smart contract, not a financial transaction. Financial transactions are a special case of legal transactions (legal transactions may or may not have a financial component, but all financial transactions are necessarily legal transactions).
Thus OT (and even more so in the case of the functionality we are building into Monetas) enables the full range of legal transactions, from simple contracts to the most sophisticated types of financial and legal contracts, including legal entities and voting.

Where Fellow Traveler has built a software platform for decentralized financial and legal transactions, I have developed legal concepts that enable a maximally decentralized legal system sophisticated enough to operate communities, organizations, and entire countries—yet simple enough that a child can understand them. Monetas represents the coming together of these financial and legal concepts and tools in a very powerful platform that we believe will revolutionize how we live and do business.

It sounds like you have similar ideas and goals—perhaps we should talk? You can reach me at DELETED



Johann




-------- Original Message --------
Subject:        services and costs
Date:   Wed, 28 Nov 2012 17:20:05 -0800 (PST)
From:   Vincent <DELETED>

I've been thinking for many years about how to design a P2P network to
replace the whole Internet and all financial services and all
governments.  OT only aspires to the financial services portion, and as
such lacks many concepts I have designed in my mind.  However, my
thoughts about micro payments for services applies to OT.  I explained
some of my thoughts about micropayments in the comments section of a
recent entry on Ian Grigg's blog:


OT servers need to make money to provide the incentive for people to
operate and run them.  Server operators should have the choice of which
services they offer, and what they charge, or else set an AI in charge
of variable rates.  So the server ought to have a protocol to inquire
what services it offers and what is the current price for each of those
services.  Each server should be able to use any arbitrary currency in
setting and charging its prices.

Charging for time stamping should just be another service handled by
this same protocol.

- Vincent

Vincent
For a system to be successful, it needs to be profitable for all participants. Only systems that are Win-Win for all participants …
to open-transactions
For a system to be successful, it needs to be profitable for all participants.  Only systems that are Win-Win for all participants will survive long term.  If it isn't profitable for some people, that is where it fails.

 I'm not sure I understand Ripple, but as far as I can tell, I don't see how it profits anyone to have a transaction routed through them, nor how it profits anyone to operate a Ripple server.  It appears to me that a person who has a transaction routed through them assumes risk with no profit to offset that risk.  Also, if a transaction has multiple routes to choose from, how does the route get chosen?  I don't understand that.

I have a P2P currency concept which you might compare to Ripple, but I developed it independently of Ripple.  Every person can issue their own currency using whatever units they want, backed by whatever they want, and the links between currencies are trading exchanges, with an order book of waiting bids and asks.  The key to understand this is that a buy offer for a person's currency on a trading exchange is the exact same thing as giving them credit.  If I am willing to buy your currency, my purchase of it gives you credit.  Imagine a P2P network where the nodes are personal currencies, and all of the links are trading exchanges between those currencies.  A least cost route can be found to convert any two currencies in the network.  It could even be automated.  So a person could spend their personal currency by converting it through the network into the personal currency of the person they want to pay.

However, because the links are trading exchanges, the units for each currency can be different.  Also, bids and offers can have discounts which reflect the level of trust in the currency and the amount of risk assumed by extending credit.  Thus a person who is starting to look unreliable may still be able to spend their currency, but maybe only at a discount.  Conversion rates will implicitly and automatically reflect the amount of trust a currency deserves.http://www.open-transactions.com/2012/06/open-transactionscom-via.html

Market makers who facilitate conversion between currencies will profit from their activity, maintaining a bid ask spread.  Thus, people will want transactions routed through them and will profit from it.

Furthermore, such a system does not require any politics nor governance nor group policy.  Each person sets their own policies for their own currency.  If they manage their currency in an untrustworthy way, the network will simply discount or devalue their currency.  Thus it would be self managing.

- Vincent



--- On Thu, 11/29/12, Mark Friedenbach <mark@monetize.io> wrote:

From: Mark Friedenbach <DELETED>
Subject: Re: Fwd: services and costs
To: open-transactions@rayservers.com
Date: Thursday, November 29, 2012, 9:51 AM

Vincent, what you describe sounds a lot like Ripple generalized beyond financial transactions.

You and Johann might be interested in something we are working on in the Freicoin community: a proof-of-stake based protocol for distributed government I've named “republicoin.” The simplest expiation of the idea is that by adding a certain form of proof-of-stake voting, stakeholders, miners, and clients will be able to come to distributed agreement on greater or lesser restrictive rulesets governing the Bitcoin protocol. One application would be management of what we're calling “budgets”--mandated payments from the perpetual demurrage-offset subsidy (in Freicoin's case) or a percentage of transaction fees (if you were to do this in Bitcoin).

This is currently being discussed in the “should all the demurrage go to the miners?” thread on the Freicoin forums at freicoin.org, but I plan on splitting it off into its own project in the coming weeks/months. We'll be doing a one-off chain first to test the concept, and if that goes well integrate it into Freicoin and the OT/proof-of-work hybrid I'm cooking up.

Cheers,
Mark


On Wed, Nov 28, 2012 at 8:45 PM, Vincent <vly3@yahoo.com> wrote:
My concept does not use a legal system, nor arbitration unless individual peers themselves choose to use an arbiter to help resolve a dispute.  My system is based on a network of assurances between peers.  Between any two nodes, a route of assurances can be found, and a least cost route for filing a claim.

- Vincent


--- On Wed, 11/28/12, Johann Gevers <DELETED> wrote:

From: Johann Gevers <DELETED>
Subject: Fwd: services and costs
To: "Fellow Traveler" <open-transactions@rayservers.com>
Date: Wednesday, November 28, 2012, 8:44 PM


Vincent, your vision is very much aligned with our vision at Monetas. OT is actually fundamentally a smart contracting platform. Thus the fundamental concept in the design of OT (as well as the more advanced platform we are building at Monetas that extends OT) is actually that of a smart contract, not a financial transaction. Financial transactions are a special case of legal transactions (legal transactions may or may not have a financial component, but all financial transactions are necessarily legal transactions).
Thus OT (and even more so in the case of the functionality we are building into Monetas) enables the full range of legal transactions, from simple contracts to the most sophisticated types of financial and legal contracts, including legal entities and voting.

Where Fellow Traveler has built a software platform for decentralized financial and legal transactions, I have developed legal concepts that enable a maximally decentralized legal system sophisticated enough to operate communities, organizations, and entire countries—yet simple enough that a child can understand them. Monetas represents the coming together of these financial and legal concepts and tools in a very powerful platform that we believe will revolutionize how we live and do business.

It sounds like you have similar ideas and goals—perhaps we should talk? You can reach me at DELETED



Johann




-------- Original Message --------
Subject:        services and costs
Date:   Wed, 28 Nov 2012 17:20:05 -0800 (PST)
From:   Vincent <DELETED>

I've been thinking for many years about how to design a P2P network to
replace the whole Internet and all financial services and all
governments.  OT only aspires to the financial services portion, and as
such lacks many concepts I have designed in my mind.  However, my
thoughts about micro payments for services applies to OT.  I explained
some of my thoughts about micropayments in the comments section of ahttp://www.open-transactions.com/2012/06/open-transactionscom-via.html
recent entry on Ian Grigg's blog:


OT servers need to make money to provide the incentive for people to
operate and run them.  Server operators should have the choice of which
services they offer, and what they charge, or else set an AI in charge
of variable rates.  So the server ought to have a protocol to inquire
what services it offers and what is the current price for each of those
services.  Each server should be able to use any arbitrary currency in
setting and charging its prices.

Charging for time stamping should just be another service handled by
this same protocol.

- Vincent

Mark Friedenbach

They profit from the access to credit that comes with participating in the Ripple network. > Also, if a transaction has multiple r…
to open-transactions
On Thu, Nov 29, 2012 at 9:47 PM, Vincent <DELETED> wrote:
It appears to me that a person who has a transaction routed through them assumes risk with no profit to offset that risk.

They profit from the access to credit that comes with participating in the Ripple network.
Also, if a transaction has multiple routes to choose from, how does the route get chosen?  I don't understand that.

Depends on the implementation because really it doesn't matter, so long as a choice is made. I think on current implementations the Ripple server simply makes a choice.
I have a P2P currency concept which you might compare to Ripple, but I developed it independently of Ripple.  Every person can issue their own currency using whatever units they want, backed by whatever they want, and the links between currencies are trading exchanges, with an order book of waiting bids and asks.  The key to understand this is that a buy offer for a person's currency on a trading exchange is the exact same thing as giving them credit.  If I am willing to buy your currency, my purchase of it gives you credit.  Imagine a P2P network where the nodes are personal currencies, and all of the links are trading exchanges between those currencies.  A least cost route can be found to convert any two currencies in the network.  It could even be automated.  So a person could spend their personal currency by converting it through the network into the personal currency of the person they want to pay.

That *is* Ripple, and not new. See for example the various distributed commit protocols on the Ripple wiki, and FT's own description of how to implement Ripple within OT, which almost exactly matches the above:


Vincent
I can see that FT's description of currency exchange closely matches my own concept. We have a difference of ideology, however. Y…
to open-transactions
I can see that FT's description of currency exchange closely matches my own concept.

We have a difference of ideology, however.  Your ideology is a communist ideology applied to credit: "to each according to his need (of credit), from each according to his ability (to supply credit)".  Why would any wealthy businessman or experienced trader want to participate in a Ripple network?  They don't need credit, thus your statement that they "profit from the credit provided to them by the network" does not apply.  Such
 people would be primarily suppliers of credit.  The system needs to be profitable for such people.  It needs to be profitable for people who don't share your ideology and for people whose only motive is their own profit.  Communism works in small communities where people share the same ideology.  Capitalism works globally among people with widely different ideologies.

Bitcoin has succeeded so far because it doesn't care about anybody's ideology, and it provides incentive for those motivated only by profit.

How the transactions get routed does matter.  If I don't know how transactions get routed then the system lacks transparency. How transactions get routed affects somebody's liabilities, profits and losses.

FT's concept if implemented with trading exchanges with trading books, and least cost routing, would become the same as mine.  The link provided does not mention anything about trading exchanges with order books and least cost routing.  It appears to assume fixed ratios of exchange and arbitrary routing the same as Ripple.

If you use trading exchanges, then the route will not be arbitrary, there will be a route which gets the best exchange rate.  Everybody along the route will profit.  And a currency can be a stock, a futures contract, an option, whatever.  Thus the trading exchanges for the whole financial system would be integrated seamlessly into the currency system.   All the stocks of the NYSE, the NASDAQ, etc could trade as currencies in this system.  That can only happen if the links between currencies are trading exchanges.  It won't happen if the links are fixed ratios with arbitrary routing.

- Vincent


--- On Fri, 11/30/12, Mark Friedenbach <DELETED> wrote:

From: Mark Friedenbach <DELETED>
Subject: Re: Fwd: services and costs
To: open-transactions@rayservers.com
Date: Friday, November 30, 2012, 2:05 AM

On Thu, Nov 29, 2012 at 9:47 PM, Vincent <vly3@yahoo.com> wrote:
It appears to me that a person who has a transaction routed through them assumes risk with no profit to offset that risk.

They profit from the access to credit that comes with participating in the Ripple network.



Also, if a transaction has multiple routes to choose from, how does the route get chosen?  I don't understand that.

Depends on the implementation because really it doesn't matter, so long as a choice is made. I think on current implementations the Ripple server simply makes a choice.
I have a P2P currency concept which you might compare to Ripple, but I developed it independently of Ripple.  Every person can issue their own currency using whatever units they want, backed by whatever they want, and the links between currencies are trading exchanges, with an order book of waiting bids and asks.  The key to understand this is that a buy offer for a person's currency on a trading exchange is the exact same thing as giving them credit.  If I am willing to buy your currency, my purchase of it gives you credit.  Imagine a P2P network where the nodes are personal currencies, and all of the links are trading exchanges between those currencies.  A least cost route can be found to convert any two currencies in the network.  It could even be automated.  So a person could spend their personal currency by converting it through the network into the personal currency of the person they want to pay.

That *is* Ripple, and not new. See for example the various distributed commit protocols on the Ripple wiki, and FT's own description of how to implement Ripple within OT, which almost exactly matches the above:


Mark Friedenbach
Communism? Ideology? I not sure I even want to respond to this. It's a simple result of game theory: cooperation and collaboration…
to open-transactionsShow detailsInbox
Communism? Ideology? I not sure I even want to respond to this.

It's a simple result of game theory: cooperation and collaboration can be self-interested even if there is no immediate reward, as the act of cooperating itself creates an environment from which future value can be derived. More simply, in your analysis you are neglecting the future value derived from a functioning Ripple network.

You see the same thing in Bitcoin-OTC, and other webs of trust.

Mark


On Fri, Nov 30, 2012 at 8:48 AM, Vincent <DELETED> wrote:
I can see that FT's description of currency exchange closely matches my own concept.

We have a difference of ideology, however.  Your ideology is a communist ideology applied to credit: "to each according to his need (of credit), from each according to his ability (to supply credit)".  Why would any wealthy businessman or experienced trader want to participate in a Ripple network?  They don't need credit, thus your statement that they "profit from the credit provided to them by the network" does not apply.  Such
 people would be primarily suppliers of credit.  The system needs to be profitable for such people.  It needs to be profitable for people who don't share your ideology and for people whose only motive is their own profit.  Communism works in small communities where people share the same ideology.  Capitalism works globally among people with widely different ideologies.

Bitcoin has succeeded so far because it doesn't care about anybody's ideology, and it provides incentive for those motivated only by profit.

How the transactions get routed does matter.  If I don't know how transactions get routed then the system lacks transparency. How transactions get routed affects somebody's liabilities, profits and losses.

FT's concept if implemented with trading exchanges with trading books, and least cost routing, would become the same as mine.  The link provided does not mention anything about trading exchanges with order books and least cost routing.  It appears to assume fixed ratios of exchange and arbitrary routing the same as Ripple.

If you use trading exchanges, then the route will not be arbitrary, there will be a route which gets the best exchange rate.  Everybody along the route will profit.  And a currency can be a stock, a futures contract, an option, whatever.  Thus the trading exchanges for the whole financial system would be integrated seamlessly into the currency system.   All the stocks of the NYSE, the NASDAQ, etc could trade as currencies in this system.  That can only happen if the links between currencies are trading exchanges.  It won't happen if the links are fixed ratios with arbitrary routing.

- Vincent



--- On Fri, 11/30/12, Mark Friedenbach <DELETED> wrote:

From: Mark Friedenbach <DELETED>
Subject: Re: Fwd: services and costs
Date: Friday, November 30, 2012, 2:05 AM


On Thu, Nov 29, 2012 at 9:47 PM, Vincent <DELETED> wrote:
It appears to me that a person who has a transaction routed through them assumes risk with no profit to offset that risk.

They profit from the access to credit that comes with participating in the Ripple network.



Also, if a transaction has multiple routes to choose from, how does the route get chosen?  I don't understand that.

Depends on the implementation because really it doesn't matter, so long as a choice is made. I think on current implementations the Ripple server simply makes a choice.
I have a P2P currency concept which you might compare to Ripple, but I developed it independently of Ripple.  Every person can issue their own currency using whatever units they want, backed by whatever they want, and the links between currencies are trading exchanges, with an order book of waiting bids and asks.  The key to understand this is that a buy offer for a person's currency on a trading exchange is the exact same thing as giving them credit.  If I am willing to buy your currency, my purchase of it gives you credit.  Imagine a P2P network where the nodes are personal currencies, and all of the links are trading exchanges between those currencies.  A least cost route can be found to convert any two currencies in the network.  It could even be automated.  So a person could spend their personal currency by converting it through the network into the personal currency of the person they want to pay.

That *is* Ripple, and not new. See for example the various distributed commit protocols on the Ripple wiki, and FT's own description of how to implement Ripple within OT, which almost exactly matches the above:


Apostolis Xekoukoulotakis

Why do you assume that people only care about themselves? What is the gain of someone writing a wikipedia article? People have the…
to open-transactions
From:
Why do you assume that people only care about themselves?
What is the gain of someone writing a wikipedia article?

People have the ability to be and act however they want.
Capitalism on the other hand and the rules of its game transform the human behaviour toward selfishness.

Capitalism isnt an efficient system either. Problems that affect the society in general cannot be solved because noone wants to give money.
The deterioration of the state of the environment will be more costly than proactively protecting it.
A working force that doesnt have health insurance reduces their productivity so that the cost of the insurance system is smaller than the money lost because of reduced productivity.

As you can see, if society in general were to choose, it would choose sane, cost reductive measures.
But there is no such economic agent in Capitalism. 

We can have both accountability(selfishness) and care for others.

You can improve ripple to add multiple currency abilities and whatever else you want.

2012/11/30 Vincent <DELETED>

I can see that FT's description of currency exchange closely matches my own concept.

We have a difference of ideology, however.  Your ideology is a communist ideology applied to credit: "to each according to his need (of credit), from each according to his ability (to supply credit)".  Why would any wealthy businessman or experienced trader want to participate in a Ripple network?  They don't need credit, thus your statement that they "profit from the credit provided to them by the network" does not apply.  Such
 people would be primarily suppliers of credit.  The system needs to be profitable for such people.  It needs to be profitable for people who don't share your ideology and for people whose only motive is their own profit.  Communism works in small communities where people share the same ideology.  Capitalism works globally among people with widely different ideologies.

Bitcoin has succeeded so far because it doesn't care about anybody's ideology, and it provides incentive for those motivated only by profit.

How the transactions get routed does matter.  If I don't know how transactions get routed then the system lacks transparency. How transactions get routed affects somebody's liabilities, profits and losses.

FT's concept if implemented with trading exchanges with trading books, and least cost routing, would become the same as mine.  The link provided does not mention anything about trading exchanges with order books and least cost routing.  It appears to assume fixed ratios of exchange and arbitrary routing the same as Ripple.

If you use trading exchanges, then the route will not be arbitrary, there will be a route which gets the best exchange rate.  Everybody along the route will profit.  And a currency can be a stock, a futures contract, an option, whatever.  Thus the trading exchanges for the whole financial system would be integrated seamlessly into the currency system.   All the stocks of the NYSE, the NASDAQ, etc could trade as currencies in this system.  That can only happen if the links between currencies are trading exchanges.  It won't happen if the links are fixed ratios with arbitrary routing.

- Vincent



--- On Fri, 11/30/12, Mark Friedenbach <DELETED> wrote:

From: Mark Friedenbach <DELETED>
Subject: Re: Fwd: services and costs
Date: Friday, November 30, 2012, 2:05 AM


On Thu, Nov 29, 2012 at 9:47 PM, Vincent <DELETED> wrote:
It appears to me that a person who has a transaction routed through them assumes risk with no profit to offset that risk.

They profit from the access to credit that comes with participating in the Ripple network.



Also, if a transaction has multiple routes to choose from, how does the route get chosen?  I don't understand that.

Depends on the implementation because really it doesn't matter, so long as a choice is made. I think on current implementations the Ripple server simply makes a choice.
I have a P2P currency concept which you might compare to Ripple, but I developed it independently of Ripple.  Every person can issue their own currency using whatever units they want, backed by whatever they want, and the links between currencies are trading exchanges, with an order book of waiting bids and asks.  The key to understand this is that a buy offer for a person's currency on a trading exchange is the exact same thing as giving them credit.  If I am willing to buy your currency, my purchase of it gives you credit.  Imagine a P2P network where the nodes are personal currencies, and all of the links are trading exchanges between those currencies.  A least cost route can be found to convert any two currencies in the network.  It could even be automated.  So a person could spend their personal currency by converting it through the network into the personal currency of the person they want to pay.

That *is* Ripple, and not new. See for example the various distributed commit protocols on the Ripple wiki, and FT's own description of how to implement Ripple within OT, which almost exactly matches the above:


--





Sincerely yours, 
     Apostolis Xekoukoulotakis"

Source:

Open-Transactions list.
See:  

http://www.open-transactions.com/2012/06/open-transactionscom-via.html "

Source:

http://www.open-transactions.com/2012/12/ot-smart-contracting-law-finance-crypto.html

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1 comment :

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