Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by mullingitover on Monday June 21, 2021 @02:40PM
(#27582353)
> Distributed Betting Markets (Transaction locked up depending on outcome of a sports game) Distributed Derivatives (financial instruments locked up based on price/date) Distributed Insurance (If I'm a farmer, I could put money up based on rainfall, price of wheat, or other metrics).
Don't the executions of these contracts still depend on a (centralized) outside source of information which pretty much wrecks the decentralized aspect of the network?
Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by thebean11 on Monday June 21, 2021 @02:53PM
(#27582604)
No, the outcome is decided by the consensus of betting market participants, with mechanisms to "punish" liars/bad oracles.
Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by mullingitover on Monday June 21, 2021 @03:07PM
(#27582850)
Reading through this, I don't see any guarantee that your contract would be safe from bad oracles if the stakes are high enough and the attacker has adequate resources. If your attack is successful, you not only get steal the amount at stake in the contract, you steal what the good oracles have staked, and all with zero recourse.
Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by thebean11 on Monday June 21, 2021 @03:38PM
(#27583334)
Yes, there is not a guarantee, but the goal of these consensus mechanisms is to make the cost of attack greater than the reward.
In order for a successful attack, I believe you'd need to control a very large portion of all available REP. If your attack is successful, the value of your REP would likely go down (as the market is no longer trusted) so there's likely no economic incentive to do such an attack.
Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by tfehring on Monday June 21, 2021 @03:00PM
(#27582740)
Can't speak to the others but insurance couldn't really work that way and compete on price with traditional insurers. The only way for the "policyholder" to be confident that an untrusted "insurer" will have the money to pay their claim is if the smart contract forces the "insurer" to fully collateralize it - e.g., to fund a trust or escrow account with the maximum amount of money that it could possibly be required to pay out in claims. For insurance to be attractive as a seller, you need to pool enough risks that you can generally hold a reserve that's much lower than the maximum possible loss amount because otherwise you need too much capital to fund it. You can get around this to some extent with reinsurance, but that's not eliminating risk pooling, it's just shifting it to a different balance sheet.
Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by bob33212 on Monday June 21, 2021 @02:42PM
(#27582411)
In theory crypto could cure cancer by funding a promising researcher via micro payments. But until that actually happens, crypto's use case is ransomware, buying drugs online, and being used as a way to "invest" in coins that have no cashflow.
Re:Doge Branded as Ponzi by Federal Reserve Bank of Minneapo...
by thebean11 on Monday June 21, 2021 @02:54PM
(#27582643)
Distributed prediction markets (in the post you replied to) already exist, it's not theoretical
Distributed Betting Markets (Transaction locked up depending on outcome of a sports game) Distributed Derivatives (financial instruments locked up based on price/date) Distributed Insurance (If I'm a farmer, I could put money up based on rainfall, price of wheat, or other metrics).
These aren't simpler, but they can be cheaper. Think insurance at a true market rate based on your specific details. No paying for advertising, or other cohorts with different risk profiles bundled.
Not saying that there aren't problems to be solved, or that it's worth it's current value, but there are some pretty cool stuff that you can do with it if they tech gets good enough. It's like an electric car, pretty terrible in a lot of situations previously, but if someone is able to come up with a good enough battery, the game changes.