Your comment just feels like typical crypto-booster vague handwaving to me - can you give an actual example of such a situation where the existing third parties that alreayd exist to solve these kind of problems cannot be used? Be concrete.
The typical answer is "just trust a third-party service" which side-steps the constraints in the question.
FWIW there is a variety of reasons you may not want to use a service like escrow.com — they take a cut of the exchange, operate as a for-profit business in a particular US-based jurisdictions, only operate on a limited set of currencies, request personal/private data sharing, and tend to settle the transaction in days, not seconds or minutes.
Even considering only these digital assets, you have an implicit notion of trust. The xyz.eth representation on the Ethereum blockchain is considered valuable because most people think it does represent what people expect to find at xyz.eth. But the ICANN can change this at any moment by adding .eth to https://en.wikipedia.org/wiki/List_of_Internet_top-level_dom... and this will all be gone.
Humans don't live in a blockchain, and blockchain rules don't apply outside of it, so you can't solve this boundary problem. Or rather, you solve it by trusting whoever's in charge of this boundary.
These assets do have market value (despite your own personal feeling on what they “should” be worth) and so users do wish to find ways of interacting with and trading them without an intermediary.
The TLD/ICANN is irrelevant, as “.eth” is a construct for Ethereum clients, not HTTPS clients.
And yes, we build trust of, say, an immutable contract address originated by a human, and continue to trust in it years later because (a) the ledger is incredibly expensive to dismantle and (b) we can cryptographically verify this on our own local node.
Yes I understood where you were going. Just pointing out that the scope of the problem you're solving is way smaller than that of a generic transaction, to the point that it has very little relevance for pretty much anything real.
> The TLD/ICANN is irrelevant, as “.eth” is a construct for Ethereum clients, not HTTPS clients.
What do you think would happen to the value of the xyz.eth domain registered on Ethereum if ICANN decided to have .eth as a TLD and somebody made a website on a xyz.eth reachable natively via mainstream browsers?
This value would decrease, independently of what actually happens on the blockchain. Value doesn't exist independently from the real world.
Trusting a certain smart contract about what's at xyz.eth rather than another is also arbitrary and is a matter of social capital, again something that's not embedded within the blockchain.
It is very easy to come to a shared consensus about what address “mattdesl.eth” points to, because the history is recorded on-chain, and can be verified locally. I’m sure the exact valuation of this domain will go up and down, but as long as the the chain and network continues to exist, the asset holds value within the network, regardless of what occurs with ICANN/TLDs.
AKA trust, so we're not transacting only with "a bunch of people that you do not trust".
Even with "purely digital assets" you have the trouble with oracles that provide you with data and whom you must explicitly trust, and with trust in general (when someone sells you NFTs that may or not be stolen from someone else).
The sum total of "p2p transfer of digital assets and digital state that is recorded on-chain between parties [without intermediaries - d.] that don't trust each other" is a very minuscule part of a very minuscule subset of a very minuscule number of activities that people engage in.
As a simbling comment desctibed it, "the scope of the problem you're solving is way smaller than that of a generic transaction, to the point that it has very little relevance for pretty much anything real."
These discussions often circle back to the notion that USDC, ENS, or any other ERC20 or ERC721 (NFT) is "not real" and therefore this problem is not worthy of study.
And yet nobody has an issue with Namecheap marketplace—a centralized ledger that manages token balances and virtual property exchange (domain names), without these token credits/debits ever being realized in your bank account (i.e. you can transact within their virtual dollar system without withdrawing funds to PayPal).
So,
1. "a very minuscule subset of a very minuscule number of activities that people engage in", to quote myself, and
2. flash loans and "HFT" using speculative virtual tokens, so very much a circular reference
> And yet nobody has an issue with Namecheap marketplace
1. First time I heard of it
2. It doesn't pretend to be "redefining finance", or "being a revolution", or "destroying traditional banking", or whatever other bullcrap comes out of "DeFi" and other crypto
3. Never does it say anything about "virtual dollars", all prices are listed in real money, and the deposits you may make into your account are also real money
If nobody has an issue with it, why are you talking about an alternative to it? What's the benefit? Also note that Namecheap does sell domains that are then recognized by many other entities, it's not a "virtual property" that only leaves within Namecheap's system, it's something you end up owning in the legal world.
The "not real" argument is that you change your trust model as soon as you reach boundaries. Uniswap etc. are trustless, but only up to the point where the assets traded become real and are redeemed outside of the blockchain and some legal entity can actually back up the value of the tokens you traded. One of the selling points of Ethereum is that you don't need to trust anyone; if that's not the case, as we both agree, what's left? Why do you need Uniswap to be trustless when you rely on legal entities to ensure that what you're trading has some non-fictitious value?
You wrote:
> it can be used as a tool to help build social consensus about certain digital state/records without placing the data in control of a single centralized entity
If I try to parse this, you substitute some blockchain to the laws usually ruling relationships between entities, and instead of a judge, you use smart contracts to decide what happens. But again the scope is too limited to be useful, because the real world doesn't live in a blockchain, and the smart contracts will only rule a tiny part of these relationships. That's the token redemption example above.
this entire far-too-long discussion I’ve participated in stemmed from the notion that blockchain’s goals are already better solved by existing solutions. I asked for any that solves peer-to-peer decentralized escrow of a digital asset like a domain name; so far the primary response have been “you don’t need to do that since you can trust [centralized company].”
I’m gonna have to step out of this thread at this point but thanks for the discussion!
It's more like: you can try, but current blockchain-based systems don't succeed at this, because you do end up trusting one or several entities (you wrote "Using a blockchain doesn't mean you no longer need trust."). So even blockchain-based solutions don't solve this problem, and if they don't, it's unclear what benefit they bring, even years after.
In order to solve this in a centralized way, you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper... the third party company which has enormous financial incentive to cheat, on behalf of literally all its customers.
But with distributed ledgers with attestation, the record is unfalsifiable. Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard and the value of the lie is low.
You could achieve this with paper and signatures for each tomato, but it would be a lot of paper.
The flaw is that there is never any way to actually tie the real world to the Blockchain. It's literally impossible. You can have all the fancy mathematically proven Blockchain records you like, but it's just impossible to tie that to an actual tomato or actual pesticide.
We have track and trace system already for crops and they have the same problem: all the paperwork in the world can't prevent someone from, say, weighing a box of tissues instead of the box of cigars you intend to sell. In the end you need to trust someone.
I think this is a holdover of thought from bitcoin. Bitcoin wanted to be a currency for our real world economy. It never became more than that for many reasons. ETH (and now more modern chains) have become more than currencies. They are digital economies. Physical items are foreign goods in a foreign jurisdiction the local economy has little control over.
Even within crypto, different L1's are like foreign economies, and moving assets cross chain is complicated.
And how does blockchain prevent them from lying?
> you need to sign up and authenticate literally all the farm organizations in Europe, and all the competing grocers and transport companies. They all need to sign that they trust the third party service to be a fair and neutral record keeper
Instead they all need to sign up onto the blockchain and lie directly on the blockchain
> Each tomato can have its own blockchain with attested entries from each fertilization, spray, and transporter, all added and attested at the point where lying is hard
Fertilizer put on the record that tomatos are fertilized.
Sprayer put on the blockchain that tomatos were sprayed.
Transporter put on the record that tomatos were transported.
You arrive at the shop to find rotten potatoes instead.
How did blockchain help?
Also note that in this current world that is so horrible according to you you arrive at a shop to find tomatos that have passed all inspections and have been delivered to you. What eaxctly does blockchain intend to solve?
All of human society is based on trust, and it works just fine and has for centuries.
Who would even want to live in a trust less society? That sounds like hell.
Many kinds of fraud attack the fallible human element, not technology. And blockchains cannot change that, as you can see with a glance at crypto news.
I was just trying to point out that trust is not binary.
And just because the technical solution to a technical problem might not be (/isn’t) a good/practical solution to the practical problem that the technical problem is inspired by, doesn’t make interest in the technical solution illegitimate.
You need to trust this other channel through which you're receiving it.
So, I can buy a car from someone I don't trust by using a blockchain, with no need to rely on courts or other third parties?
The more i've tried to hack with smart contracts for physical stuff, the more I realize that's not what it's good for. But if you stop thinking of the physical world, and only think of the digital world, and you use a modern chain (I use avax). It works pretty good. I think there's a few missing pieces of infrastructure still, but the people who "are in it to build, and not for the money" (I include myself in this) stick around to build what I consider the first purely digital economy.
Or, if that's too silly, how do I buy a .com domain name in exchange for some ETH, assuming neither I nor the seller of the domain name trust each other?
These are all digital goods, so can avax help me do it?
This is using the C-Chain. Most games now would use a subnet (which is like a parallel blockchain integrated with the mainnet, but cheaper transactions)
1. Dev Create an ERC721 contract for WoW items
2. Dev Create an ERC20 contract for Final Fantasy 14 money
3. ANYONE can Create a liquidity pair for the Final Fantasy ERC20 with AVAX in one or more of the numerous dex's (since i'm using avax, probably using Trader Joe's)
4. Players Swap Final Fantasy money for AVAX, use AVAX to purchase WOW NFT at any of the numerous NFT marketplaces.
The game should be integrated with the blockchain directly, if I was unclear I apologize. That means, when you open the game, you need to use your wallet to connect to the game. You don't have a "Steam" account or whatever, you have your Web3 identity.
"Transacting digital assets on a particular market (be it a single blockchain or Steam or the WoW Auction House) is a solved problem"
1 of those things is not like the other. The blockchain isn't "a market", it's an economy. An economy with multiple markets... and it's your choice. Steam is a single market, and I have no choices.
If your assets are on the Avalanche blockchain (that's the avax I keep talking about) you can choose to use Trader Joes (https://traderjoexyz.com/trade#/) Pangolin (https://app.pangolin.exchange/#/swap) Sushiswap (https://app.sushi.com/swap) or one of the hundred other choices. If you want to buy items you can use NFT Trade (https://nftrade.com/) Kalao (https://marketplace.kalao.io/) or one of the other hundred choices popping up. It's an economy with choices and competition. Steam is a centralized market that sets the rules, and you either have to take it or leave it. They get to charge a premium for that privledge, and there's no possibility of competition to check that privledge.
Saying you prefer steam, is like saying you'd prefer to buy popcorn from a movie theatre over a grocery store.
But it could just as easily be integrated with a non-blockchain central authority.
And you are still trusting their code to integrate it, so you haven't solved any trust issue. Nothing stops their code from saying "asset transferred" when the asset wasn't actually transferred.
Blockchain solves nothing here. All of this could be accomplished just as well or better without it.
Sure, you could. But then you'e in a feudal arrangement instead of a free economy.
"And you are still trusting their code to integrate it, so you haven't solved any trust issue"
The tokens are trustless, the transaction of those tokens are trustless. How the are tokens used has nothing to do with my ability to freely trade the tokens.
"Blockchain solves nothing here. All of this could be accomplished just as well or better without it."
Well, perhaps you're just not trying to have a good faith discussion. Because I pointed out what it solves, and you keep ignoring it. The blockchain creates the ability to have a free market with many participants without having to be under the control of a central authority. Free markets are unquestionably better, and so I'd say "accomplished just as well or better" is just flat out wrong. A centralized service is not better unless you disagree that a free market economy is superior to feudalism.
The point of the transaction is to use the item, not to own the token. If the item can't be used, then you paid money for nothing (since obviously no one else is going to buy it off you either).
Sure there are countries with no functioning legal systems and extreme levels of corruption but most people affected by that would probably have a hard time using blockchain technologies directly and would have to rely on 3rd parties anyway.