A Distributed Version of Repugnance as a Constraint on Markets

libertystreeteconomics.newyorkfed.org

27 points·bpolania··4 comments

> Ripple sets the threshold high (80 percent) to provide adequate protection from double spending. But by doing so, it gives a submajority the ability to block transactions that they perceive to be repugnant.

So in the context of an exchange, a small minority could, say, stop short selling or halt the market in a high volatility environment. All this ads liquidity risk which in turn reduces the value of the infrastructure.

"All this ads liquidity risk which in turn reduces the value of the infrastructure."

Completely agree, and here's what's especially interesting about that comment: in the "traditional" (non-Bitcoin/ripple/etc) finance world, it takes an even SMALLER minority to block transactions.

From the perspective of "how many people do you need to piss off before you cease to have liquidity", the worst system on the planet is ye old bank.

In the traditional world, there is a specific minority you can't piss off. But with Ripples, you can't piss of any sufficiently large minority. This is a big difference.

A slight aside: in the first paragraph they mention matching problems. I wish more people in the "sharing economy" world made themselves aware of this.

Most companies in that field seem to behave as if providers are fungible, when instead, the underlying problems they're fixing are matching problems.

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