Hacker News Reader

Comment by andreasklinger | Hacker News Reader

Decentralized systems allow you to formalize market dynamics. Eg how selling/providing works. Through this you can create marketplaces to which everyone can connect to but nobody can leverage their own position to change the rules.

A (naive [in details] weak) example i regularly use is electricity:

Imagine you own solar roof panels and produce more electricity than you need. You want to sell it back. But you want to sell it at the highest possible price to the best payer.

The centralized concept is that you sell it to your main provider and hope they pay the best price (or that your are able to move cheaply/quickly enough). Or that you sell it to a intermediary (or price-comparison service) that hopefully has the lowest rate (or that your are able to move cheaply/quickly enough).

The decentralized approach to this is to announce the sale on the network/market and pick the best offer.

View on HN

Electricity marketplace is a good example and is commonly mentioned as a killer-app for blockchain technologies. But what technology would you use to implement this marketplace?

Would you use a public, permissionless blockchain like Ethereum or should we use a private blockchain? There are private blockchains like JP Morgan Quorum (https://github.com/jpmorganchase/quorum) that is based on Ethereum software and allows to have >10K transactions per second. These private blockchains use different consensus methods that are much less decentralized than public Ethereum, all participants are known, and access to the network is restricted.

Would a private blockchain be a better fit in this case? If you would a public blockchain, could you elaborate why?

for anything that aims to be the definitive market for an asset it would try to make it (as) public (as possible/useful).

the technical details (eg performance) is almost it's own discussion imo - there are people who are better experienced/educated to answer it fully qualified.

With regard to stuff such as decentralisation of electricity I find it an interesting topic to try and formalise a method of determining how to support all the necessary infrastructure.

For example, a flat tax on transactions would likely not work well. Alternatively could you base the tax on the regions or even the specific routes taken to transmit the power.

With that, if you were basing fees on the routing, obviously rural and long distance routing would be penalised. How does one compensate for that and guarantee that low value infrastructure(rural) is properly maintained? Additionally, how would such a system address determining new infrastructure additions?

this might be a too complex topic to discuss properly here

imo you address two things here very well

- who pays for infrastructure

- how do you do governance

imo the second one could be solved if you decided how you want to do the first one.

> The decentralized approach to this is to announce the sale on the network/market and pick the best offer

It seems that we already have similar marketplaces implemented in a centralized fashion, e.g., Nasdaq. It allows to perform price discovery and does not force you to see to a specific party.

Do we really need to build a decentralized marketplace?

Centralized marketplaces / price comparison services / middle men etc exist and do a good job

But very often they can't do the optimal prices or all the inventory - eg stock not listed on nasdaq - so it comes down to "are you able to move quickly/cheaply" (and/or is the inventory able to move quickly/cheaply)

> But very often they can't do the optimal prices

Are there any reasons why a centralized marketplace are worth in price discovery?

> eg stock not listed on nasdaq

I guess if a stock is not listed on Nasdaq it either listed somewhere else or there are some (probably reasonable) legal restrictions that prevent it from being listed.

Reply on news.ycombinator.com