Comment by tkfu | Hacker News Reader

Comment by tkfu | Hacker News Reader

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You're being willfully obtuse here.

> What non-blockchain solution solves the double spend problem when transferring digital assets in a peer-to-peer network?

Literally any trusted central authority or database.

> Or, in the case of Ethereum, providing solutions to general-purpose decentralized computation and state (rather than only peer-to-peer payments) with such strong public consensus?

You haven't actually stated a problem here, you've described a solution in search of a problem.

> User A holds digital asset X (such as a valuable domain name "xyz.eth")

You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.

As usual, “just trust Amazon or Google” which is centrally owned, and not peer-to-peer (distributed/decentralized), and not an answer to my question.

> You're mentioning a .eth domain name being bought with cryptocurrency as an example, which is entirely circular. "Hurr durr, betcha can't swap one blockchain thing (.eth domain) for another blockchain thing (cryptocurrency tokens) without using a blockchain" isn't as strong an argument as you think it is. If we were talking about a .com domain name, no blockchain in the world will help you with that transaction.

Your argument feels in bad faith, but I’ll bite: “.eth” and ENS is a valuable construct for those transacting in the network. These assets do have clear market value, even if you personally feel they shouldn’t.

So how do you coordinate this so called decentralized transaction? Over the internet through SSL certs that are centrally signed? You're still putting blind trust in something.

Transactions are broadcast with RPC. Once accepted and written to the ledger (ie: after a number of confirmations), you can verify the state of the transaction via your own local node.

It is impossible to completely remove the need for trust. We trust that our computers work as expected, that our modems and routers are not compromised, that RPC endpoints and software is running as expected, that the internet infrastructure in our country is sending messages correctly.

The blockchain isn’t a catch-all solution to our need to trust things in life. But it does allow us to, say, record and alter global state without placing it in the control of a single centralized intermediary.

You trust the private companies/individuals making your hardware and protecting your communications but suddenly trusting a private escrow is heresy? Seems like a weird double standard.

> record and alter global state without placing it in the control of a single centralized intermediary

Paxos solved this in the 90s

A centralized escrow is not heresy; it involves a different set of trade-offs. In some cases the decentralized escrow might be more appealing. To go back to my original example of a domain transfer, the exchange can occur in a matter of seconds or minutes within a blockchain, rather than 1 to 20 business days with escrow.com.

Never heard of Paxos, if it could achieve the same problems I've outlined earlier, I'd be curious to see it implemented.

The 20 days delay is a problem with escrow.com specifically. Domain sales are a trivially automated process that should be instant e.g. literally any domain registrar.

Paxos family of algorithms solves distributed state replication. It is the backbone of the database engines that already power most of the internet.

https://en.wikipedia.org/wiki/Paxos_(computer_science)

Namecheap: 10% commission, only works with Namecheap-registered domains, the exchange may take up to 96 hours, and then 5 days later you can withdraw these funds to PayPal (which will incur additional fees).

Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.

Looking at Paxos: it is permissioned, lacks Sybil protection, uses leader-based rather than peer-to-peer data replication, and seems limited in how many nodes it can support. This isn't to say it's useless, but it clearly aims to solve a different set of problems than Nakamoto's consensus mechanism (and, more generally, cryptocurrency networks).

> Namecheap: 10% commission, only works with Namecheap-registered domains, the exchange may take up to 96 hours, and then 5 days later you can withdraw these funds to PayPal (which will incur additional fees).

> Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.

You're not comparing the same products. Namecheap probably doesn't sell .tez, and you probably cannot buy a .com via Tezos. There are big differences between TLDs, I didn't even know about .tez websites until today. If I receive a .xyz link I tend to think it's a scam. If I had received a .tez link before today, I would have thought it was just a weird typo.

Beyond this, assuming equivalent products, there's no technical reason for the Tezos solution to be superior. Consider this: whatever Tezos is doing, Namecheap could do the same using the same technology (they don't have tougher requirements, maybe short of regulations, but I don't think you're talking about regulation arbitrage here anyway). They could just use a blockchain but be the sole entity allowed to interact with it.

Namecheap can get away with higher prices, so they do (it's a business). On the other hand many blockchain-based systems are highly subsidized (I don't know if that's the case for the Tezos domain system), making direct comparisons difficult.

Sure, they are apples and oranges. Namecheap will likely never be able to match these settlement times, 0-2.5% fees, data privacy, interoperability etc.

If they decide to one day sell crypto domains like ‘.eth’ and ‘.tez’, they will be entering an extremely competitive market; and compete against marketplaces that trade any valid NFT (including domains) like Objkt.com and OpenSea, with commissions around 2.5%, no need for data sharing, and instant settlements. They would also be competing against custom contracts and OSS tools which may take no fees, and other directly peer-to-peer transactions like I outlined in my OP.

The point I’m trying to illustrate here is that there are reasons for choosing a decentralized and peer-to-peer system of digital assets & ownership over a purely centralized system, and blockchain is currently an ideal tech for this application.

Again, whatever technical advantage Tezos might have in terms of efficiency, nothing prevents Namecheap from using a database instead of a blockchain and reaching higher efficiency.

You're assuming that the fees you pay Namecheap are representative of their costs. You could also say that Apple will never be able to compete with mid-range Android phones because iPhones are so expensive,. The point of a business is to make money, and the margin represents a big share of the price, so you can't just forget about it. The price / fees don't necessarily reflect anything about the business costs, especially in tech.

Blockchain-based solutions are usually cheap because they're either subsidized (like Uber was very cheap because it was just not profitable), because they offer a strictly worse product (almost no company wants a .tez) or a combination of both.

Nothing is stopping a peer-to-peer network from having a central database administered by the a randomly selected group of peers, for example.

The bigger issues in pure decentralized and distributed networks in finance are around KYC/CFT etc. Who ensures compliance if there is no control about flow of funds, for example.

What you are suggesting sounds like a consensus mechanism. How do you safely choose which peers to assign this responsibility? How do you ensure it is resistant to a Sybil attack?

Suddenly the answers begin to look a lot like Proof of Work or Proof of Stake.

The answer could or could not look like that. In practice people have done this many times throughout history totally without blockchains (or computers) for that matter (e.g., money transfer systems, exchanges, etc.).

If this has been done many times in a way that solves my original question (decentralized escrow), there should be some concrete examples you can point to besides blockchain/crypto systems.

Obviously, non-digital assets, but does the Hawala system fit your analog version for decentralized escrow? Early stock exchanges were sometimes created to get around existing third parties ("auctioneers") and allow the brokers to directly transact p2p. What about a credit coop (it is central, but it is also owned by all the users)?

Edit: at it's most basic, reliable coinage was kind of way to create reliable p2p abilities without risk of "double spend". Once the coins were out there, central authority didn't matter so much, i.e., "good" coins were used fair and wide beyond the coining state (e.g., Athenian tetradrachma). Funny add. in some areas people actually allow temporary double spend (so that can be another solution)...

Perhaps, but my original question was around digital assets across the internet (and ideally on a global scale). If you are trading a plush toy for a coconut the "atomic swap" could be done with each party's two hands.

In the generic form, blockchain/DLT cannot solve the double spend there either. Selling a picture for a token does not magically delete all copies or makes it impossible for me to sell it again (yes, someone could look in some blockchain, but that might not even deter another buyer - even fake goods trade).

Basically, for on-chain assets, a blockchain solves double spend and also ensures that on-chain funds/assets are correctly delivered (malicious attacks aside). This also exists outside of blockchains, for example in payment vs payment settlement in FX. Banks created CLS precisely to avoid having one part of an FX transaction settle while the other was still outstanding - so other ecosystems with immaterial goods and risky settlement found other solutions/created their own "middle man mechanic".

> Literally any trusted central authority or database.

But they said peer-to-peer network.

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