Topic: [XMR] Monero - A secure, private, untraceable cryptocurrency - page 1193. (Read 4670643 times)

The last we heard of it:


And

my thoughts, for whatever they're worth:

this whole multisig / escrow thing - isn't it possible to create an autonomous 3rd party?

buyer buys something, sends XMR to autonomous 3rd party (ATP).
buyer receives thing, notifies ATP that item is good
ATP sends funds to seller

ATP funds can be distributed to special wallets of network participants (wallets under control of ATP).

Aspects of this concept (decentralized autonomous reserve) are outlined in the DAFne thread. The OP has become thick. My fault. I ramble.
https://bitcointalksearch.org/topic/decentralized-lending-protocol-network-881888

it would be possible for the community to vote if a dispute occurs to control the ATP.

this might utilize a sister blockchain.

edited to add: sorry its brief, i gotta run to work.

Even bitcoin's OpenBazaar will have abysmal volume let alone XMR's version. Centralized websites will remain the hotbeds of commerce.

Source? Why?

Does anyone have more info on XMR multisig? I only find requests for more info, but no definitive statements. Is anyone working on this at all, even on a theoretical level?

i think you are missing the point of my post

multisig is not goin' to happen

it seems escrow/multisig is a good tool to bootstrap seller's reputation but is not really necessary afterwards when the seller is well established.
this is an interesting point of view - it would mean that openbazaar can use such seller bootstrapping with multisig/escrow using any crypto and than let buyers use monero simply out of convenience.

People who negotiate large, long-term, international contracts in mainstream currencies like USD/EUR/RUB/CNY need to buy and sell options to hedge against volatility as well. Every currency deals with volatility. Smaller currencies simply have to deal with it more.

As long as people/merchants are concerned with getting a crypto converted to fiat the crypto world will never go mainstream. It is unfortunate that people do not see what crypto is really for, a replacement to fiat, not a way to collect more fiat.

No, my conclusion about Openbazaar/Freebazaar is that it's never going to have any significant use (even with bitcoin) and it would be a very good idea not to get XMR involved with it at all.

The suggestion is completely separate. I'm going to delete it from that post and post separately about that.

So you suggest we make sure to have an easy hedging solution by the time FreeBazaar is finished (a finish-to-finish dependancy, as it is called in projec management)? Am I reading it right? If yes, I consider this requires diverting financing and energy to the search of such tool. Do you have any lead?

There is a connected issue lurking here that is going to pose a problem for Freebazaar. It's volatility. If I sold something on Monero Freebazaar two days ago, and the XMR was held in escrow, then my profit margin (calculated in the currency that my costs are priced in), would've almost certainly been erased by XMR/BTC's plunge. Users don't have a way to hedge against Monero's volatility.

With bitcoin, there are well-developed margin trading and options trading platforms now. If a merchant is selling 2 BTC worth of merchandise on Freebazaar, and 2 BTC is put in escrow, he can immediately borrow 2 BTC on Bitfinex and sell them for his desired currency. If bitcoin's price plummets, he takes no risk. When the 2 BTC are released from escrow, he uses those BTC to cover the short. Of course, this may be complicated and time consuming from the merchant's perspective. First, it requires the merchant to keep some USD on Bitfinex as collateral in order to borrow the BTC. Money that will be sitting there doing nothing, which is an opportunity cost. Second, borrowing the BTC also comes at a cost in the form of interest. Third, selling the BTC incurs fees. Fourth, there is counter-party risk in leaving funds on BitFinex. So hedging comes at a cost.

Let's go back to the basics. What do we want out a customer-merchant transaction:

We want (at least):
1) Security for both parties
2) Low costs for both parties
3) Convenience

But, like Zooko's triangle, we are finding it difficult to satisfy all three at the same time.

If we make the customer safe by using escrow, the merchant's costs go way up due to volatility.
If we lower the merchant's costs by letting him get paid upfront, the customer's security goes way down.
If we tell the merchant to go on Bitfinex and do short sales every time a customer escrows funds, that is inconvenient and costly as well.

So what is the market's solution?

1. In bitcoin's normal clearnet marketplaces, the customer often simply forgoes any consumer protections such as escrow and trusts the merchant. He trusts Dell. Dell has a long history, a solid return policy, and there's little risk. In an extreme scenario involving a very large order, the customer can sue Dell in court and they will likely arrive at a settlement. This is a reasonable situation, especially if the merchant gives the customer a discount in exchange for the costs that the merchant will save (no charge-back fraud). The customer is happy to receive the discount. The merchant is also happy, as he can utilize a payment processor such as Bitpay or Coinbase to immediately convert some or all of his payment into government fiat. He no longer has to deal with fraud.

2. If you look at bitcoin's dark net marketplaces, the market's solution is the same. Customers voluntarily give up escrow and pay anonymous merchants upfront. These merchants offer discounts in exchange. This is known as "FE" (Finalize Early).  
Finalize early: This is the release of escrow funds before the seller knows that the conditions of the contract have been met. This is used to reduce seller risk from BTC price fluctuation, and against market shutdown. This is also used to scam buyers as after the escrow has been released there is no recourse for the buyer if the seller does not deliver on their promises. As you can imagine, customers are frequently scammed after they FE.

The prevalence of FE in anonymous darknet markets means that customers are not using multi-sig or escrow even when it is available and offered by default.

To bring it all back to XMR Freebazaar, my conclusion is thus:

The market has already rejected the escrow approach (which is what Freebazaar uses) in both the clearnet and the darknet markets. Escrowed cryptocurrency is far too volatile, making costs for merchants prohibitively high. Even in the world of government fiat currencies, where volatility is not a problem, the escrow approach is not often used except in special circumstances. It is used in far less than 1% of online transactions. The market consistently settles on security-imperfect solutions in exchange for speed and convenience. We can sit here and call these customers stupid for giving up their security, and we can create high-security, decentralized platforms such as Freebazaar to use Monero on, but this is simply not what people want. So it's not going to be used.

260 or 2600 does not really matter. Did some research since this is a new toppic for me. The experts come to this conclusion

Not every bit of buying and selling needs to be anonymous (nor do I necessarily want people rifling through my finances just because I happen to transact with them non-anonymously), but if you do want to run a p2p marketplace anonymously, do it as a hidden service on Tor or i2p.

Perhaps someday there will be some tools/packages that make this easier to set up, or support for it built into the OB/FB code itself (as we plan to do with the Monero node and i2p). I wouldn't be surprised.

Given the above, why would XMR, a coin concerned with privacy and anonymity, build anything on top of OB?  Am I missing something?

Like I said before I don't want to start an off-topic conversation especially about a coin I have no involvement in and don't follow closely at all.

I don't know what's taking him so long. They should get other people not involved to review as well though definitely. I've been saying that from the beginning.

But not publicly documented - and this what we want.
TheKoziTwo, as far as I remember, Poloniex got massive inspiration from your code at cryptonote.exchange.to for inclusion in Poloniex (and swaphole too). Could you prepare some documentation, that the community would happily polish?

This backporting would be indeed a large part of the PR (as in Public Relations) to expect outside of the existing community.

Now that is an attitude you don't see in many coins!

I see no fundamental problem with bugs being fixed and ultimately being pulled upstream to OB. It would be unconscionable of Atrides to do it any other way - the OB developers have, after all, put in the effort to give him a base from which to work.