[notahacker]

The "social stack" is what actually makes finance's "application layer" happen, because it turns out that blockchains can't actually enforce delivery of barrels of oil or sue ICO recipient for spending their proceeds on coke and hookers, and things like hiring and receiving goods and valuing insurance losses all involve counterparties.

Much as you would like to personalise this debate, it's not about my level of agreement with straw gatekeepers. It's about the simple fact the "application layer" doesn't exist. You're not getting your mortgage or pension from a blockchain.

[MrPatan]

Nobody is saying delivery of assets is done on chain.

That's a strawman you've skewered twice already, well done.

What we're saying is: a lot of the low level infrastructure used now in finance (brokers! Dealers! Clearinghouses!) is easily replaced by some code, once you have trustless decentralized computers. Which we do now.

Then your oil barrel market is just some code nobody needs to trust, and yes, the "last mile" of it still needs "guys with guns" infra. So what? We made a part of that market freer and fairer.

Cool, isn't it?

[notahacker]

You started off asking "why do you still want the guys with guns solution" and insisting that blockchain provided a "trustless, decentralized" solution to the problems financial markets purport to solve.

So I don't think it's a "straw man" to point out the answer to your question is market participants want promises actually delivered upon which you now admit is entirely dependent on the "guys with guns" (and/or trust). By extension, blockchains don't actually provide a trustless or decentralized solution to the actual problems of finance. Actually knowing that your counterparty will send you oil isn't some unimportant detail of the oil barrel market which can be handwaved away, it's considerably more important than the implementation detail of the transaction record updates or whether brokers are involved.

You've moved more goalposts in this discussion than crypto has moved in the useful bits of finance.

[MrPatan]

No. Here's the quote I responded to originally, slightly expanded for your convenience and ease of use:

> Similarly, building a somewhat straighter fibre (and then microwave towers) from Chicago to NY has no societal benefit I can discern. (But the solution to that is fintech and regulation, not crypto.)

I've always been talking about technical infrastructure, you're the one who brought up delivery of oil barrels.

If you think this bit is not important enough that's fine. Feel free not to get involved.

[notahacker]

If you're purely focused on the GP's suggestion that the extra liquidity permitted by HFT might not generate enough benefits to the entities engaging in productive activity to warrant trading-specific infrastructure like dedicated fibre lines, you shouldn't even have needed to ask why he didn't consider this to be solved by a tech stack that uses the electricity consumption of a medium sized country to allow people to traded purely speculative synthetic assets :D (even a blockchain not computationally inefficient by design wouldn't stop arms races to be first in line to accept the trade, or the incentives to do so existing. At least regulators have the theoretical power to make life difficult for certain types of market participant)

The GP's wider point was the purpose of the finance industry is to facilitate real world productive activity. If the "decentralised" bit is isolated from that, you haven't got a decentralised alternative to financial markets.

[Breza]

All those levels of infrastructure already run on code. There's no tech reason that Robinhood can't sell you stock that it holds. The FTX situation shows you why they aren't allowed to do that.