[nbouscal]

I'm out of my league here technically, but I'm having a hard time seeing how your critiques don't apply to the entire market economy just as well.

The collective actions of all participants result in an effective price model, the causes of which are unknown to any of its participants and likely unknowable to any one human mind, and which changes over time in ways that are highly opaque.

In the market at large, participants certainly don't need to understand the global ramifications of their actions, only the local ones. I don't see why that isn't the case here as well.

(For what it's worth I want to point out that like Walter, I really enjoyed reading this discussion, even if much of it is over my head.)

[kanzure]

> In the market at large, participants certainly don't need to understand the global ramifications of their actions, only the local ones. I don't see why that isn't the case here as well.

The primary reason why that does not apply here is because nobody is selling "the market at large" to you as a cryptographically-secure decentralized consensus system. And besides, those ledgers are edited all the time by Authorities; it's irrelevant to this topic.

Edit: you are attempting to reason by analogy about a pricing system, and then trying to apply it to proof-of-work consensus? May I ask why?

[nbouscal]

No, the market economy is sold as a surplus-maximizing decentralized price system. I was attempting to reason by analogy. You've pointed to a difference between the two, but haven't given an explanation of why that difference is sufficient reason for the analogy to break. I'm happy to believe that it is, but am as yet uneducated as to why.

Edit in response to your edit: It just occurred to me that most of the critiques that nullc was making were in very direct correspondence to critiques one could make of the price system. I have no idea if this analogy is useful, but it seemed awfully coincidental.

[nullc]

Markets are frequently manipulated and distorted, they fail and fault and such.

But they're not keeping consensus ledgers for limited supply cryptocurrencies. Any of these failures or faults can allow a coin to be spent twice (or other mutually excluded transaction) with parties that have different views of the system, the result-- and any transaction which is casually depended on the conflict-- can never be part of a common system.

So it's like someone manipulates the market economy to convince you to buy a cheeseburger most other parties think they sold to someone else, and now your hand cannot interact with your neighbor's door because your hand contains atoms that-- as far as your neighbor's door is concerned-- aren't part of your hand but are instead part of my foot.

Markets are a tool. They have their applications and limitations, building the security of a cryptocurrency in an adversarial environment out of them sounds like a plan for failure. No less than using a cryptosystem in a place where you really needed a market may not give great results.

But you don't have to take my word for it, the prior consensus model in Stellar _already_ faulted, all on its own when, the requirement for the trust topology was violated. This fault wasn't a surprise, I (and others) called it out years before-- but the vulnerability of the system was publicly ignored by Stellar's creators while they ran Ripple and Stellar's advisers (including Mazieres, who was an adviser listed on the Stellar site on day one) even as they facilitated the sale of their ripple-reboot asset to the general public. It was not acknowledged until it knocked their system out. The improved consensus may better confines the failure domain, but retains the property that the safety of the consensus is largely external and depends on particular topological constraints without a procedure that provides any assurance the constraints are likely to be met.

Another response to me argues that it will probably be fine; but this flys in the face of reason. The same property existed before and it demonstratively wasn't fine.

If you look at the old BCT thread, I was a big fan of the original ripple IOU system, before ripple labs bought the name, and had recommended it as a potentially fruitful area to many people. The original system could potentially have been implemented without any global consensus at all, which was a large part of why I found it interesting-- Global consensus is enormously costly. But functionality like a new cryptocurrency currency for the purpose of funding the company and the integrated non-interactive rippling (which apparently has been largely turned off in ripple now due to other security vulnerabilities) brought back in the global consensus requirement. (The result was that I felt I had to go edit all my old posts to remove my recommendations, since the system was wildly changed to be something else)