
On Settlement Finality - sethbannon
https://blog.ethereum.org/2016/05/09/on-settlement-finality/
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lisper
> First of all, a very important philosophical point to make is that there is
> no system in the world that offers truly 100% settlement finality in the
> literal sense of the term. If share ownership is recorded on a paper
> registry, then it is always possible for the registry to burn down, or for a
> hooligan to run into the registry, draw a “c” in front of every “1” to make
> it look like a “9”, and run out.

This is a disingenuous straw-man argument. Of course _paper_ records can never
offer settlement finality, but a centralized _cryptographic_ system certainly
can (or, at least, it can offer settlement finality with confidence equal to
that of the underlying cryptographic system).

~~~
mhluongo
I think the bigger point is that settlement, at some level, is a social
fiction. Anything in the physical world can be altered or voided through the
use of force. We're talking about ledgers across potentially unstable
economies and governments.

~~~
lisper
> settlement, at some level, is a social fiction

No. This has been true historically, but with the advent of modern
cryptography (and specifically with the invention of secure digital
signatures) it is no longer true (or at least it need no longer be true). And
the folks at Etherium surely know this, which is why the paper ledger argument
is not merely a straw man but also disingenuous.

~~~
mhluongo
Look, I'm a big crypto fan myself. I appreciate what you're saying, but it
doesn't match the real world. Put land grants on the blockchain. Crypto all
you want, but the guys with guns can seize the land next regime change.

What you're saying is only true, AFAIK, for bearer bond type instruments.

~~~
lisper
> the guys with guns can seize the land next regime change.

Sure, violence trumps everything. But if civilization is sufficiently intact
that the concept of "settlement of a financial transaction" is a meaningful
concept, the crypto + a trusted third party can provide it. (Actually, the
third party doesn't even have to be trusted, just agreed upon by all parties.)

> bearer bond type instruments

No, people with guns can steal those too. Violence trumps everything.

~~~
mhluongo
I know bearer bonds can be stolen. What I meant is that the idea of
"ownership" is more complicated than you're admitting.

We can choose to ignore what the crypto says about who owns an underlying
asset. The asset can be seized, destroyed, etc. I mention bearer bonds in this
context because if the value is native to the crypto- as is the case with
digital currencies- settlement is more meaningful.

~~~
lisper
I'm not talking about ownership, I'm talking about settlement finality. While
these two concepts are closely related, they are not the same. Crytography
cannot guarantee ownership. Ultimately force is the only thing that can do
that. But crypto can guarantee settlement finality with a confidence equal to
one's ability to keep a secret key secure.

