
Show HN: A practical credit network implementation - spolu
https://settle.network/posts/intro/?b=3
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profuse99
How is this different than say, bills of exchange (at least an 800 year old
instrument) which are essentially over the counter iou's

Bills of exchange created tons of credit booms and busts throughout history.
How does your system control leverage and make sure nothing "blows up"?

This also seems like it misses the fact that iou's become money. For example,
rather than call in a loan / iou, if the iou is to someone credit worthy, then
traders just trade the iou back and forth

This works a treat until some calls in a loan and there's no cash to back it
up. So again controlling systemic leverage is essential.

The desire to control / smooth boom bust cycles is what ultimately opened the
door for the rise of powerful central banks to be the ultimate backstop. And
even without a central bank, powerful entities arose naturally in the US for
example jp Morgan single handedly backstopped the credit crisis of 1907. Money
and power tend to concentrate in a few hands even without central banks

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spolu
I agree that pure credit networks left with no supervision have been quite bad
historically, but it also appear in our new online world as one of the less
cumbersome way to move value at scale. What changed since then I think is the
amount of information we have on each actor of the credit network which may
lead to other outcomes at scale. Also sub part of the network may be quite
safe, as an example the subnet that allows BTC wallet users to pay on Stripe
merchants with one hop through gdax or any other exchange.

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profuse99
> sub part of the network may be quite safe

true, seems like the more something in finance resembles a utility (like a
pure conduit or short term store of cash / tokens) the safer it seems to be.
altho i guess even those types of agents can get infected if enuf shennanigans
are going on around them (e.g. money market's breaking the buck in 2008-2009)

> BTC wallet users to pay on Stripe merchants with one hop through gdax or any
> other exchange

thats pretty cool. so thats how stripe's btc processing works? dump the btc
for usd (for example) at market via some exchange routing algo? then forward
the fiat so the merch never has to handle any cryptocurrency?

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fiatjaf
I see you've had some relationship with the Stellar[1] currency. Why didn't
you use it to implement Settle, since it has innate capabilities of personal
asset generation that would very much fit the model of issuing personal GBPs,
USDs and so what and then trusting others? (In fact the API is quite the
same.)

[1]: [https://stellar.org/](https://stellar.org/)

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spolu
Very good question. The cost. I wanted to explore/play with a system with free
transactions, which is only achievable interestingly without a global
blockchain to maintain.

