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From millions of dollars to under a grand: The dramatic fall of the NFT (english.elpais.com)
submitted 7 months ago by to c/technology@lemmy.world
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[–] -5 points 7 months ago (16 children)

Ethereum has the potential to carry real world assets on its chain. Why does an share of stock have to go through a clearing house when it could be an L2 on ethereum? A company having a total of 1 million shares is no different from a L2 coin having a total number of 1 million coins. They can even be fractional too.

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  • [–] 8 points 7 months ago (13 children)

    Literally every cryptocurrency supports this. But if the real world assets can be seized with a court order, then what's the point of a blockchain and not just a legally compliant database?

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  • [–] -1 points 7 months ago* (1 child)

    Bitcoin doesn't support this. It's what is being mirrored, yes. But, Ethereum is kinda like the distributed operating system/network that could/would allow 24 hour trading without having a clearing-house middleman.

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  • [–] -3 points 7 months ago* (7 children)

    The true libertarians and anarchists in the room would call out the fact that they are attempting to build a world where governments don't run courts because governments don't exist and that all courts would be arbitration courts and decentralized and run by the community. If I have a problem with you, I tell my arbitrator about it, and my arbitrator tells you that I have a problem with you. If you don't like my arbitrator, then you choose your own arbitrator, and if I don't like the arbitrator you choose, then the arbitrators choose a third party arbitrator that they both agree on, and we agree to be bound by what that arbitrator says.

    Edit: If you are willing to watch a 22 minute video, this might be of interest to you.

    https://www.youtube.com/watch?v=fZ0Qkhnt6bQ

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  • [–] 2 points 7 months ago (4 children)

    If your organization is decentralized, then its assets can't be seized by a court order. For example, darknet market admins (arbitrators) and their drug dealers don't even know who each other are. They've had a polycentric legal system for years.

    But corporate stock remains centralized. They have a known headquarters with a known board of trustees. Their assets aren't carried on-chain; only some guy's promise to those assets.

    My point is that an anarchist economy needs to be built from the ground up, circumventing the state's legal system. Slapping a blockchain on top of an already centralized system won't make it decentralized and thus provides no benefit.

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  • [–] 2 points 7 months ago (2 children)

    Oh, absolutely. But that's because the way we've always done the stock market is through centralized systems. If a company were to be formed today and only ever issue their stock tokens on a decentralized system such as Ethereum, then the Ethereum system would be the final arbiter of who does and does not have shares in that company.

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  • [–] 2 points 7 months ago (1 child)

    Let's say I open a factory and issue shares on Ethereum. Then for whatever reason a judge orders the company to give up some shares. The shareholders, safely in cypherspace, ignore that court order. And then the state seizes the whole factory. In practice the original shares no longer mean anything.

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  • [–] 2 points 7 months ago

    Yeah, blockchain adds nothing to an existing economy. It could be useful as a means of distributed public records between anarchist communities, but it is documentation, not ownership. Ownership is an extension of political power and grows from the same barrel of a gun

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  • [–] 2 points 7 months ago (1 child)

    What's the point of an arbirator when there's no means to enforce compliance with their decision? And what could that system actually be? Functionally, it'd be identical to a government.

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  • [–] 0 points 7 months ago

    I'm assuming you didn't watch the video, because it did discuss that.

    Alice, who is a subscriber of Dawn Defense, was murdered by Bill, who is a subscriber of Tanner Justice. Dawn Defense is pro-death penalty for murderers and Tanner Justice is not. Therefore, each company does a calculation to figure out how many users and how much revenue they will lose if their side is not upheld and the side that is likely to lose more pays the other side to stand down. In the case of the video, the assumption is that if Dawn Defense loses, they will lose one million currency units worth of customers, where if Tanner Justice loses, they will lose 500,000 currency units. So, Dawn Defense pays Tanner Justice 800,000 currency units to stand down, which is more than the 500,000 they would have lost, and less than the 1 million that Dawn would lose if they weren't able to enforce the death penalty on Bill.

    These stand-down arrangements would be known beforehand, and therefore, when Bill subscribes to Tanner Justice, he would be informed that if he murders a client of dawn defense, that he will not be protected from the death penalty.

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  • [–] 3 points 7 months ago* (1 child)

    There is no provable way to show that any claim of ownership on Ethereum is legitimate, unless that person has some real-world proof of ownership, in which case the Ethereum link adds no value. It's just another step with another middleman.

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  • [–] 1 point 7 months ago

    In today's world, we are moving from analog systems to digital systems, and therefore, physical proof of ownership supersedes electronic proof of ownership.

    If a company is digital native and issues their shares on a blockchain without ever issuing any kind of analog shares, then the electronic proof would supersede the physical proof, no matter what happened.

    Say Alice has a hair salon that's called Alice's hair salon, and she issues one million tokens on the Ethereum blockchain, and each token represents one one millionth of the company, Alice's hair salon. Well, since she never issued any stock on the analog systems, the Ethereum system would be the final arbiter of who does and does not own any of those Alice's hair salon tokens.

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