BitLaw - Polycentric Law in Crypto-Space (part 2)

With anonymity what honour have you to lose? The whole thing hinges on reputation and relationship building. You don’t get that by popping in, performing a single interaction and disappearing back into the void. So think about honour in terms of gaining wealth. If you are totally anonymous yes you can do whatever but you are also poorer than a pauper in terms of reputation. Say you wanted to filter out excessive anon attacks on a forum or something. Yes there will be newbies who JUST made their SAFE account and might just find your forum the next day or something but real people would post on the forum, like posts, send messages and generally interact with people, thereby generating reputation and honor one way or another. Someone who just made an account to spam would not do that, post a single message and disapear. Ergo you could either set up the entire forum to only allow people to post who have otherwise aquired a minimum of reputation or set up some kind of temporary post area where newbies can post which gets cleaned out every so often. That way you only have to clean one board instead of the entire forum. Or set it so that the posts of “newbies” only last like 10 days or something. However you want to set it up. Point is low or no reputation acts as a filter. “I don’t know you so I’m not giving you any bisuits. Go sleep in the hayloft.” as opposed to “Oh hey George! 'Sup? C’mon in and have a beer.”

If you had a store or something it would work the same way. If a new user had no reputation then you might only let them buy lower valued items because they’re lower risk of you being scammed/stolen from or otherwise ripped off. If he’s well established as a reputable buyer and seller of goods on the other hand you can trade with him with confidence that he’ll honor deals and pay what’s owed.

In short there would need to be a record keeping app of some kind. Something that recorded one’s reputation with others. Goods and services paid for, people’s impressions, one’s affilitations if one chose to share those, all that kind of thing, you know a reputation system.

You’re saying reputation and anonymity aren’t conflicting goals.
Are there any successful examples of that that you can name?

How much in $ would you agree to lend to the 5th most reputable member of this forum?

It’s easy to sell something even to a thief if the payment is escrowed.
Tell me how that works with buying from and lending money to anonymous users from distant lands.

This is a highly subjective question since it leaves out information like:

Have I gotten to know him personally?

Is he in good standing with other members of the community?

What does he plan to use the money for?

Does he have a good history of utilizing money for other projects?

How much disposable income do I have to spend on such an act?

See what I mean? Just throwing a dollar value out there and comparing it to a reputation place value isn’t an accurate assessment as it doesn’t account for all the variables.

I had said it’s very hard to combine reputation with anonymity, it seems you had said the same (earlier, I misread that sentence).

Of course it can’t work well across the board with anonymity (which prevents you from knowing answers to all those questions).

That’s why I am curious to see how SAFE farmer reputation will matter to farmers in terms of keeping the churn at a bearable rate.

I guess that depends on what you mean by anonymity. I don’t need to know your name, gender, address, phone number or any other such information in order to know your reputation in a particular buying community. If you buys somewhere or sell somewhere and have a decent reputation doing so then your name doesn’t really matter. It’s how you treat people that matters. Do I know you? Do I know you to be trustworthy? Again I don’t need to know your name or info but I do need to know if you are reliable, honest, preferably well mannered and have aligning values. Can I trust you to maintain my privacy? What kind of protocols or apps will we use if any? All these little questions. Details. One doesn’t need to compromise anonymity to generate trust but one does need to build a relationship and reputation.

Imagine it like this. Anonymity is like this huge suit of armor or cloak you wear when you walk into town. You could do all your dealings while wearing that suit and no one could know who you are under it but they would get a feel for you by what you do and how you act. So in essence you would build a character or persona for yourself to act as proxie for your identity. And that character is what people would place trust and reputation in.

If it was so simple, there would be a functioning reputation system that preserves anonymity. There are none.

What treatment? You sell or lend, I buy or borrow. Either I pay on time or not.

Of course not. If you could, you wouldn’t ask the question. I have nothing at stake and I’m anonymous. How could you trust me? Because I said I like Tesla cars, small fury animals and liked 7 of your posts?

The armor example in my context: in the virtual world I can marshal a small cloaked army of 1000 and instruct them to trade with each other. Thousands of transactions every day, no deadbeats, great reputation. If the market where they operate is small (say, 2000 participants), all they need to become reputable is just 1 unit of money ($1, for example). Then one day they all disappear with unpaid debts.

There’s a reason that there is no functioning reputation system for anonymous participants.

You must have horrible customer relations skills if you assume that’s all it takes to run a business. Even on amazon or ebay they have a reputation system going where customers can review products and the good sellers REPLY to those comments. Same with Google Play for that matter. And how do I know if you pay on time or not? You develop reputation with real people.

No you can’t because bots can’t develop relationships with people. As you point out one’s sales ratio alone doesn’t mean anything. It’s only when you combine it with comments from real live human beings and conversations back and forth that it may or may not mean anything. Also as you point out the amount traded matters. So if it’s just 1,000 transactions of $1 with no comments on quality or questions about stock or anything it’s likely to be just a bunch of bots, ie a scam and not a reputable vendor. I tend to value product reviews and comments more than the manufacter’s propaganda. No reviews = faster passover while scanning through products. Imagine the process in your example. No comments, no reviews, no conversations, no relationships, hinky stats, it smells like an automated system.

Okay why do you feel like a real life person can be trusted but an anonymous user cannot?

You can meet a real life person and not know anything about them but their name, and names can be falsified. So you walk up to some vendor on the street or something and know nothing about them. Why wouldn’t they rip you off? Because it’s illegal? There you are implying reputation amongst a community and negetive feedback. “Hey that guy did something bad. Stop him! Expel him!” But an anonymous user can still be part of a community and fear expusion from that community and therefore have something to lose. That same anonymous user can also fear reputation loss among that community as a result of bad behaviour. So what ensures good behaviour is adherance to a community moral code of coduct and/or honor, in short a communal moral code. When one breaks with this code one risks expulsion from the group and risks isolation or the need to find a new group. You can’t trade in isolation.

@Blindsite2k is correct. Every profile and it’s reputation has a context. Reputation isn’t generic. Credit Rating could be built up by someone’s district profile. The person behind that particular profile might be the worst evil that ever existed but they are good for a loan. (I really want to bring up the Lannisters here but that’s not going to help)

They are not conflicting if reputation isn’t free and you’re only concerned with the specific context. Meaning I start with nothing and build my credit rating with a specific profile. When you’re loaning money, you might only care about the credit rating profile if your only interest is interest.

Another way to do it perhaps:
With smart contracts anonymity can be preserved completely I think. A system could be built were you didn’t need to know who you are doing business with at all. To enter into my contract you only have to have a specific number of past contracts you were good on (specific tokens). Anyone who was good on those contracts is fine with me. Once the contract is excited each side receives tokens because they completed it successfully. The next level of contact might require the account holds more tokens to enter into it…

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With a contract/token system you might always run the risk of someone building up tokens so they could do a really high level contact and then not fulfilling that last one. A form of pump and dump. Not sure how to get around that.

If you are selling woolen socks and I send you a pm about where the wool was made and if it was shorn from sheep living a good life or from sheep in some horrid factory farm to which you give no reply that is not good for your business. If you want to sell me a product and I want to ask if there is a return policy or warrenty and again you do not reply promptly that again is not good for your business. There is more to trade than just buying and selling.

I like this but I think this oversimplifies things. Not all business arrangements and interactions are strictly contractual. There’s much to business and developing reputation that goes on before the actual sale and after.

Totally agree, just got me thinking on how this could work, perhaps a bit off-topic.

Also keep in mind that the whole polycentric law thing doesn’t just involve commerce but all human interaction so it needs to be flexible enough for general human interactions. Which is why reputation in general comes into play. It’s not just a tit for tat thing and direct exchange of goods. People don’t really interact with each other in terms of contracts.

Gee you sound like Peter Drucker is hiding behind your alias. I wonder if you ever owned a business.

Yes, and not with anonymous SAFE addresses. How can you not understand that? You said it yourself:

What are you trying to achieve arguing against your own (earlier) statement using a centralized example (Amazon) above?

Thanks for making this example. That’s not P&D but you could say it’s similar - it’s called “Long Con” and I wanted to mention it earlier but didn’t because Blindsite2k is still struggling with very basic concepts and contradicting himself from one comment to another.

No. Every exchange is a contract.

When I buy Coca Cola from a street vendor, what freaking reputation do I need to impress him to sell me a can of Coke? And how long do I need to build that “relationship” before I can quench my thirst? Would 17 hours be enough?
That’s why we have contracts: so that I don’t need to give a crap about his circumstances and he about mine.

Every exchange is a contract. Not every exchange requires reputation or relationship.

But why would you be stupid enough to contract with someone you do not trust!

You trust that the street vendor is selling you coke and not a can of cynanide! Your money is just as good to him if you are dead. Especially if it’s an anonymous exchange and he has no reputation to risk. Which just underlines the point why would you contract with someone with no reputation that therefore you cannot trust?

If he doesn’t give a crap about your circumstances or you about his then what prevents him from killing you while he’s selling you something just for kicks?

My point is not that repution is not important but rather it’s no good to verify one as an entire entity. A background check supposes that one’s entire history can be recorded, that it’s a centralized file as it were. A reputation persona would only be one persona. This would need to be explicitly understood. So that verifying the reputation of one persona could not necesarily insure the moral or ethical veracity of another persona. In short a reputation check of a persona is not comparible to a background check, unless one is suggesting that one’s “real life” that one is doing a background check on is merely just a persona that one develops reputation on. But generally the idea people have about background checks is that if one checks out they can trust them across the board.

Take for instance developing a reputation within a trading community and then making an assumption that person was honest and trying to date them. They are honest in their business dealings because it is profitable for them to do so but they could be a complete liar in personal relationships, or worse a raping murderer serial killer. So there would need to be reputation built in two separate contexts.

To get back to the can of coke example you had earlier. The vendor needs reputaion just to get you to buy the can of coke in the first place. What if he’s charging $2 for a can of sewage water? If he’s getting his product from a supplier of some kind then he needs reputation with his supplier, after all he’s selling their product and affecting THEIR reputation and THEIR profits.

Even when one buys something from a vending machine one trusts the stock is not tainted for horribly expired. One trusts the machine is in working order. One trusts that the food manufacter is not producing something that will kill them (for the most part considering most of the stuff you get out of vending machines is complety unhealthy). And so they are contracting with someone (manufacters, maintainance crews, health inspectors, and so on) they have developed or are extending trust towards.

Because there’s almost nothing at stake.
If I’m buying a can of Coke I am risking $1. The seller could sell cyanide but they’d probably get caught quickly and go to jail.

Also, what I was pointing out is that when I say how much for a can of Coke, and when you said $1, when I then said okay the contract existed. You made an offer and Inaccepted it.
There is no need, and it’s impractical too, to bring lawyers or the government into the whole thing. We have the product, price, payment terms, delivery schedule. The whole contract, without signing anything. The both parties can be illiterate, in fact, and they would still have concluded a completely valid contract.

Not everything requires police and private armies. Most people are reasonable and good. When there is little at stake or the incentives are right, people do the right thing. By cheating someone for $1, with Bitcoin you “taint” you address. Of course it costs nothing to create a new one, but if (say) I have a market where reputation belongs to addresses who’ve traded honestly and successfully then some people will get cheated but soon after that those who haven’t will have a large market share as they will have completed 1, 5, 47 successful trades.
They can still cheat by making one big trade and running away with $100 worth of payment, but for small trades it’s cheaper to take a risk or even keep buying on Amazon or eBay, than to lawyer up.

One of Amazon’s own products is a trusty marketplace, by the way: they control the veracity of reviews, pervent cheating, stop fake products, handle returns, etc. By eliminating Amazon you don’t just eliminate the “middleman” but also trust. For some products and services that matters, for others not. You can have multisig in place of Bitcoin, but who is the third party that takes Amazon’s place? Someone almost certainly less trustworthy than Amazon. And if he or she is also anonymous, it becomes pretty hard to compare Amazon with the Wild West of anonymous P2P (which I like, but also know it’s no Amazon or eBay).

How? How would they get caught if they have nothing at stake? The whole concept of accountability and “getting caught” is based on reputation. If there is no reputation there is no “getting caught.” No reputation = no law = no jail. Also what’s at stake is not only your money but also your health and your life if food is involved. Dude, seriously, make some connections.

Now you seem to be contradicting yourself as you just started this post by saying that if someone sold cynanide in a can of “coke” and killed their customer that they’d go to jail. Isn’t that involving lawyers and government?

True it’s a valid contract but that doesn’t make it a SAFE contract to participate in. It doesn’t insure that either party is reputable. You can partipate in a parfectly valid contract with a con artist and get sold a rubber duck for a grand when you thought you were going to get a duck made of gold. The contract could state “One golden duck for $1,000” it doesn’t have to state the duck is made of gold bullion, it just has to be gold, as in it could be just gold paint. Or you could buy dog food made with sawdust. It again is a perfectly valid contract but the seller isn’t producing good quality product. A valid contract doesn’t equate to security or good products.

Did I say everything requires police and armies? No. But most human interactions operate on the basis of reputation and communities of various kinds. People do the “right thing” when they feel a sense of attatchment or community. But they can be damn well inhuman when it comes to someone they do not feel a sense of attachment towards. Don’t believe me? The “right” and most logical thing would be to build the homeless homes. But what do people do instead? Ignore them and treat them like vermin. All over the world there are debates going on about letting Syrian refuges into “the country” be it Canada, the U.S., the UK, Russia or wherever. Now you can debate the economics of it but really it comes down to “I want to help my tribe before I help your tribe.” People are willing to let other human beings starve and FREEZE to death as a matter of course because of tribalism and attachment. Yes it can be argued that most human beings are good and will do the “right thing” but does the “right thing” include the other party at the other end of the “contract” or not. Is the person you are contracting with part of your tribe or is he the guy left to freeze to death.

But this is all reputation! You started by saying that you don’t need reputation but then defend your position by citing a reputation system? If you can “taint” your address then you have just developed a reputation system. You are making my case for me.

Yes but who would agree to one big trade if the person you are trading with has not developed the reputation to prove that they won’t run off with the dough? Again why contract with someone you do not trust? It’s stupid.

Why does it have to be one person? Why couldn’t it be a decentralized system and set of people. For instance on the darknet if someone wants to buy illegal drugs or something they have goods held in escrow by a third party, the money too is also held in escrow, that way if either party doesn’t send their stuff they garner bad reputation and the defendant can get his goods or money back. A similar situation could be devised for checking the veracity of products. Products could be sent to a third party, or an anonymous inspector hired by the system, could order a random sample of the merchandise for testing. The tests are performed and the data is sent back to the network. If it’s good the vendor gains possitive rep and prospers, if it’s not good then the vendor loses rep and business. Either way the network prospers. A return could be handled in a similar fashion to an order except in reverse. Reviews could in themselves be a way to gain or lose reputation. If you give an accurate review you gain reputation, if you give an inaccurate review you lose reputation.

The Coke example was for a real life scenario in which nobody uses written contracts. Have you every had a formal contract to buy a drink? No.
In the virtual world, of course they have nothing at stake. That’s why it’s different and that’s why I’ve been telling you with anonymity no one has managed to build a working reputation system.

I can authorize a person or multi-sig group to execute justice based on their opinion through a majority vote (Dead man's switch - Wikipedia). Of course that’s the last resort in a society where justice doesn’t work, but I wouldn’t have to use the government (or lawyers).

Coulda, shoulda, woulda.
Name a functional reputation system that works with anonymity or admit there’s none. That’s all I’m trying to explain to you. Instead you’re making a mix of various real world (= doesn’t apply) or hypothetical (= works in theory) examples. If it any of that applied to crypto, we’d have a working system and we don’t. Admit it.

Maybe a workable system will be found few years from now, but at this moment there’s no solution for anonymous reputation, so why pretend otherwise?

Edit: see Andreas speaking against reputation and for anonymity. This just came out so I didn’t notice it until just now and I’m not claiming he says the same thing as I do, but the key point is he’s against reputation and identity (and your “relationship building”), and for anonymity.

But they have. They do it on the dark net all the time that’s why it’s safer to buy drugs over tor than it is on the street. Because there IS a reputation system in place.

Also you might consider giving this a read.

True you could authorize an asssassin to kill your target. But that wouldn’t bring you back from the dead and you would still need to be able to supply said assassin with the target and since the target is anonymous you’re kind of up the creek.

Have you watched this yet?

In short he outlines how the darknet works and more relavent to this conversation the way reputation systems work on the darknet. How do you in fact ensure security, gain reputation and prevent scams while maintaining anonymity (or at least the psudoanonymity tor and bitcoin provide).

I have in fact named a reputation system that works but you have chosen to ignore me. We know that there are reputation systems that work because we know there are flourishing markets for illegal merchandise on the dark net. If there were no reputation systems in place the markets would not flourish.