Show HN: Offset – Credit card powered by trust between people
offsetcredit.org
Show HN: Offset – Credit card powered by trust between people
1–10 of 113 posts
Re: Show HN: Offset – Credit card powered by trust between people
#2This looked initially like a cool idea, then I realized that to trade with someone you have to have a mutual credit line with them, or through someone who already has a credit line. How is this any different than the current model, where the bank/government/central money issuer is our mutual credit line and why wouldn't this model eventually end up with banker-type people managing the credit for everyone? You could go now to a bakery and ask for mutual credit, the problem is they would prefer the safest route, which is credit through the current monetary system. How is Offset protecting against the same thing happening? Am I missing something?
Re: Show HN: Offset – Credit card powered by trust between people
#3This looked initially like a cool idea, then I realized that to trade with someone you have to have a mutual credit line with them, or through someone who already has a credit line. How is this any different than the current model, where the bank/government/central money issuer is our mutual credit line and why wouldn't this model eventually end up with banker-type people managing the credit for everyone? You could g…
If one, this would be open.
The current banking system doesn't suck because people are greedy or bankers are bad people. It sucks because it is closed and no one can join.
(If you're tempted to say: "no, anyone can join, they just have to fulfill the regulations blablabla", then this is your answer.)
Re: Show HN: Offset – Credit card powered by trust between people
#4This looked initially like a cool idea, then I realized that to trade with someone you have to have a mutual credit line with them, or through someone who already has a credit line. How is this any different than the current model, where the bank/government/central money issuer is our mutual credit line and why wouldn't this model eventually end up with banker-type people managing the credit for everyone? You could g…
If one, this would be open. The current banking system doesn't suck because people are greedy or bankers are bad people. It sucks because it is closed and no one can join. (If you're tempted to say: "no, anyone can join, they just have to fulfill the regulations blablabla", then this is your answer.)
> It sucks because it is closed and no one can join.
Playing the devil’s advocate, limiting the number of bankers may make it easier* to regulate their behavior as a whole, because there are fewer of them to monitor/investigate. Predatory or exclusionary lending can be difficult to detect and curb already: increasing the number of actors to regulate may make it near-impossible. What are your thoughts on protecting borrowers in a web-scale marketplace of lenders?
* independent of other variables, such as the ability of the wealthy to influence policy in their favor
Re: Show HN: Offset – Credit card powered by trust between people
#5This looked initially like a cool idea, then I realized that to trade with someone you have to have a mutual credit line with them, or through someone who already has a credit line. How is this any different than the current model, where the bank/government/central money issuer is our mutual credit line and why wouldn't this model eventually end up with banker-type people managing the credit for everyone? You could g…
If one, this would be open. The current banking system doesn't suck because people are greedy or bankers are bad people. It sucks because it is closed and no one can join. (If you're tempted to say: "no, anyone can join, they just have to fulfill the regulations blablabla", then this is your answer.)
There are local communities around the world that run their own credit lines for exchange of goods outside of the banking system, so it's not that Offset is enabling something that isn't happening already. Maybe the software is more convenient but is it any more different? I'm trying to understand. My question is what's preventing few people accumulating trust and credit lines and eventually becoming bankers for this system? Everybody needs bread, but those that sell bread don't need javascript applications, so there has to be a middle man even in this system for me to buy bread. The current banking system exists because it has established credit lines with goods that are almost impossible to acquire without a middleman, like petroleum, electricity, infrastructure.
Re: Show HN: Offset – Credit card powered by trust between people
#6Earlier quoted context omitted.
If one, this would be open. The current banking system doesn't suck because people are greedy or bankers are bad people. It sucks because it is closed and no one can join. (If you're tempted to say: "no, anyone can join, they just have to fulfill the regulations blablabla", then this is your answer.)
> It sucks because it is closed and no one can join. Playing the devil’s advocate, limiting the number of bankers may make it easier* to regulate their behavior as a whole, because there are fewer of them to monitor/investigate. Predatory or exclusionary lending can be difficult to detect and curb already: increasing the number of actors to regulate may make it near-impossible. What are your thoughts on protecting bo…
Exactly, nothing is stopping few individuals from becoming mafia. Eventually a secondary system needs to be established to regulate those guys at gunpoint, then voila, you've got current society.
Re: Show HN: Offset – Credit card powered by trust between people
#7This is interesting, but I’m really skeptical about the implementation. I’d really kind to see a much more concrete specification, and details about adversarial conditions.
It feels like it’s easy to create identities, establish credit lines with no intent to repay, and propagate bad money into this system. It only takes one bad actor to corrupt the chain of mutual credit. From the documentation on the website it’s not clear at all how it handles even simple adversarial conditions like this. The fallback seems to be that you can limit what you are willing to lose by only establishing mutual credit up to a certain amount with each trusted party.
If a store doesn’t have a direct relationship with me it has to initiate a payment between an arbitrary number of intermediaries in order to fulfill the credit. Anyone have more insight into the practical application of mutual transitive credit?
Re: Show HN: Offset – Credit card powered by trust between people
#8This is interesting, but I’m really skeptical about the implementation. I’d really kind to see a much more concrete specification, and details about adversarial conditions. It feels like it’s easy to create identities, establish credit lines with no intent to repay, and propagate bad money into this system. It only takes one bad actor to corrupt the chain of mutual credit. From the documentation on the website it’s n…
Hey, interesting questions. Let me try and answer.
> I’d really kind to see a much more concrete specification
The best I can show you at this point is here: https://docs.offsetcredit.org/en/latest/theory/mutual_credit... This document is far from a full mathematical proof of safety, but it shows how things work. I expect the protocol to change in the next months, so I didn't want to be too detailed about the current protocol. Just to be sure it is known, Offset is open source, and you can find the full schema of communication here: https://github.com/freedomlayer/offset/tree/master/component...
> It feels like it’s easy to create identities, establish credit lines with no intent to repay
You can in fact create as many new identities as you wish with Offset, however, an identity doesn't worth much without established credit lines. Establishing a credit line requires human intervention. You will not be able to trick your human friend into adding your multiple identities of yourself as new credit lines to his Offset client. In other words, what protects you from Sybil attacks here is real world relationships with people.
If you ever decide to open your own "hub" or "bank" with Offset, giving credit lines to many strangers, you might want to have extra security, like maybe asking for their id card, or asking for some kind of collateral. But if the people you arrange credit line with aren't strangers, I don't think you have a real issue here.
> It only takes one bad actor to corrupt the chain of mutual credit
A bad actor can only compromise his direct "Offset friends", not a whole chain. When you set up your Offset node and add credit lines to your direct "Offset friends", you have to set up credit limits. Those credit limits limit how much money you can lose if any of your friends defaults. You can never lose more money than what you set up as your credit limits. If a friend of your friend defaults, your friend loses the money, not you.
> If a store doesn’t have a direct relationship with me it has to initiate a payment between an arbitrary number of intermediaries in order to fulfill the credit
Offset does this automatically for you. You don't really need to worry about this during the payment.
I might have missed something with my answers. Please tell me if you think something is missing!
Re: Show HN: Offset – Credit card powered by trust between people
#9This looked initially like a cool idea, then I realized that to trade with someone you have to have a mutual credit line with them, or through someone who already has a credit line. How is this any different than the current model, where the bank/government/central money issuer is our mutual credit line and why wouldn't this model eventually end up with banker-type people managing the credit for everyone? You could g…
Hi. You are correct, you need to have some credit line, possibly indirect, between you and the other party, if you want to send money or receive money with Offset. This is the core of how Offset works.
> why wouldn't this model eventually end up with banker-type people managing the credit for everyone?
I thought about this question for a long time myself. As a first note, I don't think Offset should completely replace the traditional banking system. Everything has its place in the world. I admit that I still use my bank account daily.
If I understand correctly, your concern is that Offset might eventually become centralized, and therefore will return to the starting point: the banking system that we have today. I have some thoughts about this:
1. I believe that technology like Offset gives very convenient tools to make payments work in a decentralized way. It takes about three "bash" lines to set up an Offset node in the cloud, and you have your own credit hub. I agree that it takes a certain amount of credibility to open a credit hub, but I still believe it makes things much easier than opening your own bank nowdays.
2. There is this idea of 6 degrees of separation, where every two people in the world probably have a chain of friends between them that is of length no more than 6. If things actually work this may, it might be possible to pay using Offset without relying on central hubs.
There are two caveats to this idea though: (a) Currently Offset clients on mobile phones will eat your battery if you keep them open for too long. (b) You might not be able to make very large payments through the credit limits you set with your friends. Most people will trust their bank with $50000, but most people will not trust their friends with this amount of money.
About issue (a): Maybe it is temporary, and in 5 years we won't have these kind of battery limitations. For (b), I'm not sure yet myself. Maybe you will always need credible credit hubs to be able to make large payments.
3. Even if Offset becomes more centralized, based on a few credit hubs, I think that it is still better in some ways than the current ways banks work. (though note that I might be biased here).
a. Your money will be protected from inflation caused by state money printing.
b. Not much regulation is required, because the nature of Offset doesn't allow the "credit hubs" to do things like play with your money, generate new money through loans and more. More than that: Offset always provides the end user with a cryptographic proof about the amount of money in his account.
c. I expect that fees with Offset will be much lower than what you get with your banks.
d. It is easy to create Offset hubs, so there will always be competition.
e. Money will move through an auditable open protocol.
Offset is still pretty young and I am very far from having answers to everything. If you think something is still missing, please send a message.
Re: Show HN: Offset – Credit card powered by trust between people
#10Congratulations. You have reinvented tally sticks.
Snark aside, I wish you lots of luck, have thought about this model a lot, think there is probably a small place for it in the world.
Two suggestions from random stranger on the internet, take them for what they're worth:
* don't use the word "money." This is a private credit network, not money. Private credit networks sometimes become money, but they don't start out that way. Stick to that language.
* don't solve for "inflation." There is a lot more to say here but fundamentally there is a tension between store of value and medium of exchange. Be a private credit network/medium of exchange, not a store of value.
Good luck!