[p2p-research] Trust Relationships in P2P Networks

[Alex Rollin]

On Thu, Jul 29, 2010 at 3:39 PM, danny jp <dannyjpw at gmail.com> wrote:

> my view is that if a network is truely P2P then there can be no
> multilateral trust relationships.
>
Do you mean bilateral here?

>
> in fact in a pure P2P network the only multilateral trust relationship is
> between network nodes and the software and servers that do the routing.
>
In a P2P network there would seem to be the potential for all relationships
to be multi-lateral.

>
> a P2P network in which digital crypto currency or digital coins circulate
> is a hybrid that does exhibit multilateral trust.
>

Security measures like signatures would allow tracking and additional checks
on validity.  These might identify nodes, or help to rate the trust in a
transaction, and some could be anonymous.  Transactions between 2 peers can
build a trust rating that may or may not be acceptable to the rest of peers.
 This means, to me, that trust can build up to fully multilateral status.

>
> IMO a P2P network with no circulating multilateral currency has high trust
> but low ability to perform maturity transformation. The total trust embodied
> in all bilateral connections sets the limits on how much can be borrowed,
> and the amount of multilateral trust defines how much liquidity can be
> created.
>

By multilateral currency you mean something with redemptive value.  This
could be CPU time, labor time, or some other discretely redemptible currency
that would allow clearing between potentially unknown nodes in the network?

>
> So a pure P2P network has high borrowing capacity but low liquidity.
>

By liquidity you mean that the low trust from single use bilateral currency
would pile up and wouldn't be abe to be cleared. Nodes/People might borrow a
lot but wouldn't be able to pass it on?

The question for me that comes up is, what happens when the currency,
primarily, is multilateral.  Let's say a network owns a house.  The currency
is "occupancy" like a day of occupancy.  People trade all kinds of currency
for it, and some of it is sovereign currency.  Why would that force low
liquidity?  These are peer-to-peer networks as in "person-to-person."
 Ripple users who want/do/maintain/build common resources like a house, car,
or windmills.

A



>
>
>
> On Thu, Jul 29, 2010 at 12:04 PM, Alex Rollin <alex.rollin at gmail.com>wrote:
>
>> The followoin came through the Ripple list.
>>
>> I wondered if others would agree that bilateral and multilateral trust can
>> occur in a P2P Network and that this would by definition form a
>> Commons when the trust ia multilateral.  There may be an inter-network
>> commons then like the bank below that also enjoyed multilateral trust as a
>> resource offering asset use value to multiple networks.
>>
>> A
>>
>> Begin forwarded message:
>>
>> *From:* danny jp <dannyjpw at gmail.com>
>> *Date:* July 29, 2010 12:10:06 PM GMT+02:00
>> *To:* <rippleusers at googlegroups.com>rippleusers at googlegroups.com
>> *Subject:* *Re: outside money*
>> *Reply-To:* <rippleusers at googlegroups.com>rippleusers at googlegroups.com
>>
>> Trust relationships are not primarily public and private.
>>
>> *They are bilateral and multilateral.* An example of a bilateral trust
>> relationship is a ripple connenction or the relationship between a buyer of
>> a corporate bond and the seller of it.
>>
>> An example of a multilateral relationship is that between private
>> individuals and a bank. Many people trust the bank to pay.
>>
>> The  trust relationship upon which our whole economy is based is as
>> follows:
>>
>> 1) individuals trust banks but not one another, hence they clear
>> transactions between them using a bank (banks enjoy limited multilateral
>> commitment from individuals)
>> 2) banks trust the government but not one another, hence they clear
>> transactions between them using the central bank (aka government)
>> 3) everyone trusts the government (enjoys full multilateral commitment)
>>
>> belief in deposit insurance comes from (3).
>>
>> the reason we use public debt as outside money is that it is easier to
>> trust taxpayers to meet future commitments (since they can be compelled to
>> pay) than it is a given private bank.
>>
>>
>>
>
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