Can Bitcoin Tech, bring DROs to life, in the next 5 years?

[Juan S. Galt]

Hello! fellow Philosophers. 

 

EDIT: To be perfectly clear, I do not endorse Bitnation. I only mention it as an example of people working on decentralized insurance companies among other things, Decentralized insurance or DDROs are my only interest in Bitnation right now. And it is their essense that intrigues me not the means in which they may be applied, atleast at this time.

There's a topic that I've wanted to bring to your attention for a while now and I'm exited to say the time has come. 

I'm not sure how familiar all of you are with the Bitcoin technology, but I believe it has the power to speed hack us to a free-er society in a variety of ways. 

For those that are not familiar with the back end of Bitcoin. Bitcoin is a long list of every transaction that has ever been made, this transactions can carry anything from information about who owns what coin, to digital files that represent things in the real world. 

A google maps image of your house for example can be "hashed" and turned into a unique set of digits that once added to the blockchain along side a hash of a contract signed could prove transferred ownership of the house. 

 

This ledger is distributed among computers all over the world and in multiple jurisdictions and it is updated live. For a variety of reasons that I can get into if people are skeptical, Bitcoin's technology makes fraud very very very difficult. 

It also allows for what have been dubbed DAO's or decentralized autonomous organizations. 

This simply put means that one can create a program that runs ontop of blockchain networks and can not be destroyed or ended by any one party, since there is no central point of failure. The internet would have to be shut down, to kill Bitcoin and that which is being built ontop of it. 

The reason I mention all this, is because there are a few projects gaining strength that may allow for what could be decentralized, jurisdiction and bureaucracy free insurance companies. 

And if I remember correctly, insurance companies are essentially what DROs are, according to stef's DRO theory. 

I'll be writing an article about this topic during the next week or so that I'll be aiming to post on Bitcoin Magazine and will be interviewing  someone deeply involved in Crypto currencies and insurance.

But I also wanted to get your thoughts on this subject. 

If we had the possibility of having insurance companies that are not subject to government power. Than can we begin to build the anarchist heaven that we have dreamt of, ontop of the internet? 

Here is one project in particular that claims to know how to do something like this. Though I am skeptical of many of the claims they make, bitcoin insurance seems to me very possible and within our grasp.

http://www.bitnation.co/

I can elaborate more or anything if you wish. I have not looked into DRO theory in a while though, so this is part of the research for the article. 

My question is. If we can create insurance companies ontop of the internet, with their headquarters being a website distributed throughout the world, and with its core members being anonymous.  And if we can find ways to have users of insurance prove to these organization when damage to insure property has happened, than do DRO's come to life? 

How is government able to control and diminish the power of insurance today and why are DROs not currently alive? 

What would be the limitations of such a system, given that peaceful parenting has not yet become mainstream?

Thank you. I look forward to your thoughts. 

[Josh F]

I think it is excellent technology for all kinds of alternatives to government.  I think critics would describe is as non-democratic, and they'd be right, because any system based on the ledger would be more like a "vote with your dollar" model, since there aren't a lot of ways to limit it to "one vote one person".  It would be more like the stock market, where the largest collection of shareholders have the most influence on the company.  I don't personally have a problem with this, but I can already see the statist talking points that this is a "government run by the rich" etc.  

 

I love this idea, but would approach it with extreme skepticism.  Saying it can act as an insurer, or provide marriages and divorces, or manage land ownership.... the state's monopoly on those services make doing those things extremely difficult.  Imagine... for example... buying property through the system.  The previous owner would still be the legal owner under the eyes of the law, unless it is done within the state system, which would defeat the point and make the ledger fairly useless.  

 

I also don't really like their approach, creating yet another altcurrency.  I would prefer is that backed their system through the bitcoin ledger instead, as altcoins rarely get the miner base required to keep them secure.  It makes me skeptical that is just another altcoin firesale.  

 

I would need to know so much more information on the people in the system and how, exactly, they plan to provide those services.  When I click White Paper, it goes to nothing.  The FAQ is sparse.  Lovely website, but nothing otherwise convinces me these are the people capable of making this a reality.  

[surfingthoughts]

I'm right with you its interesting and I am looking forward to your article. The a reason why it's not flourishing yet / it will take time in the insurance sector is the state and its laws. My dad owns a insurance brokers and the amount of regulation and rules regarding the subject is ridiculous. I would be surprised if this type of /alternative to insurance gets government approval and that is a problem when in England  for example any business that has an employee must have a government approved employers' liability insurance. That is just one of many example of the state requiring state approved insurance by law <- if you have to have this type of insurance why look to an alternative that wont meet the requirements of the state, you would have to get both which wouldn't make sense.

[Juan S. Galt]

I complitely agree that Bitnation has ALLOT to prove. I only linked it, because they claim to be working on such a solution.My only interest with Bitnation is the insurance side of things, as i think it could be done complitely in spite of the government, unless services can not be purchased with cash.If a website could be hosted online in a decentralized fation, like maidsafe is working on, or like one may be able to host on Ethereum. And such website could be controlled through anonymous channels, aka anon identities that build reputation like Satoshi nakamoto on the Bitcointalk forums.Than it could theoretically be run outside of legal jurisdiction.If say you are insured against (i like this example) police brutality. And you have audio or video recording of the attack, and is reasonable to prove that you were indeed attacked. And you don't have a history of pissing off cops, say, making your insurance cost low. Than why would this company not pay you your insurance due? Dues would be payed in Bitcoin or in Darkcoin for extra anonymity and users could sell it for Cash to buy what they need.The question ofcouse arises, well they could just not pay you and what will people do? well, people will write articles, and media outlets will make noice and than the reputation built by such a company would be destroyed.Reputation does not have to be tied to authentid identity, simply to an identity that consistantly proves its intentions. Built with hard work over time, destroyed in minutes if they try to cash it in an scam people.There might also be some way to do this in a decentralized fation, some kind of peer review, I don't know.Certainly a decentralized version of it proving and disproving damages to insured property would be preferable, but a centralized version could theoretically function ontop of such a network anyways, just like current insurance companies do, except without legal influence.

[luxfelix]

You might want to check out Coreforcruxes topic about his idea on Lexcoin: 

 

https://board.freedomainradio.com/topic/41964-lexcoin/

 

 

I think it is excellent technology for all kinds of alternatives to government.  I think critics would describe is as non-democratic, and they'd be right, because any system based on the ledger would be more like a "vote with your dollar" model, since there aren't a lot of ways to limit it to "one vote one person".  It would be more like the stock market, where the largest collection of shareholders have the most influence on the company.  I don't personally have a problem with this, but I can already see the statist talking points that this is a "government run by the rich" etc.  

 

I love this idea, but would approach it with extreme skepticism.  Saying it can act as an insurer, or provide marriages and divorces, or manage land ownership.... the state's monopoly on those services make doing those things extremely difficult.  Imagine... for example... buying property through the system.  The previous owner would still be the legal owner under the eyes of the law, unless it is done within the state system, which would defeat the point and make the ledger fairly useless.  

 

I also don't really like their approach, creating yet another altcurrency.  I would prefer is that backed their system through the bitcoin ledger instead, as altcoins rarely get the miner base required to keep them secure.  It makes me skeptical that is just another altcoin firesale.  

 

I would need to know so much more information on the people in the system and how, exactly, they plan to provide those services.  When I click White Paper, it goes to nothing.  The FAQ is sparse.  Lovely website, but nothing otherwise convinces me these are the people capable of making this a reality.  

 

What about, instead of creating another altcurrency, it was designed as an applied modifier?

[Juan S. Galt]

You might want to check out Coreforcruxes topic about his idea on Lexcoin: 

 

https://board.freedomainradio.com/topic/41964-lexcoin/

 

 

 

What about, instead of creating another altcurrency, it was designed as an applied modifier?

Thank you! I will.Yeah, whether it is another altcoin or ontop of a second gen altcoin like Ethereum, NXT or Bitnation, does not fundamentally matter, it only does as far as the efficiency of transactions and the ease of application, I would say.For example, in the time that devs have been trying to build decentralized asset exchanges ontop of Bitcoin, NXT was able to build the asset exchange, decentralized encrypted messaging and an alias system. basically catching up with the development in the space and being the first to have a decentralized stock market per say.Why? because Bitcoin was arguably a high quality proof of concept that spread like health bringing beubonic plague.NXT another crypto created by an anon developer "BCNext" was much more effective as a second gen currency and seemed to learn and improve upon the lessons of Bitcoin.That said, they may have fucked up with the IPO, since, being a Proof of stake secured coin, the fact that the early adoptors got such large stakes, has left the currency with residual FUD (fear uncertinty and doubt), even if the early adoptors spread their stakes decently as NXT supporters aregue.I my self think NXT is the most developed crypto currency tech wise that there is right now, but one that can avoid this IPO problem or prove that is not at risk of a 51% attack by major stake holders would be even better.All this said, there might be proof that NXT is secure to that 51% based on stake ditribution and oh my goodness have I gotten derailed.

[Josh F]

You might want to check out Coreforcruxes topic about his idea on Lexcoin: 

 

https://board.freedomainradio.com/topic/41964-lexcoin/

 

 

 

What about, instead of creating another altcurrency, it was designed as an applied modifier?

Whats the buy in, though?  1:1?

[luxfelix]

Whats the buy in, though?  1:1?

 

I dunno. 

 

What are the pros & cons of 1:1?

[Josh F]

I mean firstly I'm no professional.  I've been investigating how this stuff on a very amateur level.

 

1:1's benefit would be that it wasn't a scam because they were giving you 1 colored bitcoin in exchange for an uncolored coin.  This whole idea is flawed though...

 

 

So lets take an example that this service strictly provides medical care.

 

The contract itself could be insured through bitcoin: the bitcoin acting not only as the contract itself, but as an escrow on your investment.  The insurance company pools together the invested bitcoin to hedge against the cost of available healthcare.  In most places you'd need to repurchase the services from a healthcare provider in their area.  The business itself bulk purchases the insurance, like any company which provides medical care to their employees.  People who opt-in would simply gain access to some coverage at some kind of comparable rate in bitcoin.  Maybe you could get them a discount through the bulk purchases, maybe.  Then you'd have to have a nice cash flow built up to hedge against major value shifts in bitcoin.  

 

Assuming in some cases, perhaps in the realm of medical tourism, you could directly set up contracts with specific doctors offices who accept bitcoin.  In those cases it would be like any other healthcare provider, you'd insure the costs, you'd hedge their average output costs against the fees.  It would be hard to compete, since you're hardly the first player.  

 

I'd rather just see one of these companies already in this space simply ADOPT bitcoin.  Bitcoin isn't a business itself, which is why that model sounds flimsy as hell to me.  Bitcoin is a business tool, like money.  So its a business model that just says "oh we copy that real business, say its in bitcoin, and somehow thats better.  Except we aren't already the owners of an existing business in any of those fields, but... you know... bitcoin."  If there is a way to develop a market in those spaces, the money would be as a consultant to businesses thinking about how they could integrate bitcoin into their already existing models.  

 

The REAL missing market though, the big one in my opinion, is in business to business (BTB) transactions.  If Chinese manufacturers could buy silver from a Bolivian mine using bitcoin, its the dawn of a new economic reality.  But thats a big boy business.  

[luxfelix]

I mean firstly I'm no professional.  I've been investigating how this stuff on a very amateur level.

 

1:1's benefit would be that it wasn't a scam because they were giving you 1 colored bitcoin in exchange for an uncolored coin.  This whole idea is flawed though...

 

 

So lets take an example that this service strictly provides medical care.

 

The contract itself could be insured through bitcoin: the bitcoin acting not only as the contract itself, but as an escrow on your investment.  The insurance company pools together the invested bitcoin to hedge against the cost of available healthcare.  In most places you'd need to repurchase the services from a healthcare provider in their area.  The business itself bulk purchases the insurance, like any company which provides medical care to their employees.  People who opt-in would simply gain access to some coverage at some kind of comparable rate in bitcoin.  Maybe you could get them a discount through the bulk purchases, maybe.  Then you'd have to have a nice cash flow built up to hedge against major value shifts in bitcoin.  

 

Assuming in some cases, perhaps in the realm of medical tourism, you could directly set up contracts with specific doctors offices who accept bitcoin.  In those cases it would be like any other healthcare provider, you'd insure the costs, you'd hedge their average output costs against the fees.  It would be hard to compete, since you're hardly the first player.  

 

I'd rather just see one of these companies already in this space simply ADOPT bitcoin.  Bitcoin isn't a business itself, which is why that model sounds flimsy as hell to me.  Bitcoin is a business tool, like money.  So its a business model that just says "oh we copy that real business, say its in bitcoin, and somehow thats better.  Except we aren't already the owners of an existing business in any of those fields, but... you know... bitcoin."  If there is a way to develop a market in those spaces, the money would be as a consultant to businesses thinking about how they could integrate bitcoin into their already existing models.  

 

The REAL missing market though, the big one in my opinion, is in business to business (BTB) transactions.  If Chinese manufacturers could buy silver from a Bolivian mine using bitcoin, its the dawn of a new economic reality.  But thats a big boy business.  

 

Good point about business through bitcoin not being a business itself (and doesn't automatically make a business better).

 

Is this in reference to Coreforcruxes topic on Lexcoin or the modifier idea I presented (which may qualify as a BTB transaction)?

 

(Also, I think this is still related enough to the original intent of this topic, but if not, it might be polite to move to the Lexcoin topic or start a new one.)

[Josh F]

Oh yeah, sorry.  Guess I mixed up the topics.

[Juan S. Galt]

Recent Drama with Bitnation. http://cointelegraph.com/news/112725/bitnation-core-dev-team-resigns-speaks-out-before-crowdsaleI've never endorsed the project, just expressed interest in the idea and even though this implemintation likely won't happen, the essense of some of their ideas stand, particularly decentralized insurance I think.

[Josh F]

For 'DRO' type applications, keep your eye on Etherium.  

[luxfelix]

For 'DRO' type applications, keep your eye on Etherium.  

 

Any links in particular you find useful? 

[Josh F]

I think he did a TED talk explaining it on youtube

[luxfelix]

I didn't find the TED talk, but I found this:

 

[Josh F]

The website might be a bit better starting point:

 

https://www.ethereum.org

 

The idea is a bitcoin style blockchain with a full touring operating language built into it, so the blockchain can gain access to cloud processing and storage for decentralized apps.  Its a much simpler platform than bitcoin for projects like namecoin or color coin or even dropbox.  

[TheBen]

I haven't read this thread but this may be relevant:

 

http://www.bitnation.co/

[luxfelix]

Thanks for the links.