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Re: Payments and Trust

From: Andrew Miller <amiller@cs.ucf.edu>
Date: Sun, 23 Sep 2012 12:40:48 -0400
Message-ID: <CAF7tpEz4tQ3psa34GfXFk=y0K_05idcPma1v56p9-znUgoxFTA@mail.gmail.com>
To: Melvin Carvalho <melvincarvalho@gmail.com>
Cc: Web Payments <public-webpayments@w3.org>
The relationship between Trust, the Web, and Payments is profound and
deep, and Ripple is the clearest expression of this idea. The
important thing to realize is that trust is inherently a weblike
structure. Trust is subjective and indirect. I'm going to describe the
general structure of the social graph, and explain how you get
different forms by choosing the semantics of the edges.

Consider a family of directed weighted graphs sharing the same nodes,
where each node represents a persona - either a 'real identity' or a
pseudonym. Since the graphs share the same nodes, they differ only by
the edges. So by a 'family of graphs', I mean that each graph is like
an overlay of links between the same set of nodes. In each case, an
edge between a pair of personas represents some kind of direct
relationship between the two. Given one of these graphs, and a pair of
nodes/personas, what we are usually interested is observing a 'flow'
of some kind, the sum of all weighted paths from A to B.

In one overlay, each edge represents a credit line, where the weight
is the credit limit. The flow from one person to another represents
the total available credit to use as a payment. In another overlay,
each edge represents an 'outstanding balance', or a debt - credit
limits that have been exercised. These two overlays together are
Ripple, which allows payment through indirect credit on a web. Also
see "Liquidity in Credit Networks" http://arxiv.org/abs/1007.0515

In another overlay, each edge represents that one person has
diligently validated the identity of another. In another overlay, each
edge represents an assessment that a persona is trustworthy to perform
such diligent checks. These two overlays together are the PGP web of
trust, which is useful for validating identities with no central

In a slight variation of this, the edges represent trust in the
responsible trading behavior of each person. Now we are talking about
a reputation graph like Bitcoin-OTC. For an illustration, see

In another overlay, each edge represents an 'insurance bond' where one
person vouches for the other. The flow from A to B represents the
amount of insurance payout that A could collect if B misbehaves. This
graph is TrustDavis.

Do you see that these are all inherently the same kind of weblike
structure? It's disappointing that OpenTabs, for example, scopes
itself out of the potential to express indirect relationships, since
the credits are strictly limited to the two people who initially
interacted with each other. As another example, eBay has a seller
reputation, but it is global rather than weblike, and therefore also
cannot express indirect trust. Bicoin-OTC is weblike, eBay ratings are
not. Ripple is weblike, OpenTabs is not. Let us build more weblike

On Sun, Sep 23, 2012 at 8:28 AM, Melvin Carvalho
<melvincarvalho@gmail.com> wrote:
> I'm starting to think more and more that payments and trust go hand in hand.
> This is especially true when you are establishing credit limits for issuing
> new money.
> Has anyone had thoughts on this topic?

Andrew Miller
Received on Sunday, 23 September 2012 16:41:19 UTC

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