W3C home > Mailing lists > Public > public-webpayments@w3.org > September 2012

Re: Payments and Trust

From: Melvin Carvalho <melvincarvalho@gmail.com>
Date: Mon, 24 Sep 2012 23:51:58 +0200
Message-ID: <CAKaEYhKiSCi+OBDS_4e_DbNOTbpirk=p9tPtK7igOgJiwFDkyA@mail.gmail.com>
To: Amir Taaki <zgenjix@yahoo.com>
Cc: "public-webpayments@w3.org" <public-webpayments@w3.org>
On 23 September 2012 20:59, Amir Taaki <zgenjix@yahoo.com> wrote:

> Interesting generalisation of a common structure in payments systems. I
> like the idea that we can begin classifying different systems in terms of
> the sets of overlays that they encompass.
> For instance, you classify Ripple as the set that contains 2 overlays for
> credit and debits, whereas PGP is 2 overlays for validated identites and
> assessments of diligence. In the Ripple set, all the overlays have their
> behaviour encoded in them, whereas with PGP, it is up to me to decide
> whether to trust another person's assessment of someone's identity. We
> could say that overlay relies more on social involvement rather than being
> an implicit encoding of that system.
> Thinking in general terms allows us to look for commonalities between
> these very different systems. However I'd caution about over-generalising.
> I think a lot of this stuff is poorly defined. We don't really know what
> works and what doesn't. It's a soft science.
> It's as if we have a bag of tricks. Slashdot has its effective karma
> system, Stack Overflow has awards and KickStarter has reward tiers. If you
> examine how these tricks interact with each other, then it's hard to figure
> out why they produce the emergent behaviour that they do.
> eBay does not have a weblike structure. But maybe that's what works for
> eBay. It could be because the effectiveness drops off extremely fast after
> 1 hop from your node. It could also be that in these complex systems where
> their behaviour is subject to environmental and other forms of pressure,
> that it's hard to truly predict or anticipate their outcome. I think many
> of these services function according to the community that's built up
> around them, when they developed and the kind of environment they came into.

Good point.  So there was talk about users owning their own reputation in
the systems that will let you take it out.  A 'reputation dashboard'.

Reputation is one generator of trust.  If we can come with a common
language we can make reputation more portable.

That means if you do good in one community it can be more easily recognized
in another.

> So we can examine existing systems to try to draw conclusions from them.
> One such system I find interesting is CouchSurfing. There is a normal
> network of references. The way this works is that each person gets left
> references (positive, neutral, negative). You get a graph built up (as you
> described) of trust between people.
> http://www.couchsurfing.org/people/genjix/
> The implicit assumption here is that more references = more trustworthy
> people. In CouchSurfing, the emphasis is placed more on the quantity of
> assessments (or experiences) rather than the quality of them. The main
> purpose of this system is to protect people against very bad people, not to
> assess the quality of a person's character (that's done through the actual
> profile). This is an example of where I mentioned above, that a particular
> form of pressure or constraint on the system has changed how it is setup or
> ends up functioning (the early versions of CouchSurfing were much simpler
> in scope and evolved towards the current setup).

So I tend to think in data rather than algorithms.  I'd rather present the
data and let someone other do the scoring, because I cant get it perfect.
You can see the web works this way with search.  Web pages are data, but
google do page rank etc.  Bing has another algorithm.  For big systems you
want to have as few restrictions as possible.

> Of course people can now use sock-puppet accounts to try and game the
> network. But that's why in CouchSurfing you have a) vouching (prominent
> CouchSurfers can vouch for trusted people) b) a distinct friends network
> and c) a visualisation of the hops from your account to another person's
> account through your mutual friends (only when logged in).
> The way these random tricks interact with each other is kind of ad-hoc,
> but it's an example of a system that's been setup initially and then
> optimised towards a functioning state.
> Another thing is that with trust networks, we always try to give the power
> of analysis to the user rather than getting them to trust abstract
> analysis. This social issue might make it difficult to construct powerful
> trust networks.
> If we did use abstract analysis more, then I think bayesian analysis needs
> to be the first choice. Simple bayesian inference can be used to make good
> guesses about something like the ability of a person to adequately be
> depended upon in a trust network, given several indicators about that
> person.
> Another powerful tool is using statistical tools like z-testing. However
> the danger is falling into the trap of selecting for expected behaviour
> because it's the norm and thereby causing it to become the expected
> behaviour.
> Anyway the purpose of this rant is that if we use trust networks for
> payments, then you better be sure that your trust network is pretty fucking
> solid. If it can be gamed, then people will put in insane hours to do it
> for $1 or less. I like the idea of thinking about them in terms of sets of
> overlays, but I feel like perhaps there might be more to this story.
> Perhaps there is a way to describe the relationships between overlays in a
> set. Or maybe the way nodes in this directed graph weight the trust values
> that aggregate along them.

Well this is where bitcoin has blazed a trail.  I think other systems might
have to go along in the slipstream.

I think of trust and currency as different but overlapping problems.

For most people their biggest asset is the ability to work.  One way or
another this is created somewhere through a bank loan to someone.  But this
can lead to inefficient costs, false incentives, and single points of
failure (hence the finance crisis).  If we can decentralize the whole
process, we can make it that much more efficient, and maybe make a more
prosperous world ...

> ________________________________
> From: Andrew Miller <amiller@cs.ucf.edu>
> To: Melvin Carvalho <melvincarvalho@gmail.com>
> Cc: Web Payments <public-webpayments@w3.org>
> Sent: Sunday, September 23, 2012 5:40 PM
> Subject: Re: Payments and Trust
> 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
> administration.
> 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
> http://serajewelks.bitcoin-otc.com/trustgraph.php?source=nanotube&dest=amiller
> 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.
> http://www.cs.ucdavis.edu/~defigued/index_files/trustdavis.pdf
> 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
> things!
> 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 Monday, 24 September 2012 21:54:57 UTC

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