W3C home > Mailing lists > Public > public-webpayments@w3.org > April 2015

Re: decentralized wallets and payment processors

From: David Nicol <davidnicol@gmail.com>
Date: Wed, 29 Apr 2015 09:54:21 -0500
Message-ID: <CAFwScO_JRYEPodKxC62tETs1pMXHQoWNDahX-MfhtY8Q9FnJVA@mail.gmail.com>
To: Joseph Potvin <jpotvin@opman.ca>
Cc: Web Payments <public-webpayments@w3.org>
On Wed, Apr 29, 2015 at 7:46 AM, Joseph Potvin <jpotvin@opman.ca> wrote:
> Is a bank account a type of digital wallet?

of course it is

> Does the provider of any e-wallet SaaS come under banking laws & regs?

depends on the definitions. I'd say "no, they are regulated by e-wallet
SaaS laws and regs."

> If the answer to either of these question is "no", what are the boundary
> criteria between e-wallet systems/services and banking systems/services?

there is a vast gap between these very different enterprises, not a
boundary.

I currently understand that regulation starts when the fungibles tracked in
the ledger have, to
draw an analogy from operating systems, a magic "legal tender" flag or bit.
When and how that bit
gets set is not an engineering question. From an engineering perspective,
there is a bit, and it
may or may not be set. Like the "TESTING" field (T or P) in X12 EDI.

As to the boundary criteria between software engineering and money-lending,
they're entirely different animals, as different as police stations and
paper mills, or farming and manufacturing, or any other different things.

I'm a fan of analyzing businesses using the Porter's Value Chain model,
which shoehorns any activity into a mold of converting inputs to outputs
and provides a set of roles which can be mapped to the roles of the
enterprise under examination, so here's a quick nudge in that direction:

Banking systems/services loan money at interest to customers. All their
other activities are marketing for that, or regulatory compliance.

Wallet systems/services facilitate secure manipulation of ledger entries.

How do they fit into the model?




A banking institution converts an input of people without debt into an
output of people who pay interest on their loans, and only makes sense in
the context of an established fungible legal tender and a lot of other
presumptions. Alternatively, it takes an input of people without means and
facilitates the benefits of the power of affluence, or something. Either
way, it's anthropological.

A wallet service is similar in that it is also service-based, so the inputs
and outputs may take some meditative exploration and discussion to
identify. Who is the customer? What is the product? These are not clear and
might not have a single simple answer. The activity is manipulating the
ledger, so one product is ledger manipulations. Discussion of the merits of
various approaches seems to presume, often without the various parties
realizing their presumptions, various roles in the larger ledger ecosystem.
Better Wallet Software does what for its consumer? As part of the marketing
package for a banking system or a new currency, better wallet software can
provide competitive advantage.

What are the inputs for a wallet service? The ledger before, and the output
the ledger after? I'm not really confident about that but without getting
distracted with marketing, the wallet service may be functionally competing
with The Accountant's Pen, or The Headman's Memory, in terms of what niche
it has in a going meaningful ledger system.
Received on Wednesday, 29 April 2015 14:54:51 UTC

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