Manfred,
I think we agree that (a) trade size (not volume so much) needs to be
limited ; this would be set by the pool in my model and (b) collateral
size for arbitrators is linked (not sure of the formula) to that max
trade size.

The trade size maximum is quite important because all members of the
pool have to agree on it in advance. So it will probably be quite a
conservative number. The well known $10K AML limit is doubtless too high
for this.


On 03/17/2014 04:39 PM, Manfred Karrer wrote:
>
> Am 17.03.2014 um 14:57 schrieb Adam Gibson <ekaggata@???>:
>
>> On 03/17/2014 03:24 PM, Manfred Karrer wrote:
>>>
>>> To go in that direction the arbitration will become more and more central and powerful as we move all those trust problems over to the arbitration system.
>>> Its true that with MultiSig there are no theft risks (beside collusion),
>> I should emphasise for those reading this thread (I know you know
>> Manfred): the main defence against collusion is that using a randomising
>> algorithm, a buyer or seller does not know in advance which member of
>> the pool of arbitrators will handle their case.
>
> Sorry Adam that I had dropped in collusion here without explaining better the context.
> I know that the random selection will make collusion very unlikely. I meant it more as a theoretical open risk.
> For a high volume trade the gain from a theft due collusion could outperform the lost collateral/reputation inside a pool, or even worse if the whole pool is corrupt, the pool would "only" lose its reputation and future business opportinities.
> That led me also to the assumption (below) that a pegging of the collateral to the trade volume might make sense.
> But easiest solution against all those would be to limit the trade volume (per pool), no need that they deal with too risky volumes… And beside that in reality it would be probably very unlikely and highly depends on the quality of the attached identities (WoT,...).
>>
>>
>>> Maybe some structure like in liquid democracy could be used:
>>> Everyone has the basic right and possibility to be an arbitrator. If he does not like to take that chance/job he can delegate it further up in a trust line (give his arbitrator right to some he knows or abort it).
>>>
>> Such things require a pre-existing trusted identity system.
>
> Yes true. But maybe it will be some kind of possible solution in the futur. A free floating transition form P2P to more centralized models (direct democracy -> represenative democracy). Both have its pros and cons and if it can be flexible adjusted to the current needs it could benefit form whats appropiate for a certain use-case.
>
> br,
> Manfred
>
>
>>
>>> br,
>>> Manfred
>>>
>>
>>
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