Patrick McKenzie (patio11)
4 stars based on
August 05, in cryptocurrency. So I thought it was worth understanding how Stellar works, at the protocol level. It turned out to be easier to explain with a story than a code sample. What did you call them again? Meaningless complications for the moment, sir.
What is anything worthyoung Master Potter? All things are worth what someone will happily trade you for them. Surely it is worth much more, right? I suppose that depends. Galleons are a currency, Master Potter. Carrying that mountain of gold around is going to be trouble. I need to go buy supplies for Hogwarts! Not to worry, sir. We have much more convenient ways of dealing with currencies than you might be used to in the Muggle world. Oh, you have a debit card which lets me withdraw galleons?
Maybe a Visa, accepted everywhere I could want to spend them? In the wizarding world, though, we use cryptocurrencies. So I… buy this crypter-currency with galleons? And then I hand it over to the shop? Think of cryptocurrency more as an IOU that you can conveniently trade to people.
For example, do you trust us here at Gringotts? Well, you seem to have just showed me a mountain of gold when you could just as easily have taken me to an empty room and I would have been none the wiser, so I suppose I do trust you. Words are important in this world, young Master Potter. Welcome to Gringotts, young Master Potter.
Your current balance is: No one is worth unlimited trust, young Master Potter, not even a goblin. Young Master Potter, your current balance is: Clearly you two are going to be the best of friends.
A wand chooses the wizard, my boy! Oh look, this one here with a phoenix feather core is practically singing to you. It is a steal at only ten galleons. Did you say a phoenix feather? Where have I read about that before? Easy, easy, I just want a wand so that I can do magic.
Seven galleons sounds like a fair offer. Goblins use the ledgerbook directly, but carrying around one with you all the time would be dreadfully inconvenient just to spend money. I mean, think of how heavy it would be. Gigabytes at the very least. And if it were sustaining hundreds of transactions per second like Visa and each person needed their own copy of the ledgerbook then very soon ledgerbooks would represent a significant fraction of all disk space in the United Kingdom.
Here, Mister Potter, repeat after me: A pleasure doing business with you. A minute ago, Gringotts owed you galleons. Olliver here trusts Gringotts IOUs much like you do. You told Stellarmus to send him seven galleons, so it transferred seven galleons of your Gringotts IOU to him. So he can pop down to Gringotts and get himself some gold, any time he wants. Or he could just Stellarmus it to anyone else who trusts Gringotts without having to actually withdraw the galleons.
Right, or that, I suppose. One block appears roughly every ten minutes and a transaction needs to have been included in a block at least six deep to be settled. If we had settled this transaction with one of those cryptocurrencies, Mr.
No mining happens and there is no duplicative work performed worldwide in the hopes of getting seigniorage. Here, one plate of chips. Harry just paid using a pound note, written on paper. Everything is worth what someone will give you for it, or something. A goblin told me that.
Anyhow, you owe me a quid. Well, since you trust Ron up to one pound, just tell Stellarmus. Then Ron can send you an IOU for a pound. You have to say what kind of Great British pound you trust him for. A Gringotts galleon is useful to buy things from people because people trust Gringotts to actually have galleons when they ask for them. Sorry Ron, facts are facts. Gringotts is widely known to be reputable. The mid-word exclamation point is a notation sometimes used in fanfiction to distinguish two things that, since they appear in radically different circumstances, might be quite different even though they have similar names.
The part before the exclamation point is the name of the gateway — the person ultimately responsible for turning real-life things into IOUs and IOUs back into real-life things — and the part after is the currency. Alright, let me try again: Stellarmus, I trust Ron Weasley with one Weasley! And there you go.
It balances, just like double-entry accounting. Here, Hermione, go fetch us a soda. Stellarmus, send Hermione a quid. First off, you can fetch your own soda. Think of physical money. That will make it simpler. The chip shop only takes pounds. You only have galleons, but you want chips.
You need to find someone who wants galleons and has pounds, trade galleons for pounds, and then pay pounds to the chip shop. The wrinkle is that there is currently no path between the currency which you have, which is Weasley! GBP, and any currency that I accept. Why do I get the feeling you know more about this topic than I do?
Welcome to life, Harry Potter. I know more about every topic than you do. GBP and anything I want. Sort of like how a Weasley! GBP is just a number — after all, you have neither gold nor paper. Hang on a second — stellars? Alright then, one second while I phone a friend of mine who fancies herself something of a finance whiz.
Alright, as a favor: Stellarmus, I offer to buy one Weasley! GBP in exchange for ten stellars. Alright, alright, thanks Cho. Have people ever told you to think before acting? It is a useful skill in life. It figured out a way to take one pound from you and transfer 10 stellar to me. Who cares how many it is? Things are worth what people will give you for them. It was only your Weasley! GBP until you told Stellarmus to figure out some way to transfer that value to me.
She just told the world that she was willing to buy Weasley! Before Harry sent his transaction, you owed one pound. You still owe one pound.