You are correct - I should have been more explicit, but I was using comparing Taler as a system to move arbitrary money against the Bitcoin network[0], which is a system to move a specific money (Bitcoin the coins), or the various blockchain networks, which do similar for other tokens (including securitized fiat, as in stablecoins)
[0] "the Bitcoin network", meaning the use of blockchain transactions to facilitate payments, or off-chain schemes to do the same with on-chain settlement (as in lightning network)
Regulations can never be forced into a technology, they can merely be adopted. PCI-DSS exists as a regulation in different jurisdictions, but there is nothing forcing it either - its the contract your processor signs with their bank, and other many agreements similarly.
An exchange exists to convert Fiat to Tokens. A merchant can only accept tokens signed from an exchange. The Fiat<>Kudo transfer happens on an exchange and requires traditional regulated finance rails. Could you build a cash-backed exchange? Yes, but then merchants accepting that specific exchange will need a way to exchange it back to fiat, and that doesn't work.
There isn't a separate digital virtual currency in Taler. Taler is an electronic payment system that uses existing currencies (such as USD/EUR). Kudos is only used for the demo, but in a real deployment, it will be USD/EUR/etc.
This sounds a lot like David Chaum's eCash of the 90s. You transfer ordinary money into a Taler account in a Taler bank and transfer them to other Taler accounts, and from there to ordinary money. That's unlike Bitcoin in pretty much every respect.
It takes some courage to make a crypto-payment protocol explicitly taxation-friendly, but they claim the tax man only gets to see the amounts, not the identities. What a pity the design doc isn't yet on their website.
> actually decentralized transactions between two offline parties can take place.
The schema they use to explain the system's mechanisms clearly shows an exchange that needs to be audited:
> Payments are made after exchanging existing money into electronic money with the help of an Exchange service, that is, a payment service provider for Taler.
That is, the transaction can be offline, but it eventually needs to pass through a central point to be effective.
This shouldn't be viewed as a Zcash decision vs. Taler. I think this should be more viewed as full centralized Chaumian e-cash (with more flexible privacy choices) vs. Taler. If you're telling me that Taler's "value transparency" decisions are driven by technological scaling limitations that can't addressed any other way, then that's an interesting discussion to have. But it's not a discussion about Zcash.
Their website[1] gives more detailed information on how it works than I can here. Effectively, yes, but the system explicitly supports having different mints that operate over different currencies.
And while what consumers (people sending money) spend their money on is completely anonymous and cannot be correlated, merchants (people receiving money) can still have their income audited and taxed accordingly.
The system was designed by a university research team in Europe and became a GNU project a year or two ago.
So it looks like Taler is designed as a consumer to merchant payment system, and not person to person. I suppose that person to person could work with banks serving as intermediaries.
With anonymity for consumer how would transactions like exchanges and returns work?
I think GNU Taler[1] solves the untracabilty problem in a way that most people should be happy with. Consumers have all of their transactions private from everyone (the seller cannot tell how much money they have, what other transactions they've made, or where the money comes from; a government cannot tell what transactions a person has made). But seller transactions can be audited for tax reasons, to avoid tax fraud.
And best of all, it's not yet another cryptocurrency. It's a payment system that works over any currency (traditional VISA, or crypto-currencies). Of course, this means that Taler "tokens" cannot be used as a store of value, other than as a proxy for the underlying store of value. So you would only hold Taler tokens like you would cash in your wallet.
They even have really nice easy integrations into browsers and backend processing.
(I don't work on GNU Taler, I've just been saddened that such an interesting project has gotten so little press outside of GNU circles.)
I don't have time for a full write up of this system yet, and a paper would be really great.
That said, here are to me the most salient points:
* Exchanges (essentially banks in Taler) must have external auditing; there are no in-built technology mechanisms for noticing or defeating over-issuance
* HTTP/HTTPS focused -- this is intended to be an API-layer tool
* Token based, so you could use it with any system you want
* Government audit friendly -- it tries for high levels of privacy for users and almost none for merchants as a conscious decision to be bad for money laundering.
I'm not sure the Hawala comparison is accurate; Hawala relies on essentially net neutral flows between nodes [exchanges] and trust-based credits and debits (not credit in the sense of literal credit, but credit in the strict ledger sense). This is in place of an actual transfer, which is what happens with crypto assets (unless Patrick is referring here to some specific decentralized exchange mechanism) - a transfer is made from one digital wallet (the original owners) to an exchange's, and from there presumably traded to someone else who is coming in with a fiat asset.
Certainly. Using it to distribute the currency, before there's the critical mass of people wanting to make transactions enough to pay your miners seems a perfectly good fit once you're already needing to mine, though.
"There are (theoretical) systems that allow cryptographically secure transactions to take place without so much thrashing though. Even verifiable offline transactions."
Verifiable offline transactions with no centralization? Can you link to some?
"When two banks transfer money, there's no concrete thing being moved or transmitted. It pretty much just involves bank B telling bank A "You hereby have $100k of my cash". So A needs some kind of global ledger to keep track of how much cash B actually has, and double check whether it's already told C, D, E that they have all of it."
No, there's no global ledger, and it isn't required. There are checks and balances and regulations that allow money to work in a completely distributed way. Unlike cryptocurrencies that use a centralized ledger (all the 'major' ones, at least).
Yes, see David Chaum's original pre-bitcoin "e-cash" and the more recent GNU Taler project: https://taler.net/en/
The problem is that banks won't implement these systems unless they're forced to. They seem to benefit from the insecurity, surveillance, and bureaucracy of the existing system. So we will have to make new banks...
Token value perhaps, under very low volume (think single digit users). But imagine millions or billions of dollars a day in transaction volume, looking at a $5 payment at a cafe and then trying to figure out which of the people whose been assigned a $5 token to in the past month might have shopped there - it would be absolutely futile.
Taler wallets just sit there until you use them, much like cash. Realistically, there would be too many degrees of freedom to create a matching from merchant to user, even if we additionally assumed a ton of metadata about user/merchant location and such.
Cryptocurrencies can take the role of a settlement network between the money dealers. This allows money dealers who either don't fully trust each other, or simply need to settle debt internationally because the transaction flow is asymmetric, to make these transactions.
It also allows for a new kind of system where the money dealers act as access points to the network, and customers trust their local money dealer, but you don't need trust connections between the money dealers: If I want to send money to you from my remote village to yours, I ask you which money dealer you trust, go to my trusted money dealer, give him cash, and tell him that it is to go to your trusted money dealer.
The two money dealers don't have to trust each other for the transaction to work, and the transactions are much harder to disrupt than classic banking transactions.
I believe OP means that a decentralized trading network (not sure how that would be implemented with lowish latency) would circumvent this, not that the transaction needs to be done in a cryptocurrency
That was my point. I don't see how using "side-channels" or "off chain" systems are materially different from using the Visa or the Kroner system, and then when you want a public settlement layer that is open and well-defined converting some funds from those systems to a crypto system. What's the difference?
Can't off chain systems be seen as simply analogous to transacting in deposited funds with paypal where your paypal password is the signature?
Maybe these systems send something out to a public blockchain, but you're still trusting them to honor withdrawals of your deposited funds in the same way you would with paypal, correct?
What is the actual use in practice of side channels and off chain systems these days?
[0] "the Bitcoin network", meaning the use of blockchain transactions to facilitate payments, or off-chain schemes to do the same with on-chain settlement (as in lightning network)
reply