Can you help me understand a bit more?

I'm a non tech minded person, essentially I'm at the understanding the concept stage with this and wanted to ask a few questions of those who understand and can explain the proposition. So lets imagine I want to setup a courier company (company A) using third party couriers (courier Z) to deliver parcels. Am I right in thinking that Ethereum is appropriate for some but not all tasks associated with running this type of business? Lets say couriers bid for the jobs that I have available at any given point, I would expect an auction type of process is not best suited to ethereum's structure. It would be appropriate once a courier has been appointed to record acceptance of a package, specified terms and the delivery confirmation to the end customer, logging all this on the blockchain in a parcel specific smart contract.

So, correct me if I'm wrong, but courier company A requires some computational resource to conduct an auction process to appoint the third party courier Z at the best price, once courier company A and Z are in agreement with the terms as agreed on this 'extra-ethereum' system that ethereum and smart contracts come into their own, details of the agreements are written into a contract and this is then passed to ethereum for logging and handling payment between counterparties on completion of the contract.

Lets say courier company A wants to issue it's own crypto currency (post_its) can any specified qty of currency be created 100, 1000, 1 billion etc? Would it then be possible, once having created this currency to transfer x qty to an electronic wallet?

Having created it's float of post_its how would the courier company create a market for this new currency? How would the market rate be established, presumably the initial rate would be 0.000000001, how would you increase the value of post_its to 0.0001?

That's all for now, any pointers/guidance much appreciated.

Answers

  • ggeko4ggeko4 Member Posts: 2
    edited August 2015
    I realise in posting this that I didn't quote an exchange rate in the example, so instead of 'presumably the initial rate would be 0.000000001' it should read something like 'initially the GBP/post_it rate would be, for arguments sake: 1/0.000000001.' - Which begs the question; can you set the initial market rate manually or is there some machine based mechanism for determining this rate?
  • SmithgiftSmithgift Member Posts: 64
    Ethereum may be suited to some kinds of auctions. There's some technical issues for certain kinds, but I'm not going to go into them. The cost of creating another system for auctions may outweigh the benefits of using it, so it may be better just to deal with Ethereum's oddities.

    Ethereum can easily create subcurrencies with about any specific amount or economic property*. It's actually in the frontier tutorial. The standard subcoin can be "sent" to anything with an Ethereum account, which includes both people and contracts.

    As for how much each post_it would be worth, that's a rather philosophical question. It would be possible for the system to issue post_its at a specific rate**, say, at 1 GBP/0.000000001 post_it. That doesn't mean anyone will necessarily buy post_its. The exchange rate would theoretically be determined by what people wish to buy and sell post_its for***. If someone thought post_its were a steal at 0.00001, let alone 0.000000001, then the price might rapidly rise to 0.0001. Or if no one wanted them, they might not be worth anything.

    * By economic property I mean such things as interest, demurrage, being backed by something, etc. Things such as being legal tender are beyond Ethereum's powers.

    ** Actually accepting fiat payments is also beyond Ethereum's powers, because there's no way to prove that someone really did pay you five bucks programmatically, or didn't just bash you over the head with a club and run off with those five bucks subsequently. There may eventually be a way for there to be something that's "close enough" to fiat money in the same way that a credit card is "close enough" to bank notes and bank notes are "close enough" to gold.

    *** Buying and selling post_its on a decentralized marketplace, I mean. There is at least one project to create a similar thing on Ethereum, but no such system has gained maturity.
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