Re: [Taler] Support for payer-trustlessness and merchant-auditing

[Jeff Burdges]

We've looked into blockchain payment channels before.  Those schemes all
still suffer from scalability and performance issues that Taler avoids,
and most do not provide any privacy. [1]  


On Thu, 2017-10-05 at 21:13 +0200, Rune K. Svendsen wrote:
> Consequently, the merchant/recipient of funds becomes responsible for
> vetting exchanges, as opposed to the consumer/sender of funds. 

No.  Customers do not vet exchanges in Taler.  Auditors vet exchanges.
And merchants select auditors they trust.  Customers choose an exchange
which vetted by one or more auditors.  

It's simplest if the auditor can legally represent the currency, like by
being approved by a government regulatory authority.  We should be fine
if there are multiple regulatory authorities under say the Euro. 

There are likely merchant-auditor-exchange trust graphs in which we do
not handle the "your money does not work here" error well. [2]  Anything
typical could be addressed though, inducing say the currency controls in
Greece or unofficially Euro nations like Montenegro. 

Indeed, there is no reason to complicate the customer's wallet here
since ordinary risk management and conversion tools could operate
strictly between the merchant, exchange, and auditor.  At the extreme,
interledger would claim to do anything you like, but maybe not fast
enough for us, so maybe auditors should sell insurance/options against
other auditors or something else instantaneous like that.  

As for BTC, there are few enough crypto-currency exchanges that some
could simply run Taler exchanges and ask that both the the merchant and
the customer trust the same exchange, so that the exchange can settle
with off-chain transactions and be robust against future on-chain
transaction fees. 

Jeff

[1]  In particular, the BOLT payment channel scheme for ZCash suffers
from a catastrophic deanonymization attack through dropping channels if
you use it on anything besides ZCash.  And it require enormous off-chain
zero-knowledge proofs. 

[2] In the abstract, these auditing trust graphs might make an
interesting PhD project, maybe for someone studying mathematical
finance.

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