The Metaverse

[Clinamenic]

Yeah and computational integrity is a way of expressing the security of the network, I think. Poor computational integrity would mean that the database would be cryptographically easy to compromise or mutate, if I'm thinking about this right.

 

[vimothy]

so the only issue, in your view, was that the construction of these instruments wasn't public? and they were, it wouldn't have happened?

 

[Clinamenic]

Yeah and computational integrity is a way of expressing the security of the network, I think. Poor computational integrity would mean that the database would be cryptographically easy to compromise or mutate, if I'm thinking about this right.

Computational integrity is also a way of expressing the trustability of a protocol.

 

[toko]

i mean i dont know for sure, but I think it wouldn't have gotten so out of control and caused so much fear.

 

[Clinamenic]

i mean i dont know for sure, but I think it wouldn't have gotten so out of control and caused so much fear.

It would have had to be hidden by purely obfuscatory measures, perhaps. But even then, I'm sure people could have still spotted something fishy? If we're talking about corrupt credit rating?

 

[toko]

Also the rating agencies failed to determine risk. I'm not sure an algo would have done a better job but the rating agency leds us blind off a cliff.

 

[vimothy]

i mean i dont know for sure, but I think it wouldn't have gotten so out of control and caused so much fear.

why? based on what?

 

[vimothy]

weren't some of these instruments available to market participants, which is what allowed them to figure out their true worth?

 

[Clinamenic]

But on a blockchain (and this gets into the earlier discussion about tokenizing future income), I'm not sure how sub-prime mortgages could even be tokenized. Or even healthy mortgages, if ultimately the debtor's repayment is promissory in nature, as opposed to being overcollateralized from the offset?

 

[toko]

because the true extent of the liabilities would have been much more known, we would know who held bad assets and who didn't. unknown systematic risk = panic

 

[Clinamenic]

why? based on what?

Based on how it would all be tied to a publicly queryable database. You can still obfuscate things, like via Tornado Cash, but that is veritably a dead giveaway of illicit activity.

 

[toko]

weren't some of these instruments available to market participants, which is what allowed them to figure out their true worth?

yes, they ignored the rating agencies and tried to go to directly to source data. they still didn't know the extent of the liabilites, just that something was really fucked with the market and that things were very very wrong.

 

[vimothy]

assuming there are ppl in the market who can figure that out

 

[toko]

But on a blockchain (and this gets into the earlier discussion about tokenizing future income), I'm not sure how sub-prime mortgages could even be tokenized. Or even healthy mortgages, if ultimately the debtor's repayment is promissory in nature, as opposed to being overcollateralized from the offset?

yes and only kind of related, mortgages and housing in general is just a massive ponzi. Gov funds huge levered long on asset that should be cheap. i hope mortgages never come to defi.

 

[toko]

assuming there are ppl in the market who can figure that out

i think its a safe assumption, given that you can be rewarded by finding risk that the market doesn't price correctly.

 

[vimothy]

yes, they ignored the rating agencies and tried to go to directly to source data. they still didn't know the extent of the liabilites, just that something was really fucked with the market and that things were very very wrong.

point is, nominally public data didn't surface due to its effective opacity

 

[vimothy]

i think its a safe assumption, given that you can be rewarded by finding risk that the market doesn't price correctly.

hmmmmmmmmmm

 

[Clinamenic]

(basically huge levered long)

I don't understand this, a long from whose position? And on what? Still have some basic confusion regarding derivatives and debt obligations.

 

[Clinamenic]

point is, nominally public data didn't surface due to its effective opacity

By opacity you mean technical complexity? Or actual concealed details?

 

[vimothy]

yes and only kind of related, mortgages and housing in general is just a massive ponzi. Gov funds huge levered long on asset that should be cheap. i hope mortgages never come to defi

I'm very interested in hearing how crypto markets could support standard fin transactions btw