Highfidelity 'Commerce Blog' Comments


#1

https://blog.highfidelity.com/first-look-at-high-fidelity-commerce-in-action-bf9390823ba7
https://docs.highfidelity.com/high-fidelity-commerce/faq-section

“As an open, decentralized system, we are committed to democratizing as much of virtual reality as possible.”

Ok, so it has been decided it will be decentralized? Does this mean open mining or is it still going to be limited to a few select few chosen by highfidelity? From what I am seeing there is no mining at all.

“To keep prices stable as the economy expands, we will also add currency, as has been done successfully in Second Life.”

Does this mean there is no limit to the amount of HFC generated and hifi can generate as much as they want? From what I am gathering HiFi does not intend to use mining at all, but instead create a endless amount of HFC.

How is this decentralized? When you have one single entity that can create endless amount of a crypto, it is centralized, not decentralized. Every bit of new crypto generated is stealing value from all currently existing currency already generated and only benefits those who use it first, decreasing all value over time. If only a certain amount were to ever exist, it would naturally become more valuable over time.

Seriously, the only way to perceive this is a unwillingness to relinquish control of the economy, which is very much anti-decentralization.

I am wondering if this is a misunderstanding of the technology, terminology or just a blatant lie. This might sound mean but I am being nice compared to what the crypto community would say about this.

I highly doubt HFC will be very popular and I think people will opt to use existing cryptocurrencies instead. The reasons I see for opting HFC out of being an actual REAL cryptocurrency is just not enough to keep people from using actual REAL cryptocurrencies. If you want HFC to be competitive with existing cryptocurrency it needs to BE a REAL cryptocurrency, not an infinite amount of shit-coin digital asset.

Why will it fail? Well, one reason is because no cryptocurrency exchange in its right mind would deal in unlimited shitcoin digital assets (ever seen a legit cryptocurrency exchange deal in Lindens?). Nobody will be able to buy HFC anywhere. Instead, they will have to buy an existing cryptocurrency and trade those for HFC (because you don’t need licenses to exchange cryptos with other cryptos). Why bother with HFC at all if somebody else has already implemented hifi bitcoin payments and a bitcoin marketplace? HFC will just be an unnecessary extra step.

I’ll say this as I have said it before: Highfidelity is better off creating an actual cryptocoin with public mining and having a ICO of pre-mined coins to generate startup funds. Many companies have raised millions this way, with cryptos that had WAY less services to offer than HiFi does. Why rely on investors when you can generate much-needed startup capital with a (conservative amount of) pre-mined ICO? IT IS CRAZY NOT TO.

It is also crazy to have HiFi perceived as CRAP so early in its development. If you really want to democratize “as much of virtual reality as possible”, how about making a REAL cryptocurrency? This decision can literally make or break HiFi. If HiFi has actual cutting-edge cryptocurrency behind it, it could be a real heavy-hitter to stand the test of time. If it has a SL-like currency… well that doesn’t bode well for the future when real cryptocurrencies will take over every economy on earth anyway.

Sorry I just don’t see this fake-o-currency as fitting in with the whole basic concept of HiFi, anonymity and open source. So what if it is volatile for a while? Let some people make money and others lose money. It will level out eventually. No need to hand-hold people who cannot do their due-diligence.

Of course there is nothing wrong with implementing an unlimited digital asset as currency…. but to do so and call it a decentralized cryptocurrency and expecting it to be sold on crypto exchanges is very very naive (possibly even legally fraudulent as misrepresentation, I hope you ran this past your legal team first).

Highfidelity will have to handle sales of the unlimited digital asset themselves, as SL has done. Nobody is going to touch it except places like VirWox who literally rape you on the exchange rates.

Is it really worth it to use the proposed HiFiCoin with ‘fast transactions’ and ‘low fees’ when it takes ten times the amount of time to buy it and you end up having to pay out the ass for exchange rates?

(edited 17 times. might be a new record for me, haha)


#2

You should post HiFi’s plan on a cryptocurrency forum and link us to the reaction. I’m genuinely curious to see what they say. Is the lack of mining ability your main issue with the plan?


#3

Well - there’s little adult discourse on most of those forums - it’s usually a lot of TO THE MOOOOON or shitcoin or whatever. But - I’d expect any of the adults or savvy in such a place would see numerous issues. Also - without a method to self generate coin, manipulate its value and control its siphoning of $ into gulps (i.e. the pump and dump whale effect) I’d expect little enthusiasm for it much of anywhere in the crypto world.


#4

Pretty much, yes. If it cannot be mined it is not decentralized as somebody has to have the power to create new coins thus can create as many as they wish at any time like SL Lindens or US Dollars. This only benefits whoever first receives the new currency and lowers the value of already existing currency and is in effect, theft (or involuntary taxation).

If the amount of coins able to exist is infinite then the currency itself is infinitely worthless. What if whoever in control wants to make a googleplex amount of new HiFicoins and just gives them away? It would totally destroy the value of the currency for everyone. I don’t know about you but I don’t trust anyone enough to hold that sort power over my money for me, and is frankly one of the biggest reasons people want to use cryptocurrency in the first place. It is designed to be a decentralized currency. That’s all.

In this way decentralization reduces it to a digital asset rather than a real cryptocurrency, and is more or less the same as SL Lindens. An infinite buy and sell order could be placed which pretty much removes the need to use cryptocurrency in the first place.


#5

I’d rather not tarnish HiFi like that before it’s even out of beta. That could destroy it with a bad reputation that won’t go away. The internet never forgets. Let’s say HiFi decides to do the right thing and make a mined coin in the end. People will be like “oh wasn’t that the shitcoin somebody posted about before?”


#6

It might affect its reputation with cryptocurrency enthusiasts and miners

but not with the rest of the world. The average person (which means, anyone but the computer nerds running mining rigs 24/7 in their basements gobbling up a country’s worth of electricity) laughs at Bitcoin etc. and see them as valuable as Monopoly money.

Anyway, it’s better to potentially risk a harsh reaction now when there’s still time to change it. Than later when it’s too late.

Personally I’m fine with no mining, because of the environmental impacts that mining has. If High Fidelity is designed to allow other marketplaces, then won’t you also have the option of buying in other currencies if that’s what you want? I expect you’ll be in the minority on that though. Most people simply don’t care about open source, freedom, decentralization, etc. These are all selling points for us, the particular audience on this forum, but not for the average person. The average user just want something that works and is convenient. They couldn’t care less if you mention “it’s open source!” That’s gibberish to them. And so is “cryptocurrency.”


#7

I am fine with it too, but I am not fine with it being presented as something it is not. Saying it is a decentralized cryptocurrency is naive at best and at worst criminal fraud.


#8

They are looking into Federated Consensus Blockchain, and @philip proposes upon their approach.

You should definitely flag members of the hifi team if you want to have an actual discussion about the stuff, because as we know they only passively look at the forums.

Those planning the currencies have most likely already covered these things and will have an answer for them.

But generally speaking whats stopping you from not using the HFC ? I mean the entire certification stuff is still technically certified through their marketplace which is also filtered by them as of this moment, but it doesnt mean eventually others will behave as marketplaces to them too.

We aint got any details on how a third party market could even go in the middle, forexample to deal with adult material (Which they have said they will avoid, but will not stop us from doing)


#9

I don’t know if it is dishonesty or just plain ignorance.
The most outrageous statement bitcoins is more like gold than money.
Paper Money that we use today started off as receipts for gold and silver.
Gold is money!
The prices are rising not because of the amount of currency on the market but speculation.
And you have missed the point of why they setup that network in the way they did.
Because we don’t trust people like you!
Because with real currency you can stick it in your pocket or stick it in your own safe.
Having a network like that allows you to protect your investment.
Having a network like you are proposing concentrates the earnings from those transactions in your hands and your friends hands.
Don’t take us for fools!
The arrangement of that network has nothing to do with speed of transfer.
Well maybe if it’s transferring money from our pocket to yours and your friends.


#10

I finally agree with you on something.


#11

Dude there is no answer for calling a shitcoin digital asset a cryptocurrency. It’s blatantly wrong.

Digital Assets vs Cryptocurrencies

THE DIFFERENCE BETWEEN CRYPTOCURRENCIES AND DIGITAL ASSETS

More in-depth explanation: What’s the Difference Between Blockchains, Cryptocurrency, Audit Trails, and Databases?

Right now I am just giving them the benefit of the doubt. They don’t have any cryptocurrency experts on staff, so it is probably just a matter of mistaking the technology and terminology. I think they realize they need to hurry and get an economy going to keep this project alive so they are throwing stuff out there for us to discuss (otherwise Philip wouldn’t be asking us to post our opinions about their proposal in the forums).

The fact is they propose to use an infinite digital asset shitcoin while calling it decentralized cryptocurrency. There is a fear that people will vote with their wallets and create value (or lack of value) for HFC, so they propose to artificially control value.

“As with other blockchain-backed digital currencies, we anticipate that existing coin exchanges may elect to include HFC in their portfolio. In these cases, the exchange provider would be obligated to meet the laws and tax obligations particular to the jurisdiction where they operate. In many jurisdictions, the sale of virtual goods is taxable. A seller is responsible for including the cost of sales tax or VAT in the listed price of an item, and remitting to the appropriate authority.”

In other words they do not intend to buy or sell HFC themselves. Instead they are expecting crypto exchanges to do it for them. I am telling you now that NO LEGIT CRYPTO EXCHANGE WILL DEAL IN UNLIMITED DIGITAL ASSETS.

Every single crypto exchange on the face of the planet only deals in real, publicly mined, limited cryptocurrencies.

What this means is the only people who will buy and sell HFC will be sites like VirWox who charge %20+ exchange rates. We might see the return of some now-defunct ‘exchanges’ from Second Life too. But there will be ABSOLUTELY NO legit crypto exchange carrying HFC if it is not a legit cryptocurrency. There just won’t.

They propose doing it this way to maintain low transaction rates and fast transactions but the truth is you will be paying a lot just to get HFC in the first place because the only legal way for anybody to trade them (without all sorts of transmitters licenses and a cryptolicense from each US State and each country on the planet like cryptoexchanges do) is with other cryptocurrencies. This means you would have to go to a legit exchange and buy a real cryptocurrency FIRST and THEN trade them for HFC from a non-legit (unlicensed) cryptoexchange. This defeats their stated purposes of low transaction fees and fast transactions.


#12

This argument falls into 2 groups
The bankers and the labourers
The bankers seem to want to make money from air
and the laborours want to make money selling what they make.
I submit that untill anyone arrives and makes anything worth buying then your arguing over monopoly money.


#13

@philip

The decision needs to be made whether to make an actual cryptocurrency or a unlimited digital money asset. But it cannot be both.

I compiled a list of pros and cons for different types of virtual currencies. Note that I am classifying the pros and cons from the viewpoint of the HiFi company itself, not that of its users. Pros and cons will differ according to each users needs.

Unlimited Centralized Digital Money Asset:
pros

  • May be used to artificially control market value (such as Linden Labs does with linden prices)
  • Possibly faster transactions since only HiFi users will be interested in using it and HiFi will control all transactions
  • HiFi retains control of transaction fees
  • Would need to be distributed/bought/sold by HiFi itself (this could be a pro or a con)

cons

  • No legit crypto exchange will deal in them
  • Illegal to buy and sell with fiat currency (without proper licenses such as legit crypto exchanges carry)
  • Is only of value to HiFi and its users
  • Would need to be distributed/bought/sold by HiFi itself (this could be a pro or a con)
  • Many users will trade it with actual cryptocurrencies but charge ridiculous amounts

"Would need to be distributed/bought/sold by HiFi itself (this could be a pro or a con)"
This could be a pro in that they can sell for as little or as much as they wish. A con in that they would need all the proper licenses which can be a legal nightmare these days.

This is basically the same as the Second Life Linden dollar.

Decentralized Cryptocurrency with conservative pre-mine ICO
pros

  • Legit crypto exchanges can be expected to deal in them
  • HiFi can still have a level of control in that they control the open source code of the coin
  • Currency will have value outside of HiFi
  • Startup funds may be attained by holding a pre-mined ICO
  • Goes along with the whole open source / decentralized philosophy of highfidelity
  • HiFi will not be solely responsible for processing transactions or distributing the currency after ICO
  • Perceived as more trustworthy by the internet at large
  • It is common and expected that a reserve will be held to fund the maintenance and development of the coin source code

cons

  • Subject to pump and dumps from outside exchanges
  • Subject to forking
  • Initial price volatility
  • Subject to high transaction fees (although HiFi could still process transactions for low fees themselves if they still wanted to)
  • Subject to slow transaction (although HiFi could still process transactions themselves if they still wanted to)

There could also be cryptocurrency with huge or full pre-mined ICO, which is frowned upon and referred to as a shitcoin. Although HiFi could do a full pre-mine and hold a generous amount of reserve currency and still process transactions themselves. This could present problems when trying to get exchanges to deal in the coin because trading volume will generally be too low for them to be interested in it.

There could also be cryptocurrency with NO pre-mine which the crypto community would love but would create rich early adopter whales who are probably not hifi users themselves. It would also be of little use to HiFi because there would be no reserve funds for maintenance of the coin and no ICO startup funding.


#14

What if mining of HFC could be tied into the sandbox/server hosting? I think the problem with mining is that alot of computing power is dumped into it with little output other than signing the blocks etc… If the hifi server sits online with no one visiting, may as well put it to use for something.

Thanks for your detailed info @Cracker.Hax, I guess the centralized control over the money supply is the main contention… I get it.

On one side, with mining, we see a general increase in value of the currency unit, although it does not mean it translates directly to real value (unless you are saving/hoarding coins) , but in the context of a small merchant means I have to continually monitor what I’m charging (.0002342 BTC) …

On the other side , if it’s controlled play money where Hifi can add currency as they see fit, means that things will actually cost more as the value of the currency drops.

I can’t see an easy solution to this as it is a fundamental and diametrically opposed forces at play.

The tendency I see is that value items get cheaper and cheaper online to the point where there is little to no benefit for app developers or creators to make new stuff, the race to the bottom in terms of unit pricing , how can anyone make money selling an app for 99 cents…

Which model will help correct this economic online pattern? There will always be somebody to do it cheaper, but what happens to the value?

In the Linden dollar model, this race to the bottom, or selling near-free stuff can really skew the value proposition for Virtual goods (Im guilty of doing this at some points) where the continual undercutting means we have to invent even dumber pricing strategies like gatchas to approach real value for these items.

Anyway just a few thoughts…


#15

Well the value could always bet set at fiat dollar value and then automatically charged the correct amount of cryptocurrency at the time of purchase. Volatility doesn’t really matter much until you are cashing out. After all, all currency fluctuates but nobody really pays any attention unless they are currency trading.


#16

So you are suggesting HFC as a fiat currency backed by BTC or ETH for example?


#17

When I say fiat I mean currency like the USD or Euro.


#18

Oh ok, trying to imagine how this would look…


#19

@Cracker.Hax are you familiar with Bancor and Smart tokens? Would this patterns work for VR?

https://blockgeeks.com/guides/ethereum-token/ good reading on the topic (Bancor scroll down).


#20

I’m familiar with Ethereum. It’s pretty great. There is also Omni Layer and Counterparty tokens. And there is also Multichain, which is a platform for creating your own tokens. Philip already said they wouldn’t be using pre-existing coins like Ethereum or BTC though.

Speaking of Ethereum… from the beginning HiFi said they want to pay people for their processor time. Something like Golem would be perfect for that.

If I were going to go with using tokens as currency I would probably go with Multichain or Ethereum but I still think they would be far better off just making their own cryptocurrency with an ICO while they still can. It won’t be long until governments put a stop to ICOs.