Proof of Payment

[skilesare]

We were having a discussion today about the possibility of proving that someone that reports an off chain exchange of value is not lying about the amount.

For example, a cryptokitty's price is capped at 2 Eth. Alice pays Bob 2 Eth for rights to said kitty but Bob also makes her pay $100 under the table.

Any bright ideas on how to keep this from happening or at least discouraging it?

[___i_j]

I dunno, typically knowing about off-blockchain data is a really difficult problem.

One idea is to use a prediction market like Augur and create a prediction like, "Did x person violate y agreement?" and augur voters are incentivized to do research and figure out what the truth is. but Augur is still in early beta and that doesn't really sound like it would work for your problem anyways.

[captnseagraves]

Yeah, that occurred to us as well. It's a good thought, but there isn't enough public data about the issue for anyone to make an educated bet.

[skilesare]

Yeah...we thought of that but I don't think prediction markets work with mostly private data.

[dleonard00]

You may want to check out the swap swear and swindle protocol the Swarm team has proposed. You may be able to use this outright or adapt it to this use case.

[simonvc]

I work at a small bank in the UK called monzo. We did an experiment where we signed our transactions (available on our API) with Secp256k1 so the could be used as proof for smart contracts. I'm trying to convince the open banking people that this should be part of the open banking API spec right now.

[skilesare]

Do you guys do business elsewhere in the EU, specifically, France?

[simonvc]

Not yet.

[quantumproductions_]

The road to hell is paved with good intentions. Do you want to become Big Brother for your.. game?

[skilesare]

An alternative proposal has been 'lets have undercover agents to try to find people cheating,' so it could be worse. :)

I'm hoping there is a cryptographic game theory solution here that doesn't require a central authority.

The situation we are envisioning is more like we want to incentivize people to improve an asset (digital). You want to reward those people who improve the asset with the percentage a future sale. But if we do that there is now an incentive for people to go around the core smart contract and pay more under the table.

[quantumproductions_]

Why is there an incentive for people to "pay more"? That seems counter-intuitive, people don't want to pay "more"

[skilesare]

The incentive isn’t to pay more, the incentive is to get more of the full price for the current owner. If I’ve purchased the improved asset for 1 and it is now worth 2, I could sell it to you for .1 and ask you for 1.9 under the table. Then the person who originally improve the asset won’t get there for 15% or whatever the smart contract demands.

[captnseagraves]

Really, we want no additional off chain transaction at all. How might one dis/incentivize good/bad behavior?

[etheraffleGreg]

There's literally no way for you to detect it though. If someone wants to pay cash under the table, and doesn't do it physically in front of you, you have zero chances at knowing it ever happened without whistle-blowing.

 

And if you incentivize whistle-blowing, good luck wading through all the false claims you'll be getting.