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I understand from here and here that assets are defined by the unique combination of their asset_code and their asset_issuer.

Suppose I am asset_issuer=Steven and I want to issue asset_code=SteveCoins, redeemable only for high fives from Steven. It looks like I can issue them here, but what keeps someone else from also issuing SteveCoins of their own? What if they are not Steve? Being able to issue their own issuer-specific source of dollars makes sense because your dollars are as good as Steve’s, but are your SteveCoins as good? It seems like no.

Is there a network-supported-way to maintain a monopoly of your issuance and prevent knockoffs? Or from the other side, what prevents non-Stevens from issuing dollars, bitcoins, coconuts, or SteveCoins they aren’t authorized to issue (for whatever reason: they are not Steve or they don’t have dollars, etc.)? And what policies are in place by the network to punish that?

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    Just since I've seen you ask like 10 questions today, Stellar has a more active Keybase group. – Carl Vitullo Mar 15 at 17:36
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what prevents non-Stevens from issuing dollars, bitcoins, coconuts, or SteveCoins they aren’t authorized to issue?

Who would authorize that? Stellar is decentralized, so there is no central authority blessing or condemning assets.

USD, CNY, BTC, ETH, LTC, XRP, and lots of other tokens/currencies have multiple issuers. There are some sketchy issuers and there are more trustworthy issuers. The issuers act as a bridge onto the network, users have to trust that they'll uphold their end of the bargain. This is the thinking behind "trustlines"—you have to communicate to the network that you've opted-in to trust an issuer before you can interact with their token.

This is the downside of decentralization; it's much harder to deal with frauds and scammers without a central authority.

  • Thank you. I get this is the flipside of decentralization. But how do people handle this in practice? If you're a brand selling goods and services, it's vital to your business that you have some way of declaring your even self-declared authenticity, and prevent in some practical way others from obliging you to do things without your being compensated for it. Do you just count on verifying that off-chain? You publish your trustline on your website or something? – Mittenchops Mar 15 at 17:53
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Tokens are created by simply sending them from the issuer account to anyone elses account. Your "Steve" account is unique and you are the only one in possession of the private key, nobody else can issue "Steve-SteveCoins". Anyone can issue "AlsoSteve-SteveCoins" but the tokens are not interoperable unless someone trusts both Steves and offers to exchange "Steve-SteveCoins" for "AlsoSteve-SteveCoins".

Since this is an open, distributed network, there is no measure to do anything about it. It's similar to the question which of Bitcoin and BitcoinCash is the real one - it's the ones that users trust and use (except BitcoinSV is definitely not if you ask me :).

  • Hmm, OK. So, AlsoSteve can issue SteveCoins, but if people buy them, wouldn't this create an impression RealSteve is obliged to redeem them for Steve-High-Fives? He is not, but if you bought them from AlsoSteve, you might be very upset with Steve if he doesn't honor AlsoSteve's promise, right? How do you prove, "I'm the /Real/ Steve, these are the only ones redeemable /from me/," even though it is super valuable that people can make coins redeemable from AlsoSteve/themselves? – Mittenchops Mar 15 at 17:48
  • That feels to me like buying a Lowes gift card and getting mad that Home Depot won't take it. Yeah, the person may be upset, but ultimately they bought the wrong thing. If buyers are getting that impression, Steve could warn about fake SteveCoin issuers and reach out if trading platforms are confusing users, but there is no on-network verification involved. – Carl Vitullo Mar 15 at 17:55
  • Hmm, but it's more like buying a Lowes gift card that someone crossed out and wrote "Home Depot" on, right, in that they share the same name? Is the ecosystem strong enough on doing trust correctly that users are not duped by this kind of thing in practice? – Mittenchops Mar 15 at 18:01
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I understand from here and here that assets are defined by the unique combination of their asset_code and their asset_issuer.

If you understand this fully, you also understand Trustlines. An account holder has to decide that they trust a particular Steve before they can even hold SteveCoins.

To help identify the correct account to trust, Stellar facilitates setting a Home Domain field on an issuing account. This leverages the DNS system as a proof of ownership.

Further, StellarTerm has become the de facto authority for authenticating the owner of an asset by adding additional steps to prove credibility. See their criteria for listing an asset on the site.

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It is also possible to obtain a trade/servicemark for SteveCoin from the US Patent & Trademark Office or other national equivalent.

Then nobody can legally issue SteveCoins but the registered owner of the mark, and can issue cease-and-desist letters, seek court injunctions, suits for damages, etc., against anyone else who tried to issue, market or sell anything called SteveCoin (or anything confusingly similar, like StevenCoin or SteveToken).

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