Quote from: Melbustus on March 14, 2015, 08:03:28 AM

^ Above two posts...

Here's the thing: If you're "backing" a crypto-currency with something physical, someone has to maintain the backing. If you have someone doing that, you have a centralized system and you don't need a blockchain-based cryptocurrency.

True, someone or something has to maintain a backing if we are dealing with something physical.
However there's no requirement that someone or something has to be a single centralized point of failure... There are degrees of centralization.

Last I checked there was only around 13 actual miners in bitcoin.(going by the actual definition of those who actually mine tx into a block) Really right now only 3 of them need to be compromised for (at the very least) bitcoins decentralized trust narrative to be classified as compromised , and in reality a malicous actor controlling one or 2 of these entities could yield serious problems. Yet that is a much better position than last year. That's not as decentralized as some people imagine

Take the simplified example of backing a crypto asset with gold. We have an agency who'll accept your 1 gram gold and issue you 1 DIGIGOLD token. When you want your gold back you send the token and receive your gold. Simple enough, but there's the fair centralization issue you talk of. That one agency could go ahead and print as much DIGIGOLD as they want, playing fractional reserve with current supply etc.

So we can add another party in the form of a depository who'll independently verify inventory, and perhaps another party in the form of an external auditor. Then perhaps we'll segregate the trust by dividing the holdings amongst many vaults, and divide the actual issuance process to multiple agencies who have to sign off to try to prevent collusion.

Now that is nowhere near optimal (and it never will be) but it's not simple binary centralization, it's distributed trust. You write that you don't need a blockchain-based cryptocurrency, but whilst on-chain it has many of the same properties as bitcoin. (Users that hold DIGIGOLD can trustlessly send that gold token to anyone, anywhere, anytime)