...by Daniel Szego
quote
"Simplicity is the ultimate sophistication."
Leonardo da Vinci

Monday, July 23, 2018

Optimizing IOU debt graphs on the blockchain


At optimizing an IOU debt graph on the blockchain we should consider the following properties:
- Issuing a new IOU debt must be associated with a digital identity. I should be able to issue a new IOU if I can sign with my private key that I am the issuer of the given identity. 
- There should be a balance for each identity on the blockchain accumulating the numbers how much do I own for someone and how much am I owned by someone. The balance can be changed only if someone creates a new IOU requires digital signatures. 
- The IOU network can be optimized either by everyone or by special optimizer roles. Network optimization can be executed only in a way that non of the account balances changes.
- The effect of the network optimization should be a decreased complexity of the graph, which can be manifested for example as the amount of edges of the depth graph, or the edges weighted by the debt amount. 
- The decreased complexity should be incentivezed, the increased complexity should not be allowed.  - The optimization should not be a totally independent round, optimization should run parallel and consistent with the issuance of new debt.
- It is an open question of a debt can be transferred or traded explicitly without the optimization mechanism.