Doing business in USD versus Siacoin
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Hi, I'm a noob to Sia -- so pardon the silly question. After receiving VC financing, could your board of directors eventually take a stance that business should be conducted in USD versus Siacoin -- as this would make it easier for your customers to transact?
If not, it would be nice to hear why transacting in Siacoin is necessary versus USD (or any other fiat money).
Thanks!
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One word: Regulation. If you want people to transact directly in USD, then someone needs to sell Siacoins for USD. That means they are a money transmitter and subject to tons of regulation. Which is very, very costly. For the time being, it makes a lot of sense that people exchange fiat for bitcoin through one of the existing exchanges, and then convert their bitcoins to Siacoins on smaller exchanges. Maybe one day a large fiat exchanges will provide trading with Siacoins as well, e.g. as Kraken and Coinbase provides for Ethereum.
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I believe that the question was:
Why have Siacoin and BTC, and a lot of other complicated stuff if we could just use USD. Done.
You want storage? xxxUSD
You have storage to rent? XXXUSD.Keep it simple.
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Security is achieved by using cryptographic assets on a blockchain. USD is a fiat asset, meaning that to use it on a cryptographic blockchain we'd need some permission, guidance, and regulation from a centralized authority.
Sia's goal is to be decentralized, so we need the exchanges to be in decentralized assets such that money can be automatically exchanged, refunded, and removed in penalty without any central provider holding the USD.
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Its more complicated than @4matter may imagine. But becoming a "money handling business" isn't the hardest thing to do- just needs to be sufficient motivation to do so.
I've been taking a hard look at building a few front ends to Sia coin to make it more accessible to "normal people". Sia needs to become more production ready before it truly makes sense. (It looks like the devs are well on their way to making this happen though)
You'd essentially need to create a pseudo exchange, your own storage pool/set of hosts and a dropbox style client for it to truly be a good solution. From a liability stand point you'd need to provide your own hosts, and vet any 3rd party hosts if you want to go that route.
Right now if you lose files you just lose your sia collateral- if you replaced this with hard USD you'd potentially have to deal with the liability of losing someone elses files. In theory this is not a big deal with contracts in place. However- after owning a datacenter for 7 years I can tell you this never works out the way you'd like. You eventually lose someones information- and lawsuits ensue. Implied merchant-ability is not fun. We won the law suit but it took 2 years and 250k to settle the score.
The other issue of building a production worthy product for normals on Sia is what it would do to the network as a whole. If I add 800TB to the network- and I'm receiving an outsized benefit because I'm front ending all the contracts to make sure my servers are used is that fair? It'd massively blow up the block chain. All it would take is an enterprise sales guy working for a few months to end up with close to a Petabyte in essentially a silo within the network.
I'd like to see Sia compete with all the big storage providers- but what makes sense for the consumer is what created these centralized datacenters to begin with- the spirit of the internet has always been decentralized- so everything Sia does needs to stay true to that ethos.
