Stripe Launches L1 Blockchain: Tempo
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Stripe has launched a new L1 blockchain called Tempo, sparking debate among HN users about the necessity and decentralization of the project.
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https://coinmarketcap.com/currencies/tac-protocol/
This one is: https://coinmarketcap.com/currencies/toncoin/
Why does Stripe want to creatively ruin their reputation by venturing into crypto / blockchain?
I don't see anyone in the real world using blockchains at all.
I get AI as it was a real world paradigm shift, but I have never seen anything in this blockchain / crypto space that has reached 100-500 million users let alone 1 billion users, that isn't based on speculation.
People use it for selling accounts, usernames, cheats and probably much more for it. Many of these also use Stripe (major cheat providers offer payments via Stripe and crypto, so why shouldn't Stripe also try to capture the value of Crypto payments?).
Many companies are using stablecoins for cross border transactions, and for payouts in countries with volatile currencies. There's clear value for these use-cases.
Not to mention lower fees and 24/7 availability.
Stablecoins enable instant, borderless, programmable transactions, but current blockchain infrastructure isn’t designed for them: existing systems are either fully general or trading-focused. Tempo is a blockchain designed and built for real-world payments.
- First line in TFA
How?
> existing systems are either fully general or trading-focused. Tempo is a blockchain designed and built for real-world payments.
What makes existing systems not suitable for instant, borderless transactions? What makes this new chain suitable for instant, borderless transactions?
Any system with an API is programmable.
That says nothing of political idiocy which will surely follow as new levers are tested, but payment processors are in the business of making money, and ostensibly want as many transactions to happen as possible, regardless of origin or the particulars of any sale.
They shouldn't be gatekeeping goods and services for legal transactions, and I'd be willing to bet most of them absolutely don't want to be in that position.
I imagine there's also a chargeback scam reduction and accountability benefit to this, which reduces losses, and ostensibly prices.
There's a surveillance and privacy hit, but it's not like the systems currently being used aren't completely compromised and surveilled already, so maybe this adds some accountability at that level as well.
Does this mean these companies are about to start accepting stablecoins as payment (via Tempo?) some time in the future? Seems out of the ordinary to work with these companies otherwise.
I do think it's possible they put more money/talent onto the problem after it happened though.
* https://www.nist.gov/blockchain
Specifically the yes/no flowchart on whether "you may have a useful blockchain use case" (Figure 6 - DHS Science & Technology Directorate Flowchart):
* https://csrc.nist.gov/CSRC/media/Projects/enhanced-distribut...
"Are the entities with write access having a difficult time deciding who should be in charge of the data store"
The vast majority of pointless blockchaining come from organisations that have already decided that they are going to be in charge. Which is just great for them, but it doesn't induce others to join them. I wonder how much of promoting blockchains is to project the illusion of relinquishing a degree of control. I guess all the ones doing it just because others were doing it are looking at AI now.
Once it's truly "open", you can't have any sensitive identifiers in there, so you need another protocol/system for correlating opaque identifiers with real-world entities (thus defeating the purpose).
And if financial institutions are involved, they'll want the ability to do what they do now: rewrite history whenever they feel the need (or are compelled by governments). Another strike against using blockchain.
Who would of thought?
That being said, I'm not entirely sure it's a bad thing...especially outside of the US/europe banking I get the impression that banking regulations are arbitrary and political and if all we get from crypto is escape from those regulations it may be worth the extra fraud and so on.
Historically, there have been hundreds of blockchians that were basically slightly modified forks of Ethereum clients, operated by a small group of validators that sacrifice decetralization in order to achieve higher throughput. This seems to be a slightly higher effort verson of that.
*https://github.com/paradigmxyz/reth
There are some legitimate advantages of ethereum (multiple independent validator software implementations) but decentralisation of the L1 isn’t one of them, even more so when you consider most ethereum transactions happen over centralized L2s.
I did not see the mention of decentralised BTW, why would it matter here? You trust business entity at the end of the day.
Eg if Australian locals suddenly switch transacting cocaine at scale in Tether instead of AUD, the US government can borrow more money by providing that collateral to Tether.
Edit: Izzy Kaminska recently had a, as always, solid and less snarky summary at https://www.financialsense.com/blog/21379/redollarization-an...
Second, Tether is not a regulated stablecoin in United States.
The bonds are sold en masse, and the value of those bonds will be hit, driving up gov borrowing costs (plus they just lost a source of demand), meaning the stablecoin “bank” could be bankrupt, right?
With stable coins you’re really trusting a private company to invest your money in a way that is robust to a drop in confidence. Isn’t this high risk? If a coin gets large enough, is it a threat to government solvency?
But I guess we will find out in a 2027 Bessent presser announcing the Fed stepping in.
More serious answer: the bigger risk is trusting SV types to be content with a couple of percent in spread, and not starting to pull all kind of shenanigans to juice returns to a point where it becomes much harder to bail them out vs just taking back the treasuries.
US government solvency seems, as crazy as it sounds, less of an issue, as evidenced by the brief tantrums with absolutely no real effects beyond a couple of protesting headlines in the recent months. Where else are people around the world going to put their money? But as gifted as the current gov crew is at turning privilege into disaster, we're probably going to find out soon enough if there are any actual limits to that.
> Stablecoins enable instant, borderless, programmable transactions, but current blockchain infrastructure isn’t designed for them: existing systems are either fully general or trading-focused. Tempo is a blockchain designed and built for real-world payments.
What is different in the details, no idea.
Regulations in payments tend to be very technical, and inserting some crypto/distributed plausible deniability in the mix could get them 5 more years of delay (until the next generation of regulations). It will depend on how those regulations take shape in the coming months.
In this day and age, countries need not be beholden to the pile of duct tape that is the credit card system and its innumerate middle-men and inefficiencies.
This is a good thing.
https://coinmarketcap.com/charts/number-of-cryptocurrencies-...
Bitcoin is decentralized because the sun distributes energy somewhat evenly across the globe.
The other 206701340 crypto projects, including this one, are decentralized because ... ?
From the very sparse info on the page, it seems this project does what so many other chains do to make payments faster and cheaper: They log them on a database that is synchronized across only a few computers.
In other words: I can't find any info on that page explaining how they plan to achieve decentralization.
Second, permissionless does not mean decentralized. You can have all validation of a POS chain ending up on a single computer.
There are mild returns to scale in running large-scale mining operations and as a result mining power seems to actually be somewhat centralized under the control of a small number of players: https://digiconomist.net/cryptocurrency-decentralization/
Not to mention that "decentralization" is a technical property and not necessarily desirable in itself. Users might care about fairness, avoiding sanctions, purchasing illegal goods, etc, but these are only weakly connected to technical decentralization.
34 such $365M/year entities would have to collude to attack bitcoin. And accept that their business is severely damaged afterwards.
So much for the decentralization and security of Bitcoin.
How does the situation look like in other chains?
they will censor you and block you in blockchain level so literally db for few big companies, lol.
Both of these are the antithesis to censorship resistance because not only are all transactions publicly tracable but also non-fungible making censorship not only possible but viable on a large scale.
https://cryptodefendersalliance.com/blacklist
Monero is actual censorship resistant currency.
https://www.getmonero.org/resources/moneropedia/fungibility....
https://www.irishtimes.com/business/technology/stripe-takes-...
The reason Stellar was appealing was because Stripe invested into it. I wonder if Tempo is using a similar consensus mechanism as Stellar (and/or Ripple)
Importantly, none of these businesses are using crypto because it's crypto or for any speculative benefit. They're performing real-world financial activity, and they've found that crypto (via stablecoins) is easier/faster/better than the status quo ante.
There are gold tokens which I genuinely feel like it can be the best thing ever. Because bitcoin is "digital gold", lmao.... I laugh a lot on this statement nowadays because we genuinely have trustworthy way of having "digital gold" and we don't use that as much as there is hype about bitcoin...
But yes currently, it might benefit the us govt. overall
This end-run around foreign government monetary control has been touted by Stripe executives as one of the main selling points for USD stablecoins but I don't see how foreign governments don't clamp down on this is in the same ways the clamp down on other uses of USD in the country; most monetary transfers have some physical presence or touchpoints the government can control.
More importantly the US itself is eventually going to come to the conclusion that it does not want people holding US dollars for similar reasons: it also loses control over monetary policy, with excessive inflows un-intuitively leading either to unemployment or excessive debt (c.f. Michael Pettis)
That said, it's possible stablecoin networks succeed for other reasons, particularly having a widely-accepted "API" that is developed at the pace of modern technology companies instead of laggard banks.
That's part of it, but:
1. Progress often depends on evolving obsolete regulation.
Uber works much better than taxis (once upon a time, people could "call a dispatcher" an hour in advance, wait on hold, etc) and yet in the early years they had to work around taxi regs.
2. Blockchains are a fundamentally more robust way to run a ledger.
If any of you have ever written software touching tradfi custody you'll know about "reconciliation"--start of every business day, you get a dump of files in your FTP server in various proprietary formats. You parse the transactions and they don't add up. The Recon team hand-corrects and recategorizes edge cases so that the balance deltas match transaction totals and everything ties out.
This type of absurd duct tape is ubiquitous, and it's a major reason why trad rails have multi-day settlement times and even longer for international. Inflates team size and cost required to run a product. SWIFT is a messaging system -- bankers use it to essentially text each other about wires to figure out issue resolution. Some lower-level trad payments regulations are written assuming that this level of manual oversight is required to prevent ledgering errors and ensure sound accounting.
Stablecoins run on transparent, precise ledgers with machine consensus. This doesn't solve everything, but there are large categories of issues that can occur in trad payments that do not exist onchain.
3. Control is liability.
Some important regulations actually encourage blockchain-based payments. For example, money transmitter law places significant requirements on custodial money transmitters (you take money from Alice, with a promise to give it to Bob) that do not apply to noncustodial channels (you give Alice a mechanism to send directly to Bob).
Uber rides ARE taxis.
The innovation of Uber wasn't done by Uber it was done by everyone having a GPS enabled always connected phone and computing device in their hand at all times.
Uber is a whole bunch of things combined:
- very intuitive taxi ordering UX (for riders) and dispatching UX (for drivers).
- circumventing regulation so there are no more artificial limits on taxi supply in a given city.
- enabling gig economy: because you can use your own personal vehicle, you can work anytime you want for however long you want. You don't need to lease a taxi for an entire week or an entire month. You can choose to work for 4 hours on a weekend only during surge times if you wanted to. So it allows supply to be elastic to meet demand while also offering flexible work arrangements for part-time drivers.
My hang-up with crypto is that it solves the ledger-keeping part of running a financial system, but it isn't clear that's actually the hard part! Preventing and remediating fraud, money laundering, etc. are, and crypto makes those issues worse, not better.
That's more or less exactly what this is. Stripe is launching an EVM L1.
The Ethereum Virtual Machine part gives it a mature tech stack with experienced developers and auditors. Plus, well-tested smart contracts that have already processed billions of dollars on other chains can be deployed on Tempo.
The "Stripe L1" part will ensure that it's fast, simple, near zero cost.
If we skipped the whole blockchain part, wouldn’t it be faster, simpler, cheaper? What value does the whole blockchain, EVM, L1 offer? Don’t they fully control the network? Don’t they decide “everything” anyway?
I’d love to understand it, I’m not a hater, just a developer who don’t quite get this announcement.
1- they start by owning all validators, maybe they expect to open validators to other entities at some point in the future. If these entities don't collude together, we could expect some sort of neutrality
2- Marketing - because crypto is coming at an ATH and why not getting some good marketing for free (or almost)
And people mentioning costs, this is not particularly relevant. L2s are extremely cheap by most standards, let alone by Stripe standards which charge horrendous fees.
That can mean different things.
It can mean anyone can use it without needing to sign up.
It can also mean anyone can host a node, i.e. become part of the network, without needing to ask anyone for permission.
The question is how far they went with that and why people wouldn't use another L1 that offers similar features without having Stripe looming over it.
Indeed you can! We even have a name for that! Its called a blockchain.
> This maintains many benefits of the blockchain and lacks many issues (fast, simple, near zero cost, controllable to a given extent -- no takeover possible, ...).
Blockchains can do all of these things.
Perhaps you are thinking of "bitcoin", instead of "blockchains"? Bitcoin, something that was created a whole 17 years ago, indeed has many drawbacks compared to modern blockchains.
Actually yes there is a blockchain. The word you are looking for is "Federated Blockchain".
https://101blockchains.com/federated-blockchain/
> Otherwise we can name everything
No, because we literally have a word for this already. Federated Blockchain. It is a well known concept.
M valid signatures of N authorities is a consensus mechanism that just needs public keys. You don't need a blockchain if you're prepared to trust a set of authorities like stripe and their trusted partners.
[1] https://docs.google.com/document/d/1L0Me9si4iMclOq8n-oG2yNQf...
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