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Let's say I have a special diamond that's worth more than the total market cap of Ethereum. If I want to connect that diamond to the Ethereum blockchain (through a unique serial number) to verify its owners during every transaction it makes, would it be possible?

If yes, how can the payment be made? It wouldn't be possible to buy all ethers and use them to buy the diamond since the value of the diamond is higher, but would it be possible to make the payment through a regular bank transfer? Is it possible to connect a smart contract with a bank transfer?

  • Let me know any qus in your mind? – Jitendra Kumar. Balla Feb 12 '18 at 14:31
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    If someone were to try to buy all the Ether that exists, the price would go up an order of magnitude. – flygoing Feb 12 '18 at 14:42
  • What does qus mean in than context? Can't google it :| – Grzegorz Feb 15 '18 at 10:52
  • I think qus = question. – Richard Horrocks Feb 15 '18 at 17:06
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TL;DR;

Such situation is impossible. You can store the ownership of the diamond in the blockchain, but you can not use ETH to trade it

Why?

This is a peculiar situation as if you wanted to trade Mona Lisa painting. It's not a typical item to trade because there's nothing like it in the world. That's why you don't see those on Amazon.

Each sale of such item would be so unique, that it makes little sense to automatize it in a smart contract. For example, owner of such diamond may accept payments in dollars, gold, yachts, Lamborghinis, islands etc.

He would prefer to control it completely, and probably organize an auction. Because such items don't really have a market value - they are worth exactly as much as the price the buyer and seller agree on at that very moment.

Also, consider what would happen to ETH price in such situation: first the potential buyer buys all of existing ETH, and the price soars like crazy to match the diamond price. Then the purchase is made, and imagine that the new owner values JPY more than ETH. Now he has a problem.

He can dump everything, but there's probably nobody willing to buy that much at once (unless there's a second diamond like this on sale at the moment?) so the prices would be dropping.

Theory of money

I remember from economy classes I took (although I can't find a source right now) that

The value of all money = the value of all things you can buy with that money

This is worth thinking about... (also note that value != price)

In your example, if we assumed that ETH is the only currency anyone believes in, it's cap would be

value of everything in the world that can be bought = all ETH in circulation

But then - a diamond worth more than all ETH in circulation is impossible by definition.

The ultimate aristocrat, pharaoh of the known world

The situation would be similar to somebody owning every continent, and ocean, and person and aminal in it, and the extractable resources, and the labor of every being. Such person would not need ETH at all - he owns the world, and no one can buy it from him, therefore such smart contract would sit there in the blockchain never to be used ;)

Also, if you want to understand money better, read the first chapters of https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

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Nice qus. I am really wonder are you sure, your diamond value is more then $84,035,910,402 USD? If yes then obesely, user can't buy diamond by using ethers.

I guess below one is one of the good solution:

  1. Lets assume you have a web page, when user successful done the transaction take the transactions information.
  2. Write a Smart contract to save above data into chain and allocate/diamond to the user.
  3. When user want to trade then he can trade that digital diamond in side Eth. But payment settlement should happen outside the chain. Then it may not be pure dApp.

Note: Be careful while writing the smart contract. People will say use oraclize for do verification inside your smart contract. I won't recommend that, because that would go through 3rd party server. Its depends on your architecture.

Edit:

As per your requirement diamond value might be more than Eth market capital . Lets assume diamond value is equal of market cap, practically all people not willing to sell Eth tokens. And some people already lost private key's. In that situation how user will purchase diamond.

  • It's just a hypothetical question. Ok, so a purchase of that magnitude on the chain isn't possible then? Since we have to go outside the chain to settle the payment. – armara Feb 15 '18 at 9:59
  • @armara As per your requirement diamond value might be more than Eth market capital . Lets assume diamond value is equal of market cap, practically all people not willing to sell Eth tokens. And some people already lost private key's. In that situation how user will purchase diamond. – Jitendra Kumar. Balla Feb 15 '18 at 10:06

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